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53-Foot Domestic Dry Containers From the People's Republic of China: Final Affirmative Countervailing Duty Determination


American Government Trucking Cars in China

53-Foot Domestic Dry Containers From the People's Republic of China: Final Affirmative Countervailing Duty Determination

Ronald K. Lorentzen
Department of Commerce
April 17, 2015


[Federal Register Volume 80, Number 74 (Friday, April 17, 2015)]
[Notices]
[Pages 21209-21212]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08904]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-015]


53-Foot Domestic Dry Containers From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Commerce.

SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of 53-foot domestic dry containers (domestic dry containers) from the 
People's Republic of China (PRC) as provided in section 705 of the 
Tariff Act of 1930, as amended (the Act). For information on the 
estimated subsidy rates, see the ``Final Determination'' section of 
this notice.

DATES: Effective: April 17, 2015.

FOR FURTHER INFORMATION CONTACT: Yasmin Nair, David Cordell (Singamas), 
or Ilissa Shefferman (CIMC), AD/CVD Operations, Office VI, Enforcement 
and Compliance, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone (202) 482-3813, (202) 482-0408 or (202) 482-4684, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On September 29, 2014, the Department published the preliminary 
determination of the countervailing duty (CVD) investigation of 
domestic dry containers from the PRC in the Federal Register.\1\ On 
September 30,

[[Page 21210]]

2014, China International Marine Containers (Group) Co., Ltd., 
Guangdong Xinhui CIMC Special Transportation Equipment Co., Ltd., 
Nantong CIMC-Special Transportation Equipment Manufacture Co., Ltd., 
Qingdao CIMC Container Manufacture Co., Ltd., Xinhui CIMC Wood Co., 
Ltd., and Xinhui CIMC Container Co., Ltd. (collectively ``CIMC'') 
submitted ministerial error comments regarding the Preliminary 
Determination. On October 9, 2014, the Department responded to these 
comments, stating that the issues raised by CIMC were methodological in 
nature and did not constitute ministerial errors within the meaning of 
the Department's regulations.\2\
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    \1\ See Countervailing Duty Investigation of 53-Foot Domestic 
Dry Containers from the People's Republic of China: Preliminary 
Determination and Alignment of Final Determination with Final 
Antidumping Duty Determination, 79 FR 58320 (September 29, 2014) 
(Preliminary Determination) and accompanying Preliminary Decision 
Memorandum.
    \2\ See Memorandum to Richard Weible, Director, Office VI, AD/
CVD Operations, Enforcement and Compliance, ``Countervailing Duty 
Investigation of 53-Foot Domestic Dry Containers from the People's 
Republic of China: Allegation of a Ministerial Error in the 
Preliminary Determination,'' dated October 9, 2014, at 3.
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    On November 6, 2014, the Department issued a post-preliminary 
analysis with respect to CIMC, as well as Hui Zhou Pacific Container 
Co., Ltd., Qingdao Pacific Container Co., Ltd., and Qidong Singamas 
Energy Equipment Co., Ltd. (collectively, ``Singamas'').\3\
---------------------------------------------------------------------------

    \3\ See Memorandum to Ronald K. Lorentzen, Acting Assistant 
Secretary for Enforcement and Compliance, ``Countervailing Duty 
(CVD) Investigation of 53-Foot Domestic Dry Containers from the 
People's Republic of China (PRC): Post-Preliminary Analysis 
Memorandum,'' dated November 6, 2014.
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    Between November 12, 2014 and November 19, 2014, the Department 
conducted onsite verification of CIMC's, Singamas's and the Government 
of the People's Republic of China's (GOC) questionnaire responses.\4\
---------------------------------------------------------------------------

