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Countervailing Duty Investigation of Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Final Affirmative Determination, and Final Affirmative Critical Circumstances Determination, in Part

American Government Special Collections Reference Desk

American Government Cars in China

Countervailing Duty Investigation of Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Final Affirmative Determination, and Final Affirmative Critical Circumstances Determination, in Part

Paul Piquado
Department of Commerce
June 18, 2015


[Federal Register Volume 80, Number 117 (Thursday, June 18, 2015)]
[Notices]
[Pages 34888-34891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15059]



[[Page 34888]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-017]


Countervailing Duty Investigation of Certain Passenger Vehicle 
and Light Truck Tires From the People's Republic of China: Final 
Affirmative Determination, and Final Affirmative Critical Circumstances 
Determination, in Part

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

SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of certain passenger vehicle and light truck tires (passenger tires) 
from the People's Republic of China (the 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. The period of investigation is January 1, 2013, through 
December 31, 2013.

DATES: Effective date June 18, 2015.

FOR FURTHER INFORMATION CONTACT: Emily Halle, AD/CVD Operations, Office 
VII, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230; Phone: (202) 482-0176.

SUPPLEMENTARY INFORMATION: 

Background

    The Department published the Preliminary Determination on December 
1, 2014,\1\ and the Amended Preliminary Determination on December 30, 
2014.\2\ A summary of the events that occurred since the Department 
published the Amended Preliminary Determination, as well as a full 
discussion of the issues raised by parties for this final 
determination, may be found in the Final Decision Memorandum.\3\ The 
Final 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 Department of Commerce building. In addition, a complete 
version of the Final Decision Memorandum can be accessed directly at 
http://enforcement.trade.gov/frn/. The signed Final Decision Memorandum 
and the electronic version are identical in content.
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    \1\ See Countervailing Duty Investigation of Certain Passenger 
Vehicle and Light Truck Tires from the People's Republic of China: 
Preliminary Affirmative Determination, Preliminary Affirmative 
Critical Circumstances Determination, in Part, and Alignment of 
Final Determination with Final Antidumping Duty Determination, 79 FR 
71093 (December 1, 2014) (Preliminary Determination).
    \2\ See Countervailing Duty Investigation of Certain Passenger 
Vehicle and Light Truck Tires from the People's Republic of China: 
Amended Affirmative Preliminary Determination, 79 FR 78398 (December 
30, 2014) (Amended Preliminary Determination).
    \3\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Determination in the Countervailing Duty Investigation of 
Certain Passenger Vehicle and Light Truck Tires from the People's 
Republic of China,'' (Final Decision Memorandum), dated concurrently 
with this determination and hereby adopted by this notice.
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Scope of the Investigation and Scope Comments

    The products covered by this investigation are certain passenger 
tires from the PRC. The products covered by the investigation are 
currently classified under the following Harmonized Tariff Schedule of 
the United States (HTSUS) subheadings: 4011.10.10.10, 4011.10.10.20, 
4011.10.10.30, 4011.10.10.40, 4011.10.10.50, 4011.10.10.60, 
4011.10.10.70, 4011.10.50.00, 4011.20.10.05, and 4011.20.50.10. Tires 
meeting the scope description may also enter under the following HTSUS 
subheadings: 4011.99.45.10, 4011.99.45.50, 4011.99.85.10, 
4011.99.85.50, 8708.70.45.45, 8708.70.45.60, 8708.70.60.30, 
8708.70.60.45, and 8708.70.60.60. While HTSUS subheadings are provided 
for convenience and for customs purposes, the written description of 
the subject merchandise is dispositive.
    The Department received comments regarding the scope of this 
investigation from numerous interested parties, which we have 
summarized and addressed in the accompanying Final Decision 
Memorandum.\4\ As explained in the Final Decision Memorandum, to 
facilitate the scope's administrability and enforcement, we have 
clarified the scope language such that ``N'' speed-rated specialty 
trailer tires that meet certain requirements are excluded from the 
scope.\5\ For a complete description of the scope of the investigation, 
see Appendix II to this notice.
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    \4\ See Final Decision Memorandum at Comments 25 and 26.
    \5\ Id.
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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 Final Decision Memorandum. A list of the issues that 
parties raised, and to which we responded in the Final Decision 
Memorandum, is attached to this notice at Appendix I.

