[Federal Register Volume 74, Number 201 (Tuesday, October 20, 2009)]
[Notices]
[Pages 53707-53710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-25187]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-560-824]


Certain Coated Paper From Indonesia: Initiation of Countervailing 
Duty Investigation

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

DATES: Effective Date: October 20, 2009.

FOR FURTHER INFORMATION CONTACT: Gene Calvert or Dana Mermelstein, AD/
CVD Operations, Office 6, Import Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-3586 or (202) 482-1391, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On September 23, 2009, the Department of Commerce (``the 
Department'') received a countervailing duty (``CVD'') petition 
concerning imports of certain coated paper suitable for high-quality 
print graphics using sheet-fed presses (``certain coated paper'') from 
Indonesia filed in proper form by Appleton Coated LLC, NewPage 
Corporation, Sappi Fine Paper North America, and the United Steel, 
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial 
and Service Workers International Union (collectively, 
``Petitioners''). See ``Petition for the Imposition of Countervailing 
Duties: Certain Coated Paper Suitable for High-Quality Print Graphics 
Using Sheet-Fed Presses from Indonesia,'' dated September 23, 2009 
(Indonesia CVD Petition). On September 29, October 5, and October 7, 
2009, the Department issued additional requests for information and 
clarification of certain areas of the Indonesia CVD Petition. Based on 
the Department's requests, Petitioners timely filed additional 
information pertaining to the Indonesia CVD Petition on October 2, 
October 6, and October 9, 2009 (hereinafter, ``Supplement to the 
Indonesia CVD Petition,'' dated October 2, 2009, ``Second Supplement to 
the Indonesia CVD Petition,'' dated October 6, 2009, and ``Third 
Supplement to the Indonesia CVD Petition,'' dated October 9, 2009).
    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended, (``the Act''), Petitioners allege that producers/exporters of 
certain coated paper in Indonesia received countervailable subsidies 
within the meaning of sections 701 and 771(5) of

[[Page 53708]]

the Act, and that imports from these producers/exporters materially 
injure, or threaten material injury to, an industry in the United 
States.
    The Department finds that Petitioners have filed this CVD petition 
on behalf of the domestic industry because they are interested parties 
as defined in sections 771(9)(C) and 771(9)(D) of the Act, and 
Petitioners have demonstrated sufficient industry support with respect 
to the CVD investigation that they are requesting the Department to 
initiate (see ``Determination of Industry Support for the CVD 
Petition,'' below).

Period of Investigation

    The anticipated period of investigation (``POI'') is calendar year 
2008. See 19 CFR 351.204(b)(2).

Scope of Investigation

    The products covered by this investigation are certain coated paper 
from Indonesia. For a full description of the scope of this 
investigation, please see the ``Scope of Investigation'' in the 
Appendix to this notice.

