54302 Federal Register / Vol. 75, No. 172 / Tuesday, September 7, 2010 / Notices 

1Petitioners are Aluminum Extrusion Fair Trade 

Committee: Aerolite Extrusion Company; 

Alexandria Extrusions Company; Beneda 

Aluminum of Florida, Inc.; William L. Bonnell 

Company, Inc.; Frontier Aluminum Corporation; 

Futura Industries Corporation; Hydro Aluminum 

North American Inc.; Kaiser Aluminum 

Corporation; Profile Extrusion Company; Sapa 

Extrusions, Inc.; Western Extrusions Corporation; 

and the United Steel, Paper, and Forestry, Rubber, 

Manufacturing, Energy, Allied Industrial and 

Service Workers International Union. 

2Public and public versions of Departmental 

memoranda referenced in this Notice are on file in 

the Central Records Unit (CRU), Room 1117 in the 

main building of the Commerce Department. 

3See Memorandum to John M. Andersen, Acting 

Deputy Assistant Secretary for Antidumping and 

Countervailing Duty Operations, ‘‘Respondent 

Selection,’’ (May 18, 2010). 

4See Memorandum to the File, ‘‘Confirmation of 

Delivery of Initial Questionnaire to Firms Selected 

As Mandatory Respondents,’’ (June 4, 2010) 

(Delivery of Questionnaire Memorandum). 

multiplier groups, and publicity at 

industry meetings, symposia, 

conferences, and trade shows. 

Recruitment for the mission will 

begin immediately and conclude no 

later than January 31, 2011. The U.S. 

Department of Commerce will review all 

applications immediately after the 

deadline. We will inform applicants of 

selection decisions as soon as possible 

after January 31, 2011. Applications 

received after that date will be 

considered only if space and scheduling 

constraints permit. 

Contacts 

U.S. Commercial Service Domestic 

Contact: 

Natalia Susak, Phone: 202–482–4423, 

Fax: 202–482–9000, E-mail: 

Natalia.Susak@trade.gov. 

U.S. Commercial Service Saudi Arabia 

Contacts: 

Ahmed Khayyat, Phone: 966/1/488– 

3800 x 4441, Fax: 966/1/488–3237, 

E-mail: ahmed.khayyat@trade.gov. 

Natalia Susak, 

Trade Promotion Programs, Commercial 

Service Trade Missions Program. 

[FR Doc. 2010–22135 Filed 9–3–10; 8:45 am] 

BILLING CODE 3510–FP–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–968] 

Aluminum Extrusions From the 

People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(the Department) preliminarily 

determines that countervailable 

subsidies are being provided to 

producers and exporters of aluminum 

extrusions from the People’s Republic of 

China (the PRC). For information on the 

estimated subsidy rates, see the 

‘‘Suspension of Liquidation’’ section of 

this notice. 

DATES: Effective Date: September 7, 

2010. 

FOR FURTHER INFORMATION CONTACT: Eric 

B. Greynolds, AD/CVD Operations, 

Office 3, Import Administration, U.S. 

Department of Commerce, Room 4014, 

14th Street and Constitution Avenue, 

NW., Washington, DC 20230; telephone: 

202–482–6071. 

SUPPLEMENTARY INFORMATION: 

Case History 

On March 31, 2010, the Department 

received the petition filed in proper 

form by the petitioners.1 The 

Department initiated the investigation 

on April 20, 2010. See Aluminum 

Extrusions from the People’s Republic of 

China: Initiation of Countervailing Duty 

Investigation, 75 FR 22114 (April 27, 

2010) (Initiation), and accompanying 

Initiation Checklist.2

On May 18, 2010, the Department of 

Commerce (the Department) selected the 

following firms as mandatory 

respondents in this countervailing duty 

(CVD) investigation: Dragonluxe 

Limited (Dragonluxe), Miland Luck 

Limited (Miland), and Liaoyang 

Zhongwang Aluminum Profile Co. Ltd./ 

Liaoning Zhongwang Group 

(collectively, the Zhongwang Group) 

and concurrently issued to them, as well 

as the Government of China (GOC), the 

initial questionnaire.3 We confirmed 

that the three mandatory respondents 

received the CVD questionnaire.4

Responses were due on June 24, 2010. 

However, the June 24, 2010, deadline 

passed with none of the mandatory 

respondents submitting a questionnaire 

response or requesting an extension. 

The Department received requests for 

individual examination on a voluntary 

basis. On May 6, 2010, we received a 

request for treatment as a voluntary 

respondent from Zhaoqing New 

Zhongya Aluminum Co., Ltd. (New 

Zhongya), Zhongya Shaped Aluminum 

HK Holding Ltd. (Zhongya HK), and 

Karlton Aluminum Company Ltd. 

(Karlton) (collectively the Zhongya 

Companies), Chinese producers of 

subject merchandise. On May 26, 2010, 

Guang Ya Aluminum Industries Co., 

Ltd. (Guang Ya), Foshan Guangcheng 

Aluminum Co., Ltd. (Guangcheng), 

Guang Ya Aluminum Industries Hong 

Kong (Guang Ya HK), Kong Ah 

International Company Limited (Kong 

Ah), and Yongji Guanghai Aluminum 

Industry Co., Ltd. (Guanghai) 

(collectively the Guang Ya Companies), 

producers of subject merchandise, 

requested treatment as a voluntary 

respondent. In response to requests from 

the Zhongya and Guang Ya Companies, 

on June 21 and 22, 2010, we extended, 

by two weeks, the deadline for the 

submission of questionnaire responses 

by these companies to July 8, 2010. Both 

the Zhongya and Guang Ya Companies 

submitted questionnaire responses on 

July 8, 2010. 

On June 21, 2010, the Department 

postponed the deadline for the 

preliminary determination until August 

30, 2010. See Aluminum Extrusions 

from the People’s Republic of China: 

Notice of Postponement of Preliminary 

Determination in the Countervailing 

Duty Investigation, 75 FR 34982 (June 

21, 2010). 

On July 8, 2010, petitioners’ 

submitted new subsidy allegations 

regarding the Zhongya and Guang Ya 

Companies. 

On July 21, 2010, the Department 

selected the Zhongya and Guang Ya 

Companies as voluntary respondents. 

See the Memorandum to Ronald K. 

Lorentzen, Deputy Assistant Secretary 

for Import Administration, ‘‘Acceptance 

of Requests for Treatment As Voluntary 

Respondents’’ (July 21, 2010) (Voluntary 

Respondent Selection Memorandum), a 

public document on file in room 1117 

of the CRU. In addition, because 

Dragonluxe, Miland, and the 

Zhongwang Group did not submit 

responses to the Department’s initial 

questionnaire, we found the firms to be 

non-cooperative, mandatory 

respondents. Id. 

On July 21, 2010, we postponed the 

GOC’s deadline for submitting a 

response to the Department’s May 18, 

2010, initial questionnaire until August 

4, 2010. We subsequently extended the 

deadline until August 9, 2010. The GOC 

submitted its initial questionnaire 

response on August 9, 2010. 

On July 21, 2010, we also issued 

supplemental questionnaires to the 

Zhongya Companies, the Guang Ya 

Companies, and the GOC. We issued 

addenda to these supplemental 

questionnaires on July 28, 2010. The 

Zhongya and Guang Ya companies 

submitted responses to the 

supplemental questionnaires on August 

6 and August 9, 2010, respectively. The 

GOC submitted its supplemental 

questionnaire response on August 4 and 

August 9, 2010. The GOC and the 

Zhonga and Guang Ya companies 

submitted their responses to the 


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addendum to the supplemental 

questionnaire on August 9, 2010. 

On July 28, 2010, petitioners 

submitted additional new subsidy 

allegations regarding the Zhongya and 

Guang Ya Companies. On August 11, 

2010, the Department issued a new 

subsidy memorandum concerning 

petitioners’ July 13 and July 28, 2010, 

new subsidy allegations. See the 

Department’s August 11, 2010, 

Memorandum, ‘‘New Subsidy 

Allegations for the Guang Ya and 

Zhongya Companies,’’ (August 11, 2010) 

(New Subsidy Memorandum), a public 

document on file in room 1117 of the 

CRU. The Department issued new 

subsidy questionnaires to the GOC and 

the Zhongya and Guang Ya companies 

on August 11, 2010. The new subsidy 

questionnaires are due on September 3, 

2010, and, as a result, the Department is 

not able to incorporate the responses to 

the questionnaire into the preliminary 

determination. 

On August 16, 19, and 23, 2010, the 

Zhongya Companies, Guang Ya 

Companies, and the GOC submitted 

their second supplemental 

questionnaire responses, respectively. 

In the Initiation, the Department 

deferred initiating on petitioners’ 

allegation that the GOC, in an effort to 

benefit domestic producers, intervenes 

in the currency market in order to 

ensure that the RMB/U.S. dollar 

exchange rate understates the value of 

the RMB. See Initiation, 75 FR at 22117. 

On August 30, 2010, the Department 

issued a decision memorandum 

concerning petitioners’ currency 

manipulation allegation. Specifically, 

the Department has determined not to 

initiate an investigation of the 

allegation. See Memorandum to Ronald 

K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

‘‘Subsidy Allegation—Currency,’’ 

(August 30, 2010). 

Period of Investigation 

The period of investigation (POI) for 

which we are measuring subsidies is 

January 1, 2009, through December 31, 

2009, which corresponds to the most 

recently completed fiscal year. See 19 

CFR 351.204(b)(2). 

Scope of the Investigation 

The merchandise covered by this 

investigation is aluminum extrusions 

which are shapes and forms, produced 

by an extrusion process, made from 

aluminum alloys having metallic 

elements corresponding to the alloy 

series designations published by The 

Aluminum Association commencing 

with the numbers 1, 3, and 6 (or 

proprietary equivalents or other 

certifying body equivalents). 

Specifically, the subject merchandise 

made from aluminum alloy with an 

Aluminum Association series 

designation commencing with the 

number 1 contains not less than 99 

percent aluminum by weight. The 

subject merchandise made from 

aluminum alloy with an Aluminum 

Association series designation 

commencing with the number 3 

contains manganese as the major 

alloying element, with manganese 

accounting for not more than 3.0 

percent of total materials by weight. The 

subject merchandise made from an 

aluminum alloy with an Aluminum 

Association series designation 

commencing with the number 6 

contains magnesium and silicon as the 

major alloying elements, with 

magnesium accounting for at least 0.1 

percent but not more than 2.0 percent of 

total materials by weight, and silicon 

accounting for at least 0.1 percent but 

not more than 3.0 percent of total 

materials by weight. The subject 

aluminum extrusions are properly 

identified by a four-digit alloy series 

without either a decimal point or 

leading letter. Illustrative examples from 

among the approximately 160 registered 

alloys that may characterize the subject 

merchandise are as follows: 1350, 3003, 

and 6060. 

Aluminum extrusions are produced 

and imported in a wide variety of 

shapes and forms, including, but not 

limited to, hollow profiles, other solid 

profiles, pipes, tubes, bars, and rods. 

Aluminum extrusions that are drawn 

subsequent to extrusion (‘‘drawn 

aluminum’’) are also included in the 

scope. 

Aluminum extrusions are produced 

and imported with a variety of finishes 

(both coatings and surface treatments), 

and types of fabrication. The types of 

coatings and treatments applied to 

subject aluminum extrusions include, 

but are not limited to, extrusions that 

are mill finished (i.e., without any 

coating or further finishing), brushed, 

buffed, polished, anodized (including 

bright-dip anodized), liquid painted, or 

powder coated. Aluminum extrusions 

may also be fabricated, i.e., prepared for 

assembly. Such operations would 

include, but are not limited to, 

extrusions that are cut-to-length, 

machined, drilled, punched, notched, 

bent, stretched, knurled, swedged, 

mitered, chamfered, threaded, and spun. 

The subject merchandise includes 

aluminum extrusions that are finished 

(coated, painted, etc.), fabricated, or any 

combination thereof. 

Subject aluminum extrusions may be 

described at the time of importation as 

parts for final finished products that are 

assembled after importation, including, 

but not limited to, window frames, door 

frames, solar panels, curtain walls, or 

furniture. Such parts that otherwise 

meet the definition of aluminum 

extrusions are included in the scope. 

The scope includes aluminum 

extrusions that are attached (e.g., by 

welding or fasteners) to form 

subassemblies, i.e., partially assembled 

merchandise. 

Subject extrusions may be identified 

with reference to their end use, such as 

heat sinks, door thresholds, or carpet 

trim. Such goods are subject 

merchandise if they otherwise meet the 

scope definition, regardless of whether 

they are finished products and ready for 

use at the time of importation. 

The following aluminum extrusion 

products are excluded: Aluminum 

extrusions made from aluminum alloy 

with an Aluminum Association series 

designations commencing with the 

number 2 and containing in excess of 

1.5 percent copper by weight; aluminum 

extrusions made from aluminum alloy 

with an Aluminum Association series 

designation commencing with the 

number 5 and containing in excess of 

1.0 percent magnesium by weight; and 

aluminum extrusions made from 

aluminum alloy with an Aluminum 

Association series designation 

commencing with the number 7 and 

containing in excess of 2.0 percent zinc 

by weight. 

The scope also excludes finished 

merchandise containing aluminum 

extrusions as parts that are fully and 

permanently assembled and completed 

at the time of entry, such as finished 

windows with glass, doors, picture 

frames, and solar panels. The scope also 

excludes finished goods containing 

aluminum extrusions that are entered 

unassembled in a ‘‘kit.’’ A kit is 

understood to mean a packaged 

combination of parts that contains, at 

the time of importation, all of the 

necessary parts to fully assemble a final 

finished good. 

The scope also excludes aluminum 

alloy sheet or plates produced by other 

than the extrusion process, such as 

aluminum products produced by a 

method of casting. Cast aluminum 

products are properly identified by four 

digits with a decimal point between the 

third and fourth digit. A letter may also 

precede the four digits. The following 

Aluminum Association designations are 

representative of aluminum alloys for 

casting: 208.0, 295.0, 308.0, 355.0, 

C355.0, 356.0, A356.0, A357.0, 360.0, 

366.0, 380.0, A380.0, 413.0, 443.0, 

514.0, 518.1, and 712.0. The scope also 


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excludes pure, unwrought aluminum in 

any form. 

Imports of the subject merchandise 

are provided for under the following 

categories of the Harmonized Tariff 

Schedule of the United States (‘‘HTS’’): 

7604.21.0000, 7604.29.1000, 

7604.29.3010, 7604.29.3050, 

7604.29.5030, 7604.29.5060, 

7608.20.0030, and 7608.20.0090. The 

subject merchandise entered as parts of 

other aluminum products may be 

classifiable under the following 

additional Chapter 76 subheadings: 

7610.10, 7610.90, 7615.19, 7615.20, and 

7616.99 as well as under other HTS 

chapters. While HTS subheadings are 

provided for convenience and customs 

purposes, the written description of the 

scope in this proceeding is dispositive. 

Scope Comments 

In accordance with the Preamble to 

the Department’s regulations (see 

Antidumping Duties; Countervailing 

Duties, 62 FR 27296, 27323 (May 19, 

1997) (Preamble)), in the Initiation, we 

set aside a period of time for parties to 

raise issues regarding product coverage, 

and encouraged all parties to submit 

comments within 20 calendar days of 

publication of the Initiation. 

The Department received several 

scope comments from interested parties. 

The Department is evaluating the 

comments submitted by the parties and 

will issue its decision regarding the 

scope of the antidumping (AD) and CVD 

investigations in the preliminary 

determination of the companion AD 

investigation, which is due for signature 

on October 27, 2010. 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the meaning 

of section 701(b) of the Tariff Act of 

1930 (the Act), the International Trade 

Commission (the ITC) is required to 

determine whether imports of the 

subject merchandise from the PRC 

materially injure, or threaten material 

injury to, a U.S. industry. On May 17, 

2010, the ITC published its preliminary 

determination finding that there is a 

reasonable indication that an industry 

in the United States is materially 

injured by reason of imports of certain 

aluminum extrusions from the PRC. See 

Certain Aluminum Extrusion from 

China, Investigation Nos. 701–TA–475 

and 731–TA–1177 (Preliminary), 75 FR 

34482 (May 17, 2010). 