Use of Adverse Facts Available

    The Department notes that, in making these findings, we relied, in 
part, on facts available and, because one or more respondents did not 
act to the best of their ability to respond to the Department's 
requests for information, we applied adverse facts available.\6\ For 
purposes of this final determination, we applied adverse facts 
available in several instances, including with regard to the net 
subsidy rate assigned to Shandong Yongsheng Rubber Group Co., Ltd. 
(Yongsheng). For further information, see the section ``Use of Facts 
Otherwise Available and Adverse Inferences,'' in the Final Decision 
Memorandum.
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    \6\ See sections 776(a) and (b) of the Act.
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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 the respondents' subsidy rate calculations since the 
Preliminary Determination and Amended Preliminary Determination. For a 
discussion of these changes, see the Final Decision Memorandum and the 
Final Analysis Memoranda.\7\
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    \7\ See Final Decision Memorandum; see also Memoranda, ``Final 
Determination Analysis for GITI Tire (Fujian) Company Ltd.,'' and 
``Final Determination Analysis for Cooper (Kunshan) Tire Co., 
Ltd.,'' (collectively, Final Analysis Memoranda), dated concurrently 
with this determination and hereby adopted by this notice.
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Final Affirmative Determination of Critical Circumstances, in Part

    In the Preliminary Determination, the Department found that 
critical circumstances exist with respect to imports of passenger tires 
from the PRC for Yongsheng and all other exporters or producers not 
individually examined.\8\ Upon further analysis of the data and 
comments submitted by interested parties following the Preliminary 
Determination, we are modifying our findings for the Final 
Determination.\9\ Specifically, in accordance with section 705(a)(2) of 
the Act, we find that critical circumstances exist with respect to 
imports from GITI Tire (Fujian) Co., Ltd.

[[Page 34889]]

(GITI Fujian), Yongsheng, and all other producers or exporters, but do 
not exist for Cooper (Kunshan) Tire Co., Ltd. (Cooper).
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    \8\ See Preliminary Determination, 79 FR at 71094.
    \9\ For a full description of the methodology and results of our 
analysis, see the Final Decision Memorandum.
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Final Determination

    In accordance with section 705(c)(1)(B)(i) of the Act, we 
calculated a rate for GITI Fujian and Cooper, the only two individually 
investigated exporters/producers of the subject merchandise that 
participated in this investigation.\10\ We adjusted the cash deposit 
rates for GITI Fujian, Yongsheng, and all other producers or exporters 
to reflect our finding that a program-wide change exists with regard to 
one subsidy program.\11\ The cash deposit rates listed below reflect 
this adjustment.
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    \10\ The individually-investigated exporters/producers are (1) 
GITI Tire (Fujian) Co., Ltd., and its cross-owned affiliated 
companies GITI Tire (China) Investment Company Ltd., GITI Radial 
Tire (Anhui) Company Ltd., GITI Tire (Hualin) Company Ltd., GITI 
Steel Cord (Hubei) Company Ltd., Anhui Prime Cord Fabrics Company 
Ltd., GITI Tire Corporation, GITI Tire (Anhui) Company Ltd., GITI 
Greatwall Tire (Yinchuan) Company Ltd., GITI Steel Cord (Anhui) 
Company Ltd., Anhui Prime Cord Weaving Company Ltd., and Anhui Prime 
Cord Twisting Company Ltd.; (2) Cooper Kunshan Tire Co., Ltd., and 
its cross-owned affiliated company, Cooper Chengshan (Shandong) Tire 
Co., Ltd.; and (3) Yongsheng.
    \11\ See Final Decision Memorandum at Comment 15.
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    In accordance with sections 705(c)(1)(B)(i)(I) and 705(c)(5)(A) of 
the Act, for companies not individually investigated, we apply an ``all 
others'' rate, which is normally calculated by weighting the subsidy 
rates of the individual companies selected as respondents with those 
companies' export sales of the subject merchandise to the United 
States. Under section 705(c)(5)(A)(i) of the Act, the all others rate 
should exclude zero and de minimis rates calculated for the exporters 
and producers individually investigated, and any rates determined 
entirely under section 776 of the Act. We therefore have excluded 
Yongsheng's rate from the all others rate.
    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 GITI Fujian and Cooper because doing so risks disclosure of 
proprietary information. Therefore, and consistent with the 
Department's practice where such risk exists, for the all others rate, 
we calculated a weight average of GITI Fujian's and Cooper's rates 
using publicly ranged data.\12\ Since both GITI Fujian and Cooper 
received countervailable export subsidies and the all others rate is an 
average based on the individually investigated respondents, the all 
others rate includes export subsidies. We determine the total estimated 
net countervailable subsidy rates to be:
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    \12\ See, e.g., Countervailing Duty Investigation of Chlorinated 
Isocyanurates From the People's Republic of China: Preliminary 
Determination and Alignment of Final Determination With Final 
Antidumping Determination, 79 FR 10097, 10098 (February 24, 2014), 
unchanged in Countervailing Duty Investigation of Chlorinated 
Isocyanurates From the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 79 FR 56560, 56562 (September 22, 
2014); see also Memorandum, ``Calculation of the All Others Rate for 
the Final Determination,'' June 11, 2015.

