Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 54367 

United States, Court No. 05–00438, Slip 

Op. 08–61 (Ct. Int’l Trade) (May 29, 

2008) (‘‘Wuhan v. U.S.’’), which 

challenged certain aspects of the 

Department of Commerce’s (‘‘the 

Department’’) findings in Honey from 

the People’s Republic of China: Final 

Results and Final Rescission, In Part, of 

Antidumping Duty Administrative 

Review, 70 FR 38873 (July 6, 2005) 

(‘‘Final Results’’) and the accompanying 

Issues and Decision Memorandum. As 

explained below, in accordance with the 

order contained in the CIT’s May 29, 

2008, Wuhan v. U.S., the Department is 

amending the Final Results of the 

review to apply the recalculated 

surrogate value for labor in the 

Department’s normal value calculation. 

EFFECTIVE DATE: September 19, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Bobby Wong or Scot T. Fullerton, AD/ 

CVD Operations, Office 9, Import 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue NW, Room 4003, Washington, 

DC 20230; telephone: (202) 482–0409 or 

(202) 482–1386, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 27, 2005, the Department 

completed its Final Results of the 

second administrative review of honey 

from the People’s Republic of China 

(‘‘PRC’’). On July 20, 2007, the CIT 

issued its order remanding the case to 

the Department, requesting that the 

Department explain its decisions, (1) to 

include data from high–wage countries 

in its non–market economy (‘‘NME’’) 

wage rate calculation, and (2) to exclude 

from that calculation data from twenty– 

two low–wage countries placed on the 

record by plaintiffs. See Wuhan Bee 

Healthy Co., Ltd. v. United States, 2007 

Ct. Int’l. Trade, LEXIS 115, Slip Op. 07– 

113 (‘‘Wuhan Remand’’). Additionally, 

the Department requested a voluntary 

remand to recalculate the PRC wage rate 

using the data set out in its remand 

request. The CIT also directed the 

Department to reopen the record to 

provide parties an opportunity to 

submit comments regarding the 

Department’s application of ad valorem 

versus per unit assessment rates. See 

Wuhan Remand, 2007 Ct. Int’l Trade, 

LEXIS 115, Slip Op. 07–113 at *63. 

On August 3, 2007, the Department 

reopened the administrative record to 

allow parties an opportunity to 

comment on the Department’s proposed 

change in methodology from an ad 

valorem to a per-unit duty assessment. 

Petitioners filed comments in support of 

the Department’s proposed change. 

Respondents did not provide comments. 

On September 7, 2007, the Department 

released its draft remand results to 

interested parties for comments. Again, 

respondents did not provide comments. 

On October 16, 2007, the Department 

submitted the final Remand Results to 

the CIT. On May 29, 2008, the CIT 

issued its ruling and sustained the 

Department’s remand results. See 

Wuhan v. U.S., Court No. 05–00438, 

Slip Op. 08–61, at 2. The CIT found that 

the Department provided a reasonable 

explanation and conducted a reasonable 

analysis, concerning the inclusion and 

exclusion of specific countries in the 

regression analysis, sufficient to address 

the court’s concerns. Furthermore, the 

CIT found that, with respect to the 

voluntary remand, the Department 

explained its methodology reasonably, 

and thus sustained the Department’s 

recalculation of the surrogate labor rate. 

No appeals were filed with the United 

States Court of Appeals for the Federal 

Circuit (‘‘CAFC’’). 

Amendment to the Final Determination 

Because there is now a final and 

conclusive court decision, effective as of 

the publication date of this notice, we 

are amending the Final Results and 

revising the weighted average dumping 

margins for Wuhan Bee Healthy Co., 

Ltd. (‘‘Wuhan Bee’’): 

HONEY FROM THE PRC 

Manufacturer/Exporter 

Weighted-Average 

Margin 

(Percent) 

Wuhan Bee ................... 101.48 

We have calculated Wuhan Bee’s 

company-specific antidumping margin 

as 101.48 percent. See the Memorandum 

to the File from Bobby Wong, ‘‘Analysis 

Memorandum for the Draft Results of 

the Redetermination of the Wage Rate 

Remand for Antidumping Duty 

Administrative Review of Honey from 

the People’s Republic of China for 

Wuhan Bee Healthy Co., Ltd.,’’ dated 

September 6, 2007 (‘‘Draft Results 

Analysis Memo’’). There have been no 

changes to this analysis for these 

amended final results. In accordance 

with the Department’s practice of 

applying importer–specific assessment 

rates, we will instruct United States 

Customs and Border Protection (‘‘CBP’’) 

to apply the importer-specific 

assessment rate for Wuhan Bee’s exports 

to the United States. See Draft Results 

Analysis Memo at Attachment 2. The 

Department intends to issue appropriate 

assessment instructions directly to CBP 

15 days after the publication of the final 

results of this review. 

This notice is issued and published in 

accordance with sections 751(a)(1) and 

777(i)(1) of the Tariff Act of 1930, as 

amended. 

Dated: September 8, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–21979 Filed 9–18–08; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–938] 

Citric Acid and Certain Citrate Salts 

From the People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination and Alignment of 

Final Countervailing Duty 

Determination With Final Antidumping 

Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

preliminarily determines that 

countervailable subsidies are being 

provided to producers and exporters of 

citric acid and certain citrate salts from 

the People’s Republic of China. For 

information on the estimated subsidy 

rates, see the ‘‘Suspension of 

Liquidation’’ section of this notice. 

DATES: Effective Date: September 19, 

2008. 

FOR FURTHER INFORMATION CONTACT: 

Damian Felton, David Neubacher, or 

Shelly Atkinson, AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–0133, (202) 482–5823, or (202) 482– 

0116, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The following events have occurred 

since the publication of the Department 

of Commerce’s (‘‘Department’’) notice of 

initiation in the Federal Register. See 

Notice of Initiation of Countervailing 

Duty Investigation: Citric Acid and 

Certain Citrate Salts From the People’s 

Republic of China, 73 FR 26960 (May 

12, 2008) (‘‘Initiation Notice’’), and the 

accompanying Initiation Checklist. 

On June 2, 2008, the Department 

selected three Chinese producers/ 

exporters of citric acid and certain 

citrate salts (‘‘citric acid’’) as mandatory 

respondents, BBCA Group Corp., 

Shandong TTCA Biochemical Co., Ltd. 


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54368 Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 

(‘‘TTCA’’), and Yixing Union 

Biochemical Co., Ltd. (‘‘Yixing Union’’). 

See Memorandum to Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration, ‘‘Respondent 

Selection’’ (June 2, 2008). This 

memorandum is on file in the 

Department’s Central Records Unit in 

Room 1117 of the main Department 

building (‘‘CRU’’). Subsequently, on 

June 4, 2008, the Department issued a 

correction to the respondent selection 

memorandum, naming Anhui BBCA 

Biochemical Co., Ltd. (‘‘Anhui BBCA’’) 

as a mandatory respondent, and not 

BBCA Group Corp. See Memorandum to 

the File from Scott Holland, ‘‘Correction 

to Respondent Selection 

Memorandum—Selection of Anhui 

BBCA Biochemical Co., Ltd.’’ (June 4, 

2008). On June 9, 2008, we issued the 

countervailing duty (‘‘CVD’’) 

questionnaires (‘‘CVD questionnaire’’) to 

the Government of the People’s 

Republic of China (‘‘GOC’’), Anhui 

BBCA, TTCA, and Yixing Union. 

On June 11, 2008, the International 

Trade Commission (‘‘ITC’’) issued its 

affirmative preliminary determination 

that there is a reasonable indication that 

an industry in the United States is 

threatened with material injury by 

reason of allegedly subsidized imports 

of citric acid from Canada and the 

People’s Republic of China (‘‘PRC’’). See 

Citric Acid and Certain Citrate Salts 

from Canada and China; 

Determinations, Investigation Nos. 701– 

TA–456 and 731–TA–1151–1152, 73 FR 

33115 (June 11, 2008). 

On June 13, 2008, the Department 

postponed the preliminary 

determination of this investigation until 

September 12, 2008. See Citric Acid and 

Certain Citrate Salts from the People’s 

Republic of China: Notice of 

Postponement of Preliminary 

Determination in the Countervailing 

Duty Investigation, 73 FR 33805 (June 

13, 2008). 

On July 16, 2008, we were notified by 

counsel for Anhui BBCA that the 

company would not be participating in 

the investigation. 

We received responses to our 

questionnaire from the GOC, TTCA and 

Yixing Union on July 23, 2008. See the 

GOC’s Original Questionnaire Response 

(July 23, 2008) (‘‘GQR’’); TTCA’s 

Original Questionnaire Response (July 

23, 2008) (‘‘TQR’’); and Yixing Union’s 

Original Questionnaire Response (July 

23, 2008) (‘‘YQR’’). We sent 

supplemental questionnaires on the 

following dates: August 1, 2008 (TTCA 

and Yixing Union); August 7, 2008 

(TTCA); August 11, 2008 (Yixing 

Union); August 13 and 18, 2008 (GOC); 

and September 4, 2008 (GOC). We 

received responses to these 

supplemental questionnaires as follows: 

TTCA’s First Supplemental Response 

(August 6, 2008) (‘‘T1SR’’); TTCA’s 

Second Supplemental Response (August 

27, 2008) (‘‘T2SR (8/27)’’); TTCA’s 

Second Supplemental Response (August 

28, 2008); Yixing Union’s First 

Supplemental Response (August 7, 

2008); Yixing Union’s Second 

Supplemental Response (September 2, 

2008) (‘‘Y2SR’’); GOC’s First 

Supplemental Response (August 27, 

2007) (‘‘G1SR (8/27)’’); GOC’s First 

Supplemental Response (September 2, 

2008) (‘‘G1SR (9/2)’’); GOC’s Second 

Supplemental Response (September 2, 

2008) (‘‘G2SR (9/2)’’); GOC’s Second 

Supplemental Response (September 5, 

2008) (‘‘G2SR (9/5)’’); GOC’s Third 

Supplemental Response (September 9, 

2008); and TTCA’s Additional 

Translations of T1SR (8/27) (September 

10, 2008). 

On August 1, 2008, Archer Daniels 

Midland Company, Cargill, 

Incorporated, and Tate & Lyle America, 

Inc. (collectively, ‘‘Petitioners’’) 

requested that the Department extend 

the deadline for the submission of new 

subsidy allegations beyond the August 

4, 2008, deadline established by the 

Department’s regulations. See 19 CFR 

351.301(d)(4)(i)(A). The Department 

granted the request and Petitioners 

submitted new subsidy allegations on 

August 8, 2008. The GOC and Yixing 

Union submitted comments on 

Petitioners’ new subsidy allegations on 

August 18, 2008. We met with the GOC 

and Petitioners regarding the new 

subsidy allegations on August 22, 2008, 

and August 28, 2008, respectively. 

On September 12, 2008, the 

Department determined to investigate 

certain of the newly alleged subsidies, 

specifically those relating to the 

Provision of TTCA’s Plant and 

Equipment for Less Than Adequate 

Remuneration (‘‘LTAR’’); Provision of 

Land to SOEs for LTAR; Provision of 

Land in the YEDZ for LTAR; Provision 

of Land-use Fees in Jiangsu Province for 

LTAR; Provision of Land in the Anqiu 

City Economic Development Zone for 

LTAR; Administration Fee Exemption 

in Anqiu City; Exemption of Water and 

Sewage Fees in Anqiu City; Tax Grants, 

Rebates and Credits in the Yixing 

Economic Development Zone (‘‘YEDZ’’); 

Provision of Water in the YEDZ for 

LTAR; Provision of Electricity in the 

YEDZ for LTAR; Provision of 

Construction Services in the YEDZ for 

LTAR; Administration Fee Exemption 

in the YEDZ; and Grants to FIEs for 

Projects in the YEDZ. See Memorandum 

to Susan Kuhbach, Director, AD/CVD 

Operations, Office 1, ‘‘New Subsidy 

Allegations’’ (September 12, 2008). 

Questions regarding these newly alleged 

subsidies will be sent to the GOC and 

the respondent companies after this 

preliminary determination is issued. 

On September 2, 2008, Petitioners 

requested that the final determination of 

this CVD investigation be aligned with 

the final determination in the 

companion antidumping duty (‘‘AD’’) 

investigation in accordance with section 

705(a)(1) of the Tariff Act of 1930, as 

amended (the ‘‘Act’’). 

The GOC filed comments in advance 

of the preliminary determination on 

September 3, 2008 (‘‘GOC Pre-Prelim 

Comments’’). Petitioners provided 

comments on September 10, 2008, 

regarding certain issues in the GOC PrePrelim Comments. 

On September 5, 2008, Petitioners 

submitted comments regarding the rate 

to be assigned to BBCA and the allothers rate (‘‘Petitioners Comments on 

Anhui BBCA and the All-Others Rate’’). 

The GOC responded to Petitioners’ 

comments on September 9, 2008 

(‘‘GOC’s Response to Petitioners’’ 

Comments on Anhui BBCA and the AllOthers Rate’’). We address Petitioners’ 

comments and the GOC’s response 

below. 

Scope Comments 

In accordance with the preamble to 

the Department’s regulations, we set 

aside a period of time in our Initiation 

Notice for parties to raise issues 

regarding product coverage, and 

encouraged all parties to submit 

comments within 20 calendar days of 

publication of that notice. See 

Antidumping Duties; Countervailing 

Duties, 62 FR 27296, 27323 (May 19, 

1997), and Initiation Notice, 72 FR at 

62210. 

Timely comments were filed 

concerning the scope of the AD and 

CVD investigations of citric acid from 

Canada and the PRC on May 23, 2008, 

by Chemrom Inc., and by L. Perrigo 

Company on June 3, 2008. Petitioners 

responded to these comments on June 

16, 2008. 

On August 6, 2008, the Department 

issued a memorandum to the file 

regarding Petitioners’ proposed 

amendments to the scope of the 

investigations. In response, on August 

11, 2008, L. Perrigo Company and 

Petitioners’ submitted comments to 

provide clarification of the term 

‘‘unrefined’’ calcium citrate. We have 

analyzed the comments of the interested 

parties regarding the scope of this 

investigation. See Memorandum to 

Stephen J. Claeys, Deputy Assistant 

Secretary for Import Administration, re: 

Antidumping Duty Investigation of 


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Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 54369 

Citric Acid and Certain Citrate Salts 

from Canada and the People’s Republic 

of China (PRC), and CVD Investigation 

of Citric Acid and Certain Citrates Salts 

from the PRC, ‘‘Whether to Amend the 

Scope of these Investigations to Exclude 

Monosodium Citrate and to Further 

Define the Product Referred to as 

’Unrefined Calcium Citrate’’’ 

(September 10, 2008). Our position on 

these comments is reflected in the 

‘‘Scope of the Investigation’’ section 

below. 

Scope of the Investigation 

The scope of this investigation 

includes all grades and granulation sizes 

of citric acid, sodium citrate, and 

potassium citrate in their unblended 

forms, whether dry or in solution, and 

regardless of packaging type. The scope 

also includes blends of citric acid, 

sodium citrate, and potassium citrate; as 

well as blends with other ingredients, 

such as sugar, where the unblended 

form(s) of citric acid, sodium citrate, 

and potassium citrate constitute 40 

percent or more, by weight, of the blend. 