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 

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 

China’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 

China. 

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 

accompanying Issues and Decision 

Memorandum (CWP from the PRC 

Decision Memorandum) at Comment 1. 

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 (WTO), as the date from 

which the Department will identify and 

measure subsidies in the PRC for 

purposes of this investigation. See CWP 

Decision Memorandum at Comment 2. 

Use of Facts Otherwise Available and 

Adverse Inferences 

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

Act of 1930, as amended (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. 

Application of Adverse Inferences: 

Non-Cooperative Companies 

As explained above in the 

‘‘Background’’ section, the Department 

selected Dragonluxe, Miland, and the 

Zhongwang Group as mandatory 

respondents. Accordingly, the 

Department sent the initial 

questionnaire to the three companies on 

May 18, 2010. The Department 

confirmed that the three firms received 

copies of the initial questionnaire. See 

Delivery of Questionnaire 

Memorandum. Dragonluxe, Miland, and 

the Zhongwang Group failed to respond 

the Department’s initial questionnaire. 

As a result of the failure of Dragonluxe, 

Miland, and the Zhongwang Group to 

submit responses to the Department’s 

initial questionnaire, we found the firms 

to be non-cooperative, mandatory 

respondents. See the Voluntary 

Respondent Memorandum. 

We find that, by not responding to the 

Department’s initial questionnaire, 

Dragonluxe, Miland, and the 

Zhongwang Group withheld requested 

information and significantly impeded 

this proceeding. Thus, in reaching our 

preliminary determination, pursuant to 

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

we are basing the CVD rate for 

Dragonluxe, Miland, and the 

Zhongwang Group on facts otherwise 

available. 

We further preliminarily determine 

that an adverse inference is warranted, 

pursuant to section 776(b) of the Act. By 

failing to submit responses to the 

Department’s initial questionnaire, 

Dragonluxe, Miland, and the 

Zhongwang Group did not cooperate to 

the best of their ability in this 

investigation. Accordingly, we 

preliminarily find that an adverse 

inference is warranted to ensure that the 

three companies will not obtain a more 

favorable result than had they fully 

complied with our request for 

information. For purposes of this 

preliminary determination, we have 

limited our application of adverse 

inferences under section 776(b) of the 

Act to those programs included in the 

Initiation. 

In deciding which facts to use as 

adverse facts available (AFA), section 

776(b) of the Act and 19 CFR 

351.308(c)(1) and (2) 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 other information placed on 

the record. The Department’s practice 

when selecting an adverse rate from 

among the possible sources of 

information is to ensure that the rate is 


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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, e.g., 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.R. Rep. No. 

103–316, Vol. I, at 870 (1994), reprinted 

at 1994 U.S.C.C.A.N. 4040, 4199. 

It is the Department’s practice in CVD 

proceedings to select, as AFA, the 

highest calculated rate in any segment 

of the proceeding. See, e.g., 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 accompanying Issues and 

Decision Memorandum (LWS from the 

PRC Decision Memorandum) at 

‘‘Selection of the Adverse Facts 

Available.’’ In previous CVD 

investigations of products from the PRC, 

we adapted the practice to use the 

highest rate calculated for the same or 

similar program in other PRC CVD 

proceeding. See id. and Certain TowBehind Lawn Groomers and Certain 

Parts Thereof 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 70971, 70975 (November 24, 

2008) (unchanged in the Certain TowBehind Lawn Groomers and Certain 

Parts Thereof From the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination, 74 

FR 29180 (June 19, 2009), and 

accompanying Issues and Decision 

Memorandum (Lawn Groomers Decision 

Memorandum) at ‘‘Application of Facts 

Available, Including the Application of 

Adverse Inferences’’). 

Thus, under this practice, for 

investigations involving the PRC, the 

Department computes the total AFA rate 

for non-cooperating companies 

generally using program-specific rates 

calculated for the cooperating 

respondents in the instant investigation 

or calculated in prior PRC CVD cases. 

Specifically, for programs other than 

those involving income tax exemptions 

and reductions, the Department applies 

the highest calculated rate for the 

identical program in the investigation if 

a responding company used the 

identical program, and the rate is not 

zero. If there is no identical program 

match within the investigation, the 

Department uses the highest non-de 

minimis rate calculated for the same or 

similar program (based on treatment of 

the benefit) in another PRC CVD 

proceeding. Absent an above-de 

minimis subsidy rate calculated for the 

same or similar program, the 

Department applies the highest 

calculated subsidy rate for any program 

otherwise listed that could conceivably 

be used by the non-cooperating 

companies. See, e.g., Lightweight 

Thermal Paper From the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination, 73 

FR 57323 (October 2, 2008) (LWTP from 

the PRC), and accompanying Issues and 

Decision Memorandum (LWTP from the 

PRC Decision Memorandum) at 

‘‘Selection of the Adverse Facts 

Available Rate.’’ 

However, in the instant investigation 

the cooperating firms are voluntary 

respondents. Under 19 CFR 

351.204(d)(3), in calculating an allothers rate under section 705(c)(5) of the 

Act, the Department will exclude net 

subsidy rates calculated for voluntary 

respondents. Thus, as discussed in 

further detail below in the ‘‘Suspension 

of Liquidation’’ section, in accordance 

with section 705(c)(5)(A)(ii) of the Act 

and 19 CFR 351.204(d)(3), we have 

equated the all-others rate with the AFA 

rates calculated for the non-cooperative 

companies. We have adopted this 

approach because the inclusion of selfselected respondents in the derivation 

of the all-others rate could result in the 

distortion or manipulation of the allothers rate. See Preamble to 

Antidumping Duties; Countervailing 

Duties; Final Rule, 62 FR 27296, 27310 

(May 19, 1997) (Preamble to Procedural 

Regulations). Furthermore, in light of 

this concern, we determine that it is not 

appropriate to compute total AFA rates 

for non-cooperative companies using 

company-specific rates calculated for 

participating respondents, because to do 

so would require the use of program 

rates calculated for voluntary 

respondents. In addition, our reasoning 

not to base the AFA rate on program 

rates calculated for voluntary 

respondents extends to our use of 

program rates from other CVD 

proceedings involving the PRC. Thus, in 

deriving the AFA rate for the three noncooperating mandatory respondents in 

the instant investigation, we have not 

utilized company-specific program rates 

that were calculated for voluntary 

respondents. 

Therefore, for purposes of deriving 

the AFA rate for the three noncooperating mandatory respondents, we 

are using the highest non-de minimis 

rate calculated for the same or similar 

program (based on treatment of the 

benefit) in another PRC 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 

that could conceivably be used by the 

non-cooperating companies. See, e.g., 

LWTP from the PRC Decision 

Memorandum at ‘‘Selection of the 

Adverse Facts Available Rate.’’ 

Further, where the GOC can 

demonstrate through complete, 

verifiable, positive evidence that 

Dragonluxe, Miland, and the 

Zhongwang Group (including all their 

facilities and cross-owned affiliates) are 

not located in particular provinces 

whose subsidies are being investigated, 

the Department will not include those 

provincial programs in determining the 

countervailable subsidy rate for those 

companies. See, e.g., Certain Kitchen 

Shelving and Racks from the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination, 74 

FR 37012 (July 27, 2009) (Racks From 

the PRC), and accompanying Issues and 

Decision Memorandum (Racks Decision 

from the PRC Decision Memorandum) at 

‘‘Use of Facts Otherwise Available and 

Adverse Facts Available.’’ In this 

investigation, the GOC has not provided 

any such information. Therefore, we are 

making the adverse inference that the 

three non-cooperative companies, 

Dragonluxe, Miland, and the 

Zhongwang Group, had facilities and/or 

cross-owned affiliates that received 

subsidies under all of the sub-national 

programs on which the Department 

initiated. 

For the seven income tax rate 

reduction or exemption programs at 

issue in the instant investigation, we are 

applying an adverse inference that 

Dragonluxe, Miland, and the 

Zhongwang Group paid no income taxes 

during the POI. The seven programs are: 

(1) Tax Reductions for High or New 

Technology Enterprises (HNTEs) 

Involved in Designated Projects, (2) Two 

Free, Three Half Tax Exemptions for 

Productive FIEs, (3) Local Income Tax 

Exemption and Reduction Programs for 

‘‘Productive’’ FIEs, (4) Income Tax 

Benefits for FIEs in Designated 

Geographic Location, (5) Income Tax 

Benefits for Technology- or KnowledgeIntensive FIEs, (6) Income Tax Benefits 

for FIES That Are Also High or New 


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Technology Enterprises (HNTEs), and 

(7) Income Tax Reductions For ExportOriented FIEs. 

The standard income tax rate for 

corporations in the PRC during the POI 

was 25 percent. See, e.g., ‘‘Notification 

of the State Council on Carrying out the 

Transition Preferential Policies 

Concerning Enterprise Income Tax, Guo 

Fa 2007, No. 39 as included in the 

March 31, 2010, petition at Exhibit III– 

65. Further, the GOC response indicates 

that the three percent provincial income 

tax was no longer in effect during the 

POI. See the GOC’s August 4, 2010, 

supplemental questionnaire at 4. 

Therefore, the highest possible benefit 

for all income tax reduction or 

exemption programs combined is 25 

percent. Therefore, we are applying a 

CVD rate of 25 percent on an overall 

basis for these seven income tax 

programs (i.e., these seven income tax 

programs combined provide a 

countervailable benefit of 25 percent). 

This 25 percent AFA rate does not apply 

to tax credit or tax refund programs. 

This approach is consistent with the 

Department’s past practice. See, e.g., 

CWP from the PRC Decision 

Memorandum at 2, and LWTP from the 

PRC Decision Memorandum at 

‘‘Selection of the Adverse Facts 

Available Rate.’’ 

The 25 percent AFA rate does not 

apply to the following nine income tax 

credit and rebate or accelerated 

depreciation programs found 

countervailable because such programs 

may not affect the tax rate and, hence, 

the subsidy conferred, in the current 

year: (1) Value Added Tax (VAT) and 

Tariff Exemptions on Imported 

Equipment to FIEs and Certain Domestic 

Enterprises, (2) VAT Rebates on FIEs 

Purchases of Chinese-Made Equipment, 

(3) City Tax and Surcharge Exemptions 

for FIEs, and (4) Tax Offsets for 

Research and Development, (5) Income 

Tax Credits for Domesticall-Owned 

Companies Purchasing Chinese-Made 

Equipment, (6) Tax Reductions for FIEs 

Purchasing Chinese-Made Equipment, 

(7) Tax Refunds for Reinvesting of FIE 

Profits in Export-Oriented Enterprises, 

(8) Accelerated Depreciation for 

Enterprises Located in Northeast 

Region, and (9) Forgiveness of Tax 

Arrears for Enterprises in the ‘‘Old 

Industrial Bases’’ of Northeast China. 

Based on the methodology discussed 

above, we preliminarily determine to 

use the highest non-de minimis rate for 

any indirect tax program from a China 

CVD investigation. The rate we select is 

1.51 percent, calculated for the ‘‘ValueAdded Tax and Tariff Exemptions on 

Imported Equipment’’ program in CFS 

from the PRC. See CFS Decision 

Memorandum at ‘‘VAT and Tariff 

Exemptions on Imported Equipment’’. 

Regarding the Preferential Loans as 

Part of the Northeast Revitalization 

Program and the Policy Loans for 

Aluminum Extrusion Producers, we 

preliminarily determine to apply the 

highest non-de minimis subsidy rate for 

any loan program in a prior China CVD 

investigation. The highest non-de 

minimis subsidy rate is 8.31 percent 

calculated for the ‘‘Government Policy 

Lending Program,’’ from LWTP from the 

PRC. See Lightweight Thermal Paper 

From the People’s Republic of China: 

Notice of Amended Final Affirmative 

Countervailing Duty Determination and 

Notice of Countervailing Duty Order, 73 

FR 70958 (November 24, 2008) 

(Amended LWTP from the PRC). 

We are investigating a number of 

grant programs including: (1) State Key 

Technology Renovation Fund, (2) GOC 

and Sub-Central Government Grants, 

Loans, and Other Incentives for 

Development of Famous Brands and 

China World Top Brands, (3) Grants to 

Cover Legal Fees in Trade Remedy 

Cases in Shenzhen, (4) Special Fund for 

Energy Saving Technology Reform: 

Guangdong Province, (5) The Clean 

Production Technology Fund, (6) Grants 

for Listing Shares: Liaoyang City 

(Guangdong Province), Wenzhou 

Municipality (Zhejiang Province), and 

Quanzhou Municipality (Fujian 

Province), (7) Northeast Region Foreign 

Trade Development Fund, and (8) 

Northeast Region Technology Reform 

Fund. The Department has not 

calculated above de minimis rate for any 

of these programs in prior 

investigations, and, moreover, all 

previously calculated rates for grant 

programs from prior China CVD 

investigations have been de minimis. 

Therefore, for each of these grant 

programs, we preliminarily determine to 

use the highest calculated subsidy rate 

for any program otherwise listed, which 

could have been used by the noncooperative companies. We 

preliminarily determine that this rate is 

8.31 percent from the ‘‘Government 

Policy Lending Program,’’ in the 

Amended LWTP From the PRC 

The Department is also investigating 

several provision of a good or service for 

less than adequate remuneration (LTAR) 

programs: Provision of Land-Use Rights 

for LTAR in Liaoyang High-Tech 

Industry Development Zone, Provision 

of Land-Use Rights for LTAR to SOEs, 

and Provision of Primary Aluminum for 

LTAR. For two of these LTAR programs, 

we are applying the highest non-de 

minimis subsidy rate for any provision 

of land-use rights for LTAR program in 

a prior China CVD investigation. The 

highest non-de minimis subsidy rate is 

2.55 percent calculated for the 

‘‘Subsidies Provided in the TBNA and 

the Tianjin Economic and Technological 

Development Area’’ from OCTG from the 

PRC. See OCTG from the PRC Decision 

Memorandum at ‘‘Subsidies Provided in 

the TBNA and the Tianjin Economic 

and Technological Development Area.’’ 

Concerning the provision of Primary 

Aluminum for LTAR, the Department 

has not previously investigated 

allegations concerning this input 

product. Therefore, for this program, we 

are applying the highest calculated 

subsidy rate for any program otherwise 

listed that could conceivably be used by 

the non-cooperating companies. We 

preliminarily determine that this similar 

program rate is 2.55 percent from OCTG 

from the PRC. Id. 

In addition, the Department is 

investigating government purchases of 

aluminum extrusions for more than 

adequate remuneration (MTAR). The 

Department has not previously 

investigated allegations concerning this 

input. Therefore, for this program, we 

are applying the highest calculated 

subsidy rate for any program otherwise 

listed that could conceivably be used by 

the non-cooperating companies. We 

preliminarily determine that this rate is 

8.31 percent from the Amended LWTP 

from the PRC. 

On this basis, we preliminarily 

determine the AFA countervailable 

subsidy rate for the non-cooperative 

respondents (Dragonluxe, Miland, and 

the Zhongwang Group) to be 137.65 

percent ad valorem. See AFA 

Memorandum. 

As noted above, on July 8 and July 28, 

2010, petitioners submitted new subsidy 

allegations. On August 11, 2010, the 

Department initiated investigations of 

all the allegations included in 

petitioners’ July 8 and July 28, 2010, 

submissions. See New Subsidy 

Memorandum. On August 11, 2010, the 

Department also sent a new subsidy 

questionnaire to the GOC as well as to 

the Zhongya and Guang Ya Companies 

regarding these new subsidy allegations. 

The new subsidy questionnaire 

responses are currently due on 

September 5, 2010. Therefore, for 

purposes of the preliminary 

determination, we have not included 

these additional subsidy programs 

under investigation in this proceeding 

in the total AFA rates calculated for 

Dragonluxe, Miland, and the 

Zhongwang Group. We invite interested 

parties to comment on whether the 

Department should include the 

additional alleged programs and the 

various programs self-reported by the 


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Guang Ya and Zhongya companies into 

the AFA rate calculated for the noncooperating, mandatory respondents. 

