[Federal Register Volume 73, Number 192 (Thursday, October 2, 2008)]
[Notices]
[Pages 57323-57326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23271]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-921]


Lightweight Thermal Paper From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the ``Department'') has determined 
that countervailable subsidies are being provided to producers and 
exporters of lightweight thermal paper (``LWTP'') from the People's 
Republic of China (``PRC''). For information on the estimated 
countervailing duty rates, please see the ``Suspension of Liquidation'' 
section, below.

DATES: Effective Date: October 2, 2008.

FOR FURTHER INFORMATION CONTACT: David Layton, David Neubacher, or 
Scott Holland, 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) 482-0371, (202) 482-5823, or (202) 482-1279, respectively.

Petitioner

    The Petitioner in this investigation is Appleton Papers, Inc. 
(``the Petitioner'').

Period of Investigation

    The period for which we are measuring subsidies, or period of 
investigation (``POI''), is January 1, 2006, through December 31, 2006.

Case History

    The following events have occurred since the announcement of the 
preliminary determination on March 10, 2008. See Lightweight Thermal 
Paper 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 
13850 (March 14, 2007) (``Preliminary Determination'').
    The Department issued questionnaires to the Government of the 
People's Republic of China (``GOC''), Shanghai Hanhong Paper Co., Ltd. 
(``Hanhong''), Guangdong Guanhao High-Tech Co., Ltd. (``GG'') and GG's 
affiliated input supplier Zhanjiang Guanlong Paper Industrial Co., Ltd 
(``ZG'') regarding new subsidy allegations filed by the Petitioner on 
February 8 and February 14, 2008. We received responses to these 
questionnaires and to several supplemental questionnaires, and comments 
from the Petitioner regarding the responses.
    The Petitioner and GG/ZG submitted additional factual information 
consistent within the deadline for the submission of factual 
information established by 19 CFR 351.301(b)(1).
    In the Preliminary Determination, the Department stated that it 
would accept the claim of respondent Xiamen Anne Paper Co., Ltd. 
(``Xiamen Anne'') that it made no shipments of subject merchandise 
during the POI, subject to

[[Page 57324]]

verification.\1\ On May 6, 2008, counsel for Xiamen Anne informed the 
Department that Xiamen Anne would not participate further in the 
investigation and canceled the scheduled on-site verification of its 
shipments. See Memorandum to File, ``E-mail Correspondence with 
Respondent Xiamen Anne Paper Co. Ltd.'' (May 7, 2008) (``Xiamen Anne 
Memo''). On May 7, 2008, the Department informed Xiamen Anne that if it 
did not participate in the on-site verification, the Department might 
use facts otherwise available, in accordance with section 776 of the 
Tariff Act of 1930, as amended (``the Act'') and 19 CFR 351.308. See 
further discussion in the ``Use of Facts Otherwise Available'' section 
below.
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    \1\ See Preliminary Determination at 73 FR 13850.
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    From June 18 through July 1, 2008, we conducted verification of the 
questionnaire responses submitted by the GOC, Hanhong, GG and ZG.
    On September 2, 2008, we issued our post-preliminary determination 
regarding the new subsidy allegations and certain other programs 
discovered in the course of the investigation. See Memorandum to David 
M. Spooner, Assistant Secretary for Import Administration, entitled 
``Post-Preliminary Findings for New Subsidy Allegations,'' dated 
September 2, 2008, which is on file in the Central Records Unit 
(``CRU'').
    On September 2, 2008, the Department issued a preliminary 
determination that ZG was uncreditworthy for the years 2003 and 2004. 
See Memorandum from David Neubacher to Susan Kuhbach, Senior Director, 
Office 1, regarding ``Preliminary Creditworthiness Determination for 
Zhanjiang Guanlong Paper Industrial Co., Ltd.,'' dated September 2, 
2008, which is on file in the CRU.
    We received case briefs from the GOC, GG/ZG and the Petitioner on 
September 10, 2008. The same parties submitted rebuttal briefs on 
September 15, 2008.

