[Federal Register Volume 85, Number 119 (Friday, June 19, 2020)]
[Notices]
[Pages 37061-37063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13270]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-120]
Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts
Thereof From the People's Republic of China: Preliminary Affirmative
Countervailing Duty Determination, Preliminary Negative Critical
Circumstances Determination, and Alignment of Final Determination With
Final Antidumping Duty Determination
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) preliminarily determines
that producers and/or exporters subject to this investigation received
countervailable subsidies. Interested parties are invited to comment on
this preliminary determination.
DATES: Applicable June 19, 2020.
FOR FURTHER INFORMATION CONTACT: Andrew Huston, AD/CVD Operations,
Office VII, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone: (202) 482-4261.
SUPPLEMENTARY INFORMATION:
Background
This preliminary determination is made in accordance with section
703(b) of the Tariff Act of 1930, as amended (the Act). Commerce
published the notice of initiation of this investigation on February
18, 2020.\1\ On March 26, 2020, Commerce postponed the preliminary
determination of this investigation and reset the deadline to June 15,
2020.\2\
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\1\ See Certain Vertical Shaft Engines Between 223cc and 999cc,
and Parts Thereof from the People's Republic of China: Initiation of
Countervailing Duty Investigation, 83 FR 8835 (February 18, 2020)
(Initiation Notice).
\2\ See Certain Vertical Shaft Engines Between 225cc and 999cc,
and Parts Thereof from the People's Republic of China: Postponement
of Preliminary Determination in the Countervailing Duty
Investigation, 85 FR 17042 (March 26, 2020).
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For a complete description of the events that followed the
initiation of this investigation, see the Preliminary Decision
Memorandum.\3\ A list of topics discussed in the Preliminary Decision
Memorandum is included as Appendix II to this notice. The Preliminary
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. In addition, a complete
version of the Preliminary Decision Memorandum can be accessed directly
at http://enforcement.trade.gov/frn/. The signed and electronic
versions of the Preliminary Decision Memorandum are identical in
content.
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\3\ See Memorandum, ``Decision Memorandum for the Preliminary
Affirmative Determination and Preliminary Negative Critical
Circumstances Determination in the Countervailing Duty Investigation
of Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts
Thereof from the People's Republic of China,'' dated concurrently
with, and hereby adopted by, this notice (Preliminary Decision
Memorandum).
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Scope of the Investigation
The products covered by this investigation are certain large
vertical shaft engines. For a complete description of the scope of this
investigation, see Appendix I.
Scope Comments
In accordance with the Preamble to Commerce's regulations,\4\ the
Initiation Notice set aside a period of time for parties to raise
issues regarding product coverage (i.e., scope).\5\ Certain interested
parties commented on the scope of the investigation as it appeared in
the Initiation Notice. For a summary of the product coverage comments
submitted to the record for this preliminary determination, and
accompanying discussion and analysis of all comments timely received,
see the Preliminary Decision Memorandum. Commerce has not modified the
scope language as it appeared in the Initiation Notice. See Appendix I.
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\4\ See Antidumping Duties; Countervailing Duties, Final Rule,
62 FR 27296, 27323 (May 19, 1997).
\5\ See Initiation Notice.
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Period of Investigation
The period of investigation is January 1, 2019 through December 31,
2019.
Methodology
Commerce is conducting this investigation in accordance with
section 701 of the Act. For each of the subsidy programs found
countervailable, Commerce preliminarily determines that there is a
subsidy, i.e., a financial contribution by an ``authority'' that
confers a benefit on the recipient, and that the subsidy is
specific.\6\ For a full description of the methodology underlying our
preliminary conclusions, see the Preliminary Decision Memorandum.
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\6\ See sections 771(5)(B) and (D) of the Act regarding
financial contribution; section 771(5)(E) of the Act regarding
benefit; and section 771(5A) of the Act regarding specificity.
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In making these findings, Commerce relied, in part, on facts
available. For further information, see ``Use of Facts Otherwise
Available and Adverse Inferences'' in the Preliminary Decision
Memorandum.
Alignment
In accordance with section 705(a)(1) of the Act and 19 CFR
351.210(b)(4), and based on the petitioners' \7\ request,\8\ we are
aligning the final countervailing duty (CVD) determination in this
investigation with the final determination in the companion antidumping
duty (AD) investigation of certain large vertical shaft engines from
China. Consequently, the final CVD determination will be issued on the
same date as the final AD determination, which is currently scheduled
to be issued no later than October 26, 2020, unless postponed.
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\7\ The petitioners are the Coalition of American Vertical
Engine Producers and its individual members.
\8\ See Petitioners' Letter, ``Certain Vertical Shaft Engines
Between 225cc and 999cc, and Parts Thereof from the People's
Republic of China: Request to Align Countervailing Duty
Investigation Final Determination with Antidumping Duty
Investigation Final Determination,'' dated June 5, 2020.
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Preliminary Negative Determination of Critical Circumstances
The Petition \9\ included an allegation that critical circumstances
exist with
[[Page 37062]]
respect to imports of the subject merchandise. The petitioners alleged,
based on trade statistics, that there is a reasonable basis to believe
or suspect that critical circumstances exist with regard to imports of
large vertical shaft engines \10\ Based on monthly shipment information
requested from the mandatory respondents as well as publicly available
trade statistics, Commerce is preliminarily determining that critical
circumstances do not exist within the meaning of section 703(e)(1) of
the Act. For further information, see the Preliminary Decision
Memorandum.
