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Notice

Certain New Pneumatic Off-The-Road Tires from the People's Republic of China: Affirmative Preliminary Determination of Critical Circumstances

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AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

EFFECTIVE DATE:

April 21, 2008.

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FOR FURTHER INFORMATION CONTACT:

Laurel LaCivita or Charles Riggle, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4243 or (202) 482-0650, respectively.

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PRELIMINARY DETERMINATION OF CRITICAL CIRCUMSTANCES

Based on allegations contained in Petitioners'[1] March 11, 2008, amendment to the June 18, 2007, petition, we preliminarily find, pursuant to section 733(e) of the Tariff Act of 1930, as amended (“the Act”), and section 351.206 of the Department of Commerce (“the Department”) regulations, that critical circumstances do not exist with regard to imports of certain new pneumatic off-the-road tires (“OTR tires”) from the People's Republic of China (“PRC”) for the following entities: Guizhou Tyre Co., Ltd. (“GTC”), Guizhou Tyre I/E Corp. (“GTCIE”), Tire Engineering & Distribution Inc. (“TED”), and their affiliates (collectively “Guizhou Tyre”), Hebei Starbright Tire Co., Ltd. (“Starbright”), Tianjin United Tire and Rubber International Co., Ltd. (“TUTRIC”), Xuzhou Xugong Tyre Co., Ltd. (“Xugong”) and the separate-rate companies2 However, we find that Start Printed Page 21313critical circumstances do exist with respect to the PRC entity.

Background

Petitioners filed a timely allegation of critical circumstances on March 11, 2007, in accordance with section 733(e)(1) of the Act and section 351.206(c)(1) of the Department's regulations. On March 18, 2008, the Department requested that the mandatory respondents, Guizhou Tyre, Starbright, TUTRIC and Xugong report their shipments of subject merchandise to the United States on a monthly basis for the period December 2006 through December 2007. On March 28, 2008, the mandatory respondents each provided the requested information. However, Guizhou Tyre and Xugong provided shipment quantities on a per-tire basis and Starbright and TUTRIC provided shipment quantities on a per-kilogram basis. Consequently, on March 28, 2008, we requested that Guizhou Tyre and Xugong provide shipment quantities on a per-kilogram basis, and that Starbright and TUTRIC provide shipment quantities on a per-tire basis. On April 1 and 2, 2008, all four mandatory respondents provided the requested information.

Period of Investigation

The period of investigation (“POI”) is October 1, 2006, through March 31, 2007. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition (June 18, 2007).

Scope of Investigation

The products covered by the scope of the investigation are new pneumatic tires designed for off-the-road and off-highway use, subject to exceptions identified below. Certain OTR tires are generally designed, manufactured and offered for sale for use on off-road or off-highway surfaces, including but not limited to, agricultural fields, forests, construction sites, factory and warehouse interiors, airport tarmacs, ports and harbors, mines, quarries, gravel yards, and steel mills. The vehicles and equipment for which certain OTR tires are designed for use include, but are not limited to: (1) agricultural and forestry vehicles and equipment, including agricultural tractors,[3] combine harvesters,[4] agricultural high clearance sprayers,[5] industrial tractors,[6] log-skidders,[7] agricultural implements, highway-towed implements, agricultural logging, and agricultural, industrial, skid-steers/mini-loaders;[8] (2) construction vehicles and equipment, including earthmover articulated dump products, rigid frame haul trucks,[9] front end loaders,[10] dozers,[11] lift trucks, straddle carriers,[12] graders,[13] mobile cranes, compactors; and (3) industrial vehicles and equipment, including smooth floor, industrial, mining, counterbalanced lift trucks, industrial and mining vehicles other than smooth floor, skid-steers/mini-loaders, and smooth floor off-the-road counterbalanced lift trucks.14 The foregoing list of vehicles and equipment generally have in common that they are used for hauling, towing, lifting, and/or loading a wide variety of equipment and materials in agricultural, construction and industrial settings. The foregoing descriptions are illustrative of the types of vehicles and equipment that use certain OTR tires, but are not necessarily all-inclusive. While the physical characteristics of certain OTR tires will vary depending on the specific applications and conditions for which the tires are designed (e.g., tread pattern and depth), all of the tires within the scope have in common that they are designed for off-road and off-highway use. Except as discussed below, OTR tires included in the scope of the petitions range in size (rim diameter) generally but not exclusively from 8 inches to 54 inches. The tires may be either tube-type or tubeless, radial or non-radial, and intended for sale either to original equipment manufacturers or the replacement market. The subject merchandise is currently classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings: 4011.20.10.25, 4011.20.10.35, 4011.20.50.30, 4011.20.50.50, 4011.61.00.00, 4011.62.00.00, 4011.63.00.00, 4011.69.00.00, 4011.92.00.00, 4011.93.40.00, 4011.93.80.00, 4011.94.40.00, and 4011.94.80.00. While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope is dispositive.