The scope of this investigation also 

includes all forms of crude calcium 

citrate, including dicalcium citrate 

monohydrate, and tricalcium citrate 

tetrahydrate, which are intermediate 

products in the production of citric 

acid, sodium citrate, and potassium 

citrate. The scope of this investigation 

does not include calcium citrate that 

satisfies the standards set forth in the 

United States Pharmacopeia and has 

been mixed with a functional excipient, 

such as dextrose or starch, where the 

excipient constitutes at least 2 percent, 

by weight, of the product. The scope of 

this investigation includes the hydrous 

and anhydrous forms of citric acid, the 

dihydrate and anhydrous forms of 

sodium citrate, otherwise known as 

citric acid sodium salt, and the 

monohydrate and monopotassium forms 

of potassium citrate. Sodium citrate also 

includes both trisodium citrate and 

monosodium citrate, which are also 

known as citric acid trisodium salt and 

citric acid monosodium salt, 

respectively. Citric acid and sodium 

citrate are classifiable under 

2918.14.0000 and 2918.15.1000 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS), respectively. 

Potassium citrate and crude calcium 

citrate are classifiable under 

2918.15.5000 and 3824.90.9290 of the 

HTSUS, respectively. Blends that 

include citric acid, sodium citrate, and 

potassium citrate are classifiable under 

3824.90.9290 of the HTSUS. Although 

the HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description of the 

merchandise is dispositive. 

Alignment of Final Countervailing Duty 

Determination With Final Antidumping 

Duty Determination 

On May 12, 2008, the Department 

initiated the CVD and AD investigations 

of citric acid from Canada and the PRC. 

See Initiation Notice and Citric Acid 

and Certain Citrate Salts from Canada 

and the People’s Republic of China: 

Initiation of Antidumping Duty 

Investigations, 73 FR 27492 (May 13, 

2008). The CVD investigation and the 

AD investigations have the same scope 

with regard to the merchandise covered. 

On September 2, 2008, Petitioners 

submitted a letter, in accordance with 

section 705(a)(1) of the Act, requesting 

alignment of the final CVD 

determination with the final 

determination in the companion AD 

investigations of citric acid from Canada 

and the PRC. Therefore, in accordance 

with section 705(a)(1) of the Act and 19 

CFR 351.210(b)(4), we are aligning the 

final CVD determination with the final 

determination in the companion AD 

investigations of citric acid from Canada 

and the PRC. Consequently, the final 

CVD determination will be issued on 

the same date as the final AD 

determinations, which are currently 

scheduled to be issued no later than 

January 26, 2009, unless postponed. 

Period of Investigation 

The period for which we are 

measuring subsidies, i.e., the period of 

investigation (‘‘POI’’), is January 1, 

2007, through December 31, 2007. 

Application of the Countervailing Duty 

Law to Imports From the PRC 

On October 25, 2007, the Department 

published Coated Free Sheet Paper from 

the People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 72 FR 60645 (October 

25, 2007) (‘‘CFS from the PRC’’), and the 

accompanying Issues and Decision 

Memorandum (‘‘CFS Decision 

Memorandum’’). In CFS from the PRC, 

the Department found that given the 

substantial differences between the 

Soviet-style economies and the PRC’s 

economy in recent years, the 

Department’s previous decision not to 

apply the CVD law to these Soviet-style 

economies does not act as a bar to 

proceeding with a CVD investigation 

involving products from the PRC. 

See CFS Decision Memorandum, at 

Comment 6. The Department has 

affirmed its decision to apply the CVD 

law to the PRC in subsequent final 

determinations. See, e.g., Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination and Final Affirmative 

Determination of Critical 

Circumstances, 73 FR 31966 (June 5, 

2008) (‘‘CWP from the PRC’’), and the 

accompanying Issues and Decision 

Memorandum (‘‘CWP Decision 

Memorandum’’). 

Additionally, for the reasons stated in 

the CWP Decision Memorandum, we are 

using the date of December 11, 2001, the 

date on which the PRC became a 

member of the World Trade 

Organization, as the date from which 

the Department will identify and 

measure subsidies in the PRC for 

purposes of this preliminary 

determination. See CWP Decision 

Memorandum, at Comment 2. 

Use of Facts Otherwise Available and 

Adverse Inferences 

Sections 776(a)(1) and (2) of the Act 

provide that the Department shall apply 

‘‘facts otherwise available’’ if, inter alia, 

necessary information is not on the 

record or an interested party or any 

other person: (A) Withholds information 

that has been requested; (B) fails to 

provide information within the 

deadlines established, or in the form 

and manner requested by the 

Department, subject to subsections (c)(1) 

and (e) of section 782 of the Act; (C) 

significantly impedes a proceeding; or 

(D) provides information that cannot be 

verified as provided by section 782(i) of 

the Act. 

Section 776(b) of the Act further 

provides that the Department may use 

an adverse inference in applying the 

facts otherwise available when a party 

has failed to cooperate by not acting to 

the best of its ability to comply with a 

request for information. 

Anhui BBCA 

In the instant investigation, Anhui 

BBCA did not provide the requested 

information that is necessary to 

determine a CVD rate for this 

preliminary determination. Specifically, 

Anhui BBCA did not respond to the 

Department’s June 9, 2008, CVD 

questionnaire. On July 16, 2008, we 

were notified that Anhui BBCA would 

not participate in the investigation. 

Thus, in reaching our preliminary 

determination, pursuant to section 

776(a)(2)(A) and (C) of the Act, we have 

based the CVD rate for Anhui BBCA on 

facts otherwise available. 

Petitioners argue that we should 

utilize reliable record evidence to 

compute a ‘‘non-adverse facts available’’ 

rate for Anhui BBCA, rather than follow 

the adverse facts available (‘‘AFA’’) 

methodology/approach the Department 


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54370 Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 

developed in recent cases. See 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at page 5. 

Petitioners use record evidence to 

compute rates for: Certain grants, 

preferential policy loans, long-term 

loans provided to uncreditworthy 

companies, over rebate of VAT and the 

provision of land for LTAR. See 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at pages 7–15. 

Alternatively, should the Department 

calculate a total AFA rate for Anhui 

BBCA, Petitioners argue that we should 

not limit the computation to the rates of 

programs used by the cooperating 

respondents or from past cases. 

Petitioners believe that for certain 

programs, the rates calculated using 

publicly available information form a 

better source for facts available than 

does the information submitted by the 

cooperating respondents. See 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at page 16. 

While the GOC agrees with Petitioners 

that the Department should use neutral 

(non-adverse) facts available whenever 

possible, the GOC notes that Petitioners’ 

calculations for the aforementioned 

subsidy programs rely on highly adverse 

inferences to compute a supposed nonadverse rate. See GOC’s Response to 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at pages 5 and 

6. 

For the preliminary determination, we 

are not computing a ‘‘non-adverse facts 

available’’ rate for Anhui BBCA. Instead, 

we determine that an adverse inference 

is warranted, pursuant to section 776(b) 

of the Act. By failing to submit a 

response to the Department’s initial 

questionnaire, Anhui BBCA did not 

cooperate to the best of its ability in this 

investigation. Accordingly, we find that 

an adverse inference is warranted to 

ensure that Anhui BBCA will not obtain 

a more favorable result than had it fully 

complied with our request for 

information. 

In deciding which facts to use as 

AFA, section 776(b) of the Act and 19 

CFR 351.308(c)(1) authorize the 

Department to rely on information 

derived from: (1) The petition; (2) a final 

determination in the investigation; (3) 

any previous review or determination; 

or (4) any information placed on the 

record. It is the Department’s practice to 

select, as AFA, the highest calculated 

rate in any segment of the proceeding. 

See, e.g., Certain In-shell Roasted 

Pistachios from the Islamic Republic of 

Iran: Final Results of Countervailing 

Duty Administrative Review, 71 FR 

66165 (November 13, 2006), and the 

accompanying Issues and Decision 

Memorandum, at ‘‘Analysis of 

Programs’’ and Comment 1. 

The Department’s practice when 

selecting an adverse rate from among 

the possible sources of information is to 

ensure that the margin is sufficiently 

adverse ‘‘as to effectuate the statutory 

purposes of the adverse facts available 

rule to induce respondents to provide 

the Department with complete and 

accurate information in a timely 

manner.’’ See Notice of Final 

Determination of Sales at Less than Fair 

Value: Static Random Access Memory 

Semiconductors From Taiwan, 63 FR 

8909, 8932 (February 23, 1998). The 

Department’s practice also ensures ‘‘that 

the party does not obtain a more 

favorable result by failing to cooperate 

than if it had cooperated fully.’’ See 

Statement of Administrative Action 

(‘‘SAA’’) accompanying the Uruguay 

Round Agreements Act, H. Doc. No. 

316, 103d Cong., 2d Session (1994), at 

page 870. In choosing the appropriate 

balance between providing a respondent 

with an incentive to respond accurately 

and imposing a rate that is reasonably 

related to the respondent’s prior 

commercial activity, selecting the 

highest prior margin ‘‘reflects a common 

sense inference that the highest prior 

margin is the most probative evidence of 

current margins, because, if it were not 

so, the importer, knowing of the rule, 

would have produced current 

information showing the margin to be 

less.’’ See Rhone Poulenc, Inc. v. United 

States, 899 F.2d 1185, 1190 (Fed. Cir. 

1990). 

For the preliminary determination, 

consistent with the Department’s recent 

practice, we are computing a total AFA 

rate for Anhui BBCA generally using 

program-specific rates determined for 

the cooperating respondents or past 

cases. Specifically, for programs other 

than those involving income tax 

exemptions and reductions, we will 

apply the highest calculated rate for the 

identical program in this investigation if 

the responding company used the 

identical program. If there is no 

identical program match within the 

investigation, we will use the highest 

non-de minimis rate calculated for the 

same or similar program in another 

China CVD investigation. Absent an 

above-de minimis subsidy rate 

calculated for the same or similar 

program, we are applying the highest 

calculated subsidy rate for any program 

otherwise listed, which could 

conceivably be used by Anhui BBCA. 

See Circular Welded Austenitic 

Stainless Pressure Pipe From the 

People’s Republic of China: Preliminary 

Affirmative Countervailing Duty 

Determination and Alignment of Final 

Countervailing Duty Determination With 

Final Antidumping Duty Determination, 

73 FR 39657, 39661 (July 10, 2008). 

Also, as explained in Lawn Groomers 

from the PRC, where the GOC can 

demonstrate through complete, 

verifiable, positive evidence that noncooperative companies (including all 

their facilities and cross-owned 

affiliates) are not located in particular 

provinces whose subsidies are being 

investigated, the Department does not 

intend to include those provincial 

programs in determining the 

countervailable subsidy rate for the noncooperative companies. See Certain 

Tow-Behind Lawn Groomers and 

Certain Parts Thereof from the People’s 

Republic of China: Initiation of 

Countervailing Duty Investigation, 73 FR 

42324 (July 21, 2008) (‘‘Lawn Groomers 

from the PRC’’), and the accompanying 

Initiation Checklist. In this 

investigation, the GOC has provided the 

business licenses of Anhui BBCA and 

its parent company, which indicate that 

these companies are located only in 

Anhui Province. See G2SR (9/2), at 

Exhibit S2–36. Therefore, we are 

including the Anhui Province programs 

in the calculation of Anhui BBCA’s rate, 

but not the other sub-national subsidy 

programs. In addition, information 

supplied by Petitioners indicates that all 

of Anhui BBCA’s cross-owned affiliates 

are either located in Anhui Province or 

outside the PRC. See Petitioners’ 

Comments on Anhui BBCA and the AllOthers Rate, at Exhibit 2, page 26. 

Therefore, we do not reach the issue of 

attributing subsidies received by these 

cross-owned affiliates for sub-national 

subsidy programs, pursuant to 19 CFR 

351.525(b)(6)(ii). 

For the following ten alleged income 

tax programs pertaining to either the 

reduction of the income tax rates or 

exemption from income tax, we have 

applied an adverse inference that Anhui 

BBCA paid no income tax during the 

POI: (1) ‘‘Two Free, Three Half’’ 

program, (2) Reduced income tax rates 

for foreign-investment enterprises based 

on location, (3) Income tax exemption 

program for export-oriented foreigninvestment enterprises, (4) Reduced 

income tax rate for high or new 

technology enterprises, (5) Reduced 

income tax rate for technology or 

knowledge intensive foreign-investment 

enterprises, (6) Preferential income tax 

rate for research and development at 

foreign-investment enterprises, (7) 

Preferential tax programs for encouraged 

industries, (8) Preferential tax policies 

for township enterprises, (9) Local 

income tax exemption and reduction 

program for productive foreigninvestment enterprises, and (10) 


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Reduced income tax rates for 

encouraged industries in Anhui 

Province. The standard income tax rate 

for corporations in the PRC is 30 

percent, plus a 3 percent provincial 

income tax rate. Therefore, the highest 

possible benefit for these ten income tax 

rate programs is 33 percent and we are 

assigning that rate to these ten 

programs. 

This 33 percent AFA rate does not 

apply to income tax credit or refund 

programs. For the ‘‘Income Tax Credits 

on Purchases of Domestically Produced 

Equipment,’’ program, we have 

preliminarily determined to use Yixing 

Union’s rate from this investigation, 

which is 0.11 percent. Neither 

respondent used the ‘‘Tax benefits to 

foreign-investment enterprises for 

certain reinvestment of profits,’’ 

program and the Department has not 

calculated a rate for this program in any 

prior investigation. Therefore, we have 

preliminarily determined to use the 

highest non-de minimis rate for any 

indirect tax program from a China CVD 

investigation because there were only de 

minimis rates for income tax credit or 

refund programs from prior 

investigations. The rate we selected is 

1.51 percent, respondent GE’s rate for 

the ‘‘Value added tax on Tariff 

Exemptions on Imported Equipment,’’ 

program. See CFS from the PRC and CFS 

Decision Memorandum, at pages 13–14. 

For indirect tax and import tariff 

programs, we have preliminarily 

determined to use TTCA’s rate from this 

investigation for the ‘‘Value Added Tax 

Rebate for Purchases by ForeignInvestment Enterprises of Domestically 

Produced Equipment,’’ program (0.23 

percent) and Yixing Union’s rate for 

‘‘Value Added Tax and Duty 

Exemptions on Imported Equipment,’’ 

program, (0.69 percent). 

For loan programs, we have 

preliminarily determined to use TTCA’s 

rates from this investigation for the 

following programs: ‘‘NationalGovernment Policy Loan Program,’’ 

(0.01 percent); and ‘‘Other Policy Bank 

Loans,’’ (0.48 percent). Neither 

respondent used the following 

programs: ‘‘Discounted Loans for 

Export-Oriented Industries,’’ and 

‘‘Funds Provided for the Rationalization 

of the Citric Acid Industry,’’ and the 

Department has not calculated rates for 

any of these programs in prior 

investigations. Therefore, for these two 

programs, we have preliminarily 

determined to use the highest non-de 

minimis rate for any loan program from 

a China CVD investigation, which is 

4.11 percent, respondent GE’s rate for 

the ‘‘Government Policy Lending’’ 

program. See CFS from the PRC and CFS 

Decision Memorandum, at page 9–10. 

For grant programs, we have 

preliminarily determined to use Yixing 

Union’s rate from this investigation for 

the ‘‘Famous Brands’’ program (0.03 

percent ad valorem). Neither respondent 

used the following programs: ‘‘State Key 

Technology Program Fund,’’ ‘‘National 

level grants to loss-making state-owned 

enterprises,’’ and ‘‘Provincial level 

grants to loss-making state-owned 

enterprises,’’ and the Department has 

not calculated rates for any of these 

programs in prior investigations. 

Moreover, all previously calculated 

rates for grant programs have been de 

minimis. Therefore, for each of these 

programs, we have preliminarily 

determined to use the highest calculated 

subsidy rate for any program otherwise 

listed, which could conceivably have 

been used by Anhui BBCA. The rate was 

13.36 percent for the ‘‘Government 

Provision of Land for Less Than 

Adequate Remuneration,’’ program from 

Laminated Woven Sacks from the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination and Final Affirmative 

Determination, in Part, of Critical 

Circumstances, 73 FR 35639 (June 24, 

2008) (‘‘LWS from the PRC’’) and the 

accompanying Issues and Decision 

Memorandum, at 14–18. 