Various Grant Programs Self-Reported 

by the Guang Ya Companies 

The Guang Ya Companies selfreported receiving various lump sum 

cash grants from the GOC. As a result, 

the Department sent questionnaires to 

the GOC regarding these programs. See 

the July 21, 2010, first supplemental 

questionnaire sent to the GOC. In its 

supplemental questionnaire responses 

the GOC provided information 

concerning the nature of the programs 

and indicated that the programs were 

not contingent upon exports, and thus 

are not specific under section 

771(5A)(B) of the Act. However, the 

GOC failed to respond to the 

Department’s questions concerning the 

distribution of benefits, which is 

information that the Department uses to 

determine whether alleged subsidy 

programs are de facto specific under 

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

the GOC’s August 9, 2010, supplemental 

questionnaire response. Further, the 

GOC failed to supply the requested 

benefit distribution data in its second 

supplemental questionnaire response, 

despite the Department’s request that it 

do so. See the GOC’s August 19, 2010, 

second supplemental questionnaire 

response. 

Because the GOC failed to provide the 

requested benefit distribution data, we 

find that necessary information is not on 

the record, pursuant to section 776(a) of 

the Act and that the GOC has not 

cooperated to the best of its ability. 

Therefore, for those programs for which 

we lack the necessary information and 

for which the GOC failed to cooperate, 

in accordance with section 776(b) of the 

Act, we are assuming as an adverse 

inference that the programs are de facto 

specific as domestic subsidies within 

the meaning of section 771(5A)(D)(iii) of 

the Act. 

The Zhongya Companies’ Failure To 

Report All of Its Sales of Aluminum 

Extrusions Under the Purchase of 

Aluminum Extrusions for MTAR 

Program 

In its July 8, 2010, questionnaire 

response, the Zhongya Companies failed 

to provide any information concerning 

the purchase of aluminum extrusions 

for MTAR program. In response to the 

Department’s July 21, 2010, 

supplemental questionnaire, the 

Zhongya Companies provided MTAR 

data. See the Zhongya Companies’ 

August 6, 2010, first supplemental 

questionnaire response. However, the 

dataset was not complete. Specifically, 

the Zhongya Companies provided data 

for its ‘‘top 10 domestic customers.’’ Id. 

The Zhongya Companies state that the 

top 10 customers accounted for ‘‘more 

than 70 percent of New Zhongya’s total 

domestic sales of subject merchandise 

during the POI.’’ Id. The Zhongya 

Companies did not identify its other 

customers; therefore we have 

determined that necessary information 

is not on the record and that the 

Zhongya Companies have therefore 

‘‘significantly impeded the proceeding,’’ 

pursuant to sections 776(a)(1) and (a)(2) 

of the Act. 

In light of its failure to provide the 

requested benefit distribution data, we 

find that the Zhongya Companies have 

failed to cooperate to the best of its 

ability. See section 776(b) of the Act. 

Therefore, we are applying facts 

available with an adverse inference with 

respect to the 30 percent of the sales 

that the Zhongya Companies did not 

report to the Department. 

Materials used in certain government 

projects are subject to the GOC’s 

‘‘Government Procurement Law of the 

PRC’’ (Procurement Law). See the March 

31, 2010, petition at Exhibit III–153. 

Under the Procurement Law, 

government authorities are permitted to 

procure imported goods or services only 

when domestic goods or services are 

either unavailable or cannot be obtained 

under ‘‘reasonable commercial 

conditions.’’ The ‘‘Implementing 

Measures on the Government 

Procurement Law of the PRC’’ 

(Implementing Measures of the 

Procurement Law) state that: 

The situation where reasonable 

commercial terms are not available for 

procurement under Article 10 of the 

Government Procurement Law refers to 

instances where the lowest offered price for 

domestic goods, construction, or services, 

that meet the requirements of procurement 

documents, exceeds the lowest offered price 

for foreign goods, construction, or services by 

more than 20 percent. 

See the March 31, 2010, petition at 

Exhibit III–155. 

Based on the information in the 

Implementing Measures of the 

Procurement Law, we are assuming as 

AFA under section 776(b) of the Act 

that the Zhongya Companies’ 

unreported sales were made to GOC 

authorities and, thus, constitute a 

financial contribution under section 

771(5)(D)(iv) of the Act. We are further 

assuming as AFA that the Zhongya 

Companies received a 20 percent price 

premium on the unreported sales 

volumes of aluminum extrusions. For 

further information concerning the 

derivation of the benefit, see the 

‘‘Purchase of Aluminum Extrusions for 

MTAR’’ section below. 

Regarding our decision to apply AFA, 

we acknowledge that the GOC has stated 

in its questionnaire response that the 

Zhongya Companies did not sell its 

aluminum extrusions under any 

procurement program. See, e.g., the 

GOC’s August 9, 2010, questionnaire 

response at 38. However, we 

preliminarily determine that the 

Zhongya Companies’ failure to provide 

any information concerning the missing 

‘‘30 percent’’ of its customers has 

impeded the Department’s ability to 

adequately investigate whether these 

customers acquired subject merchandise 

from the Zhongya Companies for 

MTAR. Thus, we preliminarily 

determine that the application of AFA 

with regard to the Zhongya Companies’ 

use of this program is warranted. 

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)—(v) 

provides that the Department will 

attribute subsidies received by certain 

other companies to the combined sales 

of those companies when: (1) Two or 

more corporations with cross-ownership 

produce the subject merchandise; (2) a 

firm that received a subsidy is a holding 

or parent company of the subject 

company; (3) a firm that produces an 

input that is primarily dedicated to the 

production of the downstream product; 

or (4) a corporation producing nonsubject merchandise received a subsidy 

and transferred the subsidy to a 

corporation with cross-ownership with 

the subject company. 

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. 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, 600–604 (CIT 2001). 


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5For purposes of the preliminary determination, 

we have not calculated net subsidy rates for 

Guanghai. 

The Guang Ya Companies 

As discussed above, the Guang Ya 

Companies are Guang Ya, Guangcheng, 

Guanghai, Guang Ya HK, and Kong Ah. 

Guang Ya and Guangcheng are the 

producers of subject merchandise. 

Guanghai produces aluminum billet that 

it supplies to Guangcheng. Guang Ya 

HK and Kong Ah are Hong Kong-based 

trading companies that export 

merchandise produced by Guang Ya and 

Guangcheng. According to the Guang Ya 

Companies, only Guang Ya HK exported 

subject merchandise to the United 

States that was produced by the Guang 

Ya Companies. We find that the Guang 

Ya Companies are cross-owned with 

each other via common ownership 

within the meaning of 19 CFR 

351.525(b)(6)(vi). See the Guang Ya 

Companies July 8, 2010, questionnaire 

response at Exhibit 1. 

Guang Ya and Guangcheng are the 

members of the Guang Ya Companies 

that produce subject merchandise. 

Therefore, in accordance with 19 CFR 

351.525(b)(6)(ii), we have attributed 

subsidies received by Guang Ya and 

Guangcheng to the products produced 

by the two firms. According to the 

questionnaire response of the Guang Ya 

Companies, Guanghai is an input 

supplier to Guangcheng. Therefore, in 

accordance with 19 CFR 

351.525(b)(6)(iv), we would attribute 

subsidies received by Guanghai to the 

combined sales of the input made by 

Guanghai and downstream products 

produced by Guang Ya and 

Guangcheng, excluding the sales 

between corporations.5

As explained above, during the POI 

Guang Ya HK exported to the United 

States aluminum extrusions produced 

by Guang Ya and Guangcheng. In 

supplemental questionnaires issued to 

the Guang Ya Companies, the 

Department inquired about the sales 

value of extrusions destined for the 

United States that Guang Ya and 

Guangcheng made to Guang Ya HK 

during the POI. The Department also 

inquired about the sales value of 

aluminum extrusions Guang Ya HK 

made to the United States that during 

the POI. The purpose of these questions 

was to ascertain the extent to which the 

‘‘export values’’ recorded in the books of 

Guang Ya and Guangcheng did not 

reflect the actual U.S. prices because 

there was a mark-up on those sales by 

Guang Ya HK, the Hong Kong-based 

affiliate. The Department has six criteria 

it uses to determine whether such a 

difference in sales values exists and 

whether an adjustment to the net 

subsidy rate calculations is warranted. 

See, e.g., Circular Welded Austenitic 

Stainless Pressure Pipe from the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 74 FR 4936 (January 28, 

2009) (CWASPP from the PRC), and 

accompanying Issues and Decision 

Memorandum (CWASPP from the PRC 

Decision Memorandum) at ‘‘Adjustment 

to Net Subsidy Rate Calculation,’’ in 

which the Department describes the six 

criteria utilized by the Department. 

We have analyzed the sales 

information supplied by the Guang Ya 

Companies. Based on our review, we 

preliminarily determine that an 

adjustment to the net subsidy rate, as 

described in CWASPP from the PRC, is 

not warranted. We preliminarily 

determine that the sales data reported 

by the Guang Ya Companies indicate 

that the sales value of aluminum 

extrusions destined for the United 

States that Guang Ya and Guangcheng 

made to Guang Ya HK during the POI 

exceed the sales value of aluminum 

extrusions that Guang Ya HK made to 

the United States during the POI. See 

the Guang Ya Companies’ August 23, 

2010, supplemental questionnaire at 

Exhibit 93 and the Guang Ya 

Companies’ August 9, 2010, 

supplemental questionnaire at Exhibit 

56. 

The Zhongya Companies 

As discussed above, the Zhongya 

Companies are New Zhongya, Zhongya 

HK, and Karlton. New Zhongya is the 

producer of subject merchandise. 

Zhongya HK and Karlton are Hong-Kong 

based firms that are cross-owned with 

New Zhongya, within the meaning of 19 

CFR 351.525(b)(6)(vi). During the POI, 

Zhongya HK exported products, 

including subject merchandise, 

produced by New Zhongya. During the 

POI, New Zhongya did not export 

aluminum extrusions to the United 

States through Karlton. In this 

preliminary determination, in 

accordance with 19 CFR 

351.525(b)(6)(ii), we are attributing 

subsidies received by New Zhongya to 

products produced by New Zhongya 

and exported through Zhongya HK. 

In supplemental questionnaires 

issued to the Zhongya Companies, the 

Department inquired about the sales 

value of extrusions destined for the 

United States which New Zhongya 

produced and sold to Zhongya HK 

during the POI. As explained above, the 

Department also inquired about the 

sales value of aluminum extrusions 

which New Zhongya produced and 

which Zhongya HK sold to the United 

States that during the POI. The purpose 

of these questions was to ascertain the 

extent to which the ‘‘export values’’ 

recorded in the books of New Zhongya 

did not reflect the actual U.S. prices due 

to a mark-up on those sales by Zhongya 

HK, the Hong Kong-based affiliate. 

Based on our review of the information 

submitted by the Zhongya Companies, 

we preliminarily determine that no such 

mark-up exists and, as a result, an 

adjustment to the net subsidy rate, as 

discussed in CWASPP from the PRC, is 

not necessary. See Zhongya Companies 

July 8, 2010, questionnaire response at 

6 for information concerning the sales of 

aluminum extrusions Zhongya HK made 

to the United States and the Zhongya 

Companies August 16, 2010, second 

supplemental questionnaire response at 

2 for information concerning the sales of 

aluminum extrusions destined for the 

United States that New Zhongya made 

to Zhongya HK. In addition, we find 

that the Zhongya Companies have not 

adequately responded to the 

Department’s questions concerning the 

extent to which the price charged by 

New Zhonga to Zhongya HK differs 

from the price Zhongya HK charges to 

its U.S. Customers, which is one of the 

six criteria the Departments examines 

when determining whether to adjust the 

net subsidy rate. See the Zhongya 

Companies August 6, 2010, first 

supplemental questionnaire response at 

12. 

Benchmarks and Discount Rates 

The Department is investigating loans 

received by the Guang Ya Companies 

from Chinese policy banks and stateowned commercial banks (SOCBs), 

which are alleged to have been granted 

on a preferential, non-commercial basis. 

Therefore, the derivation of the 

Department’s benchmark and discount 

rates is discussed below. 

Benchmark for Short-Term RMB 

Denominated Loans: 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 

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). 

As noted above, section 771(5)(E)(ii) 

of the Act indicates that the benchmark 


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should be a market-based rate. However, 

for the reasons explained in CFS from 

the PRC, loans provided by Chinese 

banks reflect significant government 

intervention in the banking sector and 

do not reflect rates that would be found 

in a functioning market. See CFS 

Decision Memorandum at Comment 10. 

Because of this, any loans received by 

respondents from private Chinese or 

foreign-owned banks would be 

unsuitable for use as benchmarks under 

19 CFR 351.505(a)(2)(i). Similarly, 

because Chinese banks reflect 

significant government intervention in 

the banking sector, we cannot use a 

national interest rate for commercial 

loans as envisaged by 19 CFR 

351.505(a)(3)(ii). Therefore, because of 

the special difficulties inherent in using 

a Chinese benchmark for loans, the 

Department is selecting an external 

market-based benchmark interest rate. 

The use of an external benchmark is 

consistent with the Department’s 

practice. For example, in Softwood 

Lumber from Canada, the Department 

used U.S. timber prices to measure the 

benefit for government-provided timber 

in Canada. See Notice of Final 

Affirmative Countervailing Duty 

Determination and Final Negative 

Critical Circumstances Determination: 

Certain Softwood Lumber Products 

From Canada, 67 FR 15545 (April 2, 

2002) (Softwood Lumber from Canada), 

and accompanying Issues and Decision 

Memorandum (Softwood Lumber from 

Canada Decision Memorandum) at 

‘‘Analysis of Programs, Provincial 

Stumpage Programs Determined to 

Confer Subsidies, Benefit.’’ 

We are calculating the external 

benchmark using the regression-based 

methodology first developed in CFS 

from the PRC and more recently 

updated in LWTP from the PRC. See 

CFS Decision Memorandum at 

Comment 10; see also LWTP from the 

PRC Decision Memorandum at 

‘‘Benchmarks and Discount Rates.’’ This 

benchmark interest rate is based on the 

inflation-adjusted interest rates of 

countries with per capita gross national 

incomes (GNIs) similar to the PRC. The 

benchmark interest rate takes into 

account a key factor involved in interest 

rate formation (i.e., the quality of a 

country’s institutions), which is not 

directly tied to the state-imposed 

distortions in the banking sector 

discussed above. 

This methodology relies on data 

published by the World Bank and 

International Monetary Fund (see 

further discussion below). For the year 

2009, the World Bank, however, has not 

yet published all the necessary data 

relied on by the Department to compute 

a short-term benchmark interest rate for 

the PRC. Specifically, the following data 

are not yet available: World Governance 

Indicators and World Bank 

classifications of lower-middle income 

countries based on GNI per capita in 

U.S. dollars. Therefore, for purposes of 

this preliminary determination, where 

the use of a short-term benchmark rate 

for 2009 is required, we have applied 

the 2008 short-term benchmark rate for 

the PRC, as calculated by the 

Department (see discussion below). The 

Department notes that the current 2008 

loan benchmark may be updated, by the 

final determination, pending the release 

of all the necessary 2009 data. 

The 2008 short-term benchmark was 

computed following the methodology 

developed in CFS from the PRC. We first 

determined which countries are similar 

to the PRC in terms of GNI, based on the 

World Bank’s classification of countries 

as: low income; lower-middle 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. As 

explained in CFS from the PRC, this 

pool of countries captures the broad 

inverse relationship between income 

and interest rates. 

Many of these countries reported 

lending and inflation rates to the 

International Monetary Fund and are 

included in that agency’s international 

financial statistics (IFS). 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. First, we did not include those 

economies that the Department 

considered to be non-market economies 

for AD purposes for any part of the years 

in question, for example: Armenia, 

Azerbaijan, Belarus, Georgia, Moldova, 

and Turkmenistan. Second, the pool 

necessarily excludes any country that 

did not report both lending and 

inflation rates to IFS for those years. 