Specifically excluded from the scope are new pneumatic tires designed, manufactured and offered for sale primarily for on-highway or on-road use, including passenger cars, race cars, station wagons, sport utility vehicles, minivans, mobile homes, motorcycles, bicycles, on-road or on-highway trailers, light trucks, and trucks and buses. Such tires generally have in common that the symbol “DOT” must appear on the sidewall, certifying that the tire conforms to applicable motor vehicle safety standards. Such excluded tires may also have the following designations that are used by the Tire and Rim Association:Start Printed Page 21314

Prefix letter designations:

  • P - Identifies a tire intended primarily for service on passenger cars;
  • LT - Identifies a tire intended primarily for service on light trucks; and,
  • ST - Identifies a special tire for trailers in highway service.

Suffix letter designations:

  • TR - Identifies a tire for service on trucks, buses, and other vehicles with rims having specified rim diameter of nominal plus 0.156″ or plus 0.250″;
  • MH - Identifies a tire for Mobile Homes;
  • HC - Identifies a heavy duty tire designated for use on “HC” 15″ tapered rims used on trucks, buses, and other vehicles. This suffix is intended to differentiate among tires for light trucks, and other vehicles or other services, which use a similar designation.
  • Example: 8R17.5 LT, 8R17.5 HC;
  • LT - Identifies light truck tires for service on trucks, buses, trailers, and multipurpose passenger vehicles used in nominal highway service; and
  • MC - Identifies tires and rims for motorcycles.

The following types of tires are also excluded from the scope: pneumatic tires that are not new, including recycled or retreaded tires and used tires; non-pneumatic tires, including solid rubber tires; tires of a kind used on aircraft, all-terrain vehicles, and vehicles for turf, lawn and garden, golf and trailer applications; and tires of a kind used for mining and construction vehicles and equipment that have a rim diameter equal to or exceeding 39 inches. Such tires may be distinguished from other tires of similar size by the number of plies that the construction and mining tires contain (minimum of 16) and the weight of such tires (minimum 1500 pounds).

Critical Circumstances

On March 11, 2008, Petitioners alleged that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to the antidumping investigation of OTR tires from the PRC. Because Petitioners submitted critical circumstances allegations more than 30 days before the scheduled date of the final determination but later than 20 days before the preliminary determination, the Department must issue a preliminary determination of critical circumstances within 30 days of Petitioners' submitted allegation.15 Section 733(e)(1) of the Act provides that, upon receipt of a timely allegation of critical circumstances, the Department will determine whether there is a reasonable basis to believe or suspect that: (A)(i) there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period.

Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine (i) the volume and value of the imports, (ii) seasonal trends, and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that, “In general, unless the imports during the relatively short period' . . . have increased by at least 15 percent over the imports during an immediately preceding period of comparable duration, the Secretary will not consider the imports massive.”

Section 351.206(i) of the Department's regulations defines “relatively short period” as generally the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. This section provides further that, if the Department “finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely,” the Department may consider a period of not less than three months from that earlier time.

In determining whether the above statutory criteria have been satisfied, we examined the following information: (1) the evidence presented in Petitioners' March 11, 2008, submission; (2) evidence obtained since the initiation of the less-than-fair-value (“LTFV”) investigation (i.e., import statistics released by the U.S. Census Bureau); and (3) the International Trade Commission's (“ITC”) preliminary material injury determination.16

In determining whether a history of dumping and material injury exists, the Department generally considers current or previous antidumping duty orders on subject merchandise from the country in question in the United States and current orders in any other country with regard to imports of subject merchandise. Petitioners made no statement concerning a history of dumping with respect to OTR tires from the PRC. We are not aware of any other antidumping order in the United States or in any country on OTR tires from the PRC. Therefore, the Department finds no history of injurious dumping of OTR tires from the PRC pursuant to section 733(e)(1)(A)(i) of the Act.