Finally, for the ‘‘Provision of Land for 

Less than Adequate Remuneration in 

Anhui Province’’ program, we have 

preliminarily determined to use the 

highest non-de minimis rate for the 

provision of land from prior 

determinations (13.36 percent from LWS 

from the PRC). 

For further explanation of the 

derivation of Anhui BBCA’s AFA rate, 

see the Memorandum to the File, 

‘‘Adverse Facts Available Rate for 

Anhui BBCA Biochemical Co., Ltd’’ 

(September 12, 2008) (‘‘Anhui BBCA 

AFA Calc Memo’’). 

Section 776(c) of the Act provides 

that, when the Department relies on 

secondary information rather than on 

information obtained in the course of an 

investigation or review, it shall, to the 

extent practicable, corroborate that 

information from independent sources 

that are reasonably at its disposal. 

Secondary information is ‘‘information 

derived from the petition that gave rise 

to the investigation or review, the final 

determination concerning the subject 

merchandise, or any previous review 

under section 751 concerning the 

subject merchandise.’’ See e.g., SAA, at 

page 870. The Department considers 

information to be corroborated if it has 

probative value. See id. To corroborate 

secondary information, the Department 

will, to the extent practicable, examine 

the reliability and relevance of the 

information to be used. The SAA 

emphasizes, however, that the 

Department need not prove that the 

selected facts available are the best 

alternative information. See SAA, at 

page 869. 

When the Department applies AFA, to 

the extent practicable, it will determine 

whether such information has probative 

value by evaluating the reliability and 

relevance of the information used. With 

regard to the reliability aspect of 

corroboration, we note that these rates 

were calculated in prior final CVD 

determinations. No information has 

been presented that calls into question 

the reliability of these calculated rates 

that we are applying as AFA. Unlike 

other types of information, such as 

publicly available data on the national 

inflation rate of a given country or 

national average interest rates, there 

typically are no independent sources for 

data on company-specific benefits 

resulting from countervailable subsidy 

programs. 

With respect to the relevance aspect 

of corroborating the rates selected, the 

Department will consider information 

reasonably at its disposal in considering 

the relevance of information used to 

calculate a countervailable subsidy 

benefit. Where circumstances indicate 

that the information is not appropriate 

as AFA, the Department will not use it. 

See Fresh Cut Flowers from Mexico; 

Final Results of Antidumping Duty 

Administrative Review, 61 FR 6812 

(February 22, 1996). 

In the absence of record evidence 

concerning these programs due to 

Anhui BBCA’s decision not to 

participate in the investigation, the 

Department has reviewed the 

information concerning PRC subsidy 

programs in this and other cases. For 

those programs for which the 

Department has found a program-type 

match, we find that programs of the 

same type are relevant to the programs 

of this case. For the programs for which 

there is no program-type match, the 

Department has selected the highest 

calculated subsidy rate for any PRC 

program from which Anhui BBCA could 

conceivably receive a benefit to use as 

AFA. The relevance of this rate is that 

it is an actual calculated CVD rate for a 

PRC program from which Anhui BBCA 

could actually receive a benefit. Due to 

the lack of participation by Anhui BBCA 

and the resulting lack of record 

information concerning these programs, 

the Department has corroborated the 

rates it selected to the extent 

practicable. 


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On this basis, we preliminarily 

determine that the AFA countervailable 

subsidy rate for Anhui BBCA is 97.72 

percent ad valorem. See Anhui BBCA 

AFA Calc Memo. 

Subsidies Valuation Information 

Allocation Period 

The average useful life (‘‘AUL’’) 

period in this proceeding as described 

in 19 CFR 351.524(d)(2) is 9.5 years 

according to the U.S. Internal Revenue 

Service’s 1977 Class Life Asset 

Depreciation Range System for assets 

used to manufacture the subject 

merchandise. Consistent with the 

Department’s practice, we have rounded 

the 9.5 years up to 10 years for purposes 

of setting the AUL. See Polyethylene 

Terephthalate Film, Sheet, and Strip 

From India: Preliminary Results and 

Rescission, in Part, of Countervailing 

Duty Administrative Review, 72 FR 

43607 (August 6, 2007) (unchanged in 

final). No party in this proceeding has 

disputed this allocation period. 

Attribution of Subsidies 

The Department’s regulations at 19 

CFR 351.525(b)(6)(i) state that the 

Department will normally attribute a 

subsidy to the products produced by the 

corporation that received the subsidy. 

However, 19 CFR 351.525(b)(6)(ii) 

directs that the Department will 

attribute subsidies received by certain 

other companies to the combined sales 

of those companies if (1) crossownership exists between the 

companies, and (2) the cross-owned 

companies produce the subject 

merchandise, are a holding or parent 

company of the subject company, 

produce an input that is primarily 

dedicated to the production of the 

downstream product, or transfer a 

subsidy to a cross-owned company. The 

Court of International Trade (‘‘CIT’’) has 

upheld the Department’s authority to 

attribute subsidies based on whether a 

company could use or direct the subsidy 

benefits of another company in 

essentially the same way it could use its 

own subsidy benefits. See Fabrique de 

Fer de Charleroi v. United States, 166 F. 

Supp. 2d. 593, 604 (CIT 2001). 

According to 19 CFR 

351.525(b)(6)(vi), cross-ownership exists 

between two or more corporations 

where one corporation can use or direct 

the individual assets of the other 

corporation(s) in essentially the same 

ways it can use its own assets. This 

regulation states that this standard will 

normally be met where there is a 

majority voting interest between two 

corporations or through common 

ownership of two (or more) 

corporations. 

TTCA 

TTCA provided a questionnaire 

response on behalf of itself and one 

affiliate (‘‘affiliate A’’). See TQR. The 

names and details of TTCA’s exact 

relationship with its affiliates are 

proprietary and, hence, addressed 

separately. See Preliminary 

Determination Calculation 

Memorandum for TTCA Co., Ltd., at 

page 2 (September 12, 2008) (‘‘TTCA 

Preliminary Calc Memo’’). TTCA 

reported that none of its affiliates 

produces subject merchandise, supplies 

any inputs to TTCA, or received and 

transferred subsidies to TTCA. See TQR, 

at page 4. Based on the questionnaire 

response for affiliate A, we 

preliminarily determine that this 

company has not received any 

subsidies. Thus, we are preliminarily 

excluding affiliate A from the subsidy 

calculation. 

After reviewing TTCA’s relationship 

with its reported affiliates (i.e., 

comparing the list of common 

shareholders for the reported affiliates), 

we requested that TTCA provide a 

complete questionnaire response for an 

additional affiliate (‘‘affiliate B’’). We 

received affiliate B’s questionnaire 

response shortly before the deadline for 

this preliminary determination, and 

have not been able to fully analyze the 

response or affiliate B’s relationship 

with TTCA. See T2SR (8/27), at Exhibit 

8. Consequently, for this preliminary 

determination, we are limiting our 

investigation to subsidies received by 

TTCA, but will continue to examine this 

issue for the final determination. 

Yixing Union 

Yixing Union responded to the 

Department’s questionnaire by 

providing information on the subsidies 

it received. In its response, Yixing 

Union identified Yixing Union 

Cogeneration Co., Ltd. (‘‘Cogeneration’’) 

as its parent and a supplier of energy. 

Based on this information, we 

requested, and Yixing Union provided, 

a questionnaire response on behalf of 

Cogeneration. 

We preliminarily determine that 

Yixing Union and Cogeneration are 

cross-owned within the meaning of 19 

CFR 351.525(b)(6)(vi). We further 

preliminarily determine that the energy 

supplied by Cogeneration to Yixing 

Union is not primarily dedicated to the 

downstream product and, consequently, 

that any subsidies received by 

Cogeneration should not be attributed to 

Yixing Union under 19 CFR 

351.525(b)(6)(iv). Instead, because 

Cogeneration is the parent of Yixing 

Union, we are attributing the subsidies 

received by Cogeneration to Yixing 

Union pursuant to 19 CFR 

351.525(b)(6)(iii). 

To calculate the benefit to Yixing 

Union from subsidies given to 

Cogeneration, we would normally use 

the consolidated sales of Cogeneration 

and its subsidiaries, pursuant to 19 CFR 

351.525(b)(6)(iii). However, we do not 

have consolidated sales information for 

Cogeneration on the record. 

Consequently, for the purposes of the 

preliminary determination, we generally 

used the total sales of Yixing Union and 

the total sales of Cogeneration less sales 

between the two companies. For 2005, 

we did not have the amount of sales 

between Yixing Union and 

Cogeneration. Therefore, we subtracted 

the 2006 amount for sales between these 

two companies to arrive at the 2005 

‘‘consolidated’’ sales. See Preliminary 

Determination Calculation 

Memorandum for Yixing Union 

Biochemical Co., Ltd. (September 12, 

2008) (‘‘Yixing Union Preliminary Calc 

Memo’’). We intend to seek 

consolidated sales information for 

Cogeneration for the final 

determination. 

Yixing Union also identified several 

other affiliated companies. However, 

Yixing Union reported that these 

affiliates do not produce the subject 

merchandise and do not provide inputs 

to Yixing Union. Therefore, because 

these companies do not produce subject 

merchandise or otherwise fall within 

the situations described in 19 CFR 

351.525(b)(6)(iii)–(v), we do not reach 

the issue of whether these companies 

and Yixing Union are cross-owned 

within the meaning of 19 CFR 

351.525(b)(6)(iii)–(vi), and we are not 

including these companies in our 

subsidy calculations. 

Benchmarks and Discount Rates 

Benchmarks for Short-Term RMB 

Denominated Loans 

The Department is investigating loans 

received by respondents from policy 

banks and state-owned commercial 

banks (‘‘SOCBs’’), which are alleged to 

have been granted on a preferential, 

non-commercial basis. Section 

771(5)(E)(ii) of the Act explains that the 

benefit for loans is the ‘‘difference 

between the amount the recipient of the 

loan pays on the loan and the amount 

the recipient would pay on a 

comparable commercial loan that the 

recipient could actually obtain on the 

market.’’ Normally, the Department uses 

comparable commercial loans reported 

by the company for benchmarking 


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purposes. See 19 CFR 351.505(a)(3)(i). If 

the firm did not have any comparable 

commercial loans during the period, the 

Department’s regulations provide that 

we ‘‘may use a national interest rate for 

comparable commercial loans.’’ See 19 

CFR 351.505(a)(3)(ii). 

The Department has previously 

determined that loan benchmarks must 

be market-based and that Chinese 

interest rates are not reliable as 

benchmarks because of the 

pervasiveness of the GOC’s intervention 

in the banking sector. Specifically, the 

Department found that the GOC’s 

predominant role in the banking sector 

results in significant distortions that 

render lending rates in the PRC 

unsuitable as benchmarks. This 

determination led us to rely on an 

external benchmark. See e.g., Certain 

New Pneumatic Off-the-Road Tires from 

the People’s Republic of China; Final 

Affirmative Countervailing Duty 

Determination and Final Negative 

Determination of Critical 

Circumstances, 73 FR 40480 (July 15, 

2008) (‘‘Tires from the PRC’’), and the 

accompanying Issues and Decision 

Memorandum, at page 7 (‘‘Tires 

Decision Memorandum’’). 

The GOC disputes the Department’s 

prior findings and, in this investigation, 

has argued that the Department should 

rely on the Shanghai Inter-bank Offered 

Rate (‘‘SHIBOR’’) as its benchmark. This 

rate was officially introduced in January 

2007. According to the GOC, it is an 

average of quotations submitted by 16 

commercial banks and, according to the 

GOC, these rates reflect the demand for 

and supply of funds on the money 

market for maturities of up to one year. 

See GQR, at pages 23–27. The GOC 

contends that this rate is more suitable 

than the external benchmark the 

Department has relied upon to-date 

because: (i) It is an in-country 

benchmark; (ii) the rate is unrelated to 

the allocation of credit and preferential 

rates to specific borrowers; (iii) the rate 

is a truly market-determined rate for 

unsecured funds among banks operating 

in the Shanghai wholesale money 

market; and (iv) the rate is determined 

in part by foreign-owned banks. 

We have not adopted the SHIBOR as 

the benchmark for this preliminary 

determination. We disagree that it is a 

market-determined rate because the 

banks whose rates form the SHIBOR are 

subject to a deposit rate cap and lending 

rate floor. These aspects of the banking 

system, inter alia, led us to conclude in 

CFS from the PRC that ‘‘the way interest 

rate formation is regulated in China both 

distorts lending rates and provides 

explicit recognition that banks in China 

are not yet fully able to set interest rates 

on a market basis.’’ See CFS Decision 

Memorandum, at Comment 10. We also 

found in CFS from the PRC that foreign 

banks account for a very small share of 

credit in the PRC, operating mainly in 

niche markets, and, therefore, did not 

offer a suitable benchmark. See id. 

Therefore, we are calculating an 

external benchmark using the 

regression-based methodology first 

developed in CFS from the PRC and 

more recently updated in Tires from the 

PRC. This benchmark interest rate is 

based on the inflation-adjusted interest 

rates of countries with per capita gross 

national incomes (‘‘GNIs’’) similar to 

that of the PRC, and takes into account 

a key factor involved in interest rate 

formation, that of the quality of a 

country’s institutions, that is not 

directly tied to state-imposed distortions 

in the banking sector discussed above. 

As explained in the CFS Decision 

Memorandum, at Comment 10, to derive 

this rate we determine which countries 

are similar to the PRC in terms of GNI, 

based on the World Bank’s classification 

of countries as: low income; lowermiddle income; upper-middle income; 

and high income. The PRC falls in the 

lower-middle income category, a group 

that includes 55 countries as of July 

2007. See TTCA Preliminary Calc 

Memo, at page 3. 

Many of these countries reported 

lending and inflation rates to the 

International Monetary Fund and they 

are included in that agency’s 

International Financial Statistics 

(‘‘IFS’’). The GOC contends that 

although the Department has 

characterized them as such, many of the 

reported lending rates are not short-term 

rates. See GOC Pre-Prelim Comments, at 

pages 26–28. We have reviewed the 

information submitted by the GOC and 

agree that certain of the interest rates 

used in our regression analysis may 

reflect maturities of longer than oneyear. Indeed, as the GOC points out, the 

head notes to the IFS state that these 

rates apply to loans that meet short- and 

medium-term financing needs. GOC’s 

Pre-Preliminary Comments, at Exhibit B 

(International Monetary Fund, 

International Financial Statistics 

Yearbook 2007, at xix). Therefore, we 

believe that these rates should not be 

treated as exclusively short-term in 

nature. See 19 CFR 351.102 (where 

‘‘short-term loan’’ is defined as having 

repayment terms of one-year or less). 

To address this concern, we will 

continue to use the same interest rate 

data and regression-based benchmark 

rate (after deleting deposit rate data 

reported by Jordan and U.S. dollardenominated interest rates reported by 

Timor L’este), but will apply it to loans 

with terms of two years or less. We 

invite interested parties to comment on 

what might be a more appropriate cutoff for short- and medium-term loans, in 

view of several factors. First, there are 

no data available on the term structure 

of the loans underlying the IMF interest 

rate data. Second, we could not find a 

definition of ‘‘medium-term’’ to which 

countries reporting interest rate data to 

the IMF must adhere. And third, from 

a review of the 2008 IFS country notes 

and EIU Country Finance country 

reports, it appears that a majority of the 

countries in the basket either report 

loans with terms of one year or less or 

have loan markets where short-term 

lending predominates. See GOC PrePrelim Comments, at Attachment B; see 

also, Memorandum to the File, 

‘‘Additional Lending Benchmark 

Memo’’ (September 12, 2008) 

(‘‘Additional Lending Benchmark 

Memo’’). 

