The Ministry of Commerce of the People's Republic of China (hereinafter referred to as the "MOFCOM") received on November 19, 2015 a petition formally filed by the China Alcoholic Drinks Association (hereinafter referred to as the "Petitioner") on behalf of China's distiller's dried grains with or without solubles industry for a countervailing duty investigation into imports of distiller's dried grains with or without solubles originating from the U.S. In accordance with Article 16 of the Countervailing Duty Regulations of the People's Republic of China, the MOFCOM issued on December 15, 2015 the U.S. government an invitation for consultations in relation to matters under the countervailing duty investigation, and carried out consultations on December 29 with the U.S. government. On January 4, 2016, the U.S. government submitted written comments on relevant subsidy items.

The MOFCOM has examined, in accordance with relevant provisions of the Countervailing Duty Regulations of the People's Republic of China, the qualification of the Petitioner, product in question, similar products in China, impact of the product in question on domestic industry, and countries (regions) involved.

According to the evidence provided by the Petitioner and the preliminary examination conducted by the MOFCOM, the Petitioner filed such petition as per the resolution and authorization of its members, and the aggregate distiller's dried grains with or without solubles output represented by the Petitioner took up over 50% of the total output of similar products in China in 2012, 2013, 2014 and January to September, 2015, which was in line with the provisions on a petition for a countervailing duty investigation by domestic industry as prescribed in Articles 11 and 13 of the Countervailing Duty Regulations of the People's Republic of China.

The petition states that the product in question has received subsidies from the U.S. government, and there are 42 items of subsidies that may benefit the industry (enterprises) of distiller's dried grains with or without solubles in the U.S. According to the evidence and information reasonably obtained, the Petitioner made a preliminary estimate of the amount of subsidies for the product in question, and found that the amount was not minor. Meanwhile, the petition states that, as the substantial increase in the quantity of the product in question entering the Chinese market and the overall decline in prices beat down and restrain the prices of similar products in Chinese industry, resulting in ineffective utilization of production capacity of similar products in Chinese industry, substantial rise in inventory, decrease in market share, and continuous negative pre-tax profits and rate of return on investment, there is material injury to the Chinese domestic industry and a causal relationship between subsidies received by the product in question and material injury to the Chinese domestic industry. Upon examination, the MOFCOM believed that the petition provides contents and relative evidence required for initiating a countervailing duty investigation as prescribed in Articles 14 and 15 of the Countervailing Duty Regulations of the People's Republic of China.

According to the above outcome of examination and in accordance with Article 16 of the Countervailing Duty Regulations of the People's Republic of China, the MOFCOM decided on January 12, 2016 to initiate a countervailing duty investigation into imports of distiller's dried grains with or without solubles originating from the U.S. And it is hereby announced as follows:

I. Countervailing duty investigation and period of investigation

Upon the release hereof, the MOFCOM initiates a countervailing duty investigation into imports of distiller's dried grains with or without solubles originating from the U.S. The period for countervailing duty investigation is from October 1, 2014 to September 30, 2015, and the period for industry injury investigation is from January 1, 2012 to September 30, 2015.

II. Product in question and investigation scope

Investigation scope: imports of distiller's dried grains with or without solubles originating from the U.S.
Name of the product in question: distiller's dried grains with or without solubles.
Product description: Distiller's dried grains with or without solubles are alcohol lees and dried residual liquid obtained after the processing of fermented liquid in the course of alcohol (ethanol) production by way of fermentation from such raw materials as corn and other grains, regardless of whether they contain soluble protein substances or not.
Main use: Distiller's dried grains with or without solubles are mainly used as feed for animals. Formula will be prescribed from distiller's dried grains with or without solubles and other nutrients for feeding poultry, livestock, aquatic products and special animals.
The tariff line of the product is 23033000 under the Customs Import and Export Tariff of the People's Republic of China.

III. Items under countervailing duty investigation

The Petitioner claimed in the petition submitted that there were totally 42 items of subsidies provided by the U.S. government for the U.S. distiller's dried grains with or without solubles industry. Upon preliminary examination, and taking into account in accordance with the law the claims of the U.S. government and evidential materials attached, the MOFCOM has decided to investigate the following subsidy items:

(I) Items granted by federal government

1. Crop insurance
2. Price loss protection
3. Agricultural risk protection
4. Financial aid for value-added producers
5. Federal ethanol tax relief
6. Federal tax relief for small fuel ethanol businesses
7. Export credit guarantee
8. Foreign market development
9. Market access
10. Farm loans

(II) Items granted by local governments

11. Alabama tax relief for biofuel producers
12. Arkansas investment and job creation incentives
13. Arkansas alternative fuel development fund
14. Colorado tax relief for alternative fuel infrastructure
15. Georgia tax relief for alternative biofuel producers
16. Hawaii tax relief for ethanol producers
17. Illinois renewable fuel development
18. Illinois economic development tax relief
19. Illinois tax relief for business parks
20. Illinois tax relief for major commercial projects
21. Illinois tax relief for small-sized businesses for job creation
22. Indiana tax relief for ethanol production
23. Iowa high-quality employment
24. Iowa revolving loans for alternative energy
25. Iowa loans for value-added agricultural products
26. Kansas ethanol production incentives
27. Kentucky tax relief for ethanol production
28. Kentucky financial aid for agricultural biofuel production
29. Maine tax relief for biofuel production
30. Maryland biofuel production incentives
31. Mississippi biofuel production incentives
32. Missouri fuel ethanol production incentives
33. Montana ethanol production incentives
34. Montana property tax relief for ethanol production facilities
35. North Carolina tax relief for ethanol production equipment
36. North Dakota loans for biofuels
37. North Dakota ethanol production incentives
38. North Dakota tax relief for companies of new industries
39. Oregon loans for alternative fuels
40. Oregon biofuel production assets tax relief
41. South Carolina tax relief for biofuel production equipment
42. South Dakota ethanol and biobutanol production incentives