Scope of the Investigation

    The merchandise subject to this investigation includes certain 
lightweight thermal paper, which is thermal paper with a basis weight 
of 70 grams per square meter (``g/m\2\'') (with a tolerance of <plus-
minus> 4.0 g/m\2\) or less; irrespective of dimensions; \2\ with or 
without a base coat \3\ on one or both sides; with thermal active 
coating(s) \4\ on one or both sides that is a mixture of the dye and 
the developer that react and form an image when heat is applied; with 
or without a top coat; \5\ and without an adhesive backing. Certain 
lightweight thermal paper is typically (but not exclusively) used in 
point-of-sale applications such as ATM receipts, credit card receipts, 
gas pump receipts, and retail store receipts. The merchandise subject 
to this investigation may be classified in the Harmonized Tariff 
Schedule of the United States (``HTSUS'') under subheadings 
4811.90.8040, 4811.90.9090, 3703.10.60, 4811.59.20, 4820.10.20, and 
4823.40.00.\6\ Although HTSUS subheadings are provided for convenience 
and customs purposes, the written description of the scope of this 
investigation is dispositive.
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    \2\ LWTP is typically produced in jumbo rolls that are slit to 
the specifications of the converting equipment and then converted 
into finished slit rolls. Both jumbo rolls and converted rolls (as 
well as LWTP in any other forms, presentations, or dimensions) are 
covered by the scope of these investigations.
    \3\ A base coat, when applied, is typically made of clay and/or 
latex and like materials and is intended to cover the rough surface 
of the paper substrate and to provide insulating value.
    \4\ A thermal active coating is typically made of sensitizer, 
dye, and co-reactant.
    \5\ A top coat, when applied, is typically made of polyvinyl 
acetone, polyvinyl alcohol, and/or like materials and is intended to 
provide environmental protection, an improved surface for press 
printing, and/or wear protection for the thermal print head.
    \6\ HTSUS subheading 4811.90.8000 was a classification used for 
LWTP until January 1, 2007. Effective that date, subheading 
4811.90.8000 was replaced with 4811.90.8020 (for gift wrap, a non-
subject product) and 4811.90.8040 (for ``other'' including LWTP). 
HTSUS subheading 4811.90.9000 was a classification for LWTP until 
July 1, 2005. Effective that date, subheading 4811.90.9000 was 
replaced with 4811.90.9010 (for tissue paper, a non-subject product) 
and 4811.90.9090 (for ``other,'' including LWTP). Petitioner 
indicated that, from time to time, LWTP also may have been entered 
under HTSUS subheading 3703.90, HTSUS heading 4805, and perhaps 
other subheadings of the HTSUS, including HTSUS subheadings: 
3703.10.60, 4811.59.20, 4820.10.20, and 4823.40.00.
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Scope Comments

    The scope listed above has changed from the Preliminary 
Determination.
    We set aside a period for interested parties to raise issues 
regarding product coverage. See Antidumping Duties; Countervailing 
Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). The Department 
encouraged all interested parties to submit such comments within 20 
calendar days of signature of the Initiation Notice.\7\ We only 
received comments on the scope from the Petitioner. See the 
Petitioner's letter to the Department regarding, ``Lightweight Thermal 
Paper from China, Germany, and Korea,'' dated November 19, 2007. 
Petitioner requested that the Department include in LWTP's scope 
language the HTSUS subheadings 3703.10.60,\8\ 4811.59,\9\ 4820.10,\10\ 
and 4823.40,\11\ because LWTP may enter the United States under one of 
these HTSUS subheadings. Specifically, the Petitioner contends that 
HTSUS subheading 3703.1060 should be included because LWTP is sensitive 
to heat radiation; LWTP with certain latex topcoats could enter as 
paper coated with plastic under HTSUS subheading 4811.59; HTSUS 
subheading 4820.10's description may encompass products converted from 
thermal paper; and HTSUS subheading 4823.40's description appears to 
encompass LWTP not elsewhere specified within the HTSUS.
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    \7\ See Notice of Initiation of Countervailing Duty 
Investigation: Lightweight Thermal Paper from the People's Republic 
of China, 72 FR 62209, 62210 (November 2, 2007) (``Initiation 
Notice'').
    \8\ See ITC website located at http://usitc.gov/ which describes 
3703.1060 as ``photographic paper, paperboard, and textiles, 
sensitized: other.''
    \9\ See id, which describes HTSUS subheading 4859.10 as ``other: 
In strips or rolls of a width exceeding 15 cm or in rectangular 
(including square) sheets with one side exceeding 36 cm and the 
other side exceeding 15 cm in the unfolded state.''
    \10\ See id, which describes HTSUS subheading 4820.10 as 
``Registers, account books, notebooks, order books, receipt books, 
letter pads, memorandum pads, diaries and similar articles.''
    \11\ See id, which describes HTSUS subheading 4823.40 as 
``Rolls, sheets and dials, printed for self-recording apparatus.''
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    On April 11, 2008, and April 16, 2008, the Department received a 
request from U.S. Customs and Border Protection (``CBP'') to update the 
antidumping and countervailing duty (``AD/CVD'') module for LWTP from 
the PRC. Specifically, CBP requested that the Department add HTSUS 
subheadings 3703.10.60, 4811.59.20, 4820.10.20, and 4823.40.00 to the 
AD/CVD module. See the Department's memorandum to the file entitled, 
``Request from Customs and Border Protection to update AD/CVD Module,'' 
dated April 17, 2008. Based on the requests from the Petitioner and 
CBP, we are modifying the scope of this investigation to include the 
additional HTSUS subheadings.