With the exceptions noted below, we 

have used the interest and inflation 

rates reported in the IFS for the 

countries identified as ‘‘low middle 

income’’ by the World Bank. See TTCA 

Preliminary Calc Memo, at page 3. We 

did not include those economies that 

the Department considered to be nonmarket economies for AD purposes for 

any part of the years in question: the 

PRC, Armenia, Azerbaijan, Belarus, 

Georgia, Moldova, Turkmenistan, and 

Ukraine (for Ukraine only, prior to 

2007). The benchmark necessarily also 

excludes any country that did not report 

both lending and inflation rates to IFS 

for those years. Third, the rate reported 

to the IMF by Jordan is based on deposit 

borrowings, rather than lending rates 

and the rate reported by Timore L’este 

is based on the U.S. dollar. See GOC 

Pre-Prelim Comments, at Attachment B; 

see also, Additional Lending 

Benchmark Memo. Therefore, both 

countries’ rates have been excluded. 

Finally, for each year the Department 

calculated an inflation-adjusted shortterm benchmark rate, we have excluded 

any aberrational country for the year in 

question. See TTCA Preliminary Calc 

Memo, at page 4; see also, Yixing Union 

Preliminary Calc Memo, at page 4. 

The resulting inflation-adjusted 

benchmark lending rates are provided in 

Yixing Union’s and TTCA’s preliminary 

calculation memoranda. See TTCA 

Preliminary Calc Memo, at 4; see also, 

Yixing Union Preliminary Calc Memo, 

at page 5. Because these are inflationadjusted benchmarks, it is necessary to 

adjust respondents’ interest payments 

and discount rates for inflation. This 

was done using the PRC inflation figure 

as reported in IFS. See TTCA 

Preliminary Calc Memo, at 4; see also, 


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Yixing Union Preliminary Calc Memo, 

at page 4. 

In the GOC Pre-Preliminary 

Comments, the GOC argues that the 

regression used by the Department to 

compute this benchmark is flawed 

because there is no correlation between 

governance indicators and interest rates. 

We addressed these concerns in the 

LWRP Decision Memorandum, at 

Comment 12, which we hereby 

incorporate by reference. See Lightwalled Rectangular Tube and Pipe from 

the PRC: Final Affirmative 

Countervailing Duty Determination, 73 

FR 35642 (June 24, 2008) (‘‘LWRP from 

the PRC’’), and the accompanying Issues 

and Decision Memorandum (‘‘LWRP 

Decision Memorandum’’). 

Benchmarks for Long-Term Loans 

The lending rates reported in IFS 

represent short- and medium-term 

lending, and there are no sufficient 

publicly available long-term interest rate 

data upon which to base a robust 

benchmark for long-term loans. To 

address this problem, the Department 

has developed an adjustment to the 

short- and medium-term rates to convert 

them to long-term rates using Bloomberg 

U.S. corporate BB-rated bond rates. See 

e.g., LWRP Decision Memorandum, at 

page 8. 

In its pre-preliminary comments, the 

GOC argues that the Department should 

not base its adjustment on BB-grade 

bonds because doing so is inconsistent 

with the Department’s own regulations, 

which identify creditworthy companies 

as those having ratings of Aaa to Baa. If 

the Department were to use data on U.S. 

borrowers rated Aaa to Baa, the 

adjustment to convert to long-term rates 

would be downward, according to the 

GOC. 

We have not adopted the GOC’s 

position with respect to this issue. The 

regulations at 19 CFR 351.505(a)(3)(iii) 

specify a formula for the interest rate 

benchmark, ib, for uncreditworthy 

companies. The regulations essentially 

direct the Department to derive ib by 

equating returns on loans to companies 

in the Aaa to Baa and Caa to C ranges 

on a risk-adjusted basis. The fact that 19 

CFR 351.505(a)(3)(iii) relies on interest 

rates and default rates for companies in 

the Aaa to Baa range to calculate ib does 

not in any way imply that the long-term 

interest rate benchmark under 

351.505(a)(3)(i) or (ii) must be based on 

interest rates charged to companies in 

the Aaa to Baa range. In fact, in cases 

where the Department must rely on a 

national average long-term interest rate 

for benchmarking purposes, there is no 

statutory or regulatory requirement that 

the rate reflect only lending to 

companies in the Aaa to Baa range. In 

addition, such a rate would likely reflect 

lending to companies in a ratings range 

broader than Aaa to Baa. 

In the instant investigation, given that 

the Department has decided to reject all 

internal PRC interest rates for 

benchmarking purposes, the question 

before the Department is what long-term 

mark-up to use to construct the longterm RMB interest rate benchmark. In 

view of the transitional nature of 

financial accounting and reporting 

standards and practices in the PRC, as 

well as the PRC’s underdeveloped credit 

rating capacity, the Department has 

determined that company-specific markups (to account for investment risk) 

should not be the general rule. Instead, 

the Department will rely on a single 

mark-up for all companies not found to 

be uncreditworthy. That mark-up 

should therefore reflect the average 

investment risk associated with 

companies in the PRC not found 

uncreditworthy by the Department. 

Since the Department has (1) no 

objective basis to determine this average 

investment risk and (2) no basis to 

presume it is for companies with an 

investment-grade rating only, we have 

preliminarily used rates for BB-rated 

bonds, the highest non-investment 

grade, to calculate the mark-up. 

Alternatively, the Department may 

consider using a mark-up derived from 

the average of bonds rated from AAA to 

B minus and invite parties to comment 

for our final determination. 

In the GOC Pre-Prelim Comments, the 

GOC further argues that the adjustment 

factor should be added to the short-term 

interest rate rather than multiplied. We 

addressed these concerns in the LWRP 

Decision Memorandum, at Comment 12, 

which we hereby incorporate by 

reference. 

However, we have made one change 

to the long-term adjustment to 

correspond to the change described 

above regarding our regression-based 

benchmark. Specifically, because the 

benchmark now covers loans up to two 

years, we have calculated the long-term 

adjustment based on the difference in 

the BB rates for bonds that match the 

maturity of the loan in question and 

two-year bonds. 

Discount Rates 

Consistent with 19 CFR 

351.524(d)(3)(i)(A), we have used as our 

discount rate, the long-term interest rate 

calculated according to the methodology 

described above for the year in which 

the government agreed to provide the 

subsidy. 

Creditworthiness 

In their petition, Petitioners alleged 

that Anhui BBCA was uncreditworthy 

for the years 2005 to 2006. On July 25, 

2008, we determined that Petitioners 

did not provide a reasonable basis to 

believe or suspect that Anhui BBCA was 

uncreditworthy. See Memorandum to 

Susan H. Kuhbach, Office Director, AD/ 

CVD Operations, Office 1, 

‘‘Uncreditworthy Allegation for Anhui 

BBCA Biochemical Co., Ltd.’’ (July 25, 

2008). 

On September 5, 2008, Petitioners 

submitted additional information to 

support their allegation. See Petitioners’ 

Comments on Anhui BBCA and the AllOthers Rate. Because the Department 

did not receive Petitioners’ allegation 

until September 5, 2008, one week prior 

to our preliminary determination, we 

are still reviewing the allegation and 

will decide whether to investigate 

Anhui BBCA’s creditworthiness after 

this preliminary determination. 

Analysis of Programs 

Based upon our analysis of the 

petition and the responses to our 

questionnaires, we determine the 

following: 

I. Programs Preliminarily Determined 

To Be Countervailable 

A. Government Policy Lending 

The Department is examining whether 

preferential loans were provided to 

citric acid producers based on 

government plans promoting 

modernization loans for encouraged 

projects. The GOC has asserted that 

there must be evidence that the policy 

caused the loan to be provided in order 

for the Department to find such a 

program countervailable. The GOC has 

further claimed that: (1) None of the 

cooperating respondents’ loans or 

supporting documentation mentions 

any government policy or plan; (2) no 

plan or policy for the chemical industry 

on the record mentions targeted loans, 

or directs SOCBs to provide targeted 

project loans; and (3) none of these 

plans mentions the citric acid industry 

or citric acid producers, much less 

encourages modernization loans for the 

chemical industry. 

Based on our review of the 

information and responses provided by 

the GOC, we preliminary determine that 

certain of the loans received by TTCA 

from SOCBs were made pursuant to 

government policy directives. 

National-Government Policy Lending 

Program 

Record evidence demonstrates that 

certain GOC policy documents outline 


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the government’s goals regarding energy 

saving and pollution reduction, and the 

manner in which these goals would be 

implemented. For example, the PRC’s 

Eleventh Five-Year Plan sets out as one 

of its policy goals to ‘‘{o}ptimally 

develop of fundamental chemical raw 

material, actively develop fine chemical 

and eliminate high polluting chemical 

enterprise.’’ See GQR, at page 31. The 

GOC has stated that this is a ‘‘nonbinding’’ goal and that the only binding 

goal in regard to environment or 

pollution reduction is that ‘‘energy 

consumption of unit GDP would be 

lowered down about 20% and emission 

volume of main pollutants would be 

decreased by 10% * * *’’ See G2SR (9/ 

2), at page 10. Further, according to the 

State Council Circular on Realizing the 

Major Targets in the ‘‘Outline of the 

Eleventh Five-Year Plan for National 

Economic and Social Development of 

the People’s Republic of China and 

Division of Tasks’’, the reduction of 

energy consumption was to be the 

responsibility of the National 

Development and Reform Commission 

(‘‘NDRC’’) while the State 

Environmental Protection 

Administration (‘‘SEPA’’) was tasked 

with reducing major pollution 

discharges. 

Also in connection with these energy 

saving and pollution goals, the NDRC 

formulated and the State Council 

approved the Notice of State Council on 

Circulation of Comprehensive Work 

Plan on Energy Saving and Emission 

Reduction (Guo Fa 2007) No. 15) (‘‘State 

Council Circular’’). The GOC has 

described the purpose of this document 

as ‘‘enabling government departments at 

each level to understand the concrete 

tasks of energy saving and emission 

reduction, and proposing detailed work 

plans.’’ See GQR, at page 41. In this 

document, there are a number of 

recommendations that specifically 

address the government’s energy savings 

and emission goals, in particular with 

respect to financing: 

Consummate financial policies promoting 

energy-saving and emission reduction. The 

people’s government at each level shall 

allocate certain funds within the financial 

budget, by way of subsidy and reward, to 

support major projects of energy-saving and 

emission-reduction, promotion of high 

effective energy-saving and new mechanism 

for energy-saving, construction of 

management ability of energy-saving as well 

as construction of supervision system for 

emission-reduction. We shall further promote 

financial basic construction investment to 

incline to energy-saving and environmentprotection projects. 

See GQR at Exhibit I–A–36, page 16. 

The State Council also recommends: 

Enhance financial service for energy-saving 

and environment-protection. We shall 

encourage and guide financial institutions to 

enhance credit support to circular economy, 

environment-protection, and reform projects 

for energy-saving and emission-reduction 

technologies, first provide direct financing 

service for qualified energy-saving and 

emission-reduction projects and circular 

economy projects. 

See id. at page 17. The GOC has 

explained in its responses that the 

purpose of the cited passages was ‘‘to 

enlarge the funding source for energysaving and environment-protection 

projects, to assist and support the 

construction and promotion of energysaving and emission reduction 

projects.’’ See G2SR (9/2), at page 12. In 

terms of specific actions taken, the GOC 

explained that the first statement 

referred to a special fund established by 

the Ministry of Finance for basic 

infrastructure energy-saving and 

environmental-protection projects, 

while the second statement involved the 

Ministry of Environmental Protection 

(‘‘MPE’’) and the establishment of an 

information sharing system which 

would provide technical advice to 

enable banks to better assess the 

feasibility of and returns on pollution 

control projects. See id. Although the 

GOC has related these particular actions 

to the statements in the State Council 

Circular, it is unclear whether other 

actions or policies may also be 

included. For example, the relationship 

between the MPE sharing system and 

the provision of ‘‘direct financing 

service for qualified energy-saving and 

emission-reduction projects’’ is unclear, 

and we intend to seek clarification of 

these statements during the course of 

this investigation. For purposes of our 

preliminary determination, however, we 

conclude that the record evidence 

indicates that the purpose of the State 

Council Circular was to provide details 

on achieving the energy-saving and 

pollution-reducing goals and the means 

by which the goals would be fulfilled. 

Additional record evidence indicates 

that specific guidance has been issued 

to PRC banks regarding the 

government’s energy-saving and 

pollution-reduction goals. In particular, 

following the approval of the State 

Council Circular, the People’s Bank of 

China (‘‘PBOC’’) issued the Guidelines 

on Improvement and Strengthening of 

Financial Services in Energy Saving and 

Environmental Protection Areas (Yin Fa 

2007 No. 215) (‘‘PBOC Guidelines’’). In 

its response, the GOC stated that the 

document contains guidelines to banks 

and does not set concrete goals and 

objectives. The PBOC Guidelines were 

created in accordance with the State 

Council Circular and ‘‘opinions in video 

conferences call regarding national wide 

work on emission reduction, in order to 

further improve industrial restructuring, 

evolution of economic growth mode as 

well as enhancement of good and fast 

economic development.’’ The key 

sections of PBOC Guidelines state: 

{a}ll banking institutions and branches of 

the People’s Bank of China shall fully 

recognize the importance of financial 

services in energy saving and emission 

reduction, enhance the sense of 

responsibility and mission, improve and 

strengthen the financial services in energy 

saving and emission reduction areas, 

reasonably control the increase of lending, 

pay attention to improvement of credit 

structure, strengthen the credit risk 

management, and enhance the coordinated 

and sustainable development of the economy 

and finance. 

See Petitioner’s April 24, 2008, response 

(‘‘PSR’’) at Exhibit 111. In regard to 

projects and lending, the PBOC 

Guidelines state: 

{a}ll banking financial institutions shall 

follow the national industry structure 

adjustment policy, and follow differentiation 

principles in allocating the loan resources. 

For investment projects encouraged by the 

government, a banking institution shall 

simplify the lending procedures and 

proactively provide lending supports; as to 

investment subject to restrictions * * * For 

any other projects, the banking financial 

institutions shall take into consideration of 

resource saving and environmental 

protection factors and shall follow general 

credit principles when providing lending 

supports. 

See id. 

Finally, the GOC has placed on the 

record several industrial catalogues 

which list industries and/or activities 

considered encouraged by the GOC. 

These catalogues include the Catalogue 

for the Guidance of Industrial Structure 

Adjustment (2005 version), Catalogue 

for the Guidance of Foreign-Invested 

Industries (amended in 2007), Catalogue 

for the Guidance of Foreign-Invested 

Industries (amended in 2004), and 

Catalogue for Industries, Products, and 

Technologies Currently Particularly 

Encouraged by the State for 

Development. The GOC claims that 

citric producers are not identified in any 

of the catalogues as an encouraged 

industry. See GQR at I–10—I–15 and 

G2SR (9/2) at S2A2–S2A4. 

TTCA reported a loan used to 

construct the Project on Electricity 

Generator with Recycling Methane. See 

T2SR (8/27) at 18. TTCA and the GOC 

provided supporting documentation 

regarding this loan. See T2SR, at Exhibit 

S37; see also, G1SR (9/2), at Exhibit S1– 

7–a–2 and Exhibit S1–8–b. This 

documentation is business proprietary 


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and, therefore, is discussed separately. 

See Memorandum to the File regarding, 

‘‘BPI Memo for Government Policy 

Lending’’ (‘‘BPI Lending Memo’’). 

