[Federal Register Volume 74, Number 119 (Tuesday, June 23, 2009)]
[Notices]
[Pages 29670-29674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14743]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-946]


Prestressed Concrete Steel Wire Strand From the People's Republic 
of China: Initiation of Countervailing Duty Investigation

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


DATES: Effective Date: June 16, 2009.

FOR FURTHER INFORMATION CONTACT: Robert Copyak, AD/CVD Operations, 
Office 3, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Room 4014, Washington, DC 20230; telephone: (202) 482-2209.

SUPPLEMENTARY INFORMATION:

The Petition

    On May 27, 2009, the Department of Commerce (``Department'') 
received a petition filed in proper form by American Spring Wire Corp., 
Insteel Wire Products Company, and Sumiden Wire Products Corp 
(collectively, ``Petitioners''), domestic producers of prestressed 
concrete steel wire strand (``PC Strand''). On June 1, 2009, the 
Department issued a request for additional information and 
clarification of certain areas of the Petition. Based on the 
Department's request, Petitioners filed supplements to the Petition on 
June 4, 2009 (``Supplement to the AD Petition'' and ``Supplement to the 
AD/CVD Petitions''). On June 4, 2009, the Department requested further 
clarification of Petitioners' subsidy allegations. Based on the 
Department's request, Petitioners filed supplements to the 
countervailing duty (``CVD'') petition on June 11, 2009 (``Supplement 
to the CVD Petition''). On June 8, 2009, the Department requested 
further clarifications of industry support and producers/exporters 
identified in the Petitions. Based on the Department's request, 
Petitioners filed supplements to the Petition on June 9, 2009 (``Second 
Supplement to the AD/CVD Petitions''). On June 12, 2009 the Department 
again asked for clarification regarding the scope. Based on the 
Department's request, Petitioners filed an additional supplement to the 
Petition on June 15, 2009 (``Third Supplement to the AD/CVD 
Petitions'').
    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (``the Act''), Petitioners allege that manufacturers, 
producers, or exporters of PC Strand in the People's Republic of China 
(``PRC'') receive countervailable subsidies within the meaning of 
section 701 of the Act, and that such imports are materially injuring, 
or threatening material injury to, an industry in the United States.
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in section 771(9)(C) of the Act, and Petitioners have demonstrated 
sufficient industry support with respect to the CVD investigation (see 
``Determination of Industry Support for the Petition'' section below).

Period of Investigation

    The period of investigation is January 1, 2008, through December 
31, 2008.

Scope of Investigation

    The products covered by this investigation are PC Strand from the 
PRC. For a full description of the scope of the investigation, please 
see the ``Scope of the Investigation'' in Appendix I of this notice.

Comments on Scope of Investigation

    During our review of the 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 (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 July 6, 2009, twenty calendar days 
from the signature date of this notice. 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 
invited representatives of the Government of the PRC for consultations 
with respect to the CVD Petition. The Department held these 
consultations in Washington, DC, on June 1, 2009. See the Memorandum 
from Dana S. Mermelstein to the Files, entitled, ``Countervailing Duty 
Petitions on Pre-Stressed Concrete Steel Wire

[[Page 29671]]

Strand and Certain Grating from the People's Republic of China: 
Consultations with the Government of the People's Republic of China,'' 
(June 3, 2009), which is on file in the Central Records Unit (``CRU'') 
of the main Department of Commerce building, Room 1117.

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 U.S. 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 (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 (CIT 2001), citing Algoma Steel 
Corp. Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 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 subtitle.'' 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 do not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that PC strand constitutes 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: PC Strand from the PRC (``Initiation Checklist'') 
at Attachment II (``Industry Support''), dated concurrently with this 
notice and on file in the Central Records Unit (``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 Petition with reference to the domestic like product 
as defined in the ``Scope of Investigation'' section above. To 
establish industry support, Petitioners provided their production of 
the domestic like product for the year 2008, and compared this to total 
production of the domestic like product for the entire domestic 
industry. See Volume I of the Petition, at 4, and Exhibit General-1. 
Petitioners calculated total domestic production based on their own 
production plus information provided by the two other non-petitioning 
companies that produce the domestic like product in the United States, 
who are supporters of the Petition. See Volume I of the Petition, at 
Exhibit General-1, and Supplement to the AD/CVD Petitions, at 5-6, and 
Attachment 3, and Second Supplement to the AD/CVD Petitions, dated June 
9, 2009, at 5, and Attachment 1; see also Initiation Checklist as 
Attachment II, Industry Support.
    Our review of the data provided in the Petition, supplemental 
submissions, and other information readily available to the Department 
indicates that Petitioners have established industry support. First, 
the 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 and 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 Petitions account for at least 25 percent of the total 
production of the domestic like product. See 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 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 Petition. 
Accordingly, the Department determines that the 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 Petition on behalf 
of the domestic industry because they are interested parties as defined 
in section 771(9)(C) of the Act and they have demonstrated sufficient 
industry support with respect to the antidumping investigation that 
they are requesting the Department initiate. See id.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that imports of PC strand from the PRC are 
benefitting from countervailable subsidies and that such imports are 
causing or threaten to cause, material injury to the domestic 
industries producing PC strand. 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, increased import penetration, 
underselling and price depressing and suppressing effects, lost sales 
and revenue, reduced production, capacity, and capacity utilization, 
reduced employment, and an overall decline in 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