Third, we removed any country that 

reported a rate that was not a lending 

rate or that based its lending rate on 

foreign-currency denominated 

instruments. For example, Jordan 

reported a deposit rate, not a lending 

rate, and the rates reported by Ecuador 

and Timor L’Este are dollardenominated rates; therefore, the rates 

for these three countries have been 

excluded. Finally, for the calculation of 

the inflation-adjusted short-term 

benchmark rate, we also excluded any 

countries with aberrational or negative 

real interest rates for the year in 

question. 

For the resulting inflation-adjusted 

benchmark lending rate, see 

Memorandum to the File from Eric B. 

Greynolds, Program Manager, AD/CVD 

Operations, Office 3, regarding ‘‘2008 

Short-Term Interest Rate Benchmark’’ 

(August 30, 2010). Because these are 

inflation-adjusted benchmarks, it is 

necessary to adjust the respondent’s 

interest payments for inflation. This was 

done using the PRC inflation rate as 

reported in the IFS. 

Benchmark for Long-Term RMB 

Denominated Loans: The lending rates 

reported in the 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 long-term benchmark. To address 

this problem, the Department has 

developed an adjustment to the shortand medium-term rates to convert them 

to long-term rates using Bloomberg U.S. 

corporate BB-rated bond rates. See 

Light-Walled Rectangular Pipe and Tube 

From the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Investigation Determination, 73 FR 

35642 (June 24, 2008) (LWRP from the 

PRC), and accompanying Issues and 

Decision Memorandum (LWRP Decision 

Memorandum) at ‘‘Discount Rates.’’ In 

Citric Acid from the PRC, this 

methodology was revised by switching 

from a long-term mark-up based on the 

ratio of the rates of BB-rated bonds to 

applying a spread which is calculated as 

the difference between the two-year BB 

bond rate and the n-year BB bond rate, 

where n equals or approximates the 

number of years of the term of the loan 

in question. See Citric Acid and Certain 

Citrate Salts From the People’s Republic 

of China: Final Affirmative 

Countervailing Duty Determination, 74 

FR 16836 (April 13, 2009) (Citric Acid 

from the PRC), and accompanying 

Issues and Decision Memorandum 

(Citric Acid from the PRC Decision 

Memorandum) at Comment 14. 

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 provided 

the subsidy. 

Analysis of Programs 

Programs Preliminarily Determined To 

Be Countervailable 

A. Exemption From City Construction 

Tax and Education Tax for FIEs 

Pursuant to the Circular Concerning 

Temporary Exemption from Urban 

Maintenance and Construction Tax and 

Additional Education Fees for ForeignFunded and Foreign Enterprises 

(GUOSHUIFA {1994} No. 38), the local 

tax authorities exempt all FIEs and 


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foreign enterprises from the city 

maintenance and construction tax and 

education fee surcharge. The 

construction tax is based on the amount 

of product tax; value added tax, and/or 

business tax actually paid by the 

taxpayer. For taxpayers located in urban 

areas, the rate is seven percent; for 

taxpayers located in counties or 

townships, the rate is five percent; and 

for taxpayers located in areas other than 

urban areas, counties, and townships, 

the rate is one percent. Regarding the 

education fee surcharge, FIEs pay only 

one percent of the actual amount of the 

product tax, value-added tax, and 

business tax paid, whereas other entities 

pay four percent of that amount. 

Guangcheng and New Zhongya are FIEs 

and, therefore, received exemptions 

under this program. 

Consistent with our finding in Racks 

from the PRC, we preliminarily 

determine that the exemptions from the 

city construction tax and education 

surcharge under this program confer a 

countervailable subsidy. See Racks from 

the PRC Decision Memorandum at 

‘‘Exemption from City Construction Tax 

and Education Tax for FIEs in 

Guangdong Province.’’ The exemptions 

are financial contributions in the form 

of revenue forgone by the government 

and provide a benefit to the recipient in 

the amount of the savings. See section 

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

351.509(a)(1). We also preliminarily 

determine that the exemptions afforded 

by this program are limited as a matter 

of law to certain enterprises, i.e., FIEs, 

and, hence, specific under section 

771(5A)(D)(i) of the Act. To calculate 

the benefit, we treated the tax savings 

and exemptions received by 

Guangcheng and New Zhongya as 

recurring benefits, consistent with 19 

CFR 351.524(c)(1). Guangcheng and 

New Zhongya both reported that they 

are exempted from the city construction 

tax and education fee surcharge. 

To compute the amount of city 

construction tax savings, we first 

determined the rate the companies 

would have paid in the absence of the 

program. Both Guangcheng and New 

Zhongya reported that a seven percent 

construction tax would have been 

applied to them absent the program. 

They further reported that they paid a 

one percent education tax instead of a 

four percent education tax that would 

have been applicable absent the 

program. Thus, we compared the rates 

the companies would have paid during 

the POI in the absence of the program 

(seven percent for the construction tax 

and 4 percent on the education tax) with 

the rate the companies paid (zero 

percent construction tax and 1 percent 

education tax), because they are FIEs. 

To calculate the total benefit under the 

program, we summed the savings from 

the construction tax exemption and 

education fee exemption. 

To calculate the program rate, we 

divided the companies’ tax savings 

received during the POI by their total 

consolidated sales, net of intra-company 

sales. Specifically, for New Zhongya, we 

divided the benefit by Zhongya’s total 

sales for the POI. For Guangcheng, we 

divided the benefit the combined total 

sales of Guangcheng and Guang Ya. 

On this basis, we preliminarily 

determine the countervailable subsidy 

to be 0.01 percent ad valorem for the 

Guang Ya Companies and 0.07 percent 

ad valorem for the Zhongya Companies. 

B. GOC and Sub-Central Government 

Grants, Loans, and Other Incentives for 

Development of Famous Brands and 

China World Top Brands 

The Famous Brand program is 

administered at the central, provincial, 

and municipal government level. During 

the POI, New Zhongya and Guang Ya 

reported receiving grants under the 

Famous Brand program from their 

respective local governments. 

Though operated at the local level, the 

GOC issued ‘‘Measures for the 

Administration of Chinese Top-Brand 

Products,’’ which state that the 

requirements for application require 

that firms provide information 

concerning their export ratio as well as 

the extent to which their product 

quality meets international standards. 

See Chapter 3 of the ‘‘Measures for the 

Administration of Chinese Top-Brand 

Products’’ at Exhibit 24 of the Guang Ya 

Companies July 8, 2010, questionnaire 

response. 

Based on the information available on 

the record of the investigation, we 

determine that the grants that the 

Zhongya and Guang Ya Companies 

received under the famous brand 

program constitute a financial 

contribution and a benefit under 

sections 771(5)(D)(i) and 771(5)(E) of the 

Act, respectively. Regarding specificity, 

section 771(5A)(B) of the Act states that 

an export subsidy is a subsidy that is, 

in law or in fact, contingent upon export 

performance, alone or as one of two or 

more conditions. Based on the 

information on the record of the 

investigation, we determine that grants 

provided to the Zhongya and Guang Ya 

Companies under the famous brands 

program are contingent on export 

activity. Therefore, we find that the 

program is specific under section 

771(5A)(B) of the Act. Our approach in 

this regard is consistent with the 

Department’s findings in prior CVD 

proceedings involving the PRC. See, 

e.g., Pre-Stressed Concrete Steel Wire 

Strand from the People’s Republic of 

China: Final Affirmative Countervailing 

Duty Determination, 75 FR 28557 (May 

21, 2010) (PC Strand from the PRC), and 

accompanying Issues and Decision 

Memorandum (PC Strand from the PRC 

Decision Memorandum) at ‘‘Subsidies 

for Development of Famous Export 

Brands and China World Top Brands at 

Central and Sub-Central Level.’’ 

The grants that the Zhongya and 

Guang Ya Companies received during 

the POI were less than 0.5 percent of 

their respective total export sales in the 

year of approval/receipt. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount year of 

receipt. Guang Ya also received a grant 

prior to the POI that was greater than 0.5 

percent of its total export sales in the 

year of approval/receipt. Therefore, we 

allocated the benefit over time using the 

methodology provided under 19 CFR 

351.524(d)(2). 

On this basis, we calculated a total net 

subsidy rate of 0.32 percent ad valorem 

for the Guang Ya Companies. 

Concerning the Zhongya Companies, the 

benefit it received under the program 

was fully expensed prior to the POI. 

C. Two Free, Three Half Income Tax 

Exemptions for FIEs 

The Foreign Invested Enterprise and 

Foreign Enterprise Income Tax Law (FIE 

Tax Law), enacted in 1991, established 

the tax guidelines and regulations for 

FIEs in the PRC. The intent of this law 

is to attract foreign businesses to the 

PRC. According to Article 8 of the FIE 

Tax Law, FIEs that are ‘‘productive’’ and 

scheduled to operate not less than 10 

years are exempt from income tax in 

their first two profitable years and pay 

half of their applicable tax rate for the 

following three years. FIEs are deemed 

‘‘productive’’ if they qualify under 

Article 72 of the Detailed 

Implementation Rules of the Income 

Tax Law of the People’s Republic of 

China of Foreign Investment Enterprises 

and Foreign Enterprises. New Zhongya 

reported receiving benefits under this 

program that are attributable to the POI. 

We determine that the exemption or 

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 GOC and it provides a 

benefit to the recipients in the amount 

of the tax savings. See sections 

771(5)(D)(ii) and 771(5)(E) of the Act 

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

determine that the exemption/reduction 

afforded by this program is limited as a 


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6Consistent with our past practice, we did not 

include this program in the Guang Ya Companies’ 

total net subsidy rate because it is not numerically 

insignificant. See, e.g., CFS from the PRC Decision 

Memorandum at ‘‘Analysis of Programs, Programs 

Determined Not To Have Been Used or Not To Have 

Provided Benefits During the POI for GE.’’ 

matter of law to certain enterprises, 

‘‘productive’’ FIEs, and, hence, is 

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

the Act. Our approach in this regard is 

consistent with the Department’s 

practice. See CFS from the PRC Decision 

Memorandum at ‘‘Two Free/Free Half 

Program.’’ 

To calculate the benefit from this 

program, we treated the income tax 

exemption claimed as a recurring 

benefit, consistent with 19 CFR 

351.524(c)(1). We then compared the tax 

rate paid to the rate that otherwise 

would have been paid by New Zhongya 

and multiplied the difference by the 

company’s taxable income. We divided 

the benefit by the total sales of the 

Zhongya Companies during the POI. 

On this basis, we determine a 

countervailable subsidy of 0.53 percent 

ad valorem for the Zhongya Companies. 

D. Import Tariff and VAT Exemptions 

for FIEs and Certain Domestic 

Enterprises Using Imported Equipment 

in Encouraged Industries 

Enacted in 1997, the Circular of the 

State Council on Adjusting Tax Policies 

on Imported Equipment (Guofa No. 37) 

(Circular 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. The National 

Development and Reform Commission 

(NDRC) and the General Administration 

of Customs are the government agencies 

responsible for administering this 

program. Qualified enterprises receive a 

certificate either from the NDRC or one 

of its provincial branches. To receive 

the exemptions, a qualified enterprise 

only has to present the certificate to the 

customs officials upon importation of 

the equipment. The objective of the 

program is to encourage foreign 

investment and to introduce foreign 

advanced technology equipment and 

industry technology upgrades. The 

Department has previously found this 

program to be countervailable. See, e.g., 

Citric Acid Decision from the PRC 

Memorandum at ‘‘VAT Rebate on 

Purchases by FIEs of Domestically 

Produced Equipment.’’ 

New Zhongya, an FIE, reported 

receiving VAT and tariff exemptions 

under this program for imported 

equipment prior to and during the POI. 

Guangcheng, also an FIE, reported 

receiving VAT and tariff exemptions 

under this program for imported 

equipment prior to the POI. 

We determine that the 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 the exemptions 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 351.509(a)(1). We further determine 

that the VAT and tariff exemptions 

under this program are specific under 

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

because the program is limited to 

certain enterprises. As described above, 

only FIEs and certain domestic 

enterprises are eligible to receive VAT 

and tariff exemptions under this 

program. No information has been 

provided to demonstrate that the 

beneficiary companies are a nonspecific group. As noted above, the 

Department finds FIEs to be a specific 

group under section 771(5A)(D)(i) of the 

Act. In addition, the additional certain 

enterprises requiring approval by the 

NDRC does not render the program to be 

non-specific. See, e.g., CFS from the 

PRC Decision Memorandum at 

Comment 16, and 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 

accompanying Issues and Decision 

Memorandum (Tires from the PRC 

Decision Memorandum) at ‘‘VAT and 

Tariff Exemptions for FIEs and Certain 

Domestic Enterprises Using Imported 

Equipment on Encouraged Industries.’’ 

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)(1). Therefore, we 

have examined the VAT and tariff 

exemptions that New Zhongya received 

under the program during the POI and 

prior years. 

To calculate the amount of import 

duties exempted under the program, we 

multiplied the value of the imported 

equipment by the import duty rate that 

would have been levied absent the 

program. To calculate the amount of 

VAT exempted under the program, we 

multiplied the value of the imported 

equipment (inclusive of import duties) 

by the VAT rate that would have been 

levied absent the program. Our 

derivation of VAT in this calculation is 

consistent with the Department’s 

approach in prior cases. See, e.g., 

Circular Welded Carbon Quality Steel 

Line Pipe from the People’s Republic of 

China: Final Affirmative Countervailing 

Duty Determination, 73 FR 70961 

(November 24, 2008) (Line Pipe from the 

PRC), and accompanying Issues and 

Decision Memorandum (Line Pipe from 

the PRC Decision Memorandum) at 

Comment 8 (‘‘* * * we agree with 

Petitioners that VAT is levied on the 

value of the product inclusive of 

delivery charges and import duties’’). 

Next, we summed the amount of duty 

and VAT exemptions received in each 

year. For each year, we then divided the 

total grant amount by the corresponding 

total sales of the respondents for the 

year in question. 

For each company, we divided the 

total amount of VAT and tariff 

exemptions by the corresponding total 

sales for year in which the exemptions 

were received. Those exemptions that 

were less than 0.5 percent of total sales 

were expensed to the year of receipt. 

Those exemptions that were greater than 

0.5 percent of total sales were allocated 

over the AUL using the methodology 

described under 19 CFR 351.524(d)(2). 

On this basis, we determine the 

countervailable subsidy to be 0.52 

percent ad valorem for the Zhongya 

Companies and less than 0.005 percent 

ad valorem for the Guang Ya 

Companies.6

E. International Market Exploration 

Fund (SME Fund) 

The SME Fund, established under CQ 

(2000) No. 467, encourages the 

development of small and mediumsized enterprises (SMEs) by reducing 

the risk of operation for these 

enterprises in the international market. 

To qualify for the program, a company 

needs to satisfy the criteria in CQ 

(2000), which provides that the SME 

should have export and import rights, 

exports of less than $15,000,000, an 

accounting system, personnel with 

foreign trade skills, and a plan for 

exploring the international market. 

Guang Ya reported receiving funds 

under this program in 2008 and 2009 

from the Shishan Town Economic 

Development Office. 

We further preliminarily determine 

that the grants provided under the SME 

Fund constitute a financial contribution 

and benefit under sections 771(5)(D)(i) 


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and 771(5)(E) of the Act, respectively. 

We also determine that this program is 

an export subsidy, under section 

771(5A)(B) of the Act, because the 

program supports the international 

market activities of SMEs and is limited 

to enterprises that have exports of less 

than $15,000,000. Our findings in this 

regard are consistent with the 

Department’s practice. See Wire Decking 

from the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination, 75 FR 32902 (June 10, 

2010) (Wire Decking from the PRC), and 

accompanying Issues and Decision 

Memorandum (Wire Decking from the 

PRC Decision Memorandum) at 

‘‘International Market Exploration Fund 

(SME Fund).’’ Information on the record 

indicates that the SME Fund provides 

one-time assistance. Therefore, 

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

we are treating the grants received 

under this program as ‘‘non-recurring.’’ 

To measure the benefits of each grant 

that are allocable to the POI, we first 

conducted the ‘‘0.5 percent test’’ for the 

grant. See 19 CFR 351.524(b)(2). We 

divided the total amount approved in 

2008 and 2009 by the total export sales 

of Guang Ya and Guangcheng in 2008 

and 2009. As a result, we found that the 

grants received by Guang Ya are less 

than 0.5 percent and fully expensed to 

the year of receipt. 