However, the documentation in relation 

to this loan received by TTCA 

demonstrates that the TTCA project that 

is funded by the loan was encouraged 

by the state and that, as shown above, 

there is a clear link between the TTCA 

project and the binding goals contained 

in the Eleventh Five-Year Plan and the 

subsequent documents issued by the 

State Council and the PBOC. In the BPI 

Lending Memo, we explain the 

relationship between the Eleventh FiveYear Plan and its implementing 

documents and the TTCA loan 

documents in further detail. 

Based on this information, we 

preliminarily determine that the GOC 

has a policy in place to encourage and 

support preferential lending to certain 

encouraged projects, as expressly 

reflected in the documents described 

above. Consistent with our prior 

determinations, we also find that the 

loan received by TTCA from a SOCB 

constitutes a direct financial 

contribution from the government, 

pursuant to sections 771(5)(B) and 

771(5)(D)(i) of the Act. See CFS from the 

PRC, at Comment 8. Furthermore, the 

loan provides a benefit equal to the 

difference between what TTCA paid on 

its loan and the amount it would have 

paid on comparable commercials loans. 

As the basis for specificity relies on 

information designated business 

proprietary, we are unable to disclose 

our analysis in the Federal Register 

Notice and, therefore, it is discussed in 

the BPI Lending Memo. 

To calculate the benefit under the 

national-government policy lending 

program, we used the benchmarks 

described in the Benchmarks and 

Discount Rates section above and the 

methodology described in 19 CFR 

351.505(c)(1) and (2). On this basis, we 

preliminarily determine that TTCA 

received a countervailable subsidy of 

0.01 ad valorem under this program. 

Shandong Province Policy Loans 

Program 

Policy lending by Shandong Province 

was not separately alleged by the 

petitioners in the original petition. 

Record evidence, however, indicates 

that the Shandong Province’s industrial 

policy promoted: (1) Financing and 

guarantees for key construction projects; 

(2) the development of more key 

projects and programs to include in the 

nation’s plans; and (3) the active use of 

discount government loans to support 

policy financing. See The Shandong 

Province Outline of the Tenth Five-Year 

Plan for National Economic and Social 

Development (‘‘Shandong Province 

Tenth Five-Year Plan’’) provided at 

G1SR (9/2), at Exhibit S1–2–d. The GOC 

has stated in a supplemental 

questionnaire response that the 

Shandong Provincial government will, 

‘‘under the premise of considering the 

state industrial policies, * * * guide the 

activity of local enterprises and promote 

the industrial upgrade.’’ See G2SR, at 

page 13. Thus, through the Shandong 

Province Tenth Five-Year Plan, the 

Shandong Provincial government has 

developed a policy to support the 

development of key projects to be 

included in national industrial policy, 

and this policy is effectuated by 

promoting financing and guarantees for 

these key construction projects. 

The GOC has repeatedly stated that 

citric acid is not an industry encouraged 

by the state. However, the GOC also 

concedes that there is no uniform 

product classification used by all 

government agencies in the PRC. 

Instead, different government agencies 

may classify citric acid differently. See 

G2SR (9/2), at page 2. 

Further, the Law of the People’s 

Republic of China on Commercial Banks 

(December 27, 2003) (‘‘Commercial 

Banking Law’’), at Article 34, states that 

banks shall ‘‘carry out their loan 

business upon the needs of the national 

economy and the social development 

and under the guidance of the state 

industrial policies.’’ See Petition, at 

Exhibit IV–32. We note that the 

Commercial Banking Law prescribes 

that lending practices shall be based, at 

least in some measure, on the guidance 

of government industrial policy. 

Further, as noted above, the Shandong 

Province Tenth Five-Year Plan 

specifically directs bank financing to 

key construction projects. Consequently, 

for purposes of this preliminary 

determination, we conclude that record 

evidence demonstrates that there is a 

link between national-government 

industrial policies and the Shandong 

Province directives regarding banking 

lending. 

TTCA reported that a loan was used 

to construct a citric acid and sodium 

citrate project. See T2SR, at page 18. 

The GOC and TTCA provided 

supporting documentation for this loan, 

which was used to construct the 

aforementioned project. See T2SR, at 

Exhibit S38; see also, G1SR (9/2), at 

Exhibit S1–7–b and Exhibit S1–8–d. As 

the information contained in the loan 

and project documentation is business 

proprietary, see BPI Lending Memo for 

additional details. However, this 

document demonstrates the link 

between the Shandong Provincial 

government’s policy to support the 

development of key projects through 

financing and the company’s loan 

documents. 

On the basis of the above-cited record 

evidence, we preliminarily determine 

that the GOC has a policy in place to 

encourage and support preferential 

lending to key projects, as expressly 

reflected in the Shandong Province 

Tenth Five-Year Plan. The Department 

further finds that Shandong Province 

has a policy in place to provide lending 

in accordance with the GOC’s policies. 

We find that a loan from a SOCB 

constitutes a direct financial 

contribution from the government, 

pursuant to sections 771(5)(B) and 

771(5)(D)(i) of the Act. Furthermore, the 

loan provides a benefit equal to the 

difference between what the recipients 

paid on their loans and the amount they 

would have paid on comparable 

commercial loans. As our basis for 

specificity relies on information 

designated business proprietary, we are 

unable to disclose our analysis in the 

Federal Register Notice and, therefore, 

it is discussed in the BPI Lending 

Memo. 

To calculate the benefit under the 

provincial policy lending program, we 

used the benchmarks described in the 

Benchmarks and Discount Rates section 

above, as well as the methodology 

described in 19 CFR 351.505(c)(1) and 

(2). On this basis, we preliminarily 

determine that TTCA received a 

countervailable subsidy of 0.41 ad 

valorem under this program. 

Other Policy Bank Loans 

Certain loans reported by TTCA were 

received from a Chinese policy bank, 

and the evidence indicates these loans 

were made under a particular lending 

program operated by that bank. The 

information regarding these loans is 

business proprietary and, therefore, is 

discussed separately in the BPI Lending 

Memo. 

The Department typically treats 

policy banks, i.e., special purpose, 

government-owned banks, as 

‘‘authorities’’ within the meaning of 

section 771(5)(B) of the Act. See Final 

Affirmative Countervailing Duty 

Determination: Dynamic Random 

Access Memory Semiconductors from 

the Republic of Korea, 68 FR 37122 

(June 23, 2003), and the accompanying 

Issues and Decision Memorandum, at 

page16. Thus, we preliminarily 

determine that these loans were 

provided by the GOC and that they 

constitute financial contributions under 

section 771(5)(D)(i) of the Act. We 

further determine preliminarily that 

these loans confer a benefit because the 


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recipient is paying less than it would for 

a comparable commercial loan. See 

section 771(5)(E)(ii) of the Act. As our 

basis for specificity relies on 

information designated business 

proprietary, we are unable to disclose 

our analysis in the Federal Register 

Notice and, therefore, it is discussed in 

the BPI Lending Memo. 

To calculate the benefit conferred by 

these loans, we used the benchmarks 

described in the Benchmarks and 

Discount Rates section above and the 

methodology described in 19 CFR 

351.505(c)(1) and (2). We divided the 

benefit by certain sales reported by 

TTCA during the POI. On this basis, we 

preliminarily determine that TTCA 

received a countervailable subsidy of 

0.48 percent ad valorem under this 

program. 

B. ‘‘Famous Brands’’ Program—Yixing 

City 

According to the Implementing 

Opinions of City Government on Further 

Advancing the Brand Construction of 

Enterprise, the Government of Yixing 

City provides a lump sum award to 

enterprises that receive a ‘‘famous 

brands’’ certificate from either the 

Famous Brand Promotion Committee of 

China or the Famous Brand Promotion 

Committee of Jiangsu. To receive an 

award, the enterprise must present its 

‘‘famous brands’’ certificate from either 

promotion committee to the Quality and 

Technology Supervision Bureau of 

Yixing and the Finance Bureau of 

Yixing. The Bureaus will then review 

the submitted certificate and approve 

the award. 

Yixing Union received a ‘‘famous 

brands’’ certificate from the Jiangsu 

Famous Brand Promotion Committee 

and was granted the lump sum award 

from the Government of Yixing City 

during the POI. See G1SR (9/2), at page 

8; see also, YQR, at pages 14–15. 

We preliminarily determine that the 

grant under this program constitutes a 

financial contribution under section 

771(5)(D)(i) of the Act and also provides 

a benefit in the amount of the grant (see 

19 CFR 351.504(a)). 

Regarding specificity, information 

submitted by the GOC shows that grants 

provided under the program are 

available to any enterprise that it 

certified as a certificate of Famous 

Product of China or a Famous Product 

of Jiangsu Province. See G1SR (9/2), at 

Exhibit S1B–8. Further, the GOC 

reported that eligibility is not limited by 

law to any enterprise or group of 

enterprises, or to any industry or group 

of industries. Therefore, we 

preliminarily determine that there is no 

basis to find this program de jure 

specific under section 771(5A)(D)(i) of 

the Act. 

In determining whether this program 

is de facto specific, we must examine 

the factors identified in section 

771(5A)(D)(iii) of the Act. The GOC 

provided program usage data for 2005 

through 2007 showing the industries 

that received the award and the number 

of companies per industry that received 

the award. See G1SR (9/2), at Exhibit 

S1B–11–12. Although the grants have 

been provided to a variety of industries, 

we preliminarily determine that the 

number is limited in accordance with 

section 771(5A)(D)(iii)(I) of the Act 

because only 34 companies received 

this award from 2005 through 2007. 

Therefore, we find the program to be de 

facto specific because the number of 

companies which received the award is 

limited, within the meaning of section 

771(5A)(D)(iii)(I) of the Act. We 

preliminarily find the ‘‘Famous Brands’’ 

program provides a countervailable 

benefit to Yixing Union. 

To calculate the benefit, we divided 

the amount of the grant by Yixing 

Union’s total sales in the year the 

benefit was approved and found that the 

amount was less than 0.5 percent. 

Therefore, in accordance with 19 CFR 

351.524(b)(2), we are allocating the total 

amount of the subsidy to the year of 

receipt. On this basis, we preliminarily 

determine that a countervailable 

subsidy of 0.03 percent ad valorem 

exists for Yixing Union. 

C. Reduced Income Tax Rates to FIEs 

Based on Location 

To promote economic development 

and attract foreign investment, 

‘‘productive’’ FIEs located in coastal 

economic zones, special economic 

zones or economic and technical 

development zones in the PRC receive 

preferential tax rates of 15 percent or 24 

percent, depending on the zone, under 

Article 7 of the FIE Tax Law. See GQR, 

at Exhibit I–A–39. This program was 

created June 15, 1988, pursuant to the 

Provisional Rules on Exemption and 

Reduction of Corporate Income Tax and 

Business Tax of FIEs in Coastal 

Economic Development Zone issued by 

the Ministry of Finance. The March 18, 

1988, Circular of State Council on 

Enlargement of Economic Areas 

enlarged the scope of the coastal 

economic areas and the July 1, 1991, FIE 

Tax Law continued this policy. The 

Department has previously found this 

program to be countervailable. See CFS 

from the PRC, LWRP from the PRC, and 

Tires from the PRC. 

Yixing Union is located in a coastal 

economic development zone and was 

subject to the reduced income tax rate 

of 24 percent during the POI. 

We preliminarily determine that the 

reduced income tax rate paid by 

productive FIEs under this program 

confers a countervailable subsidy. The 

reduced rate is a financial contribution 

in the form of revenue forgone by the 

GOC and it provides a benefit to the 

recipient in the amount of the tax 

savings. See section 771(5)(D)(ii) of the 

Act and 19 CFR 351.509(a)(1). We 

further determine preliminarily that the 

reduction afforded by this program is 

limited to enterprises located in 

designated geographic regions and, 

hence, is specific under section 

771(5A)(D)(iv) of the Act. 

To calculate the benefit, we treated 

the income tax savings enjoyed by 

Yixing Union as a recurring benefit, 

consistent with 19 CFR 351.524(c)(1), 

and divided the company’s tax savings 

received during the POI by the 

company’s total sales during that 

period. To compute the amount of the 

tax savings, we compared the income 

tax rate Yixing Union would have paid 

in the absence of the program (30 

percent) with the rate it paid (24 

percent). 

On this basis, we preliminarily 

determine that Yixing Union received a 

countervailable subsidy of 0.17 percent 

ad valorem under this program. 

TTCA is also a productive FIE and is 

located in a coastal economic 

development zone where the income tax 

rate is 24 percent. Based on TTCA’s 

response, we preliminary determine that 

TTCA did not use this program during 

the POI. See TTCA Preliminary Calc 

Memo, at page 7. 

D. ‘‘Two Free, Three Half’’ Program 

Under Article 8 of the FIE Tax Law, 

an FIE that is ‘‘productive’’ and is 

scheduled to operate for more than ten 

years may be exempted from income tax 

in the first two years of profitability and 

pay income taxes at half the standard 

rate for the next three years. 

The GOC reported that Yixing Union 

was in the last year of the ‘‘three half’’ 

period under this program during the 

POI. TTCA did not use this program 

during the POI. 

We preliminarily determine that the 

exemption or reduction of the income 

tax paid by productive FIEs under this 

program confers a countervailable 

subsidy. The exemption/reduction is a 

financial contribution in the form of 

revenue forgone by the GOC and it 

provides a benefit to the recipient in the 

amount of the tax savings. See section 

771(5)(D)(ii) of the Act and 19 CFR 

351.509(a)(1). We also preliminarily 

determine that the exemption/reduction 


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afforded by this program is limited as a 

matter of law to certain enterprises, 

‘‘productive’’ FIEs and, hence, is 

specific under section 771(5A)(D)(i) of 

the Act. See CFS Decision 

Memorandum, at Comment 14. 

To calculate the benefit, we treated 

the income tax savings enjoyed by 

Yixing Union as a recurring benefit, 

consistent with 19 CFR 351.524(c)(1), 

and divided the company’s tax savings 

received during the POI by the 

company’s total sales during that 

period. To compute the amount of the 

tax savings, we compared the income 

tax rate Yixing Union would have paid 

in the absence of the program (24 

percent, as described above under 

‘‘Reduced Income Tax Rates for FIEs 

Based on Location’’) with the income 

tax rate the company actually paid (12 

percent). On this basis, we preliminarily 

determine that Yixing Union received a 

countervailable subsidy of 0.35 percent 

ad valorem under this program. 

E. Reduced Income Tax Rate for 

Technology or Knowledge Intensive FIEs 

Article 73 of the Implementing Rules 

of the Foreign Investment Enterprise 

and Foreign Enterprise Income Tax Law 

authorizes a reduced income tax rate of 

15 percent for ‘‘productive’’ FIEs located 

in coastal economic zones, special 

economic zones, or economic and 

technical development zones if they 

undertake: (1) Technology-intensive or 

knowledge-intensive projects; (2) 

projects with foreign investment of $30 

million or more and a long payback 

period; or (3) energy, transportation and 

port construction projects. Additionally, 

FIEs that have been established in other 

zones specified by the State Council and 

are engaged in projects encouraged by 

the State may qualify for the reduced 

income tax rate of 15 percent upon 

approval by the State Taxation Bureau. 

Cogeneration paid the reduced 

income tax rate of 15 percent under this 

program during the POI. TTCA did not 

use this program during the POI. 

We preliminarily determine that the 

reduction in the income tax paid by 

‘‘productive’’ FIEs under this program 

confers a countervailable subsidy. The 

exemption/reduction is a financial 

contribution in the form of revenue 

forgone by the government and it 

provides a benefit to the recipient in the 

amount of the tax savings. See section 

771(5)(D)(ii) of the Act and 19 CFR 

351.509(a)(1). We also preliminarily 

determine that the reduction afforded by 

this program is limited as a matter of 

law to certain enterprises, ‘‘productive’’ 

FIEs, and, hence, is specific under 

section 771(5A)(D)(i) of the Act. 