[[Page 29672]]

statutory requirements for initiation. See Initiation Checklist at 
Attachment III (Analysis of Allegations and Evidence of Material Injury 
and Causation for the Petition).

Initiation of Countervailing Duty Investigation

    Section 702(b) of the Act requires the Department to initiate a CVD 
proceeding whenever an interested party files a 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 petitioner(s) supporting the 
allegations.
    The Department has examined the CVD Petition on PC Strand from the 
PRC and finds that it complies with the requirements of section 702(b) 
of the Act. Therefore, in accordance with section 702(b) of the Act, we 
are initiating a CVD investigation to determine whether manufacturers, 
producers, or exporters of PC Strand in the PRC receive countervailable 
subsidies. For a discussion of evidence supporting our initiation 
determination, see Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in the PRC:

A. Loan Programs

    1. Policy Lending at the Federal Level to PC Strand Industry.
    2. Policy Lending at the Provincial and Municipal Level.
    3. Preferential Loans for State-Owned Enterprises.
    4. Treasury Bond Loans.
    5. Honorable Enterprises Program.
    6. Preferential Loans for Key Projects and Technologies.

B. Government Provision of Goods and Services for Less Than Adequate 
Remuneration (LTAR)

    1. Government Provision of Wire Rod for LTAR.
    2. Provision of Land Use Rights for LTAR to Foreign Invested 
Enterprises (``FIEs'') in Jiangxi and the City of Xinyu.
    3. Federal Provision of Electricity for LTAR.
    4. Provision of Electricity and Water at LTAR for FIEs and 
``Technologically Advanced'' Enterprises by Jiangsu Province.

C. Income and Other Direct Taxes

    1. Income Tax Credits for Domestically Owned Companies Purchasing 
Domestically Produced Equipment.
    2. Income Tax Exemption for Investment in Domestic Technological 
Renovation.
    3. Reduction in or exemption from Fixed Assets Investment 
Orientation Regulatory Tax.

D. Indirect Tax and Tariff Exemption Programs

    1. Stamp Exemption on Share Transfers Under Non-Tradable Share 
Reform.
    2. Deed Tax Exemption for State Owned Enterprises (SOEs) Undergoing 
Mergers or Restructurings.
    3. Export Incentive Payments Characterized as ``VAT Rebates.''
    4. Import Tariff and VAT Exemptions for FIEs and Certain Domestic 
Enterprises Using Imported Equipment in Encouraged Industries.
    5. Import Tariff and VAT Refunds to Promote the Development of 
Equipment Manufacturing in China.

E. Grant Programs

    1. The State Key Technology Project Fund.
    2. Subsidies for Development of Famous Export Brands and China 
World Top Brands.
    3. Sub-Central Government Programs to Promote Famous Export Brands 
and China World Top Brands.
    4. Exemptions for SOEs from Distributing Dividends to the State.
    5. Grants to Loss-Making SOEs.
    6. Program to Rebate Antidumping Fees.

F. Preferential Income Tax Subsidies for Foreign Invested Entities 
(FIEs)

    1. Two Free, Three Half Program.
    2. Income Tax Exemption Program for Export-Oriented FIEs.
    3. Local Income Tax Exemption and Reduction Programs for 
``Productive'' Foreign-Invested Enterprises.
    4. Preferential Tax Programs for Foreign-Invested Enterprises 
Recognized as High or New Technology Enterprises.
    5. Income Tax Subsidies for FIE's Based on Geographic Location.
    6. VAT Refunds for FIE's Purchasing Domestically-Produced 
Equipment.
    For further information explaining why the Department is 
investigating these programs, see the Initiation Checklist.
    We are not including in our investigation the following programs 
alleged to benefit producers and exporters of the subject merchandise 
in the PRC:

A. Export Loans

    Petitioners allege that in Line Pipe from the PRC, the Department 
found that a number of companies benefitted from export-contingent 
loans from SOCBs and that Chinese PC strand producers would be eligible 
for such loans. See Circular Welded Carbon Quality Steel Line Pipe from 
the People's Republic of China: Final Affirmative Countervailing Duty 
Determination, 73 FR 70961 (Nov. 24, 2008) (``Line Pipe from the 
PRC''), and accompanying Issues and Decision Memorandum (Line Pipe from 
PRC Decision Memorandum) at ``Export Loans'' section. According to 
Petitioners, this program has not been eliminated by any reforms to the 
Chinese banking system. Petitioners support their allegation by citing 
to Line Pipe from the PRC. However, in a subsequent initiation of a CVD 
investigation, the Department made clear the producers identified in 
that petition were the same as those investigated in Line Pipe from the 
PRC. See Certain Oil Country Tubular Goods from the People's Republic 
of China: Initiation of Countervailing Duty Investigation, 74 FR 20678 
(May 5, 2009) (``OCTG Initiation''), and accompanying Initiation 
Checklist (OCTG Initiation Checklist) at ``Export Loans'' section. The 
producers investigated in Line Pipe from the PRC and identified in the 
OCTG Initiation are not identified in the petition filed on the record 
of this proceeding. Therefore, we find that the support relied on in 
the OCTG Initiation to initiate an investigation of export loans does 
not apply to the facts of this proceeding. The petitioners have 
provided insufficient evidence indicating that PC strand producers can 
benefit from this alleged program.

B. Stamp Tax Exemption and Waiver of Administrative Charges for SOEs 
Undergoing Mergers or Restructurings

    Petitioners allege that the GOC imposes charges on companies that 
undergo a restructuring or reorganization in China for various 
administrative items that include a business registration change, 
trademark registration change, tax registration, property rights, and 
land registration. Petitioners allege that, pursuant to Cai Shui (2003) 
No. 184 and Ji Jia Fei (1998) No. 1077, SOEs are exempted from certain 
fees associated with land registration, such as land registration fees, 
survey fees, and measurement registration fees. The legislation cited 
by petitioners refers to stamp tax exemptions provided by the

[[Page 29673]]

municipality of Shenzhen. The petitioners did not provide copies of Cai 
Shui (2003) No. 184 and Ji Jia Fei (1998) No. 1077. The only 
documentation provided by petitioners refers to stamp tax exemptions 
provided by the municipality of Shenzhen. However, petitioners have not 
identified a producer of PC strand that is located in the municipality 
of Shenzhen.

C. Export Assistance Grants

    Petitioners allege that the Department found this program conferred 
countervailable benefits on Chinese pipe producers in the CWP from the 
PRC investigation.\1\\\ Petitioners contend that there is no reason to 
believe this program has been terminated, and the Department should 
investigate it accordingly. Aside from citing to CWP from the PRC, 
petitioners have not identified the administrating authority that is 
allegedly providing the export assistance grants. Therefore, 
Petitioners have not provided any indication whether the program is 
administered at the municipal, provincial, or Federal level. Nor have 
the petitioners shown that PC strand producers are located within the 
area or regions in which these assistance grants are made available.
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    \1\ See 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 ``Export Assistance Grants.''
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D. Provision of Land to SOEs for Less Than Adequate Remuneration

    According to petitioners, the Department initiated an investigation 
of the provision of land to SOEs for LTAR in OTR Tires from the PRC.\2\ 
Petitioners contend that, to the extent that it does not consider this 
program a subset of the provision of land for LTAR generally, the 
Department should investigate this as a separate program. Petitioners' 
sole support for this allegation is the Department's initiation in the 
OTR from the PRC Initiation, which we find does not constitute 
sufficient evidence that PC strand producers can benefit from this 
alleged program. We note that the information reviewed by the 
Department in the OTR from the PRC Initiation, included company-
specific information pertaining to OTR producers as well as other 
documentation that is not on the record of the current proceeding.
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    \2\ Citation to Certain New Pneumatic Off-the-Road Tires From 
the People's Republic of China: Initiation of Countervailing Duty 
Investigation, 72 FR 44122, 44124 (August 7, 2007) (``OTR from the 
PRC Initiation''), and accompanying Initiation Checklist (OTR from 
the PRC Initiation Checklist) at ``Provision of Land and Utilities 
to SOEs for Less than Adequate Remuneration.''
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E. Government Provision of Land at Less Than Adequate Remuneration to 
Companies Located in Development Zones

    Petitioners allege that local and provincial governments sell land 
for LTAR to firms located in designated geographical areas. We have 
recommended initiating an investigation into the Province of Jiangxi 
and the City of Xinyu's provision of land to FIEs for less than 
adequate remuneration in the context of the ``Provision of Land Use 
Rights for Less Than Adequate Remuneration'' program. Further, 
petitioner has provided no additional information to support its 
allegation of the provision of land for LTAR to companies located in 
other geographical regions outside the Province of Jiangxi and the City 
of Xinyu.