In determining whether an importer knew, or should have known, that the exporter was selling subject merchandise at LTFV, the Department must rely on the facts before it at the time the determination is made. The Department normally considers margins of 25 percent or more for export price (“EP”) sales and 15 percent or more for constructed export price (“CEP”) sales sufficient to impute importer knowledge of sales at LTFV.[17] For the mandatory respondents in this investigation, our preliminary determination found margins of 16.35 percent for Guizhou Tyre, 19.73 percent for Starbright, 10.98 percent for TUTRIC, and 51.81 percent for Xugong. The separate-rate companies received a margin of 24.75 percent based on the calculated weighted-average margins of Guizhou Tyre, Starbright, TUTRIC and Xugong. The PRC entity received a margin of 210.48 percent.[18] Based on these margins, the Department preliminarily finds that an importer knew, or should have known, that Guizhou Tyre, Starbright, Xugong, the separate-rate companies and the PRC entity were selling subject merchandise at LTFV.19 TUTRIC's preliminary margin did not Start Printed Page 21315meet the threshold for imputing knowledge of dumping.

In determining whether an importer knew or should have known that there was likely to be material injury caused by reason of such imports, the Department normally will look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that material injury is likely by reason of such imports.[20] In the present case, the ITC preliminarily found a reasonable indication that an industry in the United States is materially injured by imports of OTR tires from the PRC.21

Based on the ITC's preliminary determination of material injury and the preliminary dumping margins for Guizhou Tyre, Starbright, Xugong, the separate-rate companies and the PRC entity, the Department preliminarily finds that there is a reasonable basis to believe or suspect that the importers knew, or should have known, that there was likely to be material injury by means of sales of subject merchandise at LTFV of subject merchandise from these respondents.

Pursuant to section 351.206(h) of the Department's regulations, in general, we will not consider imports to be massive unless imports have increased by at least 15 percent during a relatively “short period.” The Department normally considers a “relatively short period” as the period beginning on the date the proceeding begins and ending at least three months later.[22] The Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the “base period”) to a comparable period of at least three months following the filing of the petition (i.e., the “comparison period”). According to the regulations, “if the Secretary finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, then the Secretary may consider a time period of not less than three months from that earlier time.” Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period.23

Petitioners based their allegation of critical circumstances in this investigation on the increase in imports of OTR tires that began with the filing of the antidumping duty petition on June 18, 2007, and continued through the preliminary determination on February 5, 2008. The Department's practice is to rely upon the longest period for which information is available from the month that the petition was filed through the date of the preliminary determination.[24] We have chosen a period of six months as reflective of the “relatively short period” commanded by the statute for determining whether imports have been massive.25 In applying the six-month period, we used a base period of July 2007 through December 2007 and a comparison period of December 2006 through May 2007. The Department requested that the respondents in this investigation provide monthly shipment data for the period December 2006 through December 2007.

On March 28, April 1 and April 2, 2008, the Department received company-specific data from all four mandatory respondents. We selected kilograms as the appropriate measurement by which to conduct this analysis. When we compared these companies' import data during the base period with the comparison period, we found that the volume of imports of OTR tires from the mandatory respondents did not increase over the base period by 15 percent and, thus, based upon section 351.206(h) of the Department's regulations, we did not find them to be massive.26

We did not request the monthly shipment information necessary to determine if there were massive imports for the separate-rate companies. To measure whether massive imports existed for purposes of critical circumstances, we relied on the experience of the mandatory respondents. As explained above, we compared the weighted-average import data during the base and comparison periods for all mandatory respondents, and determined that the increase in volume did not exceed 15 percent for any of the mandatory respondents. Therefore, based upon section 351.206(h) of the Department's regulations, we do not find the imports of the separate-rate companies to be massive.

Because the PRC entity did not respond to our antidumping questionnaire, we were unable to obtain shipment data from the PRC entity for purposes of our critical-circumstances analysis and there is, therefore, no verifiable information on the record with respect to its export volumes. Section 776(a)(2) of the Act provides that:

If - an interested party or any other person - (A) withholds information that has been requested by the administering authority or the Commission under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.

The statute requires that certain conditions be met before the Department may resort to the facts otherwise available. When the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. Because the PRC entity did not respond to the Department's request for information, we used facts available, in accordance with section 776(a) of the Act, in determining whether there were massive imports of merchandise produced by the PRC entity.