Therefore, for the POI, we calculated 

a total net subsidy rate of 0.01 percent 

ad valorem for the Guang Ya 

Companies. 

F. Preferential Tax Program for FIEs 

Recognized as High or New Technology 

Enterprises (HNTEs) 

According to the ‘‘Circular of the State 

Council Concerning the Approval of the 

National Development Zones for New 

and High Technology Industries and the 

Relevant Policies and Provisions’’ at 

Article 2 and 4 of Appendix III 

‘‘Regulations on the Tax Policy for the 

National New and High Technology 

Industries Parks), FIEs designated as 

HNTEs in high and new technology 

parks pay a reduced income tax rate of 

15 percent. 

We preliminarily determine that the 

reduction in the income tax paid by 

FIEs designated as HNTEs under this 

program confers a countervailable 

subsidy. The 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 sections 

771(5)(D)(ii) and 771(5)(E) of the Act, 

respectively, and 19 CFR 351.509(a)(1). 

We also determine that the reduction 

afforded by this program is limited as a 

matter of law to certain enterprises, i.e., 

FIEs designated as HNTEs, and, hence, 

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

the Act. The program is also specific 

pursuant to section 771(5A)(D)(iv) of the 

Act, as only ratified new and high 

technology enterprises located in new 

and high technology parks approved by 

the State Council can pay the reduced 

tax rate. Guang Ya and Guangcheng 

reported receiving tax benefits 

attributable to the POI under this 

program. 

We treated the income tax savings 

enjoyed by the companies as a recurring 

benefit, consistent with 19 CFR 

351.524(c)(1). To compute the amount 

of the tax savings, we compared the rate 

Guang Ya and Guangcheng would have 

paid in the absence of the program (25 

percent) with the rate the company paid 

(15 percent), and divided the tax savings 

received during the POI by the 

combined total sales of Guang Ya and 

Guangcheng. 

On this basis, we determine the 

countervailable subsidy attributable to 

Guang Ya Companies to be 0.11 percent 

ad valorem under this program. 

G. Policy Loans to Chinese Aluminum 

Extrusion Producers 

The Department is examining whether 

aluminum extrusion producers receive 

preferential lending through SOCBs or 

policy banks. According to the 

allegation, preferential lending to the 

aluminum extrusion industry is 

supported by the GOC through the 

issuance of national and provincial fiveyear plans, industrial plans for the steel 

sector, catalogues of encouraged 

industries, and other government laws 

and regulations. Based on our review of 

the responses and documents provided 

by the GOC, we preliminarily determine 

that loans received by the aluminum 

extrusion industry from SOCBs and 

policy banks were made pursuant to 

government directives. 

Record evidence demonstrates that 

the GOC, through its directives, has 

highlighted and advocated the 

development of the aluminum extrusion 

industry. At the national level, the GOC 

has placed an emphasis on the 

development of high-end, value-added 

steel products through foreign 

investment as well as through 

technological research, development, 

and innovation. In laying out this 

strategy, the GOC has identified specific 

products selected for development. For 

example, the ‘‘Catalogue of Major 

Industries, Products, and Technologies 

Encouraged for Development in China’’ 

(Encouraged Industries Catalogue), 

issued by the GOC in 2000, identifies 

526 products, technologies, and 

infrastructure facilities for business 

promotion. See the GOC’s August 4, 

2010, questionnaire response at Exhibit 

3. The Encouraged Industries Catalogue 

specifically mentions aluminum 

extrusion products under the nonferrous metals heading. Id. 

Similarly, there is the Decision of the 

State Council on Promulgating the 

‘‘Interim Provisions on Promoting 

Industrial Structure Adjustment’’ for 

Implementation (No. 40 (2005)) 

(Decision 40). The GOC implemented 

Decision 40 in order to achieve the 

objectives of the Eleventh Five-Year 

Plan. See the GOC’s August 4, 2010, 

questionnaire response at Exhibit 6. 

Decision 40 references the Directory 

Catalogue on Readjustment of Industrial 

Structure (Industrial Catalogue), which 

outlines the projects which the GOC 

deems ‘‘encouraged,’’ ‘‘restricted,’’ and 

‘‘eliminated,’’ and describes how these 

projects will be considered under 

government policies. Id. Aluminum is 

mentioned as an industry in the 

Industrial Catalogue as an ‘‘encouraged 

project.’’ Id. For the ‘‘encouraged’’ 

projects, Decision 40 outlines several 

support options available from the 

government, including financing. Id. 

In addition, the ‘‘Guidelines on 

Acceleration of the Adjustment of the 

Aluminum Industry Structure’’ 

(Aluminum Industry Guidelines), issued 

by the GOC in 2006, discusses support 

that is to be provided to producers of 

aluminum extrusions. See the GOC’s 

August 4, 2010, questionnaire response 

at Exhibit 9. For instance, under the 

heading ‘‘Increase Industry 

Concentration, Encourage 

Comprehensive Usage and Conservation 

of Resources,’’ the Aluminum Industry 

Guidelines state: 

Create favorable conditions for enterprises 

M&A and restructuring, and accelerate 

enterprises’ merger and restructuring via 

economic means. Support aluminum, 

electrolytic aluminum, and aluminum 

processing enterprises to undertake merger 

and restructuring, establish internationally 

competitive enterprise group, realize 

advantage complementation, and increase 

industry concentration. Encourage private 

capital and foreign capital to participate in 

the reform, restructuring and transformation 

of state-owned enterprises. Encourage 

backbone enterprises to keep raising 

technology and management levels, 

accelerate medium and small-sized 

aluminum processing enterprises’ technology 

transformation, and improve resource 

utilization. 

Id. The Aluminum Industry Guidelines 

also make reference to lending 

activities. Under the heading, 

‘‘Strengthen the Coordination and 

Cooperation of Credit Policy and 

Industrial Policy and Establish 

Withdrawal Mechanism Under the 


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7The Zhongya Companies reported that they did 

not have any loans outstanding during the POI. 

Policies,’’ the Aluminum Industry 

Guidelines state: 

It is required to strictly abide by the rule 

that the minimum self-owned capital 

requirement for electrolytic aluminum 

projects shall be no less than 35 percent of 

the total investment. Financial institutions 

shall rationally allocate the lending credits 

taking into account the national 

macroeconomic adjustments, industrial 

policies, and ordinary lending principles. 

Financial institutions may continue to 

provide credits to oxide aluminum or 

electrolytic aluminum enterprises that are in 

compliance with national industrial policies 

and the market entrance threshold, provided 

such lending is in accordance with the 

ordinary lending principles. No credit shall 

be provided to those enterprises that do not 

conform to national industrial policies, do 

not satisfy the market entrance threshold, 

have obsolete manufacturing processes, have 

been classified as prohibited, or have been 

ordered to cease operation. In the event that 

credits are mistakenly provided to such 

enterprises, the financial institutions shall 

take appropriate measures to reclaim the 

credits and avoid financial risk. 

Id. (emphasis added). Additionally, 

under the heading ‘‘Enhance the 

Implementation of Environmental 

Protection Regulations, Eliminate 

Capacities,’’ the Aluminum Industry 

Guidelines state that different ‘‘financing 

means’’ shall be used ‘‘to support 

enterprises’ environmental protection 

and energy savings.’’ Id. 

Support, in the form of financing, is 

also discussed in the ‘‘Nonferrous Metal 

Industry Adjustment and Revitalization 

Plan’’ (Nonferrous Metal Plan) that was 

issued by the GOC in 2009. See the 

GOC’s August 4, 2010, questionnaire 

response at Exhibit 10. Under the 

heading ‘‘Increase Dedication to 

Technology Improvement and 

Technology Reform,’’ the Nonferrous 

Metal Plan states: 

Set aside some funds from new central 

investment. Use loan interest subsidies to 

support R&D and technology reform in the 

nonferrous metals industry. Increase the level 

of financial support directed toward reform 

of energy conservation technologies. 

The Nonferrous Metal Plan further 

references financing to the aluminum 

extrusions industry under the heading, 

‘‘Continue To Implement the Financing 

Policy of ‘Encouragement and 

Discouragement: ’’ 

Increase financing support to backbone 

enterprises in the nonferrous metals industry. 

Provide support to certain enterprises in 

issuing stock, enterprise bonds, and 

corporate bonds. Enterprises eligible to 

receive such support are those which are 

engaged in projects which, in addition to 

adhering to investment management 

prescriptions, are in compliance with 

industry policy as well as relevant 

environmental and land regulations; and 

implement acquisitions, restructuring, ‘‘Going 

Abroad’’ {sic} and technological reformation. 

Id. (emphasis added). 

As noted in Citric Acid from the PRC, 

in general, the Department looks to 

whether government plans or other 

policy directives lay out objectives or 

goals for developing the industry and 

call for lending to support those 

objectives or goals. See Citric Acid from 

the PRC Decision Memorandum at 

Comment 5. Where such plans or policy 

directives exist, then it is the 

Department’s practice to determine that 

a policy lending program exists that is 

specific to the named industry (or 

producers that fall under that industry). 

See CFS Decision Memorandum at 

Comment 8, and LWTP from the PRC 

Decision Memorandum at ‘‘Government 

Policy Lending Program.’’ Once that 

finding is made, the Department relies 

upon the analysis undertaken in CFS 

from the PRC to further conclude that 

national and local government control 

over the SOCBs results in the loans 

being a financial contribution by the 

GOC. See CFS Decision Memorandum at 

Comment 8. Therefore, on the basis of 

the record information described above, 

we preliminarily determine that the 

GOC has a policy in place to encourage 

the development of the production of 

aluminum extrusions through policy 

lending. 

The GOC and the Guang Ya 

Companies provided source documents 

concerning the largest loans the Guang 

Ya Companies had outstanding during 

the POI.7 Information in these business 

proprietary documents further supports 

our preliminary determination that the 

GOC has a policy in place to encourage 

the development of the production of 

aluminum extrusions through policy 

lending. For further information, see the 

Memorandum to the File from Eric B. 

Greynolds, Program Manager, Office 3, 

Operations, ‘‘Excerpts of Internal Loan 

Documents of the Guang Ya 

Companies,’’ (August 30, 2010) (Internal 

Loan Document Memorandum). 

The GOC has argued in its August 4, 

2010, questionnaire response that the 

People’s Bank of China (PBOC) revoked 

the PRC’s policy lending programs in 

1999 pursuant to the ‘‘Circular on 

Improving Administration of Special 

Loans’’ (YINFA (1999)) No. 228 (Special 

Loans Circular). See the GOC’s August 

4, 2010, questionnaire response at 

Exhibit 18. We preliminarily determine 

that there is no basis to conclude that 

the GOC’s policy lending activities 

ceased with the issuance of the Special 

Loans Circular. The Special Loans 

Circular states that, while banks shall 

make lending decisions on their own, 

‘‘authorities’’ may continue to ‘‘give 

advice on the choice of project.’’ 

Further, the Special Loans Circular 

states that firms may continue to receive 

formerly designated ‘‘special loans:’’ 

For those (former special) loans which do 

not meet the commercial lending conditions, 

if the authorities can provide loan interest 

grant or other subsidies so that the 

commercial lending conditions are fulfilled, 

the banks may continue to provide the loans. 

Id. The Special Loans Circular goes on 

to state that: 

Wholly State-owned banks shall make 

efforts to implement the requirements above, 

and shall actively communicate with the 

authorities in charge of relevant industries, 

with a view to gaining their understanding 

and support. 

Id. Thus, despite the GOC’s claims, the 

Special Loans Circular provides a means 

by which what it refers to as ‘‘special 

loans’’ may continue to be provided to 

firms in the PRC. In addition, the 

Special Loans Circular states 

government authorities will continue to 

‘‘advise’’ and monitor the actions of the 

PRC state-owned lending institutions. 

Furthermore, the Aluminum Industries 

Guidelines and the Nonferrous Metal 

Plan, both of which mention directing 

credit to members of the aluminum 

extrusions industry, as well as the loans 

discussed in the Internal Loan 

Document Memorandum, were issued 

after the GOC released the Special Loans 

Circular. 

The Guang Ya Companies reported 

that they had outstanding loans from 

PRC-based banks during the POI. 

Consistent with our determination in 

prior proceedings, we preliminarily find 

these PRC-based banks to be stateowned commercial banks (SOCBs). See, 

e.g., Certain Oil Country Tubular Goods 

From the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination, Final Negative Critical 

Circumstances Determination, 74 FR 

64045 (December 7, 2009) (OCTG from 

the PRC), and accompanying Issues and 

Decision Memorandum (OCTG Decision 

Memorandum) at Comment 20. 

We preliminarily determine that the 

loans to aluminum extrusion producers 

from SOCBs in the PRC constitute a 

direct financial contribution from the 

government, pursuant to section 

771(5)(D)(i) of the Act, and they provide 

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 (see 

section 771(5)(E)(ii) of the Act). We 

further preliminarily determine that the 

loans are de jure specific within the 


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

Act because of the GOC’s policy, as 

illustrated in the government plans and 

directives, to encourage and support the 

growth and development of the 

aluminum extrusions industry. 

To determine whether a benefit is 

conferred under section 771(5)(E)(ii) of 

the Act, we compared the amount of 

interest the Guang Ya Companies paid 

on their outstanding loans to the 

amount they would have paid on 

comparable commercial loans. See 19 

CFR 351.505(a). In conducting this 

comparison, we used the interest rates 

described in the ‘‘Benchmarks and 

Discount Rates’’ section above. We have 

attributed benefits under this program to 

the combined total sales of Guang Ya 

and Guangcheng. 

On this basis, we preliminarily 

determine a countervailable subsidy of 

2.11 percent ad valorem for the Guang 

Ya Companies. 

H. Fund for SME Bank-Enterprise 

Cooperation Projects 

According to the GOC, 1,000 eligible 

SMEs along with several financial 

institutions were selected to participate 

in the program. Under the program, 

financial institutions in the PRC decide 

whether to extend credit to certain 

eligible SMEs. If they decide to do so, 

the Provincial Government of 

Guangdong (PGOG) provides loan 

interest assistance to the SME that 

received the financing from the 

financial institution. The program is 

administered by the PGOG’s Department 

of Finance and the Bureau of SMEs 

pursuant to the Circular on Printing and 

Distributing of the Measures on 

Implementing the 2009 GovernmentBank-Enterprise Cooperation Special 

Fund Program (YUECAIGONG (2009) 

No. 54) (Bank Enterprise Cooperation 

Measures). See the GOC’s August 9, 

2010 supplemental questionnaire 

response at Supp-1. The Guang Ya 

Companies reported that Guang Ya 

received a grant under this program 

during the POI. 

We preliminarily determine that the 

grants issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act, in the form of a direct 

transfer of funds, and a benefit under 

section 771(5)(E) of the Act. 

According to the Bank Enterprise 

Cooperation Measures, the 500 SMEs 

deemed as having the ‘‘greatest 

potential’’ as well as enterprises that 

manufacture key equipment, or pursue 

creative technologies, or engage in 

advanced manufacturing activities 

backed by both the PGOG and the 

corresponding city will receive 

preferential treatment under the 

program. In light of the selection 

process described in the Bank 

Enterprise Cooperation Measures, we 

preliminarily determine that this 

program is de jure specific under 

section 771(5)(D)(i) of the Act because 

the measures expressly limit access to 

certain enterprises. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng. The grant 

was less than 0.5 percent of the export 

sales of Guang Ya and Guangcheng in 

the year of approval/receipt. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.05 percent ad valorem 

for the Guang Ya Companies. 

I. Special Fund for Significant Science 

and Technology in Guangdong Province 

Under this program, the PGOG seeks 

to support major, generic, and key 

technology research and development of 

Guangdong industries and promote 

technology achievements and diffusion 

of technological knowledge. The 

program is administered by the 

Guangdong Science and Technology 

Department pursuant to the Provisional 

Measures on Administration of 

Guangdong Important ScienceTechnology Project Special Fund 

(YEUCAIGONG (2009) No. 166). The 

Guang Ya Companies reported that 

Guang Ya received a grant under this 

program during the POI. 