To calculate the benefit for Yixing 

Union, we treated the income tax 

savings enjoyed by Cogeneration as a 

recurring benefit, consistent with 19 

CFR 351.524(c)(1), and divided the 

company’s tax savings received during 

the POI by the combined total sales of 

Yixing Union and Cogeneration (less 

any sales between the two companies) 

during that period. To compute the 

amount of the tax savings, we compared 

the rate Cogeneration would have paid 

in the absence of the program (30 

percent) with the rate the company paid 

(15 percent). On this basis, we 

preliminarily determine the 

countervailable subsidy attributable to 

Yixing Union to be 2.07 percent ad 

valorem under this program. 

F. Income Tax Credits on Purchases of 

Domestically Produced Equipment 

The Circular of the Ministry of 

Finance and the State Administration of 

Taxation of the People’s Republic of 

China on Distribution of Interim 

Measures Concerning the Reduction and 

Exemption of Enterprise Income Tax for 

Investment in Chinese-made Equipment 

for Technological Renovation, and 

CAISHUI (2000) No. 49, Circular of the 

Ministry of Finance and the State 

Administration of Taxation on 

Enterprise Income Tax Credits for 

Purchase of Domestic Equipment by 

Foreign Invested Enterprises and 

Foreign Enterprises, permits FIEs to 

obtain tax credits of up to 40 percent of 

the purchase value of domestically 

produced equipment. Specifically, the 

tax credit is available to FIEs and 

foreign-owned enterprises whose 

projects are classified in either the 

Encouraged or Restricted B categories of 

the Catalog of Industrial Guidance for 

Foreign Investment. The credit can be 

taken for domestically produced 

equipment so long as the equipment is 

not listed in the Catalog of Non-DutyExemptible Articles of Importation. See 

GQR, at page 70. 

Cogeneration claimed credits under 

this program on the tax return filed in 

2007. See Memorandum to the File, 

‘‘Correction to Appendix 1 of the 

Second Supplemental Questionnaire for 

Yixing Union Cogeneration, Co., Ltd.’’ 

(September 4, 2008). TTCA and Yixing 

did not use this program during the POI. 

We preliminarily determine that 

income tax credits for the purchase of 

domestically produced equipment are 

countervailable subsidies. The tax 

credits are a financial contribution in 

the form of revenue forgone by the 

government and provide a benefit to the 

recipients in the amount of the tax 

savings. See section 771(5)(D)(ii) of the 

Act and 19 CFR 351.509(a)(1). We 

further preliminarily determine that 

these tax credits are contingent upon 

use of domestic over imported goods 

and, hence, are specific under section 

771(5A)(C) of the Act. 

To calculate the benefit, we treated 

the income tax savings enjoyed by 

Cogeneration as a recurring benefit, 

consistent with 19 CFR 351.524(c)(1), 

and divided the company’s tax savings 

by the combined total sales of Yixing 

Union and Cogeneration (less any sales 

between the two companies) during that 

period. On this basis, we preliminarily 

determine that a countervailable 

subsidy of 0.11 percent ad valorem 

exists for Yixing Union under this 

program. 

G. VAT Rebate on Purchases by FIEs of 

Domestically Produced Equipment 

As outlined in GUOSHUIFA (1999) 

No. 171, Notice of the State 

Administration of Taxation Concerning 

the Trial Administrative Measures on 

Purchase of Domestically Produced 

Equipment by FIEs, the GOC refunds 

FIEs with the VAT on purchases of 

certain domestic equipment produced if 

the purchases are within the enterprise’s 

investment amount and if the 

equipment falls under a tax-free 

category. Article 3 specifies that this 

program is limited to FIEs with 

completed tax registrations and with 

foreign investment in excess of 25 

percent of the total investment in the 

enterprise. Article 4 defines the type of 

equipment eligible for the VAT 

exemption, which includes equipment 

falling under the Encouraged and 

Restricted B categories listed in the 

Notice of the State Council Concerning 

the Adjustment of Taxation Policies for 

Imported Equipment (No. 37 (1997)) and 

equipment for projects listed in the 

Catalogue of Key Industries, Products 

and Technologies Encouraged for 

Development by the State. To receive 

the rebate, an FIE must meet the 

requirements above and, prior to the 

equipment purchase, bring its 

‘‘Registration Handbook for Purchase of 

Domestically Produced Equipment by 

FIEs’’ as well as additional registration 

documents to the taxation 

administration for registration. After 

purchasing the equipment, FIEs must 

complete a Declaration Form for Tax 

Refund (or Exemption) of Exported 

Goods, and submit it with the 

registration documents to the tax 

administration. The Department has 

previously found this program to be 

countervailable. See CFS from the PRC. 

TTCA reported receiving VAT rebates 

on its purchases of domestically 

produced equipment under this 

program. Yixing Union and 


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Cogeneration did not use this program 

during the POI. 

We preliminarily determine that the 

rebate of the VAT paid on purchases of 

domestically produced equipment by 

FIEs confers a countervailable subsidy. 

The rebates are a financial contribution 

in the form of revenue forgone by the 

GOC and they provide a benefit to the 

recipients in the amount of the tax 

savings. See section 771(5)(D)(ii) of the 

Act and 19 CFR 351.510(a)(1). We 

further preliminarily determine that the 

VAT rebates are contingent upon the 

use of domestic over imported goods 

and, hence, specific under section 

771(5A)(C) of the Act. 

Normally, we treat exemptions from 

indirect taxes and import charges, such 

as VAT rebates, as recurring benefits, 

consistent with 19 CFR 351.524(c)(1), 

and allocate these benefits only in the 

year that they were received. However, 

when an indirect tax or import charge 

exemption is provided for, or tied to, the 

capital structure or capital assets of a 

firm, the Department may treat it as a 

non-recurring benefit and allocate the 

benefit to the firm over the AUL. See 19 

CFR 351.524(c)(2)(iii) and 19 CFR 

351.524(d)(2). 

We requested that TTCA identify the 

category/kind of equipment for which it 

received VAT rebates from 2001 through 

the end of the POI. For one year, the 

total amount of the VAT rebates 

approved was less than 0.5 percent of 

TTCA’s total sales for that year. For that 

year, therefore, we do not reach the 

issue of whether the VAT rebates were 

tied to the capital structure or capital 

assets of the firm. Instead, we expense 

the benefit to the year in which it is 

received, consistent with 19 CFR 

351.524(a). 

In another year, however, the total 

amount of VAT rebates exceeded 0.5 

percent of TTCA’s total sales for that 

year. Based on TTCA’s reported 

information, the VAT rebates were for 

capital equipment. See TQR, at Exhibit 

39. Accordingly, the Department is 

treating the VAT rebates for this year as 

a non-recurring benefit consistent with 

19 CFR 351.524(c)(2)(iii). 

To calculate the countervailable 

subsidy for TTCA, we used our standard 

methodology for non-recurring benefits. 

See 19 CFR 351.524(b) and the 

Allocation Period section of this notice. 

Specifically, we used the discount rate 

described above in the Benchmarks and 

Discount Rates section to calculate the 

amount of the benefit for the POI. On 

this basis, we preliminarily determine 

that a countervailable subsidy of 0.23 

percent ad valorem exists for TTCA. 

H. VAT and Duty Exemptions on 

Imported Equipment 

Enacted in 1997, the Circular of the 

State Council on Adjusting Tax Policies 

on Imported Equipment (GUOFA No. 

37) (‘‘Circular No. 37’’) exempts both 

FIEs and certain domestic enterprises 

from the VAT and tariffs on imported 

equipment used in their production so 

long as the equipment does not fall into 

prescribed lists of non-eligible items. 

Qualified enterprises receive a 

certificate either from the NDRC or its 

provincial branch. The objective of the 

program is to encourage foreign 

investment and to introduce foreign 

advanced technology equipment and 

industry technology upgrades. To 

receive the exemptions, qualified 

enterprises must adequately document 

both the product eligibility and the 

eligibility of the imported article to the 

local Customs authority. The 

Department has previously found this 

program to be countervailable. See CFS 

from the PRC and Tires from the PRC. 

TTCA, Yixing Union and 

Cogeneration reported receiving VAT 

and duty exemptions under this 

program. 

We preliminarily determine that VAT 

and tariff exemptions on imported 

equipment confer a countervailable 

subsidy. The exemptions are a financial 

contribution in the form of revenue 

forgone by the GOC and they provide a 

benefit to the recipients in the amount 

of the VAT and tariff savings. See 

section 771(5)(D)(ii) of the Act and 19 

CFR 351.510(a)(1). We further determine 

the VAT and tariff exemptions under 

this program are specific under section 

771(5A)(D)(iii)(I) because the program is 

limited to certain enterprises. See CFS 

Decision Memorandum, at Comment 16. 

Normally, we treat exemptions from 

indirect taxes and import charges, such 

as the VAT and tariff exemptions, as 

recurring benefits, consistent with 19 

CFR 351.524(c)(1), and allocate these 

benefits only in the year that they were 

received. However, when an indirect tax 

or import charge exemption is provided 

for, or tied to, the capital structure or 

capital assets of a firm, the Department 

may treat it as a non-recurring benefit 

and allocate the benefit to the firm over 

the AUL. See 19 CFR 351.524(c)(2)(iii) 

and 19 CFR 351.524(d)(2). 

For TTCA, the total amount of the 

VAT and tariff exemptions for each year 

approved was less than 0.5 percent of 

TTCA’s total sales for the respective 

year. Therefore, we do not reach the 

issue of whether TTCA’s VAT and tariff 

exemptions were tied to the capital 

structure or capital assets of the firm. 

Instead, we expense the benefit to the 

year in which the benefit is received, 

consistent with 19 CFR 351.524(a). On 

this basis, we preliminarily determine 

that a countervailable subsidy of 0.08 

percent ad valorem exists for TTCA. 

For Yixing Union, the total amount of 

the VAT and tariff exemptions approved 

for some years was less than 0.5 percent 

of Yixing Union’s total sales. Therefore, 

we have expensed those amounts in the 

year in which they were received, 

consistent with 19 CFR 351.524(a). For 

those years in which the approved VAT 

and tariff exemptions were greater than 

0.5 percent of Yixing Union’s total sales 

for that year, we are treating the 

exemptions as non-recurring benefits, 

consistent with 19 CFR 

351.524(c)(2)(iii), and allocating the 

benefits over the AUL. 

For Cogeneration, the total amount of 

the VAT and tariff exemptions approved 

for some years was less than 0.5 percent 

of the combined total sales of Yixing 

Union and Cogeneration (less any sales 

between the two companies) in those 

years. Therefore, we have expensed 

those amounts in the year in which they 

are received, consistent with 19 CFR 

351.524(a). In other years, the VAT and 

tariff exemptions approved for 

Cogeneration were greater than 0.5 

percent of the combined sales of Yixing 

Union and Cogeneration (less any sales 

between the two companies) sales for 

that year. Accordingly, we are treating 

the exemptions as non-recurring 

benefits, consistent with 19 CFR 

351.524(c)(2)(iii), and allocating the 

benefit(s) over the AUL. 

To calculate the benefit for Yixing 

Union, we used our standard 

methodology for non-recurring benefits. 

See 19 CFR 351.524(b). Specifically, we 

used the discount rate described above 

in the ‘‘Benchmarks and Discount 

Rates’’ section to calculate the amount 

of the benefit for the POI. First, we 

divided Yixing Union’s VAT and tariff 

exemptions by Yixing Union’s total 

sales during that period. Next, we 

divided Cogeneration’s VAT and tariff 

exemptions by the combined total sales 

of Yixing Union and Cogeneration (less 

any sales between the two companies) 

during that period. Finally, we summed 

these two rates. On this basis, we 

preliminarily determine that Yixing 

Union received a countervailable 

subsidy of 0.69 percent ad valorem 

under this program. 

I. Local Income Tax Exemption and 

Reduction Program for ‘‘Productive’’ 

FIEs 

Under Article 9 of the FIE Tax Law, 

the provincial governments have the 

authority to exempt the local income tax 

of three percent to FIEs. According to 


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the Regulations on Exemption and 

Reduction of Local Income Tax of FIEs 

in Jiangsu Province, (see GOC CVD 

Questionnaire Response at Exhibit I–V– 

3) a ‘‘productive’’ FIE may be exempted 

from the 3 percent local income tax 

during the ‘‘Two Free, Three Half’’ 

period. Additionally, according to 

Article 6, FIEs eligible for the reduced 

income tax rate of 15 percent can also 

be exempted from paying local income 

tax. The Department has previously 

found this program to be 

countervailable. See CFS from the PRC 

and Tires from the PRC. 

Yixing Union and Cogeneration 

reported receiving an exemption from 

local income tax during the POI. TTCA, 

however, did not use this program 

during the POI. 

We preliminarily determine that the 

exemption from the local income tax 

received by ‘‘productive’’ FIEs under 

this program confers a countervailable 

subsidy. The exemption is a financial 

contribution in the form of revenue 

forgone by the government and it 

provides a benefit to the recipient in the 

amount of the tax savings. See section 

771(5)(D)(ii) of the Act and 19 CFR 

351.509(a)(1). We also preliminarily 

determine that the exemption afforded 

by this program is limited as a matter of 

law to certain enterprises, ‘‘productive’’ 

FIEs, and, hence, is specific under 

section 771(5A)(D)(i) of the Act. 

To calculate the benefit for Yixing 

Union, we treated the income tax 

savings enjoyed by Yixing Union and 

Cogeneration as a recurring benefit, 

consistent with 19 CFR 351.524(c)(1). 

To compute the amount of the tax 

savings, we compared the local income 

tax rate Yixing Union and Cogeneration 

would have paid in the absence of the 

program (i.e., three percent) with the 

income tax rate the companies actually 

paid. First, we divided Yixing Union’s 

tax savings received during the POI by 

Yixing Union’s total sales during that 

period. Second, we divided 

Cogeneration’s tax savings received 

during the POI by the combined total 

sales of Yixing Union and Cogeneration 

(less any sales between the two 

companies) during that period. Finally, 

we summed these two rates. On this 

basis, we preliminarily determine that 

Yixing Union received a countervailable 

subsidy of 0.50 percent ad valorem 

under this program. 

J. Anqiu Finance Bureau Grant 

TTCA reported receiving three grants 

in 2007 related to technology 

achievements and energy saving 

projects. See TQR, at page 49. Two of 

the grants are discussed in the 

‘‘Programs Preliminarily Determined To 

Be Not Countervailable’’ section below. 

Current information on the record does 

not indicate that these grants are tied to 

any of the other programs discussed in 

this notice. Further, it does not appear 

that the Department has previously 

investigated any of the programs. 

TTCA reported receiving a nonrecurring grant in 2007 from the Anqiu 

Finance Bureau. See TQR, at page 49. 

The GOC reported that to receive this 

grant an enterprise submits a project 

feasibility study to the municipal 

government who then, in turn, 

recommends the project to the 

Administration of Finance of Shandong 

Province and the Economic and Trade 

Commission of Shandong Province for 

approval. See G1SR (8/27), at Exhibit 

S1–18–3. We find that this grant is a 

direct transfer of funds within the 

meaning of section 771(5)(D)(i) of the 

Act, providing a benefit in the amount 

of the grant. See 19 CFR 351.504(a). 

Regarding specificity, information 

submitted by the GOC shows that grants 

provided under the program are 

available to enterprises whose projects 

meet certain energy and water saving 

criteria and are deemed to have 

economic and social benefit. See G1SR 

(8/27), at pages 27 and 29. The GOC 

reported that eligibility is not limited by 

law or in fact, to any enterprise or group 

of enterprises, or to any industry or 

group of industries. See G1SR (8/2), at 

page 28. Therefore, we preliminarily 

determine that there is no basis to find 

this program de jure specific under 

section 771(5A)(D)(i) of the Act. 