    \4\ See Memoranda to Richard Weible, Director, Office VI, AD/CVD 
Operations, Enforcement and Compliance, entitled ``Countervailing 
Duty Investigation of 53-Foot Domestic Dry Containers from the 
People's Republic of China (PRC): Verification Report of China 
International Marine Containers (Group) Co., Ltd. (CIMC Group) and 
its cross-owned affiliates CIMC Containers Holding Co., Ltd. (CIMC 
Holding); CIMC Wood Development Co., Ltd. (CIMC Wood); Guangdong 
Xinhui CIMC Special Transportation Equipment Co., Ltd. (Xinhui 
Special); Qingdao CIMC Containers Manufacture Co., Ltd. (Qingdao 
CIMC); Nantong CIMC-Special Transportation Equipment Manufacture 
Co., Ltd. (Nantong CIMC); Xinhui CIMC Container Co., Ltd. (Xinhui 
Container); and Xinhui CIMC Wood Co., Ltd. (Xinhui Wood) 
(collectively, CIMC),'' dated January 14, 2015; ``Countervailing 
Duty Investigation of 53-Foot Domestic Dry Containers from the 
People's Republic of China (PRC): Verification Report of Hui Zhou 
Pacific Container Co., Ltd. (HPCL), Qingdao Pacific Container Co., 
Ltd., (QPCL) and Qidong Singamas Energy Equipment Co., Ltd., (QSCL) 
and their holding company, Singamas Container Holdings Limited 
(SCHL) (collectively, ``Singamas''),'' dated December 22, 2014; and 
``Countervailing Duty Investigation of 53-Foot Domestic Dry 
Containers from the People's Republic of China (PRC): Verification 
Report of the Government of the People's Republic of China (GOC),'' 
dated December 22, 2014.
---------------------------------------------------------------------------

    On February 6, 2015, CIMC, Singamas and its holding company, 
Singamas Container Holdings Limited (Singamas Holding); the GOC; 
Petitioner; and Crowley Maritime Corporation and Crowley Liner 
Services, Inc. and Sea Star Line, LLC (hereafter, collectively, 
``Crowley'') filed case briefs. On February 12, 2015, CIMC, Singamas, 
Singamas Holding, the GOC, Petitioner, Crowley, and J.B. Hunt 
Transport, Inc. (J.B. Hunt) timely filed rebuttal briefs. Pursuant to 
the Department's request, Crowley and Petitioner filed additional scope 
comments to the record of this proceeding.\5\
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    \5\ On April 2, 2015, the Department instructed all interested 
parties to this investigation that filed scope comments on the 
record of the companion AD investigation to file those comments and 
rebuttals on the record of this instant investigation.
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Period of Investigation

    The period of investigation (POI) is January 1, 2013, through 
December 31, 2013.

Scope Comments

    The Department received comments regarding the scope of this 
investigation from interested parties. As detailed in the accompanying 
Issues and Decision Memorandum,\6\ we have not made any changes to the 
scope.
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    \6\ See Memorandum from Christian Marsh, Deputy Assistant 
Secretary for Antidumping and Countervailing Duty Operations, to 
Ronald K. Lorentzen, Acting Assistant Secretary for Enforcement and 
Compliance, ``Countervailing Duty Investigation of 53-Foot Domestic 
Dry Containers from the People's Republic of China: Issues & 
Decision Memorandum for the Final Determination,'' dated 
concurrently with this notice (Issues and Decision Memorandum).
---------------------------------------------------------------------------

Scope of the Investigation

    The merchandise subject to investigation is closed (i.e., not open 
top) van containers exceeding 14.63 meters (48 feet) but generally 
measuring 16.154 meters (53 feet) in exterior length, which are 
designed for the intermodal transport \7\ of goods other than bulk 
liquids within North America primarily by rail or by road vehicle, or 
by a combination of rail and road vehicle (domestic containers). 
Imports of the subject merchandise are provided for under subheading 
8609.00.0000 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Imports of the subject merchandise which meet the definition 
of and requirements for ``instruments of international traffic'' 
pursuant to 19 U.S.C. 1322 and 19 CFR 10.41a may be classified under 
subheading 9803.00.50, HTSUS. For a complete description of the scope 
of the investigation, see Appendix II to this notice.
---------------------------------------------------------------------------