------------------------------------------------------------------------
                                       Subsidy rate    Cash deposit rate
              Company                   (percent)          (percent)
------------------------------------------------------------------------
GITI Tire (Fujian) Co., Ltd. and                37.20              36.79
 certain cross-owned companies....
Cooper Kunshan Tire Co., Ltd and                20.73              20.73
 certain cross-owned companies....
Shandong Yongsheng Rubber Group                100.77             100.37
 Co., Ltd.........................
All Others........................              30.87              30.61
------------------------------------------------------------------------

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 merchandise 
under consideration from the PRC that were entered or withdrawn from 
warehouse, for consumption, on or after September 2, 2014 (for those 
entities for which we found critical circumstances exist) or on or 
after December 1, 2014, the date of publication of the Preliminary 
Determination in the Federal Register (for all entities for which we 
did not find critical circumstances exist). 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 March 31, 2015, but 
to continue the suspension of liquidation of all entries from September 
2, 2014, or December 1, 2014, as the case may be, through March 30, 
2015.
    If the U.S. International Trade Commission (the ITC) issues a final 
affirmative injury determination, we will issue a CVD order and will 
reinstate the suspension of liquidation under section 706(a) of the Act 
and will require a cash deposit of estimated CVDs 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.

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

Notification Regarding Administrative Protective Orders

    In the event 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 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 terms of an APO 
is a violation subject to sanction.
    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.

Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
    Dated: June 11, 2015.

[[Page 34890]]

