Polyester Textured Yarn From India: Final Affirmative Countervailing Duty Determination

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of polyester textured yarn (yarn) from India.

DATES:

Applicable November 19, 2019.

FOR FURTHER INFORMATION CONTACT:

Janae Martin or Jesus Saenz, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0238 or (202) 482-8184, respectively.

SUPPLEMENTARY INFORMATION:

Background

On May 3, 2019, Commerce published in the Federal Register the Preliminary Determination. On June 12, 2019, Commerce also published the Amended Preliminary Determination in the Federal Register. On August 22, 2019, Commerce issued its Post-Preliminary Analysis. The selected mandatory respondents in this investigation are JBF Industries Limited (JBF) and Reliance Industries Limited (Reliance). In the Preliminary Determination, in accordance with section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce aligned the final countervailing duty (CVD) determination with the final antidumping duty (AD) determination. The revised deadline for the final determination of this investigation is now November 13, 2019.

A summary of the events that occurred since Commerce published the Preliminary Determination, as well as a full discussion of the issues raised by parties for this final determination, may be found in the Issues and Decision Memorandum issued concurrently with this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov and is available to all parties in the Central Records Unit, Room B8024 of the main Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/ . The signed and electronic versions of the Issues and Decision Memorandum are identical in content.

Period of Investigation

The period of investigation (POI) is April 1, 2017 through March 31, 2018.

Scope of the Investigation

The product covered by this investigation is polyester textured yarn from India. For a full description of the scope of this investigation, see the “Scope of the Investigation” in Appendix I.

Scope Comments

During the course of this investigation and the concurrent AD investigation of yarn from India, and concurrent AD and CVD investigations of yarn from China, certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. Commerce addressed these comments in the Preliminary Determination, wherein Commerce preliminarily modified the scope language as it appeared in the Initiation Notice to exclude bulk continuous filament yarn. No interested parties commented on the preliminary exclusion of bulk continuous filament yarn. Thus, we have made no changes to the scope language from the Preliminary Determination with regard to bulk continuous filament yarn.

On May 2, 2019, the petitioners requested that Commerce include an additional Harmonized Tariff Schedule of the United States (HTSUS) subheading in the scope language. Specifically, the petitioners requested that Commerce add HTSUS 5402.52.00 covering twisted yarn to the scope of the investigations. As no interested parties rebutted the petitioners' request to add this HTSUS subheading, and Commerce finds that the petitioners' request is reasonable, we have revised the scope of the investigations to include HTSUS 5402.52.00. See Appendix I for the final scope of the investigation.

Verification

As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), in July 2019, we conducted verification of the questionnaire responses submitted by JBF, Reliance, and the Government of India (GOI). We used standard verification procedures, including an examination of relevant accounting and financial records, and original source documents.

Analysis of Subsidy Programs and Comments Received

The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memorandum. A list of the issues that parties raised, and to which we responded in the Issues and Decision Memorandum, is attached to this notice at Appendix II.

Methodology

Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found countervailable, Commerce determines that there is a subsidy, i.e., a financial contribution by an “authority” that gives rise to a benefit to the recipient, and that the subsidy is specific. For a full description of the methodology underlying our final determination, see the Issues and Decision Memorandum.

In making this final determination, Commerce relied, in part, on facts available pursuant to section 776(a) of the Act. Additionally, as discussed in the Issues and Decision Memorandum, because one or more respondents did not act to the best of their ability in responding to our requests for information, we drew adverse inferences, where appropriate, in selecting from among the facts otherwise available, pursuant to section 776(b) of the Act. For further information, see the section “Use of Facts Otherwise Available and Adverse Inferences” in the accompanying Issues and Decision Memorandum.

Changes Since the Preliminary Determination

Based on our review and analysis of the comments received from parties, minor corrections presented at verification, and our verification findings, we made certain changes to JBF's and Reliance's subsidy rate calculations. Commerce has also revised the all-others rate. For a discussion of these changes, see the Issues and Decision Memorandum.

Final Determination

In accordance with section 705(c)(l)(B)(i) of the Act, we calculated rates for JBF and Reliance, the producers/exporters of subject merchandise selected for individual examination in this investigation.

Section 705(c)(5)(A) of the Act provides that in the final determination, Commerce shall determine an estimated all-others rate for companies not individually examined. This rate shall be an amount equal to the weighted average of the estimated subsidy rates established for those companies individually examined, excluding any zero and de minimis rates and any rates based entirely under section 776 of the Act.