    \7\ ``Intermodal transport'' refers to a movement of freight 
using more than one mode of transportation, most commonly on a 
container chassis for on-the-road transportation and on a rail car 
for rail transportation.
---------------------------------------------------------------------------

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, which is hereby 
incorporated in, and adopted by, this notice.\8\ This memorandum also 
details the changes we made since the Preliminary Determination to the 
subsidy rates calculated for the mandatory respondents and all other 
producers/exporters. 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 7046 of the main Department of Commerce building. In 
addition, a complete version of the Issues and Decision Memorandum can 
be accessed directly at http:\\enforcement.trade.gov/frn/index.html. 
The signed Issues and Decision Memorandum and the electronic version of 
the Issues and Decision Memorandum are identical in content. A list of 
the issues that parties have raised, and to which we responded in the 
Issues and Decision Memorandum, is attached to this notice as Appendix 
I.
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    \8\ See Issues and Decision Memorandum.
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Use of Facts Otherwise Available, Including Adverse Inferences

    For purposes of this final determination, the Department relied, in 
part, on facts available and, because one or more respondents did not 
act to the best of their ability in responding to the Department's 
requests for information, drew an adverse inference where appropriate 
in selecting from among the facts otherwise available.\9\ For further 
information, see the section ``Use of Facts Otherwise Available and 
Adverse Inferences,'' in the Issues and Decision Memorandum.
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    \9\ See sections 776(a) and (b) of the Act.

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[[Page 21211]]

Changes Since the Preliminary Determination

    Based on our review and analysis of the comments received from 
parties, and minor corrections presented at verification, we made 
certain changes to CIMC's and Singamas's subsidy rate calculations 
since the Preliminary Determination. For a discussion of these changes, 
see the Issues and Decision Memorandum and the Final Analysis 
Memoranda, all dated concurrently with this notice.\10\
---------------------------------------------------------------------------

    \10\ See Memorandum to Angelica Townshend, Program Manager, from 
Ilissa Kabak Shefferman, International Trade Compliance Analyst, 
entitled ``Countervailing Duty Investigation of 53-Foot Domestic Dry 
Containers (Domestic Dry Containers) from the People's Republic of 
China: Final Determination Calculations for CIMC,'' dated April 10, 
2015; and Memorandum to Angelica Townshend, Program Manager, from 
David Cordell, International Trade Compliance Analyst, entitled '' 
Countervailing Duty Investigation of 53-Foot Domestic Dry Containers 
(Domestic Dry Containers) from the People's Republic of China: Final 
Determination Calculations for Singamas,'' dated April 10, 2015.
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Final Determination

    For each of the subsidy programs found countervailable, we 
determine that there is a subsidy, i.e., a financial contribution and 
benefit within the meaning of section 771(5) of the Act, and that the 
subsidy is specific within the meaning of section 771(5A) of the Act. 
For further analysis, see the Issues and Decision Memorandum.
    We determine the total estimated net countervailable subsidy rates 
to be:

------------------------------------------------------------------------
                                                           Subsidy rate
                    Exporter/producer                           (%)
------------------------------------------------------------------------
CIMC....................................................           28.00
Singamas................................................           17.13
All-Others..............................................           22.57
------------------------------------------------------------------------