Section 776(b) of the Act provides that if the Department finds that the respondent “has failed to cooperate by not acting to the best of its ability to comply with a request for information . . .{the Department} may use an inference that is adverse to the interests of that party in selecting from among the Start Printed Page 21316facts otherwise available.” We have determined that, in not responding to the Department's questionnaires, the PRC entity has not acted to the best of its ability and an adverse inference is warranted.27 Thus, we have made an adverse inference that there were massive imports from the PRC entity over a relatively short period.

In this case, the HTS numbers listed in the scope of the investigation include both subject merchandise and non-subject merchandise, and thus, we were not able to distinguish the amounts of shipments accounted for by the mandatory and separate rate respondents from the amount of shipments accounted for by the PRC-wide entity with respect to subject merchandise.[28] Accordingly, we were not able to use the U.S. Census Bureau data to corroborate our adverse inference. However, as the SAA states, “The fact that corroboration may not be practicable in a given circumstance will not prevent the agencies from applying an adverse inference under subsection (b).”29

We will issue a final determination concerning critical circumstances for all exporters of subject merchandise from the PRC when we issue our final determination in this investigation, which will be not later than July 7, 2008, the first business day after the statutory deadline of July 4, 2008.

Case briefs or other written comments may be submitted to the Assistant Secretary for Import Administration no later than three days after the publication of the preliminary determination of critical circumstances in this proceeding. Rebuttal briefs limited to issues raised in the aforementioned case briefs will be due no later than two days after the deadline date for case briefs.

Suspension of Liquidation

With respect to the PRC entity, we will direct CBP to suspend liquidation of all unliquidated entries of OTR tires from the PRC that were entered, or withdrawn from warehouse, for consumption on or after November 22, 2007, which is 90 days prior to February 20, 2008, the date of publication in the Federal Register of our preliminary determination in this investigation. With respect to the mandatory respondents, Guizhou Tyre, Starbright, TUTRIC and Xugong, and the separate-rate companies, in accordance with section 733(d) of the Act, we will make no changes to our instructions to CBP with respect to the suspension of liquidation of all entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after February 20, 2008.

This determination is issued and published in accordance with Sections 733(f) and 777(i)(1) of the Act.

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Dated: April 11, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

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Footnotes

1.  Titan Tire Corporation, a subsidiary of Titan International, Inc. (“Titan”), and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC (“USW”) (collectively, “Petitioners”).

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2.  Aeolus Tyre Co., Ltd. (“Aeolus”), Double Coin Holdings Ltd. (formerly known as Shanghai Tyre & Rubber Co., Ltd.) (“Double Coin”), Double Happiness Tyre Industries Corp., Ltd. (“Double Happiness”), Qingdao Free Trade Zone Full-World International Trading Co., Ltd. (“Full-World”), Jiangsu Feichi Co., Ltd. (“Feichi”), KS Holding Limited/KS Resources Limited (“KS Holding”), Laizhou Xiongying Rubber Industry Co., Ltd. (“Xiongying”), Oriental Tyre Technology Limited (“Oriental”), Qingdao Etyre International Trade Co., Ltd. (“Etyre7rdquo;), Qingdao Hengda Tyres Co., Ltd. (“Hengda”), Qingdao Milestone Tyre Co., Ltd. (“Milestone”), Qingdao Qihang Tyre Co., Ltd. (“Qihang”), Qingdao Qizhou Rubber Co., Ltd. (“Qizhou”), Qingdao Sinorient International Ltd. (“Sinorent”), Shandong Huitong Tyre Co., Ltd. (“Huitong”), Shandong Jinyu Tyre Co., Ltd. (“Jinyu”), Shandong Taishan Tyre Co., Ltd. (“Taishan”), Shandong Wanda Boto Tyre Co., Ltd. (“Wanda Boto”), Shandong Xingyuan International Trading Co., Ltd. (“Xingyuan”), Techking Tires Limited (“Techking”), Triangle Tyre Co., Ltd. (“Triangle Tyre”), Wendeng City Sanfeng Tyre Co., Ltd. (“Sanfeng”), and Zhaoyuan Leo Rubber Co., Ltd. (“Leo”).

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3.  An agricultural tractor is a four-wheeled vehicle usually with large rear tires and small front tires that is used to tow farming equipment.

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4.  A combine harvester is used to harvest crops such as corn or wheat.

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5.  An agricultural sprayer is used to irrigate agricultural fields.

