Circular Welded Austenitic Stainless Pressure Pipe from the People's Republic of China: Final Affirmative Countervailing Duty Determination

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) has made a final determination that countervailable subsidies are being provided to producers and exporters of circular welded austenitic stainless pressure pipe (CWASPP) from the People's Republic of China (PRC). For information on the estimated subsidy rates, see the “Suspension of Liquidation” section of this notice.

EFFECTIVE DATE:

January 28, 2009.

FOR FURTHER INFORMATION CONTACT:

Robert Copyak, IA Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, Room 4012, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 202-482-2209.

SUPPLEMENTARY INFORMATION:

Petitioner

The petitioners in this investigation are Bristol Metals LLP, Felker Brothers Corp., Marcegaglia U.S.A., Inc., Outokumpu Stainless Pipe, Inc., and the United Steelworkers (petitioners).

Period of Investigation

The period for which we are measuring subsidies, or period of investigation (POI), is January 1, 2007, through December 31, 2007.

Case History

On July 10, 2008, we published in the Federal Register the preliminary determination that countervailable subsidies are being provided to producers and exporters of CWASPP from the PRC, as provided under section 703 of the Tariff Act of 1930, as amended (the Act). See Circular Welded Austenitic Stainless Pressure Pipe from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination with Final Antidumping Duty Determination, 73 FR 39657 (July 10, 2008) (Preliminary Determination). On July 15, 2008, the Winner Companies filed timely allegations of significant ministerial errors contained in the Department's Preliminary Determination. After reviewing the allegations, we determined that the Preliminary Determination included significant ministerial errors as described under 19 CFR 351.224(g). Therefore, in accordance with 19 CFR 351.224(e), we made changes to the Preliminary Determination. On August 7, 2008, we published in the Federal Register the amended preliminary determination. See Circular Welded Austenitic Stainless Pressure Pipe From the People's Republic of China: Notice of Amended Preliminary Countervailing Duty Determination 73 FR 45954 (August 7, 2008) (Amended Preliminary Determination).

On August 8, 2008, the GOC requested a hearing. On August 11, 2008, petitioners requested a hearing.

On December 16, 2008, we received case briefs regarding the Preliminary Determination from the Government of the People's Republic of China (GOC), petitioners, and Winner Stainless Tube Co., Ltd. (Winner), Winner Steel Products (Guangzhou)(WSP), and Winner Machinery Enterprise Company Limited (Winner HK) (collectively the Winner Companies). On December 17, 2008, the GOC filed a letter correcting inadvertent errors its case brief. On December, 22, 2008, the GOC, petitioners, and the Winner Companies submitted rebuttal briefs.

On January 7, 2009, the Department issued a post-preliminary determination decision memorandum regarding the new subsidy allegations that were filed by petitioners on May 30, 2008. On January 12, 2009, we received case briefs regarding this post-preliminary determination decision memorandum from GOC, petitioners, and the Winner Companies. On 14, 2009, the GOC, petitioners, and the Winner Companies submitted rebuttal briefs on this decision memorandum.

The GOC and petitioners withdrew their requests for a hearing on January 8, 2009.

Scope of Investigation

The merchandise covered by this investigation is circular welded austenitic stainless pressure pipe not greater than 14 inches in outside diameter. This merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A-312 or ASTM A-778 specifications, or comparable domestic or foreign specifications. ASTM A-358 products are only included when they are produced to meet ASTM A-312 or ASTM A-778 specifications, or comparable domestic or foreign specifications.

Excluded from the scope are: (1) welded stainless mechanical tubing, meeting ASTM A-554 or comparable domestic or foreign specifications; (2) boiler, heat exchanger, superheater, refining furnace, feedwater heater, and condenser tubing, meeting ASTM A-249, ASTM A-688 or comparable domestic or foreign specifications; and (3) specialized tubing, meeting ASTM A-269, ASTM A-270 or comparable domestic or foreign specifications.

The subject imports are normally classified in subheadings 7306.40.5005, 7306.40.5040, 7306.40.5062, 7306.40.5064, and 7306.40.5085 of the Harmonized Tariff Schedule of the United States. They may also enter under HTSUS subheadings 7306.40.1010, 7306.40.1015, 7306.40.5042, 7306.40.5044, 7306.40.5080, and 7306.40.5090. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope is dispositive.

Scope Comments

Interested parties submitted comments on the scope of investigation. Those comments are fully addressed in the preliminary determination of the companion AD investigation. See Circular Welded Austenitic Stainless Pressure Pipe from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 73 FR 51788, 51789 (September 5, 2008).