Appendix I

List of Topics Discussed in the Final Decision Memorandum

I. Summary
II. Background
III. Final Determination of Critical Circumstances, in Part
IV. Scope of the Investigation
V. Application of the Countervailing Duty Law to Imports from the 
PRC
VI. Subsidies Valuation Information
VII. Benchmarks and Discount Rates
VIII. Use of Facts Otherwise Available and Adverse Inferences
IX. Analysis of Programs
X. Analysis of Comments
Comment 1: Whether GITI Fujian's Input Suppliers are Authorities
Comment 2: Appropriate Benchmark for Inputs at LTAR
Comment 3: Whether Benchmarks for LTAR Inputs Should Exclude 
International Freight or Inland Freight
Comment 4: Inputs Supplied by Other GITI Companies Should Not be 
Countervailed
Comment 5: Correct Electricity Rate Selections
Comment 6: Whether to Countervail Government Policy Lending Program
Comment 7: Whether the Export Buyer's Credit Program Was Used by 
Respondents
Comment 8: Whether to Countervail CKT's Land in the Kunshan ETDZ
Comment 9: Whether to Countervail Assets from the Chengshan Group to 
Cooper for LTAR
Comment 10: Whether PCT is the Successor-in-Interest to CCT
Comment 11: Adjustments to Cooper's Originally Reported Data
Comment 12: Whether the Department Should Accept the Minor 
Corrections Presented by GITI Fujian at Verification
Comment 13: Whether Loans to GITI Anhui Radial are Export Subsidies
Comment 14: Correct Sales Denominator for the GITI Companies
Comment 15: Cash Deposit Rate for Terminated Programs
Comment 16: Whether to Countervail the VAT Exemptions and Deductions 
for Central Regions Program
Comment 17: Whether to Countervail the Key Enterprise Staffing 
Subsidy, 2013
Comment 18: Whether to Apply AFA to Subsidies Received by Hualin 
Tyre
Comment 19: Whether the Department Should Attribute to GITI Fujian 
Subsidies Received by GITI Anhui Through 2010 and Subsidies Received 
by GITI Yinchuan Greatwall Through the POI
Comment 20: Subsidy Rate for GITI Anhui's Use of the Import Tariff 
and VAT Exemptions for Imported Equipment Programs
Comment 21: AFA Rate for Yongsheng
Comment 22: Appropriate Time Periods for Critical Circumstances 
Analysis
Comment 23: Whether Seasonality Exists in the Critical Circumstances 
Data
Comment 24: Whether Company Specific Data Should be Used in the 
Department's Critical Circumstances Analysis
Comment 25: Whether to Modify the Language of the Exclusion on 
Special Trailer (ST) Tires
Comment 26: Whether Slingshot Tires Are Included in the Scope
XI. Recommendation

Appendix II

Scope of the Investigation

    The scope of this investigation is passenger vehicle and light 
truck tires. Passenger vehicle and light truck tires are new pneumatic 
tires, of rubber, with a passenger vehicle or light truck size 
designation. Tires covered by this investigation may be tube-type, 
tubeless, radial, or non-radial, and they may be intended for sale to 
original equipment manufacturers or the replacement market.
    Subject tires have, at the time of importation, the symbol ``DOT'' 
on the sidewall, certifying that the tire conforms to applicable motor 
vehicle safety standards. Subject tires may also have the following 
prefixes or suffix in their tire size designation, which also appears 
on the sidewall of the tire:
    Prefix designations:
    P--Identifies a tire intended primarily for service on passenger 
cars.
    LT--Identifies a tire intended primarily for service on light 
trucks.
    Suffix letter designations:
    LT--Identifies light truck tires for service on trucks, buses, 
trailers, and multipurpose passenger vehicles used in nominal highway 
service.
    All tires with a ``P'' or ``LT'' prefix, and all tires with an 
``LT'' suffix in their sidewall markings are covered by this 
investigation regardless of their intended use.
    In addition, all tires that lack a ``P'' or ``LT'' prefix or suffix 
in their sidewall markings, as well as all tires that include any other 
prefix or suffix in their sidewall markings, are included in the scope, 
regardless of their intended use, as long as the tire is of a size that 
is among the numerical size designations listed in the passenger car 
section or light truck section of the Tire and Rim Association Year 
Book, as updated annually, unless the tire falls within one of the 
specific exclusions set out below.
    Passenger vehicle and light truck tires, whether or not attached to 
wheels or rims, are included in the scope. However, if a subject tire 
is imported attached to a wheel or rim, only the tire is covered by the 
scope.
    Specifically excluded from the scope of this investigation are the 
following types of tires:
    (1) Racing car tires; such tires do not bear the symbol ``DOT'' on 
the sidewall and may be marked with ``ZR'' in size designation;
    (2) new pneumatic tires, of rubber, of a size that is not listed in 
the passenger car section or light truck section of the Tire and Rim 
Association Year Book;
    (3) pneumatic tires, of rubber, that are not new, including 
recycled and retreaded tires;
    (4) non-pneumatic tires, such as solid rubber tires;
    (5) tires designed and marketed exclusively as temporary use spare 
tires for passenger vehicles which, in addition, exhibit each of the 
following physical characteristics:
    (a) The size designation and load index combination molded on the 
tire's sidewall are listed in Table PCT-1B (``T'' Type Spare Tires for 
Temporary Use on Passenger Vehicles) of the Tire and Rim Association 
Year Book,
    (b) the designation ``T'' is molded into the tire's sidewall as 
part of the size designation, and,
    (c) the tire's speed rating is molded on the sidewall, indicating 
the rated speed in MPH or a letter rating as listed by Tire and Rim 
Association Year Book, and the rated speed is 81 MPH or a ``M'' rating;
    (6) tires designed and marketed exclusively for specialty tire (ST) 
use which, in addition, exhibit each of the following conditions:
    (a) The size designation molded on the tire's sidewall is listed in 
the ST sections of the Tire and Rim Association Year Book,
    (b) the designation ``ST'' is molded into the tire's sidewall as 
part of the size designation,
    (c) the tire incorporates a warning, prominently molded on the 
sidewall, that the tire is ``For Trailer Service Only'' or ``For 
Trailer Use Only'',
    (d) the load index molded on the tire's sidewall meets or exceeds 
those load indexes listed in the Tire and Rim Association Year Book for 
the relevant ST tire size, and
    (e) either
    (i) the tire's speed rating is molded on the sidewall, indicating 
the rated speed in MPH or a letter rating as listed by Tire and Rim 
Association Year Book, and the rated speed does not exceed 81 MPH or an 
``M'' rating; or
    (ii) the tire's speed rating molded on the sidewall is 87 MPH or an 
``N'' rating, and in either case the tire's maximum pressure and 
maximum load limit are molded on the sidewall and either
    (1) both exceed the maximum pressure and maximum load limit for any 
tire of the same size designation in either the passenger car or light 
truck section of the Tire and Rim Association Year Book; or
    (2) if the maximum cold inflation pressure molded on the tire is 
less than