We preliminarily determine that the 

grants issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act, in the form of a direct 

transfer of funds, and a benefit under 

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

explained in the ‘‘Various Grant 

Programs Self-Reported by the Guang Ya 

Companies’’ section, the GOC failed to 

provide benefit distribution data for this 

program. As a result, the Department is 

applying AFA and assuming that the 

program is specific under section 

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

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.12 percent ad valorem 

for the Guang Ya Companies. 

J. Fund for Economic, Scientific, and 

Technology Development 

Under this program, the Government 

of Foshan City distributes grants to 

firms with the aim of fostering 

technological and economic 

development. The program is 

administered by the Science and 

Technology Bureau of Foshan 

Municipality and the Finance Bureau of 

Foshan Municipality pursuant to the 

Circular on Printing and Distributing of 

the Measures on Administration of 

Foshan Sci-Tech Development Special 

Fund (FOFUBAN (2008) No. 402). See 

the GOC’s August 9, 2010, supplemental 

questionnaire at Supp-4. The Guang Ya 

Companies, which are located in Foshan 

City, reported that Guang Ya received a 

grant under this program during the 

POI. 

We preliminarily determine that the 

grants issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. As explained in the 

‘‘Various Grant Programs Self-Reported 

by the Guang Ya Companies’’ section, 

the GOC failed to provide benefit 

distribution data for this program. As a 

result, the Department is applying AFA 

and assuming that the program is 

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

the Act. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.01 percent ad valorem 

for the Guang Ya Companies. 

K. Provincial Fund for Fiscal and 

Technological Innovation 

Under this program, the PGOG 

provides grants to firms for the purpose 

of promoting technological and fiscal 

innovation. The program is 

administered by the Provincial 

Department of Finance and Economic 

and Trade Commission of Guangdong 

Province pursuant to the Provisional 

Measures on Administration of 

Exploration and Renovation Provincial 

Level Fund (YUECAIQI (2003) No. 140). 

See the GOC’s August 9, 2010, 

supplemental questionnaire at Supp-1. 

The Guang Ya Companies reported that 

Guangcheng received a grant under this 

program during the POI. 

We preliminarily determine that the 

grants issued by the GOC under this 


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program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. As explained in the 

‘‘Various Grant Programs Self-Reported 

by the Guang Ya Companies’’ section, 

the GOC failed to provide benefit 

distribution data for this program. As a 

result, the Department is applying AFA 

and assuming that the program is 

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

the Act. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.04 percent ad valorem 

for the Guang Ya Companies. 

L. Provincial Loan Discount Special 

Fund for SMEs 

Under this program, the PGOG 

provides interest subsidy grants in order 

to promote and support SMEs. The 

program is administered by the 

Provincial Department of Finance and 

the Guangdong Provincial SME Bureau 

pursuant to the Measures on 

Administration of SME Loan Interest 

Assistance Special Fund 

(YUECAIGONG (2009) No. 124). See the 

GOC’s August 9, 2010 supplemental 

questionnaire at Supp-9. The Guang Ya 

Companies reported that Guangcheng 

received a grant under this program 

during the POI. 

We preliminarily determine that the 

grants issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. As explained in the 

‘‘Various Grant Programs Self-Reported 

by the Guang Ya Companies’’ section, 

the GOC failed to provide benefit 

distribution data for this program. As a 

result, the Department is applying AFA 

and assuming that the program is 

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

the Act. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng. The grant 

was less than 0.5 percent of the total 

sales of Guang Ya and Guangcheng in 

the year of approval/receipt. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.04 percent ad valorem 

for the Guang Ya Companies. 

M. Export Rebate for Mechanic, 

Electronic, and High-Tech Products 

The Guang Ya Companies reported 

that Guangcheng received a grant under 

this program during the POI. See the 

Guang Ya Companies’ July 8, 2010 

initial questionnaire response at 60. The 

Department sent two questionnaires to 

the GOC concerning this program. In its 

responses, the GOC indicated that it 

could not find any ‘‘meaningful 

information’’ concerning the program. 

See, e.g., the GOC’s August 18, 2010 

second supplemental questionnaire at 1. 

We preliminarily determine that the 

grants issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. Concerning 

specificity, we are resorting to the use 

of FA within the meaning of section 

776(a)(1) of the Act because the 

necessary information concerning the 

manner in which this program is 

administered is not on the record. Based 

on the information contained in the July 

8, 2010 questionnaire response of the 

Guang Ya Companies indicating that it 

received the grant in the form of an 

‘‘export rebate,’’ we are relying upon FA 

and preliminarily determine that the 

program is contingent upon exports and 

therefore specific under section 

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

To calculate the benefit, we divided 

the amount of the grant by the total 

export sales of Guang Ya and 

Guangcheng in the year of approval/ 

receipt. The grant was less than 0.5 

percent of the total export sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.02 percent ad valorem 

for the Guang Ya Companies. 

N. PGOG Special Fund for Energy 

Saving Technology Reform 

Under this program, the PGOG 

provides grants in the amount of RMB 

200 for every one MT of standard coal 

saved through increased energy 

efficiency during a given year. Firms 

must demonstrate annual energy savings 

equivalent to 2,000 MT of standard coal 

in order to be eligible to apply for grants 

under the program. The program is 

administered by the PGOG’s Department 

of Finance and the Economic Trade 

Commission of Guangdong pursuant to 

the ‘‘Provisional Measures on 

Administration of Guangdong EnergySaving Special Fund (YUECAIGONG) 

(2008) No. 126. See the GOC’s August 4, 

2010, initial questionnaire at Exhibit 46. 

The Guang Ya Companies reported that 

Guangcheng received a grant under this 

program during the POI. 

We preliminarily determine that the 

grant issued by the GOC under this 

program constitute a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. As explained in the 

‘‘Various Grant Programs Self-Reported 

by the Guang Ya Companies’’ section, 

the GOC failed to provide adequate 

benefit distribution data for this 

program. In its initial questionnaire, the 

GOC provided the amount of grants 

received by all firms (including 

Guangcheng) during the POI. It also 

provided for the POI the amount of 

grants received by aluminum extrusions 

producers as well as the total amount of 

grants issued under the program. 

However, the GOC did not provide, as 

requested by the Department, the 

amounts disbursed to other industries 

during the POI. In addition, the GOC 

did not provide, as requested by the 

Department, information concerning the 

distribution of benefits provided to 

firms and industry groups in the three 

years preceding the POI. See the GOC’s 

August 4, 2010, initial questionnaire at 

104–111 and Exhibit 46. Further, the 

GOC did not provide the requested 

information concerning the distribution 

of benefits in its second supplemental 

questionnaire response. See the GOC’s 

August 19, 2010, second supplemental 

questionnaire at 1. As a result, the 

Department is applying AFA and 

assuming that the program is specific 

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

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.06 percent ad valorem 

for the Guang Ya Companies. 

O. PGOG Science and Technology 

Bureau Project Fund (Also Referred to 

as Guangdong Industry, Research, 

University Cooperating Fund) 

Under this program, the PGOG 

distributes grants to universities and 

firms to support, among other things, 

industrial development and innovation 

in the province. The program is 

administered by the PGOG’s Department 

of Finance and Department of Science 

and Technology. See the GOC’s August 

9, 2010, first supplemental 

questionnaire response at 41–50 and 

Exhibit Supp–5. The Guang Ya 


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Companies reported that Guang Ya 

received a grant under this program 

during the POI. 

We preliminarily determine that the 

grant issued by the GOC under this 

program constitutes a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. As explained in the 

‘‘Various Grant Programs Self-Reported 

by the Guang Ya Companies’’ section, 

the GOC failed to provide benefit 

distribution data for this program. As a 

result, the Department is applying AFA 

and assuming that the program is 

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

the Act. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.03 percent ad valorem 

for the Guang Ya Companies. 

P. PGOG Tax Offsets Grants for Research 

and Development (R&D) 

Under this program, for R&D expenses 

incurred for developing new products 

and technologies that cannot be treated 

as intangible assets, 50 percent of the 

R&D expense shall be deducted as a tax 

offset. For R&D expenses considered 

intangible assets, the tax offset shall be 

amortized based on 150 percent of the 

R&D expenses. The program is 

administered by the PGOG’s Science 

and Technology Department and the 

Economic Trade Commission pursuant 

to the ‘‘Trial Administrative Measures 

for the Pre-Tax Deduction of Enterprises 

R&D Expenses’’ (R&D Measures). See the 

Guang Ya Companies’ July 8, 2010, 

questionnaire response at Exhibit 23. 

Article 5 of the R&D Measures states 

that eligible R&D projects: 

shall be in line with national and 

Guangdong provincial technological policies 

and industrial policies. Any projects 

belonging to producer projects, technological 

projects, or process projects eliminated or 

restricted by the central or Guangdong 

provincial government shall not enjoy the 

policy of additional calculation of R&D 

expenses. 

Id. The Guang Ya Companies reported 

that Guangcheng received a grant under 

this program during the POI. 

We preliminarily determine that the 

grant issued by the GOC under this 

program constitutes a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. Concerning 

specificity, as noted above in the ‘‘Policy 

Loans to Chinese Aluminum Extrusion 

Producers’’ section, we have 

preliminarily determined that the GOC 

and the PGOG have targeted the 

aluminum extrusions industry for 

development and assistance in a manner 

that is specific under section 

771(5A)(D)(i) of the Act, as illustrated in 

the government plans and directives, to 

encourage and support the growth and 

development of the aluminum 

extrusions industry. Given this 

preliminary finding and in light of the 

language in Article 5 of the R&D 

Measures, we preliminarily determine 

that the grants provided under this 

program are de jure specific within the 

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

Act. 

To calculate the benefit, we divided 

the amount of the grant by the total sales 

of Guang Ya and Guangcheng in the 

year of approval/receipt. The grant was 

less than 0.5 percent of the total sales of 

Guang Ya and Guangcheng. Therefore, 

pursuant to 19 CFR 351.524(b)(2), we 

expensed the grant amount to the POI 

(year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.04 percent ad valorem 

for the Guang Ya Companies. 

Q. Refund of Land-Use Tax for Firms 

Located in the Zhaoqing New and HighTech Industrial Development Zone 

(ZHTDZ) 

The Zhongya Companies reported that 

New Zhongya received a refund during 

the POI of land-use taxes paid to the 

ZHTDZ local authority in 2007. 

According to the Zhongya Companies, 

the ZHTDZ local authority reduced its 

land-use tax rate from 5 RMB per square 

meter to 2 RMB per square meter. The 

Zhongya Companies state that receipt of 

the land-use tax refund was contingent 

upon New Zhongya’s location in the 

ZHTDZ. See the Zhongya Companies 

August 6, 2010, supplemental 

questionnaire response at 27. The 

Zhongya Companies reported that New 

Zhongya recorded the tax refund in its 

‘‘subsidy income’’ ledger. Id. 

We preliminarily determine that the 

land-use tax refund received by the 

Zhongya Companies constitutes a 

financial contribution, in the form of 

revenue foregone, and a benefit, equal to 

the amount of the refund, as described 

under sections 771(5)(D)(ii) and 

771(5)(E) of the Act. Because the tax 

refund is limited to firms located in the 

ZHTDZ, we preliminarily determine 

that the program is regionally-specific 

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

To calculate the benefit, we divided 

the amount of the land-use tax received 

during the POI by the Zhongya 

Companies’ total sales. On this basis, we 

calculated a total net subsidy rate of 

0.13 percent ad valorem for the Zhongya 

Companies. 

R. Development Assistance Grants From 

the ZHTDZ Local Authority 

The Zhongya Companies reported that 

New Zhongya received a one-time 

development assistance grant from the 

ZHTDZ local authority during the POI. 

According to the Zhongya Companies, 

in determining eligibility, the ZHTDZ 

local authority examines firms’ output, 

tax payments, the level of foreign 

investment, and whether the firms’ have 

received famous brand designation. See 

the Zhongya Companies’ August 6, 

2010, supplemental questionnaire 

response at 17. 

We preliminarily determine that the 

grant issued by the GOC under this 

program constitutes a financial 

contribution under section 771(5)(D)(i) 

of the Act and a benefit under section 

771(5)(E) of the Act. Concerning 

specificity, as explained above in the 

‘‘GOC and Sub-Central Government 

Grants, Loans, and Other Incentives for 

Development of Famous Brands and 

China World Top Brands’’ section, we 

have preliminarily determined that the 

Famous Brand program is contingent 

upon export activity and, thus, is 

specific under section 771(5A)(B) of the 

Act. The Zhongya Companies indicate 

that famous brand designation is among 

the factors considered when 

determining eligibility under this 

program. Section 771(5A)(B) of the Act 

states that a program shall be deemed an 

export subsidy if receipt of the subsidy 

is contingent upon export performance, 

alone or as one of two or more 

conditions. Accordingly, because 

famous brand designation is among the 

factors the ZHTDZ local authority 

considers when determining eligibility 

and because the famous brand 

designation is contingent upon export 

activity, we preliminarily determine 

that the program is specific under 

section 771(5A)(B) of the Act. Our 

interpretation of section 771(5A)(B) of 

the Act in this regard is consistent with 

the Department’s practice. See, e.g., PC 

Strand from the PRC Decision 

Memorandum at ‘‘Subsidies for 

Development of Famous Export Brands 

and China World Top Brands at Central 

and Sub-Central Level.’’ 

To calculate the benefit, we divided 

the amount of the grant by the total 

export sales of the Zhongya Companies 

in the year of approval/receipt. The 

grant was less than 0.5 percent of the 

export sales of the Zhongya Companies. 

Therefore, pursuant to 19 CFR 


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8 In other words, in instances where we are 

applying FA, we are assuming that the percentage 

of primary aluminum purchased by domestic 

trading companies during the POI was equal to the 

ratio of primary aluminum produced by SOEs 

during the POI, as indicated by the aggregate data 

supplied in the questionnaire responses of the GOC. 

351.524(b)(2), we expensed the grant 

amount to the POI (year of receipt). 

On this basis, we calculated a total net 

subsidy rate of 0.13 percent ad valorem 

for the Zhongya Companies. 

S. Provision of Primary Aluminum for 

LTAR 

The Department is investigating 

whether producers and suppliers, acting 

as Chinese government authorities, sold 

primary aluminum to the Guang Ya and 

Zhongya Companies for LTAR. The 

Guang Ya and Zhongya Companies 

reported obtaining primary aluminum 

during the POI from trading companies 

as well as directly from primary 

aluminum producers. In the case of the 

Zhongya Companies, they were able to 

identify all of the firms that produced 

the primary aluminum that the Zhongya 

Companies purchased during the POI. 

Concerning the Guang Ya Companies, in 

some instances they were not able to 

identify the producers of the primary 

aluminum that the Guang Ya Companies 

purchased during the POI. 

In Tires from the PRC, the Department 

determined that majority government 

ownership of an input producer is 

sufficient to qualify it as an ‘‘authority.’’ 

See Tires from the PRC Decision 

Memorandum at ‘‘Government Provision 

of Rubber for Less than Adequate 

Remuneration.’’ Based on the record in 

the instant investigation, we determine 

that primary aluminum producers, 

which supplied respondents, and that 

are majority-government owned are 

‘‘authorities.’’ As a result, we determine 

that primary aluminum supplied by 

companies deemed to be government 

authorities constitute(s) a financial 

contribution in the form of a 

governmental provision of a good and 

that the respondents received a benefit 

to the extent that the price they paid for 

primary aluminum produced by these 

suppliers was for LTAR. See sections 

771(5)(D)(iv) and 771(5)(E)(iv) of the 

Act. We will follow-up with the GOC to 

determine whether suppliers that have 

less than majority government 

ownership should also be determined to 

be ‘‘authorities’’ under our CVD 

regulations. 