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6.  An industrial tractor is a four-wheeled vehicle usually with large rear tires and small front tires that is used to tow industrial equipment.

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7.  A log skidder has a grappling lift arm that is used to grasp, lift and move trees that have been cut down to a truck or trailer for transport to a mill or other destination.

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8.  A skid-steer loader is a four-wheel drive vehicle with the left-side drive wheels independent of the right-side drive wheels and lift arms that lie alongside the driver with the major pivot points behind the driver's shoulders. Skid-steer loaders are used in agricultural, construction and industrial settings.

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9.  A haul truck, which may be either rigid frame or articulated (i.e., able to bend in the middle) is typically used in mines, quarries and construction sites to haul soil, aggregate, mined ore, or debris.

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10.  A front loader has lift arms in front of the vehicle. It can scrape material from one location to another, carry material in its bucket or load material into a truck or trailer.

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11.  A dozer is a large four-wheeled vehicle with a dozer blade that is used to push large quantities of soil, sand, rubble, etc., typically around construction sites. They can also be used to perform “rough grading” in road construction.

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12.  A straddle carrier is a rigid frame, engine-powered machine that is used to load and offload containers from container vessels and load them onto (or off of) tractor trailers.

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13.  A grader is a vehicle with a large blade used to create a flat surface. Graders are typically used to perform “finish grading.” Graders are commonly used in maintenance of unpaved roads and road construction to prepare the base course onto which asphalt or other paving material will be laid.

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14.  A counterbalanced lift truck is a rigid frame, engine-powered machine with lift arms that has additional weight incorporated into the back of the machine to offset or counterbalance the weight of loads that it lifts so as to prevent the vehicle from overturning. An example of a counterbalanced lift truck is a counterbalanced fork lift truck. Counterbalanced lift trucks may be designed for use on smooth floor surfaces, such as a factory or warehouse, or other surfaces, such as construction sites, mines, etc.

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15.  See Section 351.206(c)(2)(ii) of the Department's regulations.

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16.  See Investigation Nos. 701-TA-448 and 731-TA-1117 (Preliminary), Certain Off-the-Road Tires From China, 72 FR 50699, (September 4, 2007) (“ITC Preliminary Determination”).

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17.  See, e.g., Carbon and Alloy Steel Wire Rod From Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine: Notice of Preliminary Determination of Critical Circumstances, 67 FR 6224, 6225 (February 11, 2002) (unchanged in the final determination).

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18.  See Certain New Pneumatic Off-The-Road Tires from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 73 FR 9278 (February 20, 2008) (“Preliminary Determination”).

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19.  In this investigation, Guizhou Tyre reported making both CEP and EP sales, and Starbright reported making only CEP sales. We based our analysis for TUTRIC and Xugong on EP sales. Because CEP sales constitute the vast majority of Guizhou Tyre's total U.S. sales by quantity, we find that it is appropriate to base our finding of knowledge of dumping on whether Guizhou Tyre's margin exceeds 15 percent. See Notice of Final Determination of Sales at Less Than Fair Value and Final Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 FR 29310 (May 22, 2006), and accompanying Issues and Decision Memorandum at Comment 9.

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20.  See, e.g., Final Determination of Sales at Less Than Fair Value: Certain Cut-To-Length Carbon Steel Plate from the People's Republic of China, 62 FR 61964 (November 20, 1997).

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21.  See ITC Preliminary Determination.

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22.  See section 351.206(i) of the Department's regulations.

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23.  See section 351.206(c)(2) of the Department's regulations.

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24.  See Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 68 FR 66800, 66809 (November 28, 2003) (unchanged in the final determination).

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25.  See section 733(e)(1)(B) of the Act.

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26.  See Memorandum, “Less-than-Fair-Value Investigation of Certain New Pneumatic Off-The-Road Tires (“OTR Tires7rdquo;) from the People's Republic of China (“PRC”), Affirmative Preliminary Determination of Critical Circumstance,” dated concurrently with this notice.

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27.  See Preliminary Determination.

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28.  See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils from Japan, Part II, 64 FR 30574, 30585 (June 8, 1999).

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29.  See Statement of Administrative Action (SAA) accompanying the Uruguay Round Agreements Act, H. Doc. No. 316, 103d Cong., 2d Session, Vol. 1 (1994) at 870.

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[FR Doc. E8-8575 Filed 4-18-08; 8:45 am]

BILLING CODE 3510-DS-S