In determining whether this program 

is de facto specific, we examine the four 

de facto specificity factors under section 

771(5A)(D)(iii) of the Act. Section 

771(5A)(D)(iii) of the Act also provides 

that we take into account the length of 

time during which a subsidy program 

has been in operation when evaluating 

the four de facto specificity factors. In 

the case of a new subsidy program, the 

first three de facto specificity factors 

(i.e., limited number of users, dominant 

users, or disproportionately large user) 

may provide little or misleading 

indications regarding whether a 

program is de facto specific. See 

Countervailing Duties; Final Rule, 63 FR 

65348, 65356 (November 25, 1998) 

(‘‘CVD Preamble’’); SAA, at page 931. 

The GOC provided partial program 

usage data for 2006 and 2007 (the GOC 

stated that it had information on the 

number of grants but not the amount of 

grants) because the program only began 

in 2006. See G1SR (9/2), at page 14. 

Consequently, in accordance with the 

CVD Preamble, we next consider the 

fourth de facto specificity factor (i.e., 

discretion) because the manner in 

which the GOC has exercised its 

discretion in the early stages of this 

program (e.g., by excluding certain 

applicants and limiting the benefit to a 

particular industry) might impact our 

analysis of the first three de facto 

specificity factors. See CVD Preamble, 

63 FR at 65356; SAA, at page 931. 

As noted above, in addition to 

meeting specified energy and water 

saving criteria, projects submitted by 

enterprises must be recommended by 

municipal levels of government and 

deemed to provide economic and social 

benefit to receive the grant. See G1SR 

(8/27), at page 29. It appears that the 

GOC has the ability to exercise 

discretion in the decision to provide 

grants under this program. 

Consequently, in contrast to the 

‘‘Investment Development Award’’ 

program noted below, at the early stage 

of this program, we are able to rely on 

the first three de facto specify factors 

provided under 771(5A)(D)(iii) of the 

Act to preliminarily determine whether 

this program is specific as a matter of 

fact. 

The GOC usage data indicates six 

enterprises comprising two industries 

received grants in 2007. See G1SR (9/2), 

at page 14. Consequently, we find that 

the actual recipients of the subsidy are 

limited in number on both an enterprise 

and industry basis within the meaning 

of section 771(5A)(D)(iii)(I) of the Act. 

Further, in accordance with the 

Department’s regulations, our de facto 

specificity analysis is sequential and we 

will find a domestic subsidy to be 

specific based on the presence of a 

single factor. See 19 CFR 351.502(a). 

Therefore, we are not performing an 

analysis to determine whether the 

enterprise or industry is a dominant or 

disproportionately large user. In 

addition, as noted above, the GOC did 

not provide the amounts of benefits 

received by industry, which is required 

to determine dominant or 

disproportionately large usage. 

To calculate the benefit, we divided 

the amount received from the nonrecurring grant by TTCA’s total sales in 

2007. On this basis, we preliminarily 

determine the countervailable subsidy 

to be 0.20 percent ad valorem for this 

program. 

II. Programs Preliminarily Determined 

To Be Not Countervailable 

A. Excessive VAT Rebates on Export 

The GOC began refunding the VAT for 

exported products in 1984. See, GQR, at 

page 83. The current rules governing the 

program, Provisional VAT Rules of 

China (Decree 134 of the State Council) 

(‘‘Provisional VAT Rules’’), were 


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promulgated in 1993. See id., at Exhibit 

I–T–3. Article 25 of the Provisional VAT 

Rules permits VAT rebates for exports. 

The GOC argues that an excessive 

rebate of VAT upon exports is not 

possible given the manner in which the 

system is structured. 

The Department has consistently 

found that the GOC’s program to rebate 

VAT on exports does not result in an 

excessive VAT remission. See CWP 

Decision Memorandum, at page 16; 

LWRP Decision Memorandum at page 

11; and Tires Decision Memorandum, at 

page 24. In those cases, we found no 

subsidy because VAT was assessed on 

home market sales at a rate of 17 

percent, while the rebate was set at 13 

percent. The same is true with respect 

to citric acid. See GQR, at page 80. 

Therefore, consistent with 19 CFR 

351.517(a) and the above-cited 

determinations, we preliminarily find 

the VAT remission upon export is not 

excessive and does not confer a 

countervailable subsidy on the subject 

merchandise. 

In their allegation, petitioners 

additionally noted that citric acid 

producers may not pay VAT on their 

agricultural inputs. The GOC and the 

responding companies have reported 

that the VAT rate on corn (the 

agricultural input used to produce citric 

acid) is 13 percent and that this amount 

is paid by the citric acid producers on 

their purchases. See id., at page 80; 

TQR, at page 30; and YQR, at page 21. 

The GOC has further responded that: (i) 

Sellers of goods are responsible for 

paying the VAT to the government 

(Article 1 of the Provisional VAT Rules) 

and (ii) agricultural products sold by the 

agricultural producers that produce 

them are exempt from VAT (Article 16 

of the Provisional VAT Rules). See G1SR 

(8/27), at page 13. Thus, citric acid 

producers pay a VAT on their corn 

purchases in the sense that the VAT 

appears on the purchase invoices for 

corn and they deduct this VAT in 

preparing their VAT reconciliations (to 

calculate the amount of VAT they must 

remit on their sales of citric acid), but 

no VAT is remitted to the government 

by the agricultural producers selling the 

corn. 

Because citric acid producers pay the 

VAT on their corn purchases and it is 

the agricultural producers who are 

exempted from paying the VAT on their 

sales, we preliminarily determine that 

any potential subsidy arising from this 

exemption is conferred on the 

agricultural producers and not on the 

purchasers (i.e., citric acid producers). 

Therefore, we preliminarily determine 

that the VAT exemption on agricultural 

products does not provide a 

countervailable subsidy on the subject 

merchandise. 

As noted above, the VAT rate set for 

corn is 13 percent. TTCA reported that 

it was exempted from paying that VAT 

on its sales of corn scrap during the POI. 

See TQR, at page 49. Because any 

potential subsidy from such an 

exemption would be tied to sales of corn 

scrap, in accordance with 19 CFR 

351.525(b)(5)(i), we preliminarily 

determine that there is no 

countervailable subsidy conferred on 

subject merchandise from the VAT 

exemption on corn scrap sales. 

B. Science and Technology Reward— 

Anqiu City 

TTCA reported receiving a grant in 

2007 as the result of a science and 

technology award. See TQR, at page 49. 

To calculate the potential benefit, we 

divided the amount received by TTCA’s 

total sales in 2007. On this basis, we 

preliminarily determine that a potential 

countervailable subsidy of less than .005 

percent ad valorem exists for TTCA. See 

TTCA Preliminary Calc Memo, at page 

9. Where the countervailable subsidy 

rate for a program is less than .005 

percent, the program is not included in 

the total CVD rate. See, e.g., Final 

Results of Countervailing Duty 

Administrative Review: Low Enriched 

Uranium from France, 70 FR 39998 

(July 12, 2005), and the accompanying 

Issues and Decision Memorandum at 

‘‘Purchases at Prices that Constitute 

‘More than Adequate Remuneration’’’ 

(citing Final Results of Administrative 

Review: Certain Softwood Lumber 

Products from Canada, 69 FR 75917 

(December 20, 2004)). Consequently, we 

are exercising our discretion to not 

investigate the benefit provided by this 

non-recurring subsidy. 

C. Investment Development Award— 

Government of Anqiu 

TTCA was awarded the first grant 

under the ‘‘Investment Development 

Award’’ program by the People’s 

Government of Anqiu for TTCA’s 

investment in a technology project. See 

G1SR (8/27), at Exhibit S1–18–1, page 3. 

We find that this grant is a direct 

transfer of funds within the meaning of 

section 771(5)(D)(i) of the Act, providing 

a benefit in the amount of the grant. See 

19 CFR 351.504(a). 

Regarding specificity, information 

submitted by the GOC shows that grants 

provided under the program are 

available to any enterprise that has 

productive fixed asset investment for a 

single project of more than RMB 10 

million. See G1SR (8/27), at Exhibit S1– 

18–1. If the aforementioned criterion is 

met, any enterprise will receive a 

benefit and there is no discretion to 

approve or disapprove. See id. Further, 

the GOC reported that eligibility is not 

limited by law or in fact, to any 

enterprise or group of enterprises, or to 

any industry or group of industries. See 

G1SR (8/27), at page 17. Therefore, we 

preliminarily determine that there is no 

basis to find this program de jure 

specific under section 771(5A)(D)(i) of 

the Act. 

In determining whether this program 

is de facto specific, we must examine 

the four de facto specificity factors 

under section 771(5A)(D)(iii) of the Act. 

Section 771(5A)(D)(iii) of the Act also 

provides that we take into account the 

length of time during which a subsidy 

program has been in operation when 

evaluating the four de facto specificity 

factors. In the case of a new subsidy 

program, the first three de facto 

specificity factors (i.e., limited number 

of users, dominant users, or 

disproportionately large user) may 

provide little or misleading indications 

regarding whether a program is de facto 

specific. See CVD Preamble at 65356; 

SAA, at page 931. 

The GOC provided program usage 

data for 2007 only because the 

‘‘Investment Development Award’’ 

program was created in 2006, with no 

awards bestowed until 2007. See G1SR 

(8/27), at pages 14 and 18. Although the 

number of users were not large during 

the period, in accordance with the CVD 

Preamble, we also consider the fourth 

de facto specificity factor (i.e., 

discretion) because the manner in 

which the GOC has exercised its 

discretion in the early stages of this 

program (e.g., by excluding certain 

applicants and limiting the benefit to a 

particular industry) might impact our 

analysis of the first three de facto 

specificity factors. See CVD Preamble, 

63 FR at 65356; SAA, at page 931. 

As noted above, any enterprise will 

receive grants provided under the 

‘‘Investment Development Award’’ 

program if the enterprise meets a 

specified project investment threshold. 

It appears that the GOC does not have 

the ability to exercise discretion in the 

decision to provide grants under this 

program. Therefore, due to the GOC’s 

apparent lack of discretion, at the early 

stage of this program, we preliminarily 

determine that it is not appropriate to 

rely on an analysis of the first three de 

facto specify factors provided under 

771(5A)(D)(iii) of the Act to determine 

whether this program is specific as a 

matter of fact. Consequently, we do not 

find any basis to determine that the 

program is specific. 


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III. Programs Preliminarily Determined 

To Be Not Used By TTCA and Yixing 

Union 

A. Discounted Loans for Export-Oriented 

Industries 

B. Funds Provided for the Rationalization of 

the Citric Acid Industry 

C. Loans Provided to the Northeast 

Revitalization Program 

D. State Key Technology Renovation Project 

Fund 

E. National Level Grants to Loss-making 

SOEs 

F. Reduced Income Tax Rate for High or New 

Technology Enterprises 

G. Income Tax Exemption Program for 

Export-Oriented FIEs 

H. Tax Benefits to FIEs for Certain 

Reinvestment of Profits 

I. Preferential Income Tax Rate for Research 

and Development at FIEs 

J. Preferential Tax Programs for Encouraged 

Industries 

K. Preferential Tax Policies for Township 

Enterprises 

L. Provincial Level Grants to Loss-making 

SOEs 

M. Reduced Income Tax Rates for 

Encouraged Industries in Anhui Province 

N. Provision of Land for Less Than Adequate 

Remuneration in Anhui Province 

O. Funds for Outward Expansion of 

Industries in Guangdong Province 

P. Income Tax Exemption for FIEs Located in 

Jiangsu Province 

In our initiation, we included the 

program ‘‘Income Tax Exemption for 

FIEs located in Jiangsu Province.’’ 

According to the GOC, the Regulations 

on Exemption and Reduction of Local 

Income Tax of FIEs in Jiangsu Province 

(Order of the People’s Government of 

Jiangsu Province, June 17, 1992) 

includes a ‘‘basket’’ of benefits which 

can be enjoyed by FIEs located in 

Jiangsu province. See GQR, at Exhibit I– 

V–3. 

Certain benefits under this program 

are already addressed under the ‘‘Two 

Free, Three Half’’ program and the 

‘‘Local Income Tax Exemption and 

Reduction Program for ’Productive’ 

FIEs.’’ Therefore, we are treating the 

‘‘Income Tax Exemption for FIEs located 

in Jiangsu Province’’ as not used during 

the POI to avoid the double-counting of 

subsidies. 

Q. Preferential Tax Programs for Enterprises 

Located in the Su Qian Economic 

Development Zone 

R. Provision of Land for LTAR in the Su Qian 

Economic Development Zone 

S. Provision of Electricity for LTAR in the Su 

Qian Economic Development Zone 

T. Loans and Interest Subsidies Pursuant to 

the Liaoning Province’s Five-Year 

Framework 

U. Local Income Tax Exemptions and 

Reductions for Firms Located in Qilu 

Chemicals Industry Park 

V. Preferential Tax Program for Enterprises 

Located in Shanxi Province 

W. Funding for Enterprises under the Shanxi 

Province 10th Five-Year Plan 

X. Export Interest Subsidy Funds for 

Enterprises Located in Shenzhen City 

Y. Export Interest Subsidy Funds for 

Enterprises Located in Zhejiang Province 

Z. Exemptions and Reductions in Taxes and 

Fees for Chemical Research and 

Development Institutions Located in 

Zhejiang Province 

AA. Provision of Land for LTAR for 

Enterprises Located in Hangzhou Bay 

Chemical Park 

BB. Provision of Electricity for LTAR for 

Enterprises Located in Hangzhou Bay 

Chemical Park 

VI. Programs for Which More 

Information Is Required 

As mentioned under the Case History 

section of this notice, the Department 

recently determined to investigate 

several additional alleged subsides 

including: The Provision of TTCA’s 

Plant and Equipment for LTAR; 

Provision of Land to SOEs for LTAR; 

Provision of Land in the YEDZ for 

LTAR; Provision of Land-use Fees in 

Jiangsu Province for LTAR; Provision of 

Land in the Anqiu City Economic 

Development Zone for LTAR; 

Administration Fee Exemption in Anqiu 

City; Exemption of Water and Sewage 

Fees in Anqiu City; Tax Grants, Rebates 

and Credits in the Yixing Economic 

Development Zone (‘‘YEDZ’’); Provision 

of Water in the YEDZ for LTAR; 

Provision of Electricity in the YEDZ for 

LTAR; Provision of Construction 

Services in the YEDZ for LTAR; 

Administration Fee Exemption in the 

YEDZ; and Grants to FIEs for Projects in 

the YEDZ. We intend to seek 

information on these programs from the 

GOC and the respondents, and issue an 

interim analysis describing our 

preliminary findings with respect to 

these programs before the final 

determination so that parties will have 

the opportunity to comment on our 

findings. 

Verification 

In accordance with section 782(i)(1) of 

the Act, we will verify the information 

submitted by the respondents prior to 

making our final determination. 

Suspension of Liquidation 

In accordance with section 

703(d)(1)(A)(i) of the Act, we calculated 

an individual rate for each producer/ 

exporter of the subject merchandise. We 

preliminarily determine the total 

estimated net countervailable subsidy 

rates to be: 

Exporter/manufacturer Net subsidy 

rate 

TTCA Co., Ltd. ......................... 1.41 

Exporter/manufacturer Net subsidy 

rate 

Yixing Union Biochemical Co., 

Ltd.; and Yixing Union Cogeneration Co., Ltd. .............. 3.92 

Anhui BBCA Biochemical Co., 

Ltd. ........................................ 97.72 

All-Others .................................. 2.67 

In accordance with section 

703(d)(1)(A)(i) of the Act, we have 

calculated an individual rate for the 

companies under investigation, Anhui 

BBCA, TTCA and Yixing Union. 