[[Page 34891]]

any cold inflation pressure listed for that size designation in either 
the passenger car or light truck section of the Tire and Rim 
Association Year Book, the maximum load limit molded on the tire is 
higher than the maximum load limit listed at that cold inflation 
pressure for that size designation in either the passenger car or light 
truck section of the Tire and Rim Association Year Book;
    (7) tires designed and marketed exclusively for off-road use and 
which, in addition, exhibit each of the following physical 
characteristics:
    (a) The size designation and load index combination molded on the 
tire's sidewall are listed in the off-the-road, agricultural, 
industrial or ATV section of the Tire and Rim Association Year Book,
    (b) in addition to any size designation markings, the tire 
incorporates a warning, prominently molded on the sidewall, that the 
tire is ``Not For Highway Service'' or ``Not for Highway Use'',
    (c) the tire's speed rating is molded on the sidewall, indicating 
the rated speed in MPH or a letter rating as listed by the Tire and Rim 
Association Year Book, and the rated speed does not exceed 55 MPH or a 
``G'' rating, and
    (d) the tire features a recognizable off-road tread design.
    The products covered by the investigation are currently classified 
under the following Harmonized Tariff Schedule of the United States 
(HTSUS) subheadings: 4011.10.10.10, 4011.10.10.20, 4011.10.10.30, 
4011.10.10.40, 4011.10.10.50, 4011.10.10.60, 4011.10.10.70, 
4011.10.50.00, 4011.20.10.05, and 4011.20.50.10. Tires meeting the 
scope description may also enter under the following HTSUS subheadings: 
4011.99.45.10, 4011.99.45.50, 4011.99.85.10, 4011.99.85.50, 
8708.70.45.45, 8708.70.45.60, 8708.70.60.30, 8708.70.60.45, and 
8708.70.60.60. While HTSUS subheadings are provided for convenience and 
for customs purposes, the written description of the subject 
merchandise is dispositive.

[FR Doc. 2015-15059 Filed 6-17-15; 8:45 am]
BILLING CODE 3510-DS-P



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