Disclosure

    We intend to disclose to parties the calculations performed in this 
proceeding within five days of the public announcement 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) of the Act, we instructed U.S. Customs and Border 
Protection (CBP) to suspend liquidation of all entries of domestic dry 
containers from the PRC that were entered or withdrawn from warehouse, 
for consumption on or after September 29, 2014, the date of publication 
of the Preliminary Determination in the Federal Register.\11\ 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 
January 27, 2015, but to continue the suspension of liquidation of all 
entries from September 29, 2014, through January 26, 2015.
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    \11\ See Preliminary Determination, 79 FR at 58321.
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    In accordance with section 705(c)(1)(B)(i) of the Act, we 
calculated individual estimated countervailable subsidy rates for the 
individually-investigated producers/exporters of the subject 
merchandise, CIMC and Singamas. Section 705(c)(5)(A)(i) of the Act 
states that for companies not individually investigated, we will 
determine an ``all-others'' rate equal to the weighted average 
countervailable subsidy rates established for exporters and producers 
individually investigated, excluding any zero and de minimis 
countervailable rates, and any rates determined entirely under section 
776 of the Act. As described above, neither of the mandatory 
respondents' subsidy rates was zero or de minimis or was calculated 
entirely under section 776 of the Act.
    Notwithstanding the language of section 705(c)(5)(A)(i) of the Act, 
we have not calculated the ``all-others'' rate by weight averaging the 
rates of the two individually investigated respondents, because doing 
so risks disclosure of proprietary information. Therefore, for the 
``all-others'' rate, we calculated a simple average of the rates of 
CIMC and Singamas.

International Trade Commission Notification

    In accordance with section 705(d) of the Act, we will notify the 
U.S. International Trade Commission (ITC) of our final affirmative CVD 
determination. Because the final determination in this proceeding is 
affirmative, the ITC will make its final determination, in accordance 
with section 705(b)(2)(B) of the Act, as to whether the domestic 
industry in the United States is materially injured or threatened with 
material injury, or whether the establishment of an industry in the 
United States is materially retarded, by reason of imports of domestic 
dry containers from the PRC no later than 45 days after our final 
determination. If the ITC issues a final affirmative injury 
determination, we will issue a CVD order and reinstate the suspension 
of liquidation under section 706(a) of the Act, and will require a cash 
deposit of estimated CVDs for appropriate entries of merchandise in the 
amounts indicated above. If the ITC determines that material injury, 
threat of material injury, or material retardation of the establishment 
of an industry 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. 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

    This notice also serves as a reminder to parties subject to APOs of 
their responsibility concerning the disposition of proprietary 
information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return or destruction 
of APO materials, or conversion to judicial protective order, is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    This determination and notice are issued and published pursuant to 
sections 705(d) and 777(i) of the Act.

     Dated: April 10, 2015.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.

Appendix I

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. Application of the Countervailing Duty Law to Importers From the 
PRC
VI. Use of Facts Otherwise Available and Adverse Inferences
VII. Analysis of Comments

CIMC Issues

Comment 1: The Department should correct the Ad Valorem subsidy rate 
with respect to loans that CIMC received during the POI from the 
China Export-Import Bank
Comment 2: Whether CIMC is a State owned enterprise (SOE) such that 
it could benefit from the loans to SOEs program
Comment 3: Whether the CIMC Preferential Lending to SOEs loan 
program is specific
Comment 4: Whether the Department should apply adverse facts 
available in calculating the benefit CIMC received under the 
preferential lending to SOEs program

[[Page 21212]]

Singamas Issues

Comment 5: The sales e value to be used as denominators to calculate 
subsidy rates with respect to Singamas

Overlapping Issues

Comment 6: Hot-Rolled Steel Sheet and Plate Less than Adequate 
Remuneration (LTAR) and whether the Department should reverse its 
findings regarding the hot-rolled LTAR benchmark.
    (A) Whether the Department should use domestic Chinese steel 
prices on the record to determine whether the GOC provided hot-
rolled steel for LTAR.
    (B) Whether the Department properly found that ``authorities'' 
provided a benefit in the form of the provision of a good for LTAR
    (C) Whether the Department properly found ``Specificity''
    (D) Benchmarks and calculation of benefit
Comment 7: Export Buyer's Credits Program
Comment 8: Scope Exclusion Request
VIII. Recommendation