Comments on Scope of Investigation

    During our review of the Indonesia CVD Petition, we discussed the 
scope with Petitioners to ensure that it is an accurate reflection of 
the products for which the domestic industry is seeking relief. 
Moreover, as discussed in the preamble to the regulations (See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for interested 
parties to raise issues regarding product coverage. The Department 
encourages all interested parties to submit such comments by November 
2, 2009. Comments should be addressed to Import Administration's APO/
Dockets Unit, Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. The period of scope 
consultations is intended to provide the Department with ample 
opportunity to consider all comments and to consult with parties prior 
to the issuance of the preliminary determinations.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
held consultations with the Government of Indonesia (``GOI'') with 
respect to the Indonesia CVD Petition on October 7, 2009. See 
Memorandum to The File, ``Consultations with the Government of 
Indonesia Regarding the Countervailing Duty Petition on Certain Coated 
Paper from Indonesia,'' dated October 9, 2009, a public document on 
file in the Central Records Unit (``CRU''), Room 1117 of the main 
Department of Commerce building.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The United States International Trade Commission 
(``ITC''), which is responsible for determining whether ``the domestic 
industry'' has been injured, must also determine what constitutes a 
domestic like product in order to define the industry. While both the 
Department and the ITC must apply the same statutory definition 
regarding the domestic like product (see section 771(10) of the Act), 
they do so for different purposes and pursuant to a separate and 
distinct authority. In addition, the Department's determination is 
subject to limitations of time and information. Although this may 
result in different definitions of the like product, such differences 
do not render the decision of either agency contrary to law. See USEC, 
Inc. v. United States, 132 F. Supp. 2d 1, 8 (Ct. Int'l Trade 2001), 
citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 
(Ct. Int'l Trade 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989), cert. 
denied 492 U.S. 919 (1989).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, Petitioners offer a 
definition of domestic like product that includes sheeter rolls (rolls 
of certain coated paper intended to be slit and used in sheet-fed 
presses) and, therefore, is broader than the scope of the 
investigation, which does not include sheeter rolls. Based on our 
analysis of the information submitted on the record, we have determined 
that certain coated paper described in the scope of the investigations 
and sheeter rolls constitute a single domestic like product and we have 
analyzed industry support in terms of that domestic like product. For a 
discussion of the domestic like product analysis in this case, see 
Countervailing Duty Investigation Initiation Checklist: Certain Coated 
Paper from Indonesia (``Indonesia CVD Initiation Checklist'') at 
Attachment II, Analysis of Industry Support for the Petitions Covering 
Certain Coated Paper from the People's Republic of China and Indonesia, 
dated concurrently with this notice and on file in the CRU, Room 1117 
of the main Department of Commerce building.
    In determining whether Petitioners have standing under section 
702(c)(4)(A) of the Act, we considered the industry support data 
contained in the Indonesia CVD Petition with reference to the domestic 
like product as defined in the Indonesia CVD Petition. To establish 
industry support, Petitioners provided their own 2008 shipments of the 
domestic like product, as well as one supporting company's (SMART 
Papers) 2008 shipments, and compared the total to the 2008 shipments of 
the entire domestic industry. See Volume I of the Indonesia CVD 
Petition, at 2-3, Exhibits I-3, I-4, and I-19, and Supplement to the 
Indonesia CVD Petition, dated October 2, 2009, at 19-22 and Exhibit 4. 
Petitioners estimated total 2008 shipments of the domestic like product 
based on the American Forest & Paper Association annual Coated Printing 
Papers Survey. See Volume I of the Indonesia CVD Petition, at 3 and 
Exhibits I-3 and I-4, and Supplement to the Indonesia CVD Petition, 
dated October 2, 2009, at 22 and Exhibit 4; see also Indonesia CVD 
Initiation Checklist at Attachment II.

[[Page 53709]]

    Our review of the data provided in the Indonesia CVD Petition, 
supplemental submissions, and other information readily available to 
the Department indicates that Petitioners have established industry 
support. First, the Indonesia CVD Petition established support from 
domestic producers (or workers) accounting for more than 50 percent of 
the total production of the domestic like product and, as such, the 
Department is not required to take further action in order to evaluate 
industry support (e.g., polling). See section 702(c)(4)(D) of the Act; 
see also Indonesia CVD Initiation Checklist at Attachment II. Second, 
the domestic producers (or workers) have met the statutory criteria for 
industry support under section 702(c)(4)(A)(i) of the Act because the 
domestic producers (or workers) who support the Indonesia CVD Petition 
account for at least 25 percent of the total production of the domestic 
like product. See Indonesia CVD Initiation Checklist at Attachment II. 
Finally, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 702(c)(4)(A)(ii) of the Act 
because the domestic producers (or workers) who support the Indonesia 
CVD Petition account for more than 50 percent of the production of the 
domestic like product produced by that portion of the industry 
expressing support for, or opposition to, the Indonesia CVD Petition. 
Accordingly, the Department determines that the Indonesia CVD Petition 
was filed on behalf of the domestic industry within the meaning of 
section 702(b)(1) of the Act. See id.
    The Department finds that Petitioners filed the Indonesia CVD 
Petition on behalf of the domestic industry because they are interested 
parties as defined in sections 771(9)(C) and 771(9)(D) of the Act and 
they have demonstrated sufficient industry support with respect to the 
countervailing duty investigation that they are requesting the 
Department initiate. See id.