In prior CVD proceedings involving 

the PRC, the Department has 

determined that when a respondent 

purchases an input from a trading 

company or non-producing supplier, a 

subsidy is conferred if the producer of 

the input is an ‘‘authority’’ within the 

meaning of section 771(5)(B) of the Act 

and the price paid by the respondent for 

the input was sold for LTAR. See CWP 

from the PRC Decision Memorandum at 

‘‘Hot-Rolled Steel for Less Than 

Adequate Remuneration;’’ Racks from 

the PRC Decision Memorandum at 

‘‘Provision of Wire Rod for Less than 

Adequate Remuneration;’’ and CWASPP 

from the PRC Decision Memorandum at 

‘‘Provision of SSC for LTAR.’’ Therefore, 

in our initial questionnaire, we 

requested that the respondent 

companies and the GOC together 

identify the producers from whom the 

trading companies acquired the primary 

aluminum that was subsequently sold to 

respondents during the POI and to 

provide information that would allow 

the Department to determine whether 

those producers were government 

authorities. 

The Zhongya Companies were able to 

identify the entities that produced the 

primary aluminum that they acquired 

during the POI. Regarding the Guang Ya 

Companies, for certain purchases, they 

were able to identify the producers. 

However, for several other purchases, 

although they identified their primary 

aluminum suppliers and indicated 

whether the suppliers were trading 

companies in the business of reselling 

primary aluminum, the Guang Ya 

Companies did not identify the 

producers that supplied the trading 

companies. For purposes of this 

preliminary determination, where 

available, we are relying on the 

information supplied by the GOC and 

by the Guang Ya and Zhongya 

Companies when determining whether 

the suppliers identified in the firms’ 

questionnaires responses are 

government authorities. We will followup with the Guang Ya Companies with 

respect to the identity of the producers 

that supplied the trading companies. 

Because the Guang Ya Companies 

have not been able to supply the 

requested information, we find that the 

necessary information is not on the 

record and, as a result, we are resorting 

to the use of facts available (FA) within 

the meaning of sections 776(a)(1) and (2) 

of the Act. In its response, the GOC 

provided information on the amount of 

primary aluminum produced by stateowned enterprises (SOEs) and private 

producers in the PRC. Using these data, 

we derived the ratio of primary 

aluminum produced by SOEs during the 

POI. Thus, pursuant to sections 

776(a)(1) and (2) of the Act, we have 

resorted to the use of FA with regard to 

the primary aluminum sold to the 

Guang Ya Companies by certain 

domestic trading companies. 

Specifically, we assumed that the 

percentage of primary aluminum 

supplied by these domestic trading 

companies that is produced by 

government authorities is equal to the 

ratio of primary aluminum produced by 

SOEs during the POI.8 Regarding this 

ratio, we note that the GOC classified 

the CHALCO Aluminum Corporation of 

China (CHALCO) as a privately-owned 

primary aluminum producer. However, 

based on publicly available information, 

we are treating CHALCO as a GOC 

authority. See the Memorandum to the 

File, ‘‘Factual Information Placed On 

Record Regarding the Ownership of a 

Primary Aluminum Producer,’’ (August 

16, 2010) (CHALCO Memorandum), a 

public document on file in room 1117 

of the CRU. Our use of FA in this regard 

is consistent with the Department’s 

practice. See, e.g., CWP from the PRC 

Decision Memorandum at ‘‘Hot-Rolled 

Steel for Less Than Adequate 

Remuneration;’’ see also LWRP from the 

PRC Decision Memorandum at ‘‘HotRolled Steel for Less Than Adequate 

Remuneration.’’ The Department will 

continue to examining the identities of 

the firms that produced the primary 

aluminum that was purchased by the 

Guang Ya Companies during the POI 

and will continue to investigate whether 

the firms that produced the primary 

aluminum for both the Guang Ya and 

the Zhongya Companies operated as 

government authorities. 

Having addressed the issue of 

financial contribution, we must next 

analyze whether the sale of primary 

aluminum to the mandatory 

respondents by suppliers designated as 

government authorities conferred a 

benefit within the meaning of section 

771(5)(E)(iv) of the Act. The 

Department’s regulations at 19 CFR 

351.511(a)(2) set forth the basis for 

identifying appropriate marketdetermined benchmarks for measuring 

the adequacy of remuneration for 

government-provided goods or services. 

These potential benchmarks are listed in 

hierarchical order by preference: (1) 

Market prices from actual transactions 

within the country under investigation 

(e.g., actual sales, actual imports or 

competitively run government auctions) 

(tier one); (2) world market prices that 

would be available to purchasers in the 

country under investigation (tier two); 

or (3) an assessment of whether the 

government price is consistent with 

market principles (tier three). As we 

explained in Softwood Lumber from 

Canada, the preferred benchmark in the 

hierarchy is an observed market price 

from actual transactions within the 

country under investigation because 


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such prices generally would be expected 

to reflect most closely the prevailing 

market conditions of the purchaser 

under investigation. See Softwood 

Lumber from Canada Decision 

Memorandum at ‘‘Market-Based 

Benchmark’’ section. 

Beginning with tier one, we must 

determine whether the prices from 

actual sales transactions involving 

Chinese buyers and sellers are 

significantly distorted. As explained in 

the Preamble: 

Where it is reasonable to conclude that 

actual transaction prices are significantly 

distorted as a result of the government’s 

involvement in the market, we will resort to 

the next alternative {tier two} in the 

hierarchy. 

See Preamble to Countervailing Duty 

Regulations, 63 FR 65377, (November 

25, 1998) (Preamble). The Preamble 

further recognizes that distortion can 

occur when the government provider 

constitutes a majority or, in certain 

circumstances, a substantial portion of 

the market. Id. 

In the instant investigation, the GOC 

reported the total primary aluminum 

production by SOEs during the POI. The 

share of production number of these 

SOEs, after adjustment by the 

Department, accounted for more than 50 

percent of the PRC’s production. See 

Memorandum to the File from Eric B. 

Greynolds, Program Manager, ‘‘Share of 

Primary Aluminum Production During 

Period of Investigation,’’ (August 30, 

2010). We find this majority share by 

SOEs makes it reasonable to conclude 

that actual transaction prices are 

significantly distorted as a result of the 

government’s involvement in the 

market. See Preamble, 63 FR at 65337. 

Our finding in this regard is in 

accordance with the Department’s 

practice. See, e.g., Wire Decking from 

the PRC Decision Memorandum at 

‘‘Provision of Zinc for LTAR.’’ In 

addition, as further evidence of the 

government’s predominant role in the 

market, we note that GOC has imposed 

export tariffs on two of the three HTS 

categories that cover primary aluminum. 

Such export restraints can discourage 

exports and increase the supply of 

primary aluminum in the domestic 

market, with the result that domestic 

prices are lower than they would be 

otherwise. See, e.g., Racks from the PRC 

Decision Memorandum at 15. For this 

reason, we preliminarily determine that 

domestic prices charged by privatelyowned primary aluminum producers 

based in the PRC may not serve as 

viable, tier one benchmark prices. 

The Department has on the record 

primary aluminum prices, as published 

by the London Metals Exchange (LME). 

We find that these prices may serve as 

a tier-two benchmark, as described 

under 19 CFR 351.511(a)(2)(ii), when 

determining whether the Zhongya 

Companies received a benefit on its 

purchases of primary aluminum from 

government authorities. Concerning the 

LME prices, we note that the 

Department has relied on pricing data 

from industry publications in prior CVD 

proceedings involving the PRC. See, 

e.g., CWP from the PRC Decision 

Memorandum at ‘‘Hot-Rolled Steel for 

Less Than Adequate Remuneration’’ 

section; see also LWRP from the PRC 

Decision Memorandum at ‘‘Hot-Rolled 

Steel for Less Than Adequate 

Remuneration’’ section. For purposes of 

the preliminary determination, we find 

prices from the LME to be sufficiently 

reliable and representative for use in the 

benchmark calculation. 

The Zhongya and Guang Ya 

Companies reported that they imported 

primary aluminum. In past cases, the 

Department has incorporated prices on 

company-specific imports into the 

LTAR benchmark provided that the 

Department’s analysis indicates that the 

company-specific import prices are not 

distorted by the dominance of 

government production in the PRC. See, 

e.g., Circular Welded Austenitic 

Stainless Pressure Pipe from the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, (74 FR 4936) January 28, 

2009, (CWASPP from the PRC), and 

accompanying Issues and Decision 

Memorandum (CWASPP from the PRC 

Decision Memorandum) at ‘‘Provision of 

SSC for LTAR;’’ see also CWP from the 

PRC Decision Memorandum at 

Comment 7. 

However, upon further examination, 

we preliminarily determine that when 

the Department has determined that it is 

reasonable to conclude that actual 

transaction prices are significantly 

distorted as a result of the government’s 

involvement in the market, it is not 

appropriate to utilize company-specific 

prices as a tier-one benchmark. This is 

consistent with the language of the 

Preamble. We preliminarily determine 

that it is reasonable to conclude that the 

prices of goods that are imported into 

the domestic market are also 

significantly distorted as a result of the 

government’s involvement in the 

market. 

To determine whether primary 

aluminum suppliers, acting as 

government authorities, sold primary 

aluminum to respondents for LTAR, we 

compared the prices the respondents 

paid to the suppliers to our primary 

aluminum benchmark price. We 

conducted our comparison on a 

monthly basis. When conducting the 

price comparison, we converted the 

benchmark to the same currency and 

unit of measure as reported by the 

mandatory respondents for their 

purchases of primary aluminum. 

Under 19 CFR 351.511(a)(2)(iv), when 

measuring the adequacy of 

remuneration under tier one or tier two, 

the Department will adjust the 

benchmark price to reflect the price that 

a firm actually paid or would pay if it 

imported the product, including 

delivery charges and import duties. 

Accordingly, in deriving the benchmark 

prices, we ensured that ocean freight 

and inland freight were included. 

Specifically, we included ocean freight 

pricing data from the Maersk shipping 

company pertaining to shipments of 

aluminum, articles of aluminum, and 

metal products from the port of Busan, 

South Korea, to Hong Kong. See 

petitioners’ August 20, 2010, 

submission at Exhibit 4. We used this 

information because it was the only 

information on the record for ocean 

freight. Concerning inland freight, we 

calculated company-specific inland 

freight rates using cost data supplied by 

the Guang Ya and Zhongya Companies. 

Further, we added to the benchmark 

import duties and the VAT applicable to 

imports of primary aluminum into the 

PRC as reported by the GOC. In deriving 

the benchmark we did not include 

marine insurance. In prior CVD 

investigations involving the PRC, the 

Department has found that while the 

PRC customs authorities impute an 

insurance cost on certain imports for 

purposes of levying duties and 

compiling statistical data, there is no 

evidence to suggest that PRC customs 

authorities require importers to pay 

insurance charges. See, e.g., PC Strand 

from the PRC Decision Memorandum at 

Comment 13. Further, we have not 

added separate brokerage, handling, and 

documentation fees to the benchmark 

because we find that such costs are 

already reflected in the ocean freight 

cost from Maersk that is being used in 

this preliminary determination. See 

petitioners’ August 20, 2010, 

submission at Exhibit 4. 

Regarding the primary aluminum 

prices that respondents paid to 

government authorities, both the 

Zhongya and Guang Ya Companies 

reported their prices to the Department 

inclusive of inland freight and indicated 

the domestic VAT applied to their 

purchases. Accordingly, when 

performing our comparison, we 

included the domestic VAT paid on 

purchases from government authorities. 

In this manner, we find the Department 


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9For purposes of this preliminary determination, 

we are assuming that the Zhongya Companies made 

this statement in reference to their sales value. 

has conducted the comparison on an 

apples-to-apples basis. 

Comparing the benchmark unit prices 

to the unit prices paid by respondents 

for primary aluminum, we determine 

that primary aluminum was provided 

for LTAR and that a benefit exists in the 

amount of the difference between the 

benchmark and what the respondent 

paid. See section 771(5)(E)(iv) of the Act 

and 19 CFR 351.511(a). 

Finally, with respect to specificity, 

the third subsidy element specified 

under the Act, the GOC has provided 

information on end uses for primary 

aluminum. The GOC stated that the end 

uses of primary aluminum relate to the 

type of industry involved as a direct 

purchaser of the input. The GOC further 

stated that the consumption of primary 

aluminum occurs across a broad range 

of industries. While numerous 

companies may comprise the listed 

industries, section 771(5A)(D)(iii)(I) of 

the Act clearly directs the Department to 

conduct its analysis on an industry or 

enterprise basis. Based on our review of 

the data and consistent with our past 

practice, we determine that the 

industries named by the GOC are 

limited in number and, hence, the 

subsidy is specific. See section 

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

from the PRC Decision Memorandum at 

Comment 7; see also Racks from the 

PRC Decision Memorandum at 

‘‘Provision of Wire Rod for Less Than 

Adequate Remuneration.’’ 

We find that the GOC’s provision of 

primary aluminum for LTAR to be a 

domestic subsidy as described under 19 

CFR 351.525(b)(3). Therefore, to 

calculate the net subsidy rate, we 

divided the benefit by a denominator 

comprised of total sales. Regarding the 

Zhongya Companies, we divided the 

benefit by the companies’ total sales 

during the POI. Regarding the Guang Ya 

Companies, we divided the benefit by 

combined total sales of Guang Ya and 

Guangcheng. 

On this basis, we calculated a total net 

subsidy rate of 2.36 percent ad valorem 

for the Zhongya Companies and 3.07 

percent ad valorem for the Guang Ya 

Companies. 

T. Purchase of Aluminum Extrusions for 

MTAR 

We initiated on a program that alleged 

that the GOC, under the Government 

Procurement Law and the Indigenous 

Innovation program, purchases 

aluminum extrusions for MTAR. 

Therefore, the Department requested 

information on whether the GOC or 

GOC authorities purchased aluminum 

extrusions from respondents for MTAR. 

The GOC and the two company 

respondents stated that neither the two 

companies nor their products are listed 

in local government indigenous 

innovation catalogues; therefore, we 

preliminarily determine that the 

companies did not use the Indigenous 

Innovation programs. However, 

information provided in the companies’ 

responses indicate that they may have 

benefited from the government’s 

purchase of aluminum extrusions under 

the Government Procurement Law. 

The Guang Ya and Zhongya 

Companies provided information 

concerning their sales of aluminum 

extrusions during the POI. The Guang 

Ya Companies provided complete sales 

information. The Guang Ya Companies 

report in their questionnaire response 

which customers were GOC authorities 

and which were private companies. See 

the Guang Ya Companies August 9, 

2010, supplemental questionnaire 

response at Exhibits 68 and 69. The 

Zhongya Companies provided the 

requested sales information for 70 

percent of its sales, which corresponded 

to its top ten customers.9 The Zhongya 

Companies report that these top ten 

customers were private companies. See 

Attachment 4 of the Zhongya 

Companies’ August 6, 2010, 

supplemental questionnaire. However, 

as discussed above in the ‘‘Adverse 

Facts Available’’ section, the Zhongya 

Companies’ failed to report the 

requested information for the remaining 

30 percent of its sales value. 

The Department also requested 

information from the GOC regarding the 

ownership structure of the customers 

that purchased aluminum extrusions 

from the Guang Ya and Zhongya 

Companies. Specifically, the 

Department requested ownership 

information that would enable it to 

determine whether the two firms’ 

customers were government authorities 

capable of providing a financial 

contribution under section 771(5)(D)(iv) 

of the Act. In the case of the Guang Ya 

Companies, the GOC provided 

ownership information for a portion of 

the companies’ customers. For the 

Zhongya Companies, the GOC provided 

ownership information for six out of the 

ten customers. 

For purposes of this preliminary 

determination, we are relying on the 

information supplied by the GOC and 

by the Guang Ya and Zhongya 

Companies when determining whether 

the customers identified in the firms’ 

questionnaire responses are government 

authorities. Accordingly, we determine 

that the aluminum extrusions the Guang 

Ya Companies sold to GOC authorities 

constitute a financial contribution under 

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

Concerning the Zhongya Companies, as 

explained in the ‘‘Adverse Facts 

Available’’ section, we are assuming as 

AFA that the Zhongya Companies’ 

unreported sales values were made to 

GOC authorities and, thus, constitute a 

financial contribution under section 

771(5)(D)(iv) of the Act. We will 

continue to solicit information from the 

GOC, the Zhongya Companies, and 

Guang Ya Companies concerning the 

identities and ownership structure of 

their customers. 