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Tariff Act of 1930, as amended (the 
Act), section 701(a)(2) of the Act applies to this investigation. 
Accordingly, the International Trade Commission (``ITC'') must 
determine whether imports of the subject merchandise from the PRC 
materially injure, or threaten material injury to a U.S. industry. On 
December 11, 2007, the ITC published its preliminary determination that 
there is a reasonable indication that an industry in the United States 
is threatened with material injury by reason of allegedly

[[Page 57325]]

subsidized imports of LWTP from the People's Republic of China 
(``PRC'') and Germany. See Certain Lightweight Thermal Paper from 
China, Germany and Korea, Investigation Nos. 701-TA-415 and 731-TA-
1126-1128, 72 FR 70343 (Preliminary) (December 11, 2007).

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the decision memorandum, which is 
hereby adopted by this notice. See ``Issues and Decision Memorandum for 
the Final Determination,'' from Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration, to David M. Spooner, Assistant 
Secretary for Import Administration, dated September 25, 2008 
(``Decision Memorandum''). Attached to this notice as an Appendix is a 
list of the issues that parties have raised and to which we have 
responded in the Decision Memorandum. Parties can find a complete 
discussion of all issues raised in this investigation and the 
corresponding recommendations in this public memorandum, which is on 
file in the CRU. In addition, a complete version of the Decision 
Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/. The paper copy and electronic version of the 
Decision Memorandum are identical in content.

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.
    In this investigation, Shenzhen Yuanming Industrial Development 
Co., Ltd. (``Shenzhen Yuanming''), MDCN Technology Co., Ltd. 
(``MDCN''), and Xiamen Anne did not provide the requested information 
that is necessary to determine a CVD rate for this final determination. 
Specifically, MDCN did not respond to the Department's December 14, 
2007, request for shipment data and never participated in the 
investigation. Shenzhen Yuanming responded to the Department's December 
14, 2007, request for shipment data, but failed to respond to the 
Department's January 4, 2008, CVD questionnaire and ceased to 
participate further in the investigation after the December 26, 2007, 
submission of its shipment data. In the case of Xiamen Anne, on 
November 29, 2007 it notified the Department that it did not ship the 
subject merchandise to the United States during the POI. However, 
Xiamen Anne did not permit the Department to verify Xiamen Anne's claim 
of no shipments of subject merchandise, and since May 6, 2008, Xiamen 
Anne has not participated in the investigation. See Memorandum to File, 
``E-mail Correspondence with Respondent Xiamen Anne Paper Co. Ltd.'' 
(May 7, 2008). Thus, in reaching our final determination, pursuant to 
section 776(a)(2)(A) and (C) of the Act, we have based the 
countervailing duty rates of Shenzhen Yuanming, MDCN, and Xiamen Anne 
on facts otherwise available.
    In selecting from among the facts available, the Department has 
determined that an adverse inference is warranted, pursuant to section 
776(b) of the Act because, in addition to not fully responding to all 
of our requests for information, MDCN, Shenzhen Yuanming and Xiamen 
Anne withdrew from all participation in the investigation. MDCN failed 
to respond to any of the Department's questionnaires. Shenzhen Yuanming 
responded to the Department's December 14, 2008, request for shipment 
data, but thereafter ceased to participate in the investigation. Xiamen 
Anne notified the Department that it had no shipments of subject 
merchandise, but after tentatively scheduling an on-site verification, 
it decided to cancel the verification and stop its participation in the 
proceeding. Thus, MDCN, Shenzhen Yuanming, and Xiamen Anne failed to 
cooperate by not acting to the best of their abilities to comply with 
the Department's requests for information, and our final determination 
is based on total AFA. Accordingly, we find that an adverse inference 
is warranted to ensure that MDCN, Shenzhen Yuanming, and Xiamen Anne 
will not obtain a more favorable result than had they 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. 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 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).