Injury Test

    Because Indonesia is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) of the Act 
applies to this investigation. Accordingly, the ITC must determine 
whether imports of the subject merchandise from Indonesia materially 
injure, or threaten material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that imports of certain coated paper from 
Indonesia are benefitting from countervailable subsidies and that such 
imports are causing, or threaten to cause, material injury to the 
domestic industry producing certain coated paper. In addition, 
Petitioners allege that subsidized imports exceed the negligibility 
threshold provided for under section 771(24)(A) of the Act.
    Petitioners contend that the industry's injured condition is 
illustrated by reduced market share, underselling and price depressing 
and suppressing effects, increased import penetration, lost sales and 
revenue, reduced production, capacity, and capacity utilization, 
reduced shipments and inventories, reduced employment, and reduced 
financial performance. We have assessed the allegations and supporting 
evidence regarding material injury, threat of material injury, and 
causation, and we have determined that these allegations are properly 
supported by adequate evidence and meet the statutory requirements for 
initiation. See Indonesia CVD Initiation Checklist at Attachment III, 
``Analysis of Allegations and Evidence of Material Injury and 
Causation'' for the Petitions Covering Certain Coated Paper from the 
People's Republic of China and Indonesia.

Initiation of Countervailing Duty Investigation

    Section 702(b)(1) of the Act requires the Department to initiate a 
CVD investigation whenever an interested party files a CVD petition on 
behalf of an industry that: (1) alleges the elements necessary for an 
imposition of a duty under section 701(a) of the Act; and (2) is 
accompanied by information reasonably available to the petitioners 
supporting the allegations.
    The Department has examined the countervailing duty petition on 
certain coated paper from Indonesia and finds that it complies with the 
requirements of section 702(b)(1) of the Act. Therefore, in accordance 
with section 702(b)(1) of the Act, we are initiating a CVD 
investigation to determine whether producers/exporters of certain 
coated paper from Indonesia receive countervailable subsidies. For a 
discussion of evidence supporting our initiation determination, see 
Indonesia CVD Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the Indonesia CVD Petition to provide countervailable 
subsidies to producers/exporters of the subject merchandise:
    1. Provision of Standing Timber for Less Than Adequate 
Remuneration.
    2. Government Prohibition of Log Exports.
    3. Government Provision of Interest-Free Reforestation Loans.
    4. Debt Forgiveness through the Indonesian Government's Acceptance 
of Financial Instruments with No Market Value.
    5. Debt Forgiveness through APP/SMG's Buyback of its Own Debt from 
the Indonesian Government.
    6. Government Forgiveness of Stumpage Obligations.
    7. Tax Incentives for Investment in Priority Business Lines and 
Designated Regions:
    a. Corporate Income Tax Deduction;
    b. Accelerated Depreciation and Amortization;
    c. Extension of Loss Carryforward;
    d. Reduced Withholding Tax on Dividends.