IV. Registration for responding

Any interested party or government of any interested country (region) responding to the countervailing duty investigation may, within 20 days upon the release hereof, register with the Trade Remedy and Investigation Bureau of the MOFCOM. Any interested party or government of any interested country (region) responding to the investigation shall, as per the Reference Format for Responding to Investigation, provide basic identity information and other materials demonstrating the volume and value of exports or imports of the product in question to or from China, the volume and value of similar products produced and sold, and affiliated information. The Reference Format for Responding to Investigation can be downloaded at the relevant website (see URL below, hereinafter the same).

"Interested parties" as mentioned herein refer to the individuals and organizations as prescribed in Article 19 of the Countervailing Duty Regulations of the People's Republic of China.

V. Access to public information

Any interested party or government of any interested country (region) can download at the relevant website, or search, read, transcribe and copy in the Trade Remedy Public Information Reading Room of the MOFCOM (Tel: 0086-10-65197878), the non-confidential text of the petition submitted by the Petitioner. Any interested party or government of any interested country (region) can, in the course of investigation, have access to the public information on the case concerned at the relevant website, or search, read, transcribe and copy such information in the Trade Remedy Public Information Reading Room of the MOFCOM.

VI. Comments

Any interested party or government of any interested country (region) needing to express comments on the product scope, the qualification of the Petitioner, the countries (regions) involved and other relevant issues may, within 20 days as of the date of release hereof, send written comments to the Trade Remedy and Investigation Bureau of the MOFCOM.

VII. Investigating method

According to Article 20 of the Countervailing Duty Regulations of the People's Republic of China, the MOFCOM may collect information from relevant interested parties and governments of interested countries (regions) by questionnaires, sampling, hearings, and on-site verification to proceed with the investigation.

In order to obtain the information required for the investigation, the MOFCOM, usually within ten working days as of the date of registration for responding to the investigation as prescribed herein, send questionnaires to foreign exporters or producers and domestic producers and importers involved, as well as governments of interested countries (regions) specified in the petition. Interested parties and governments of interested countries (regions) responding to the investigation may also download questionnaires at the relevant website.

The information inquired in the Questionnaire for Foreign Exporters or Producers Involved in the Countervailing Duty Case of Distiller's Dried Grains with or without Solubles includes company structure and operation, affiliates, production costs, and sales, as well as details of all specific items of subsidies under investigation. The information inquired in the Questionnaire for Domestic Producers Involved in the Countervailing Duty Case of Distiller's Dried Grains with or without Solubles includes company profile, situation of similar products in China, operational and relevant information, financial and relevant information, and other issues required to be stated. The information inquired in the Questionnaire for Domestic Importers Involved in the Countervailing Duty Case of Distiller's Dried Grains with or without Solubles includes company profile, trade in the product in question and relevant information. The information inquired in the Questionnaire for Governments Involved in the Countervailing Duty Case of Distiller's Dried Grains with or without Solubles includes product in question, industry, management structure and policies, and details of all specific items of subsidies under investigation.

Interested parties and governments of interested countries (regions) other than those responding to the investigation may directly download the questionnaires at the relevant website or ask the Trade Remedy and Investigation Bureau of the MOFCOM for the same, and complete them as required.

All companies and governments of interested countries (regions) shall submit the questionnaires filled in with complete and accurate answers within the specified time limit. Answers should include all the information as required by the questionnaires.

VIII. Submission and disposal of confidential information

An interested party or the government of an interested country (region) may, if necessary, file a request for keeping confidential the information submitted thereby to the MOFCOM with reasons given. If the MOFCOM renders consent, the interested party or the government of the interested country (region) applying for confidentiality shall provide the non confidential summary of the confidential information at the same time. The non confidential summary should contain sufficient and meaningful information to enable other interested parties to have a reasonable understanding of the confidential information. If no non confidential summary can be provided, reasons shall be given. If an interested party or the government of an interested country (region) does not state the need for keeping confidential the information submitted thereby, the MOFCOM will deem such information as public one.

IX. Consequence of failure to render cooperation

According to Article 21 of the Countervailing Duty Regulations of the People's Republic of China, interested parties and governments of interested countries (regions) shall truthfully reflect the situation and provide relevant materials while the MOFCOM is carrying out the investigation. If any interested party or the government of any interested country (region) does not truthfully reflect the situation or provide relevant materials, or fails to provide necessary information within a reasonable period, or otherwise seriously hinders the investigation, the MOFCOM may make a ruling on the basis of available facts.

X. Investigation period

The investigation shall start on January 12, 2016, and will usually end by January 12, 2017. It may be extended to July 12, 2017 under special circumstances.

XI. Contact details of the MOFCOM

Address: No.2 Dong Chang'an Avenue, Beijing, China (100731)
Trade Remedy and Investigation Bureau of the MOFCOM
Tel: 0086-10-65198196, 65198752
Fax: 0086-10-65197590
Relevant websites: Sub-website (http://trb.mofcom.gov.cn) for the Trade Remedy and Investigation Bureau under the website for the MOFCOM
China Trade Remedy Information (http://www.cacs.mofcom.gov.cn)

Ministry of Commerce of the People's Republic of China 
January 12, 2016

Translated by Hou Zuowei

Proofread by Eddiea