Injury Test

Because the PRC 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 International Trade Commission (ITC) must determine whether imports of the subject merchandise from the PRC materially injure, or threaten material injury to a U.S. industry. On March 25, 2008, the ITC published its preliminary determination that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports from the PRC of subject merchandise. See Welded Stainless Steel Pressure Pipe from China, USITC Pub. 3986, Inv. Nos. 701-TA-454 and 731-TA-1144 (Preliminary) (March 2008); and Welded Stainless Pressure Pipe from China, 73 FR 16911 (Preliminary)(March 31, 2008).

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the accompanying January 21, 2008, memorandum to Ronald K. Lorentzen, Acting Assistant Secretary for Import Administration from John M. Andersen, Acting Deputy Assistant Secretary for Antidumping Duty/Countervailing Duty Operations, which is titled Issues and Decision Memorandum for Final Determination (Decision Memorandum) and is on file in Central Records Unit (CRU), room 1117 of the main Commerce building. Attached to this notice as an Appendix is a list of the issues that parties raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum, which is on file in the Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/. The paper copy and electronic version of the Decision Memorandum are identical in content.

Application of Facts Available, Including the Application of Adverse Inferences

For purposes of this final determination, we have relied on facts available and have used adverse inferences to determine the countervailable subsidy rates for Froch, which is one of the two mandatory respondents, in accordance with sections 776(a) and (b) of the Act. A full discussion of our decision to apply adverse facts available (AFA) is presented in the Decision Memorandum in the section “Application of Facts Available and Use of Adverse Inferences” and in “Analysis of Comments” at Comment 11.

Suspension of Liquidation

In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have calculated an individual rate for the companies under investigation, the Winner Companies and Froch Enterprise Co. Ltd. (Froch). With respect to the all-others rate, section 705(c)(5)(A)(i) of the Act provides that the all others rate is to be the weighted average of the rates established for respondents individually investigated, excluding zero or de minimis rates or rates based entirely on facts available. Based on the facts and circumstances of this investigation, we find that section 705(c)(5)(A)(i) is applicable in determining the all others rate. In this case, the Department selected two mandatory respondents as representative of all producers/exporters of CWASPP from the PRC. One of the two company respondents, Froch, did not respond to the questionnaire, and thus we have determined its countervailable subsidy rates based entirely on adverse facts available Because the Winner Companies' rate is not de minimis and is not based entirely on facts available, we determine the Winner Companies' rate to be the all others rate.

As a result of our Preliminary Determination and pursuant to section 703(d) of the Act, we instructed the U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of CWASPP from the PRC which were entered or withdrawn from warehouse, for consumption on or after July 10, 2008, the date of the publication of the Preliminary Determination in the Federal Register. In accordance with sections 703(d) of the Act, we will be issuing instructions to CBP to discontinue the suspension of liquidation for countervailing duty purposes for subject merchandise entered, or withdrawn from warehouse, on or after November 7, 2008, but to continue the suspension of liquidation of all entries from July 10, 2008 through November 6, 2008.

We will issue a CVD order and reinstate the suspension of liquidation under section 706(a) of the Act if the ITC issues a final affirmative injury determination, and will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an APO, without the written consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

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

This determination is published pursuant to sections 705(d) and 777(i) of the Act.

APPENDIX

List of Comments and Issues in the Decision Memorandum

Comment 1: Whether the Department Reasonably Treated China as a Developed Country for CVD De Minimis Purposes

Comment 2: Whether Winner HK Should be Treated as a PRC Entity for Purposes of Attribution

Comment 3: Whether the Total Sales Figure Used as the Denominator in the Preliminary Determination and Interim Decision Memorandum is Correct

Comment 4: Whether the Department Has the Legal Authority to Apply the CVD Law to the PRC While Simultaneously Treating the PRC as an NME in Parallel Antidumping Investigations

Comment 5: Whether the Provision of SSC to SOEs Constitutes the Provision of a Good by a Government Authority

Comment 6: Whether the Sale of HRS from Privately-Held Trading Companies Constitutes a Financial Contribution Under the Act

Comment 7: Whether the Provision of SSC is Specific and the Applicability of the Department's Use of AFA in its Determination of De Facto Specificity

Comment 8: Whether the Department Should Countervail the Provision of Land

Comment 9: Whether the Department Should Countervail FIE Tax Programs that are Industry, Regionally, or Export/Domestic Use Neutral

Comment 10: Whether the Department's Prevailing Interest Rate Methodology Should be Used to Calculate any Subsidy in this Case

Comment 11: Whether the Department's Choice of Adverse Facts Applied to the Non-Cooperating Respondent is Contrary to Law

Comment 12: Whether the Department's Methodology for Determining the All-Others rate in its Amended Preliminary Results is Unreasonable