Respondent Selection

    The petition identifies the Asia Pulp & Paper/Sinar Mas Group (APP/
SMG), through the two Indonesian coated paper mills it operates, PT. 
Pabrik Kertas Tjiwi Kimia Tbk. (``Tjiwi Kimia'') and PT Pindo Deli Pulp 
and Paper (``Pindo Deli''), as the one major producer of coated paper 
in Indonesia. We have placed on the record import data from U.S. 
Customs and Border Protection (``CBP'') which supports Petitioners' 
contention. We note that in a recent countervailing duty investigation 
covering coated free sheet paper from Indonesia, the Department found 
that the APP/Sinar Mas Group produced almost all exports of coated 
paper from Indonesia and that Tjiwi Kimia and Pindo Deli are cross-
owned companies within the APP/SMG family of companies, which operates 
together as a vertically integrated paper production company. See 
Coated Free Sheet Paper from Indonesia: Final Affirmative 
Countervailing Duty Determination, 72 FR 60642 (October 25, 2007), and 
accompanying Issues and Decision Memorandum.
    Because record information indicates that APP/SMG is the producer 
of nearly all of the coated paper produced in Indonesia, we are 
selecting APP/SMG as a mandatory respondent in this investigation, 
pursuant to section 777A(c)(2)(B) of the Act. We will release the CBP 
data under APO to the parties covered by APO on the day this initiation 
is announced. We will consider comments from interested parties on 
respondent selection. Parties wishing to comment must do so within five 
days of the publication of this notice in the Federal Register.

Distribution of Copies of the CVD Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, copies of 
the public versions of the Indonesia CVD

[[Page 53710]]

Petition and amendments thereto have been provided to the GOI. To the 
extent practicable, we will attempt to provide a copy of the public 
version of the Indonesia CVD Petition to each exporter named in the 
petition, as provided under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which the petition was filed, whether there is a reasonable 
indication that imports of subsidized certain coated paper from 
Indonesia materially injure, or threaten material injury to, a U.S. 
industry. See section 703(a)(2) of the Act. A negative ITC 
determination will result in the investigation being terminated; see 
section 703(a)(1) of the Act. Otherwise, the investigation will proceed 
according to statutory and regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: October 13, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Appendix I--Scope of the Investigation

    The merchandise covered by this investigation includes certain 
coated paper and paperboard \1\ in sheets suitable for high quality 
print graphics using sheet-fed presses; coated on one or both sides 
with kaolin (China or other clay), calcium carbonate, titanium dioxide, 
and/or other inorganic substances; with or without a binder; having a 
GE brightness level of 80 or higher \2\; weighing not more than 340 
grams per square meter; whether gloss grade, satin grade, matte grade, 
dull grade, or any other grade of finish; whether or not surface-
colored, surface-decorated, printed (except as described below), 
embossed, or perforated; and irrespective of dimensions (``Certain 
Coated Paper'').
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    \1\ `` `Paperboard' refers to Certain Coated Paper that is 
heavier, thicker and more rigid than coated paper which otherwise 
meets the product description. In the context of Certain Coated 
Paper, paperboard typically is referred to as `cover,' to 
distinguish it from `text.' ''
    \2\ One of the key measurements of any grade of paper is 
brightness. Generally speaking, the brighter the paper the better 
the contrast between the paper and the ink. Brightness is measured 
using a GE Reflectance Scale, which measures the reflection of light 
off of a grade of paper. One is the lowest reflection, or what would 
be given to a totally black grade, and 100 is the brightest measured 
grade.
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    Certain Coated Paper includes (a) coated free sheet paper and 
paperboard that meets this scope definition; (b) coated groundwood 
paper and paperboard produced from bleached chemi-thermo-mechanical 
pulp (``BCTMP'') that meets this scope definition; and (c) any other 
coated paper that meets this scope definition.
    Certain Coated Paper is typically (but not exclusively) used for 
printing multi-colored graphics for catalogues, books, magazines, 
envelopes, labels and wraps, greeting cards, and other commercial 
printing applications requiring high quality print graphics.
    Specifically excluded from the scope are imports of paper and 
paperboard printed with final content printed text or graphics.
    As of 2009, imports of the subject merchandise are provided for 
under the following categories of the Harmonized Tariff Schedule of the 
United States (``HTSUS''): 4810.14.11, 4810.14.1900, 4810.14.2010, 
4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.70, 4810.19.1100, 
4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.50, 
4810.22.6000, 4810.22.70, 4810.29.1000, 4810.29.5000, 4810.29.6000, 
4810.29.70. While HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of the 
investigation is dispositive.

[FR Doc. E9-25187 Filed 10-19-09; 8:45 am]
BILLING CODE 3510-DS-P