Appendix II

Scope of the Investigation

    The merchandise subject to investigation is closed (i.e., not 
open top) van containers exceeding 14.63 meters (48 feet) but 
generally measuring 16.154 meters (53 feet) in exterior length, 
which are designed for the intermodal transport \12\ of goods other 
than bulk liquids within North America primarily by rail or by road 
vehicle, or by a combination of rail and road vehicle (domestic 
containers). The merchandise is known in the industry by varying 
terms including ``53-foot containers,'' ``53-foot dry containers,'' 
``53-foot domestic dry containers,'' ``domestic dry containers'' and 
``domestic containers.'' These terms all describe the same article 
with the same design and performance characteristics. 
Notwithstanding the particular terminology used to describe the 
merchandise, all merchandise that meets the definition set forth 
herein is included within the scope of this investigation.
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    \12\ ``Intermodal transport'' refers to a movement of freight 
using more than one mode of transportation, most commonly on a 
container chassis for on-the-road transportation and on a rail car 
for rail transportation.
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    Domestic containers generally meet the characteristic for closed 
van containers for domestic intermodal service as described in the 
American Association of Railroads (AAR) Manual of Standards and 
Recommended Practices Intermodal Equipment Manual Closed Van 
Containers for Domestic Intermodal Service Specification M 930 
Adopted: 1972; Last Revised 2013 (AAR Specifications) for 53-foot 
and 53-foot high cube containers. The AAR Specifications generally 
define design, performance and testing requirements for closed van 
containers, but are not dispositive for purposes of defining subject 
merchandise within this scope definition. Containers which may not 
fall precisely within the AAR Specifications or any successor 
equivalent specifications are included within the scope definition 
of the subject merchandise if they have the exterior dimensions 
referenced below, are suitable for use in intermodal transportation, 
are capable of and suitable for double-stacking \13\ in intermodal 
transportation, and otherwise meet the scope definition for the 
subject merchandise.
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    \13\ ``Double-stacking'' refers to two levels of intermodal 
containers on a rail car, one on top of the other.
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    Domestic containers have the following actual exterior 
dimensions: An exterior length exceeding 14.63 meters (48 feet) but 
not exceeding 16.154 meters (53 feet); an exterior width of between 
2.438 meters and 2.60 meters (between 8 feet and 8 feet 6\3/8\ 
inches); and an exterior height of between 2.438 meters and 2.908 
meters (between 8 feet and 9 feet 6\1/2\ inches), all subject to 
tolerances as allowed by the AAR Specifications. In addition to two 
frames (one at either end of the container), the domestic containers 
within the scope definition have two stacking frames located 
equidistant from each end of the container, as required by the AAR 
Specifications. The stacking frames have four upper handling 
fittings and four bottom dual aperture handling fittings, placed at 
the respective corners of the stacking frames. Domestic containers 
also have two forward facing fittings at the front lower corners and 
two downward facing fittings at the rear lower corners of the 
container to facilitate chassis interface.
    All domestic containers as described herein are included within 
this scope definition, regardless of whether the merchandise enters 
the United States in a final, assembled condition, or as an 
unassembled kit or substantially complete domestic container which 
requires additional manipulation or processing after entry into the 
United States to be made ready for use as a domestic container.
    The scope of this investigation excludes the following items: 
(1) Refrigerated containers; (2) trailers, where the cargo box and 
rear wheeled chassis are of integrated construction, and the cargo 
box of the unit may not be separated from the chassis for further 
intermodal transport; (3) container chassis, whether or not imported 
with domestic containers, but the domestic containers remain subject 
merchandise, to the extent they meet the written description of the 
scope. Imports of the subject merchandise are provided for under 
subheading 8609.00.0000 of the Harmonized Tariff Schedule of the 
United States (HTSUS). Imports of the subject merchandise which meet 
the definition of and requirements for ``instruments of 
international traffic'' pursuant to 19 U.S.C. 1322 and 19 CFR 10.41a 
may be classified under subheading 9803.00.50, HTSUS. While HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the subject merchandise as set forth herein 
is dispositive.

[FR Doc. 2015-08904 Filed 4-16-15; 8:45 am]
 BILLING CODE 3510-DS-P




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