Sections 703(d) and 705(c)(5)(A)(i) of 

the Act states that for companies not 

investigated, we will determine an allothers rate equal to the weighted 

average countervailable subsidy rates 

established for exporters and producers 

individually investigated, excluding any 

zero and de minimis countervailable 

subsidy rates, and any rates determined 

entirely under section 776 of the Act. 

Petitioners contend that because 

Anhui BBCA is owned by the 

government, the Department cannot 

treat the GOC as cooperative and Anhui 

BBCA as non-cooperative. See 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at page 4. 

Consequently, Petitioners argue that 

because the GOC is a fully cooperating 

respondent, Anhui BBCA’s rate cannot 

be excluded from the all-others rate. See 

Petitioners’ Comments on Anhui BBCA 

and the all-others Rate, at page 3. 

Finally, Petitioners believe that Anhui 

BBCA is not participating in this 

investigation in an attempt to avoid its 

inclusion in the calculation of the allothers rate. See Petitioners’ Comments 

on Anhui BBCA and the All-Others 

Rate, at page 4. Petitions cite to Live 

Cattle From Canada, where the 

Department included a non-cooperating 

respondent in the calculation of the allothers rate to mitigate potential selective 

participation by respondents. See 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at pages 5 and 

6, citing Notice of Final Determination 

of Sales at Less Than Fair Value: Live 

Cattle From Canada, 64 FR 56768, 

56743 (October 21, 1999) (‘‘Live Cattle 

From Canada’’). 

The GOC notes that section 

705(c)(5)(A)(i) of the Act explains that 

the all-others rate must exclude any 

rates determined entirely under section 

776 of the Act (i.e., a rate determined 

using facts otherwise available) and the 

statute affords the Department no 

discretion to do otherwise. See GOC’s 

Response to Petitioners’ Comments on 

Anhui BBCA and the All-Others Rate, at 

page 2. Also, the GOC believes that 

Petitioners’ reliance upon Live Cattle 


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Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 54383 

From Canada is misplaced. See GOC’s 

Response to Petitioners’ Comments on 

Anhui BBCA and the All-Others Rate, at 

pages 3–5. Finally, the GOC argues that 

the Department has always treated the 

GOC and SOEs as distinct entities. 

Otherwise, it would be difficult to 

understand how the Department could 

evaluate a single entity providing a 

financial contribution or benefit to 

itself. See GOC’s Response to 

Petitioners’ Comments on Anhui BBCA 

and the All-Others Rate, at page 9. 

As noted in the Use of Facts 

Otherwise Available section above, 

because Anhui BBCA did not respond to 

the Department’s questionnaire, 

pursuant to section 776(a)(2)(A) and (C) 

of the Act, we have based the CVD rate 

of Anhui BBCA entirely on facts 

otherwise available. The fact that Anhui 

BBCA is an SOE does not mean that the 

GOC’s participation makes Anhui BBCA 

a cooperative respondent. Nor does it 

lead us to conclude that the rate we 

have calculated for Anhui BBCA is 

based on anything other than facts 

available. 

With respect to Live Cattle From 

Canada, the Department is clearly 

concerned when a company withdraws 

its response in order to manipulate an 

all-others rate. However, those are not 

the facts we have here. Anhui BBCA 

elected not to respond to the 

questionnaire. This occurs frequently in 

our investigations (and administrative 

reviews). Section 776(b) establishes the 

means for addressing this, i.e., the 

application of AFA, which is what we 

have done in this case. Therefore, 

because Anhui BBCA’s rate is based 

entirely on facts available, we are not 

including it in the all-others rate, 

pursuant to section 705(c)(5)(A)(i) of the 

Act. 

To calculate the all-others rate, we 

have taken a simple average of the two 

responding firms’ rates. We have not 

weight averaged the rates of TTCA and 

Yixing Union because doing so risks 

disclosure of proprietary information. 

Finally, because TTCA’s rate includes 

export subsidies, the all-others rate also 

includes export subsidies. 

In accordance with sections 

703(d)(1)(B) and (2) of the Act, we are 

directing U.S. Customs and Border 

Protection (‘‘CBP’’) to suspend 

liquidation of all entries of citric acid 

from the PRC that are entered, or 

withdrawn from warehouse, for 

consumption on or after the date of the 

publication of this notice in the Federal 

Register, and to require a cash deposit 

or bond for such entries of merchandise 

in the amounts indicated above. 

Program-Wide Change 

In the GOC Pre-Prelim Comments, the 

GOC argues that if the Department 

preliminarily finds countervailable 

certain programs related to the FIE Tax 

Law (e.g., ‘‘Two Free, Three Half,’’ 

‘‘Local Income Tax Exemption and 

Reduction Program for ’Productive’ 

FIEs,’’ and ‘‘Income Tax Exemption for 

FIEs Located in Jiangsu Province’’), it 

should exclude these rates from the 

companies’ cash deposit rate pursuant 

to 19 CFR 351.526, due to a programwide change. Specifically, the law that 

established these programs, the FIE Tax 

Law, was repealed effective January 1, 

2008. Thus, according to the GOC, the 

programs terminated before the 

preliminary determination. The GOC 

further contends that no respondent can 

receive residual benefits under the 

‘‘Two Free, Three Half’’ program and 

that no companies can receive residual 

benefits under the ‘‘Local Income Tax 

Exemption and Reduction Program for 

‘Productive’ FIEs’’ or the ‘‘Income Tax 

Exemption for FIEs Located in Jiangsu 

Province.’’ 

Under 19 CFR 351.526(b), a programwide change: ‘‘(1) Is not limited to an 

individual firm or firms; and (2) is 

effectuated by an official act * * * ’’ 

Moreover, 19 CFR 351.526(a) states that 

the Department may take a programwide change into account when 

establishing the estimated CVD cash 

deposit rate if (1) the program-wide 

change occurred subsequent to the POI, 

but prior to the preliminary 

determination; and (2) the change in the 

amount of countervailable subsidies 

provided under the program is able to 

be measured. However, the Department 

will not adjust the cash deposit rate for 

a terminated program if we determine 

that residual benefits may continue to 

be bestowed pursuant to 19 CFR 

351.526(d)(1). 

For the ‘‘Two Free, Three Half’’ 

program, we agree with the GOC that 

the FIE Tax Law was repealed prior to 

the date of the preliminary 

determination and may meet the criteria 

under 19 CFR 351.526(b)(2). However, 

in its responses to the Department’s 

questions on the ‘‘Two Free, Three 

Half’’ program, the GOC stated that once 

the FIE Tax Law was repealed, the 

Corporate Income Tax Law became 

effective. See GQR at I–64. According to 

Article 57 of the Corporate Income Tax 

Law, and provisions of the State 

Council, enterprises established prior to 

the promulgation of the Corporate 

Income Tax Law may enjoy reduced tax 

rates and continue to enjoy preferential 

treatments within five years after the 

law is promulgated. Additionally, 

companies that have not been able to 

enjoy the preferential treatments of the 

FIE Tax Law, before the termination of 

the law because the enterprise was 

unprofitable, can still claim benefits 

under the new Corporate Income Tax 

Law. 

Although the GOC may be correct in 

its statement that no respondent will 

enjoy residual benefits from this 

program, the Corporate Income Tax Law 

allows FIEs within the PRC to continue 

to receive benefits from this program 

beyond the termination date. The GOC 

makes note of this fact in its response. 

See G1SR (8/27), at page 10. Thus, while 

benefits to the two cooperating 

respondents in this investigation would 

be terminated under the programs 

examined, the program’s overall 

residual benefits have not been 

terminated. Therefore, we preliminarily 

determine that the criteria under 19 CFR 

351.526(a) have not been met and we 

decline to adjust Yixing Union’s rate to 

reflect termination of the program. See 

19 CFR 351.526(d)(1). 

For the ‘‘Local Income Tax Exemption 

and Reduction Programs for ‘Productive’ 

FIEs,’’ the GOC has stated in its 

response that there are no provisions 

continuing this program in the 

Corporate Income Tax Law. See GQR, at 

page 93. Based on our review of the 

Corporate Income Tax Law, we are not 

able to confirm the GOC’s claim. 

Moreover, the Notice of the State 

Council on the Implementation of the 

Transitional Preferential Policies in 

respect of Enterprise Income Tax (No. 

39 of the State Council) states that 

enterprises that previously benefited 

from the ‘‘Two Free, Three Half’’ 

program and other preferential 

treatment in the form of tax deductions 

and exemptions may continue to enjoy 

those benefits. Therefore, it is unclear 

whether local income tax reductions 

and exemptions will continue for some 

transition period. Thus, we 

preliminarily determine that the criteria 

under 19 CFR 351.526(a) have not been 

met and decline to set Yixing Union’s 

rate to reflect termination of the 

program. 

For the ‘‘Income Tax Exemption for 

FIEs Located in Jiangsu Province,’’ the 

benefits received under this program 

have already been captured under the 

‘‘Local Income Tax Exemption and 

Reduction Program for ‘Productive’ 

FIEs’’ program, and ‘‘Two Free, Three 

Half’’ program. Therefore, no rate has 

been set for this program. 

ITC Notification 

In accordance with section 703(f) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 


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54384 Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 

making available to the ITC all nonprivileged and non-proprietary 

information relating to this 

investigation. We will allow the ITC 

access to all privileged and business 

proprietary information in our files, 

provided the ITC confirms that it will 

not disclose such information, either 

publicly or under an administrative 

protective order, without the written 

consent of the Assistant Secretary for 

Import Administration. 

In accordance with section 705(b)(2) 

of the Act, if our final determination is 

affirmative, the ITC will make its final 

determination within 45 days after the 

Department makes its final 

determination. 

Disclosure and Public Comment 

In accordance with 19 CFR 

351.224(b), we will disclose to the 

parties the calculations for this 

preliminary determination within five 

days of its announcement. Case briefs 

for this investigation must be submitted 

no later than one week after the 

issuance of the last verification report. 

See 19 CFR 351.309(c) (for a further 

discussion of case briefs). Rebuttal briefs 

must be filed within five days after the 

deadline for submission of case briefs, 

pursuant to 19 CFR 351.309(d)(1). A list 

of authorities relied upon, a table of 

contents, and an executive summary of 

issues should accompany any briefs 

submitted to the Department. Executive 

summaries should be limited to five 

pages total, including footnotes. 

Section 774 of the Act provides that 

the Department will hold a public 

hearing to afford interested parties an 

opportunity to comment on arguments 

raised in case or rebuttal briefs, 

provided that such a hearing is 

requested by an interested party. If a 

request for a hearing is made in this 

investigation, the hearing will 

tentatively be held two days after the 

deadline for submission of the rebuttal 

briefs, pursuant to 19 CFR 351.310(d), at 

the U.S. Department of Commerce, 14th 

Street and Constitution Avenue, N.W., 

Washington, DC 20230. Parties should 

confirm by telephone the time, date, and 

place of the hearing 48 hours before the 

scheduled time. 

Interested parties who wish to request 

a hearing, or to participate if one is 

requested, must submit a written 

request to the Assistant Secretary for 

Import Administration, U.S. Department 

of Commerce, Room 1870, within 30 

days of the publication of this notice, 

pursuant to 19 CFR 351.310(c). Requests 

should contain: (1) The party’s name, 

address, and telephone; (2) the number 

of participants; and (3) a list of the 

issues to be discussed. Oral 

presentations will be limited to issues 

raised in the briefs. 

This determination is published 

pursuant to sections 703(f) and 777(i) of 

the Act. 

Dated: September 12, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–21949 Filed 9–18–08; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–AV00 

Atlantic Highly Migratory Species; 

Essential Fish Habitat 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of availability of a draft 

integrated environmental impact 

statement and a fishery management 

plan amendment; request for written 

comments; notice of public hearings. 

SUMMARY: NMFS announces the 

availability of an draft integrated 

environmental impact statement and 

fishery management plan amendment 

pursuant to the National Environmental 

Policy Act (NEPA) that examines 

alternatives to revise existing Highly 

Migratory Species (HMS) Essential Fish 

Habitat (EFH); considers additional 

Habitat Areas of Particular Concern 

(HAPCs); and analyzes fishing and non– 

fishing impacts on EFH consistent with 

the Magnuson–Stevens Fishery 

Conservation and Management Act 

(Magnuson–Stevens Act) and other 

relevant Federal laws. 

DATES: Public hearings for the draft 

integrated document will be held from 

September through December, 2008. See 

SUPPLEMENTARY INFORMATION for hearing 

dates, times, and locations. Written 

comments on this action must be 

received no later than 5 p.m., local time, 

on November 18, 2008. 

ADDRESSES: Public hearings will be held 

in Massachusetts, Delaware, Maryland, 

North Carolina, Florida, and Alabama. 

Written comments on this action must 

be sent to Chris Rilling, Highly 

Migratory Species Management Division 

by any of the following methods: 

• E-mail: HMSEFH@noaa.gov. 

• Mail: 1315 East–West Highway, 

Silver Spring, MD 20910. Please mark 

the outside of the envelope ‘‘Comments 

on EFH Amendment to HMS FMP.’’ 

• Fax: 301–713–1917. 

Copies of the draft Amendment 1 to 

the Consolidated Atlantic Highly 

Migratory Species (HMS) Fishery 

Management Plan (FMP) are available 

from the HMS website under Breaking 

News at http://www.nmfs.noaa.gov/sfa/ 

hms/ or by contacting Chris Rilling (see 

FOR FURTHER INFORMATION CONTACT). 

FOR FURTHER INFORMATION CONTACT: 

Chris Rilling or Sari Kiraly by phone at 

(301) 713–2347 or by fax at (301) 713– 

1917. 

SUPPLEMENTARY INFORMATION: The 

Magnuson–Stevens Act (16 U.S.C. 1801 

et seq.) as amended by the Sustainable 

Fisheries Act (Public Law 104–297) 

requires the identification and 

description of EFH in FMPs and the 

consideration of actions to ensure the 

conservation and enhancement of such 

habitat. The EFH regulatory guidelines 

(50 CFR 600.815) state that NMFS 

should periodically review and revise 

EFH, as warranted, based on available 

information. 

EFH, including HAPCs, for HMS was 

identified and described in the 1999 

FMP for Atlantic Tunas, Swordfish, and 

Sharks, and in the 1999 Amendment 1 

to the Atlantic Billfish FMP. EFH for 

five shark species was updated in the 

2003 Amendment 1 to that FMP. Later, 

NMFS reviewed all new and existing 

EFH data in the 2006 Consolidated HMS 

FMP and determined that revisions to 

existing EFH for some Atlantic HMS 

may be warranted. The draft integrated 

environmental impact statement and 

amendment to the Consolidated HMS 

FMP (hereafter Draft Amendment 1) 

proposes alternatives to amend the 

existing EFH identifications and 

descriptions. 

Habitat Areas of Particular Concern 

(HAPCs) 

To further the conservation and 

enhancement of EFH, the EFH 

guidelines encourage FMPs to identify 

HAPCs. HAPCs are areas within EFH 

that should be identified based on one 

or more of the following considerations: 

1) the importance of the ecological 

function provided by the habitat; 2) the 

extent to which the habitat is sensitive 

to human–induced environmental 

degradation; 3) whether, and to what 

extent, development activities are, or 

will be stressing the habitat type; and 4) 

the rarity of the habitat type. HAPCs can 

be used to focus conservation efforts on 

specific habitat types or areas that are 

especially important ecologically or 

particularly vulnerable to degradation. 

HAPCs are not required to have any 

specific management measures and an 

HAPC designation does not 


jlentini on PROD1PC65 with NOTICES