Having addressed the issue of 

financial contribution, we must next 

analyze whether the sales of aluminum 

extrusions to GOC authorities conferred 

a benefit within the meaning of section 

771(5)(E)(iv) of the Act. The Department 

has investigated subsidy allegations 

involving the sale of a good for MTAR 

in relatively few proceedings. The most 

recent proceeding in which the 

Department investigated the provision 

of a good for MTAR was Low Enriched 

Uranium (LEU) from France. See, e.g., 

Notice of Final Affirmative 

Countervailing Duty Determination: Low 

Enriched Uranium From France, 66 FR 

65901 (December 21, 2001) (LEU from 

France), and accompanying Decision 

Memorandum (LEU from France 

Decision Memorandum) at ‘‘Purchase at 

Prices that Constitute More Than 

Adequate Remuneration.’’ In LEU from 

France, the Department measured 

whether a benefit was conferred by 

comparing the price the government 

authority paid to the respondent for 

LEU compared to the prices the 

government authority paid to other 

foreign suppliers of LEU. Id. In LEU 

from France, the Department indicated 

that it was conducting the benefit 

calculation in this manner because it 

was the only means by which the 

Department would be able to utilize 

benchmark prices paid in the country of 

provision. Id. Thus, in LEU from France, 

the Department’s aim was to utilize a 

benchmark available in the country of 

provision. In LEU from France, such a 

benchmark was only available using 

pricing data supplied by the 

Government of France (e.g., pricing data 

from the perspective of the buyer). 

In the instant investigation, we 

preliminarily determine that there are 

benchmark data available from the 

perspective of the seller. The Guang Ya 

Companies provided information 

concerning the sales of aluminum 

extrusions made to private customers. 

For purposes of the preliminary 

determination, we find that these prices 


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10 In this section we refer to programs 

preliminarily determined to be not used by the two 

participating respondent companies. 

constitute prices available in the PRC 

and, thus, are suitable for use as a 

benchmark. Further, at this time, we 

preliminarily determine there is no 

information on the record of the 

investigation to suggest that the prices 

paid by private purchasers of aluminum 

extrusions in the PRC are distorted as a 

result of the GOC’s involvement in the 

market for aluminum extrusions. 

Thus, to determine whether a benefit 

was conferred on the Guang Ya 

Companies’ sale of aluminum 

extrusions to GOC authorities, we 

compared the prices the Guang Ya 

Companies charged to state-owned firms 

to the prices the Guang Ya Companies 

charged to privately-owned customers. 

As stated above, for purposes of the 

preliminary determination, we have 

relied on information supplied by the 

Guang Ya Companies and the GOC in 

determining which customers were 

government authorities and which were 

private companies. We conducted our 

comparison on a monthly basis using 

average unit prices. In deriving the 

benchmark, we used weighted average, 

monthly prices. We will continue to 

examine the benchmark used in this 

MTAR benefit calculation in order to 

determine the most appropriate 

benchmark for the final determination 

and we invite interested parties to 

comment on this issue. 

Comparing the benchmark unit sales 

prices to the unit sales prices the Guang 

Ya Companies sold to GOC authorities, 

we determine that a benefit exists in the 

amount of the difference between the 

benchmark sales price and the sale 

prices charged to GOC authorities. See 

section 771(5)(E)(iv). To calculate the 

benefit on each transaction, we 

multiplied the unit benefit by the 

corresponding quantity. We then 

summed the benefits on each 

transaction to calculate the total benefit 

attributable to the Guang Ya Companies. 

Regarding the Zhongya Companies, as 

noted above they failed to provide any 

information regarding 30 percent of its 

sales value. Therefore, we are assuming 

as AFA that the unreported sales were 

made to GOC authorities and, thus, we 

must determine whether a benefit was 

conferred on the sales. Therefore, to 

calculate the benefit, we first used the 

total sales value reported by the 

Zhongya Companies (70 percent of its 

total sales) to derive the Zhongya 

Companies’ total sales of aluminum 

extrusions. Next, we calculated the 

difference between these two sales 

values to derive the total sales value for 

the 30 percent of aluminum extrusion 

sales that the Zhongya Companies failed 

to report to the Department. As 

discussed in the ‘‘Adverse Facts 

Available’’ section, we are assuming as 

AFA that the Zhongya Companies made 

these sales to GOC authorities. Further, 

as discussed in the ‘‘Adverse Facts 

Available’’ section, as AFA we assumed 

that the Zhongya Companies received a 

20 percent price premium on its sales to 

GOC authorities. Accordingly, we 

calculated the benefit by multiplying 

the derived total sales value for the sales 

that were not reported by the Zhongya 

Companies by 20 percent. In this 

manner, we determine that the Zhongya 

Companies received a benefit under the 

program within the meaning of section 

771(5)(E)(iv) of the Act. 

Finally, with respect to specificity, we 

preliminarily determine that this 

program is specific under section 

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

government procurement program is 

contingent upon the use of domestic 

goods over imported goods, as 

evidenced by the price premium set 

forth in the Implementing Measures of 

the Procurement Law. 

On this basis, we calculated a total net 

subsidy rate of 6.63 percent ad valorem 

for the Zhongya Companies and 0.14 

percent ad valorem for the Guang Ya 

Companies. 

Programs Preliminarily Determined Not 

To Confer a Benefit During the POI 

Regarding programs listed below, 

benefits from these programs result in 

net subsidy rates that are less than 0.005 

percent ad valorem or constitute 

benefits that were fully expensed prior 

to the POI. Consistent with our past 

practice, we therefore have not included 

these programs in our net countervailing 

duty rate calculations. See, e.g., CFS 

from the PRC Decision Memorandum at 

‘‘Analysis of Programs, Programs 

Determined Not To Have Been Used or 

Not To Have Provided Benefits During 

the POI for GE.’’ 

A. Labor and Social Security Allowance 

Grants in Sanshui District of 

Guangdong Province 

B. ‘‘Large and Excellent’’ Enterprises 

Grant 

C. Advanced Science/Technology 

Enterprise Grant 

D. Advanced Science/Technology 

Enterprise Grant 

E. Award for Self-Innovation Brand/ 

Grant for Self-Innovation Brand and 

Enterprise Listing 

F. Tiaofeng Electric Power Subscription 

Subsidy Funds 

G. Award for Excellent Enterprise 

H. Export Incentive Payments 

Characterized as Value Added Tax 

(VAT) Rebates 

Programs Preliminarily Determined Not 

To Be Used 10

A. Loans and Interest Subsidies 

Provided Pursuant to the Northeast 

Revitalization Program 

B. Provincial Tax Exemptions and 

Reductions for ‘‘Productive’’ FIEs 

C. Tax Reductions for FIEs Purchasing 

Chinese-Made Equipment 

D. Tax Reductions for FIEs in 

Designated Geographic Locations 

E. Tax Reductions for Technology- or 

Knowledge-Intensive FIEs 

F. Tax Credits for Domestically-Owned 

Companies Purchasing Chinese-Made 

Equipment 

G. Tax Reductions for Export-Oriented 

FIEs 

H. Tax Refunds for Reinvesting of FIE 

Profits in Export-Oriented Enterprises 

I. Accelerated Depreciation for 

Enterprises Located in the Northeast 

Region 

J. Forgiveness of Tax Arrears for 

Enterprises in the Old Industrial 

Bases of Northeast China 

K. VAT Rebates on FIE Purchases of 

Chinese-Made Equipment 

L. Exemptions from Administrative 

Charges for Companies in the ZHTIDZ 

M. The State Key Technology 

Renovation Project Fund 

N. Grants to Cover Legal Fees in Trade 

Remedy Cases in Zhenzhen 

O. The Clean Production Technology 

Fund 

P. Grants for Listing Shares: Liaoyang 

City (Guangzhou Province), Wenzhou 

Municipality (Zhejiang Province), and 

Quanzhou Municipality (Fujian 

Province) 

Q. The Northeast Region Foreign Trade 

Development Fund 

R. The Northeast Region Technology 

Reform Fund 

S. Land Use Rights in the Liaoyang 

High-Tech Industry Development 

Zone 

T. Allocated Land Use Rights for SOEs 

Verification 

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

the Act, we intend to verify the 

information submitted by the Zhongya 

Companies, the Guang Ya Companies, 

and the GOC prior to making our final 

determination. 

Suspension of Liquidation 

In accordance with section 

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

calculated an individual rate for subject 

merchandise produced and exported by 

the entities individually investigated. 

We have also calculated an all-others 


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rate. We preliminarily determine the total estimated net countervailable 

subsidy rates to be: 

Company Ad valorem net subsidy 

rate 

Guang Ya Aluminum Industries Co., Ltd. (Guang Ya), Foshan Guangcheng Aluminum Co., Ltd. (Guangcheng), 

Guang Ya Aluminum Industries Hong Kong (Guang Ya HK), Kong Ah International Company Limited (Kong Ah), 

and Yongji Guanghai Aluminum Industry Co., Ltd. (Guanghai) (collectively the Guang Ya Companies).

6.18 percent ad valorem. 

Zhaoqing New Zhongya Aluminum Co., Ltd. (New Zhongya), Zhongya Shaped Aluminum HK Holding Ltd. 

(Zhongya HK), and Karlton Aluminum Company Ltd. (Karlton) (collectively the Zhongya Companies).

10.37 percent ad valorem. 

Dragonluxe Limited (Dragonluxe) ................................................................................................................................... 137.65 percent ad valorem. 

Miland Luck Limited (Miland) .......................................................................................................................................... 137.65 percent ad valorem. 

Liaoyang Zhongwang Aluminum Profile Co. Ltd./Liaoning Zhongwang Group (collectively, the Zhongwang Group) .. 137.65 percent ad valorem. 

All Others Rate ............................................................................................................................................................... 137.65 percent ad 

valorem. 

We note that section 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. 

However, as discussed above in the 

‘‘Application of Adverse Inferences: 

Non-Cooperative Companies’’ section, 

the companies under individual 

investigation that participated in the 

investigation are voluntary respondents. 

The Department’s regulations state that 

in calculating the all-others rate under 

section 705(c)(5) of the Act, the 

Department will exclude net subsidy 

rates calculated for voluntary 

respondents. See 19 CFR 351.204(d)(3). 

The Preamble to Procedural Regulations 

further explains that while this 

principle of excluding voluntary rates 

from the all-others rate is not directly 

addressed in the statute, Article 9.4 of 

the Antidumping Agreement implies 

that the all-others rate cannot be a 

function of subsidy rates calculated for 

voluntary respondents. See Preamble to 

Procedural Regulations, 62 FR at 27310. 

The Preamble to Procedural Regulations 

further explains that the purpose of 

excluding voluntary respondents from 

the all-others rate calculation is to 

prevent the ‘‘distortion or outright 

manipulation of the all others rate.’’ Id. 

We acknowledge that in a prior CVD 

investigation involving the PRC the 

Department, despite the language in the 

Preamble to Procedural Regulations and 

19 CFR 351.204(d)(3), calculated the allothers rate by simple-averaging the AFA 

rates of the non-cooperating, mandatory 

respondents with the rate calculated for 

a voluntary respondent. See LWS from 

the PRC Decision Memorandum at 

Comment 21. However, upon further 

examination, we now determine that the 

potential for voluntary respondents’ net 

subsidy rates to distort or manipulate 

the all-others rate is too great and, thus, 

we find that reliance on the approach 

from LWS from the PRC is no longer 

appropriate. 

Accordingly, because we lack subsidy 

rates established for exporters and 

producers individually investigated, we 

must resort to ‘‘any reasonable method’’ 

to derive the all-others rate, as described 

under section 705(c)(5)(A)(ii) of the Act. 

We preliminarily determine that 

equating the all-others rate with the 

total AFA rate applied to the noncooperating, mandatory respondents 

constitutes a ‘‘reasonable method’’ under 

705(c)(5)(A)(ii) of the Act. See, e.g., 

Certain Potassium Phosphate Salts 

From the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination and Termination of 

Critical Circumstances Inquiry, 75 FR 

30375 (June 1, 2010) (in an investigation 

where all of the mandatory respondents 

received a rate based on adverse facts 

available, using the AFA rate assigned 

to the mandatory respondents as the allothers rate). 

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 the subject merchandise 

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 the 

merchandise in the amounts indicated 

above. 

ITC Notification 

In accordance with section 703(f) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

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), the Department 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, which must be limited to issues 

raised in the case briefs, must be filed 

within five days after the deadline for 

submission of case briefs. See 19 CFR 

351.309(d). 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. 

In accordance with 19 CFR 

351.310(c), we will hold a public 

hearing, if requested, to afford interested 

parties an opportunity to comment on 

this preliminary determination. 

Individuals who wish to request a 

hearing must submit a written request 

within 30 days of the publication of this 

notice in the Federal Register to the 

Assistant Secretary for Import 

Administration, U.S. Department of 

Commerce, Room 1870, 14th Street and 

Constitution Avenue, NW, Washington, 

DC 20230. Parties will be notified of the 

schedule for the hearing and parties 

should confirm the time, date, and place 

of the hearing 48 hours before the 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
54322 Federal Register / Vol. 75, No. 172 / Tuesday, September 7, 2010 / Notices 

scheduled time. Requests for a public 

hearing should contain: (1) Party’s 

name, address, and telephone number; 

(2) the number of participants; and (3) 

to the extent practicable, an 

identification of the arguments to be 

raised at the hearing. 

This determination is issued and 

published pursuant to sections 703(f) 

and 777(i) of the Act and 19 CFR 

351.221(b)(4). 

Dated: August 30, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–22204 Filed 9–3–10; 8:45 am] 

BILLING CODE 3510–DS–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: Wednesday, September 

8, 2010; 10 a.m.–11 a.m. 

PLACE: Hearing Room 420, Bethesda 

Towers, 4330 East West Highway, 

Bethesda, Maryland. 

STATUS: Closed to the Public. 

MATTERS TO BE CONSIDERED: 

Compliance Status Report 

The Commission staff will brief the 

Commission on the status of compliance 

matters. 

For a recorded message containing the 

latest agenda information, call (301) 

504–7948. 

CONTACT PERSON FOR MORE INFORMATION: 

Todd A. Stevenson, Office of the 

Secretary, U.S. Consumer Product 

Safety Commission, 4330 East West 

Highway, Bethesda, MD 20814, (301) 

504–7923. 

Dated: September 1, 2010. 

Todd A. Stevenson, 

Secretary. 

[FR Doc. 2010–22302 Filed 9–2–10; 4:15 pm] 

BILLING CODE 6355–01–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

Revised Non-Foreign Overseas Per 

Diem Rates 

AGENCY: Per Diem, Travel and 

Transportation Allowance Committee, 

DoD. 

ACTION: Notice of revised non-foreign 

overseas per diem rates. 

SUMMARY: The Per Diem, Travel and 

Transportation Allowance Committee is 

publishing Civilian Personnel Per Diem 

Bulletin Number 270. This bulletin lists 

revisions in the per diem rates 

prescribed for U.S. Government 

employees for official travel in Alaska, 

Hawaii, Puerto Rico, the Northern 

Mariana Islands and Possessions of the 

United States. AEA changes announced 

in Bulletin Number 194 remain in effect. 

Bulletin Number 270 is being published 

in the Federal Register to assure that 

travelers are paid per diem at the most 

current rates. 

DATES: Effective September 1, 2010. 

SUPPLEMENTARY INFORMATION: This 

document gives notice of revisions in 

per diem rates prescribed by the Per 

Diem Travel and Transportation 

Allowance Committee for non-foreign 

areas outside the continental United 

States. It supersedes Civilian Personnel 

Per Diem Bulletin Number 269. 

Distribution of Civilian Personnel Per 

Diem Bulletins by mail was 

discontinued. Per Diem Bulletins 

published periodically in the Federal 

Register now constitute the only 

notification of revisions in per diem 

rates to agencies and establishments 

outside the Department of Defense. For 

more information or questions about per 

diem rates, please contact your local 

travel office. The text of the Bulletin 

follows: The changes in Civilian 

Bulletin 270 are updated rates for Puerto 

Rico. 

Dated: September 1, 2010. 

Mitchell S. Bryman, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense. 

BILLING CODE 5001–06–P 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1