F. Government Restraints on Exports of Wire Rod

    Petitioners allege that the GOC imposes export restrictions, such 
as export quotas, related export licensing and bidding requirements, 
minimum export prices and export duties, on the raw materials used for 
producing PC strand. Petitioners contend that these restrictions have 
resulted in artificially suppressing raw material prices of wire rod 
within the PRC. Petitioners have not adequately shown how these 
particular export taxes and licenses constitute entrustment or 
direction of private entities by the GOC to provide a financial 
contribution to producers of subject merchandise. Moreover, petitioners 
have not provided sufficient data regarding historic price and export 
trends demonstrating, e.g., price decreases or decreased exports (as a 
whole, from China) correlated with the imposition of the alleged export 
restraints.

G. Tax Reduction for Enterprises Making Little Profit

    According to China's WTO subsidies notification, enterprises with 
annual taxable incomes between RMB 30,000 and 100,000 are eligible for 
a 3 percent reduction in their annual income tax rate. Petitioners have 
not established with reasonably available information that 
``enterprises making little profit'' are a de jure specific group 
because petitioners have provided no explanation of why companies with 
access to this program comprise an enterprise or industry, or group of 
enterprises or industries. See, e.g., Preamble to Countervailing Duty 
Regulations, 63 FR 65348, 65357 (November 25, 1998) ``* * * because the 
user represented numerous and diverse industries, the program was found 
not to be specific.''

H. China's Enforced Undervaluation of Its Currency

    Petitioners allege that the GOC-maintained exchange rate 
effectively prevents the appreciation of the Chinese currency (``RMB'') 
against the U.S. dollar. In addition, petitioners allege that the GOC 
requires that foreign exchange earned from export activities be 
converted to RMB at the government prescribed rate. Therefore, when 
producers in the PRC sell their dollars at official foreign exchange 
banks, as required by law, the producers receive more RMB than they 
otherwise would if the value of the RMB were set by market mechanisms. 
Petitioners have not sufficiently alleged the elements necessary for 
the imposition of a countervailing duty and did not support the 
allegation with reasonably available information.

Respondent Selection

    For this investigation, the Department expects to select 
respondents based on U.S. Customs and Border Protection (CBP) data for 
U.S. imports during the period of investigation. We intend to make our 
decision regarding respondent selection within 20 days of publication 
of this Federal Register notice. The Department invites comments 
regarding the CBP data and respondent selection within seven calendar 
days of publication of this Federal Register notice.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition has been provided to the Government 
of the PRC. As soon as and to the extent practicable, we will attempt 
to provide a copy of the public version of the petition to each 
exporter named in the petition, consistent with section 351.203(c)(2) 
of the Department's regulations.

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 25 days after the date 
on which it receives notice of the initiation, whether there is a 
reasonable indication that imports of subsidized PC Strand from the PRC 
are causing material

[[Page 29674]]

injury, or threatening to cause 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; 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: June 16, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigation

    For purposes of this investigation, prestressed concrete steel 
wire strand (PC strand) is steel wire strand, other than of 
stainless steel, which is suitable for use in, but not limited to, 
prestressed concrete (both pretensioned and post-tensioned) 
applications. The scope of this investigation encompasses all types 
and diameters of PC strand whether uncoated (uncovered) or coated 
(covered) by any substance, including but not limited to, grease, 
plastic sheath, or epoxy. This merchandise includes, but is not 
limited to, PC strand produced to the American Society for Testing 
and Materials (ASTM) A-416 specification, or comparable domestic or 
foreign specifications. PC strand made from galvanized wire is 
excluded from the scope if the zinc and/or zinc oxide coating meets 
or exceeds the 0.40 oz./ft\2\ standard set forth in ASTM-A-475.
    The PC strand subject to this investigation is currently 
classifiable under subheadings 7312.10.3010 and 7312.10.3012 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of this investigation 
is dispositive.

[FR Doc. E9-14743 Filed 6-22-09; 8:45 am]
BILLING CODE 3510-DS-P