Selection of the Adverse Facts Available Rate

    Parties can find a full discussion of the selection of the AFA rate 
at Comment 1 in the Decision Memorandum, which is on file in the CRU.

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated an individual rate for the companies under investigation: 
GG, Hanhong, MDCN, Shenzhen Yuanming, and Xiamen Anne. Section 
705(c)(5)(A)(i) of the Act states that for companies not investigated, 
we will determine an ``all others'' rate equal to the weighted average 
countervailable

[[Page 57326]]

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. As the 
rates for MDCN, Shenzhen Yuanming, and Xiamen Anne were calculated 
under section 776 of the Act, those rates were not reflected in the 
``all others'' rate.
    In accordance with sections 703(d) and 705(c)(5)(A) of the Act, for 
companies not investigated, we determined an ``all others'' rate by 
weighting the individual company subsidy rate of each of the companies 
investigated by each company's exports of the subject merchandise to 
the United States. The ``all others'' rate does not include zero and de 
minimis rates or any rates based solely on the facts available. In this 
investigation, because we have only one rate that can be used to 
calculate the ``all others'' rate, GG's rate, we have assigned that 
rate to all other non-investigated companies.

------------------------------------------------------------------------
         Exporter/manufacturer                  Net subsidy rate
------------------------------------------------------------------------
Guangdong Guanhao High-Tech Co., Ltd..  13.17
Shanghai Hanhong Paper Co., Ltd.......  0.57 (de minimis)
Shenzhen Yuanming Industrial            137.25
 Development Co., Ltd.
MDCN Technology Co., Ltd..............  123.65
Xiamen Anne Paper Co., Ltd............  123.65
All Others............................  13.17
------------------------------------------------------------------------

    As a result of our Preliminary Determination and pursuant to 
section 703(d) of the Act, we instructed the U.S. Customs and Border 
Protection (``CBP'') to suspend liquidation of all entries of LWTP from 
the PRC which were entered or withdrawn from warehouse, for consumption 
on or after March 14, 2008, the date of the publication of the 
Preliminary Determination in the Federal Register, except for entries 
from Hanhong, which had a de minimis rate.
    In accordance with section 703(d) of the Act, we instructed CBP to 
discontinue the suspension of liquidation for countervailing duty 
purposes on all shipments of the subject merchandise entered, or 
withdrawn from the warehouse, for consumption on or after July 12, 
2008, but to continue the suspension of liquidation of entries made 
from March 14, 2008 through July 11, 2008.
    We will issue a countervailing duty order and reinstate the 
suspension of liquidation under section 706(a) of the Act if the ITC 
issues a final affirmative injury determination, and will require a 
cash deposit of estimated countervailing duties for such entries of 
merchandise in the amounts indicated above. If the ITC determines that 
material injury, or threat of material injury, does not exist, this 
proceeding will be terminated and all estimated duties deposited or 
securities posted as a result of the suspension of liquidation will be 
refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related 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 APO, without the written consent of the Assistant Secretary 
for Import Administration.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an administrative protective order (``APO'') of their 
responsibility concerning the destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and terms of an APO is a violation which is 
subject to sanction.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: September 25, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.

Appendix

List of Comments and Issues in the Decision Memorandum

Comment 1: The Department's Authority to Apply the Countervailing 
Duty Law to China.
Comment 2: Cut-off Date for Recognition of Subsidies.
Comment 3: Adverse Facts Available (``AFA'').
Comment 4: Sales Denominator for GG and ZG.
Comment 5: Government Policy Lending--Specificity.
Comment 6: Government Policy Lending--Financial Contribution.
Comment 7: Government Policy Lending--Whether Particular Banks Are 
``Authorities''.
Comment 8: Chinese Interest Rates as the Benchmark.
Comment 9: Benchmark Rates.
Comment 10: Whether to Countervail Certain Loans Received from 
Shareholders.
Comment 11: Provision of Electricity for Less Than Adequate 
Remuneration.
Comment 12: Provision of Land for Less Than Adequate Remuneration.
Comment 13: Stamp Tax and Income Tax Exemption Under Non-Tradable 
Share Reform.
Comment 14: Whether ZG is Creditworthy.
Comment 15: Double Counting/Overlapping Remedies.

 [FR Doc. E8-23271 Filed 10-1-08; 8:45 am]
BILLING CODE 3510-DS-P