In this investigation, Commerce calculated individual estimated countervailable subsidy rates for both JBF and Reliance that are not zero, de minimis, or based entirely on facts otherwise available. Commerce calculated the all-others rate using a weighted average of the individual estimated subsidy rates calculated for the examined respondents using each company's publicly-ranged values for the merchandise under consideration.

Commerce determines that the following estimated countervailable subsidy rates exist:

Disclosure

We intend to disclose to parties in this proceeding the calculations performed for this final determination within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

As a result of our Preliminary Determination and pursuant to section 703(d)(1)(B) and (d)(2) of the Act, we instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of the Preliminary Determination in the Federal Register. In accordance with section 703(d) of the Act, we issued instructions to CBP to discontinue the suspension of liquidation for CVD purposes for subject merchandise entered, or withdrawn from warehouse, on or after August 31, 2019, but to continue the suspension of liquidation of all entries from May 3, 2019 through August 30, 2019.

If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject 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.

International Trade Commission 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 administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.

Notification Regarding Administrative Protective Orders

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 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.

Notification to Interested Parties

This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act and 19 CFR 351.210(c).

Appendix I

Scope of the Investigation

The merchandise covered by this investigation, polyester textured yarn, is synthetic multifilament yarn that is manufactured from polyester (polyethylene terephthalate). Polyester textured yarn is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation, and the appearance of a natural fiber. This scope includes all forms of polyester textured yarn, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of plies, finish (luster), cross section, color, dye method, texturing method, or packing method (such as spindles, tubes, or beams).

Excluded from the scope of this investigation is bulk continuous filament yarn that: (a) Is polyester synthetic multifilament yarn; (b) has denier size ranges of 900 and above; (c) has turns per meter of 40 and above; and (d) has a maximum shrinkage of 2.5 percent.

The merchandise subject to this investigation is properly classified under subheadings 5402.33.3000 and 5402.33.6000 of the Harmonized Tariff Schedule of the United States (HTSUS). Merchandise subject to this investigation may also enter under HTSUS subheading 5402.52.00. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Subsidies Valuation

IV. Use of Facts Otherwise Available and Adverse Inferences

V. Analysis of Programs

VI. Analysis of Comments

Comment 1: Whether to Revise the All Other's Rate

Comment 2: Whether the New Subsidy Allegations Were Appropriately Initiated

Comment 3: Whether to Countervail the Advanced Authorization (AAP), Duty Drawback (DDB), and Export Promotion of Capital Goods Scheme (EPCGS) Programs

Comment 4: Whether to Countervail the Merchandise Export Incentive Scheme (MEIS) Program

Comment 5: Whether Certain Subsidies Are Tied to Subject Merchandise or Non-Subject Merchandise

Comment 6: Whether Upstream Subsidy Provisions Are Applicable to Subsidies Provided Directly to Mandatory Respondents

Comment 7: Whether the Government of India (GOI) Failed to Cooperate to the Best of Its Ability

Comment 8: Whether the SEZ Import Duty Exemption Is Countervailable

Comment 9: Whether to Recalculate the Benefits from the EPCGS Program and the SEZ Import Duty Exemption Program

Comment 10: Whether to Apply Adverse Facts Available (AFA) to Reliance's Unreported Benefits from the SGOG Electricity Program

Comment 11: Whether to Apply Different Benchmarks in the Calculation of Land Benefits Received by Reliance Under the Gujarat Industrial Development Corporation (GIDC)

Comment 12: State Government of Gujarat (SGOG) Provision of Water for Less Than Adequate Renumeration (LTAR)

Comment 13: Whether the Reliance Verification Report Contains Errors

Comment 14: Whether JBF Received a Benefit Under the State and Union Territory Sales Tax Incentive Program (State and Union Territory Sales Tax Program)

Comment 15: Whether to Countervail the GOI Policy Lending and GOI Export Financing Programs and Whether to Revise the Calculation of Benefits Received by JBF Under These Programs

Comment 16: Whether to Apply AFA to JBF' Reporting of Subject Merchandise and Whether to Revise the Calculation of Benefits Received Under the DDB Program

Comment 17: Whether to Accept JBF's Ministerial Error Comments

Comment 18: Whether to Accept JBF's Minor Corrections Regarding the AAP Program

VII. Recommendation