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\9\ See Petitioners' Letter, ``Petitions for the Imposition of
Antidumping and Countervailing Duties on Certain Vertical Shaft
Engines Between 225cc and 999cc, and Parts Thereof from the People's
Republic of China,'' dated January 15, 2020 (the Petition).
\10\ See Volume IV of the Petition at 3-6.
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All-Others Rate
Sections 703(d)(1)(A)(i) and 705(c)(5)(A) of the Act provide that
in the preliminary determination, Commerce shall determine an estimated
all-others rate for companies not individually examined. This rate
shall be an amount equal to the weighted average of the estimated
subsidy rates established for those companies individually examined,
excluding any rates that are zero, de minimis, or based entirely under
section 776 of the Act.
In this investigation, Commerce calculated individual estimated
countervailable subsidy rates for Loncin Motor Co. (Loncin) and
Chongqing Zongshen General Power Machine Co., Ltd. (Zhongshen) that are
not zero, de minimis, or based entirely on the facts otherwise
available. Commerce calculated the all-others rate using a weighted
average of the individual estimated subsidy rates calculated for the
examined respondents using each company's publicly-ranged values for
the merchandise under consideration.\11\
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\11\ With two respondents under examination, Commerce normally
calculates (A) a weighted-average of the estimated subsidy rates
calculated for the examined respondents; (B) a simple average of the
estimated subsidy rates calculated for the examined respondents; and
(C) a weighted-average of the estimated subsidy rates calculated for
the examined respondents using each company's publicly-ranged U.S.
sale quantities for the merchandise under consideration. Commerce
then compares (B) and (C) to (A) and selects the rate closest to (A)
as the most appropriate rate for all other producers and exporters.
See, e.g., Ball Bearings and Parts Thereof from France, Germany,
Italy, Japan, and the United Kingdom: Final Results of Antidumping
Duty Administrative Reviews, Final Results of Changed-Circumstances
Review, and Revocation of an Order in Part, 75 FR 53661, 53663
(September 1, 2010). As complete publicly ranged sales data was
available, Commerce based the all-others rate on the publicly ranged
sales data of the mandatory respondents. For a complete analysis of
the data, see the All-Others Rate Calculation Memorandum, dated
concurrently with this Federal Register notice.
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Preliminary Determination
Commerce preliminarily determines that the following estimated
countervailable subsidy rates exist:
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Subsidy
Producers/exporters rate
(percent)
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Loncin Motor Co............................................ 19.61
Chongqing Zongshen General Power Machine Co................ 37.75
All Others................................................. 30.98
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Suspension of Liquidation
In accordance with section 703(d)(1)(B) and (d)(2) of the Act,
Commerce will direct U.S. Customs and Border Protection (CBP) to
suspend liquidation of entries of subject merchandise as described in
the scope of the investigation section entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. Further, pursuant to 19 CFR 351.205(d),
Commerce will instruct CBP to require a cash deposit equal to the rates
indicated above.
Disclosure
Commerce intends to disclose its calculations and analysis
performed to interested parties in this preliminary determination
within five days of its public announcement, or if there is no public
announcement, within five days of the date of this notice in accordance
with 19 CFR 351.224(b).
Verification
As provided in section 782(i)(1) of the Act, Commerce intends to
verify the information relied upon in making its final determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Enforcement and Compliance no later than seven
days after the date on which the last verification report is issued in
this investigation. Rebuttal briefs, limited to issues raised in case
briefs, may be submitted no later than seven days after the deadline
date for case briefs.\12\ Pursuant to 19 CFR 351.309(c)(2) and (d)(2),
parties who submit case briefs or rebuttal briefs in this investigation
are encouraged to submit with each argument: (1) A statement of the
issue; (2) a brief summary of the argument; and (3) a table of
authorities.
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\12\ See 19 CFR 351.309; see also 19 CFR 351.303 (for general
filing requirements).
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Pursuant to 19 CFR 351.310(c), interested parties who wish to
request a hearing, limited to issues raised in the case and rebuttal
briefs, must submit a written request to the Assistant Secretary for
Enforcement and Compliance, U.S. Department of Commerce within 30 days
after the date of publication of this notice. Requests should contain
the party's name, address, and telephone number; the number of
participants; whether any participant is a foreign national; and a list
of the issues to be discussed. If a request for a hearing is made,
Commerce intends to hold the hearing at the U.S. Department of
Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time
and date to be determined. Parties should confirm by telephone the
date, time, and location of the hearing two days prior to the scheduled
date.
Parties are reminded that briefs and hearing requests are to be
filed electronically using ACCESS and that electronically filed
documents must be received successfully in their entirety by 5 p.m.
Eastern Time on the due date. Note that Commerce has temporarily
modified certain of its requirements for serving documents containing
business proprietary information, until July 17, 2020, unless
extended.\13\
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\13\ See Temporary Rule Modifying AD/CVD Service Requirements
Due to COVID-19; Extension of Effective Period, 85 FR 29615 (May 18,
2020).
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International Trade Commission Notification
In accordance with section 703(f) of the Act, Commerce will notify
the International Trade Commission (ITC) of its determination. If
Commerce's final determination is affirmative, the ITC will make its
final determination before the later of 120 days after the date of this
preliminary determination or 45 days after Commerce's final
determination.
Notification to Interested Parties
This determination is issued and published pursuant to sections
703(f) and 777(i) of the Act and 19 CFR 351.205(c).
Dated: June 15, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
Appendix I
Scope of the Investigation
The merchandise covered by this investigation consists of spark-
ignited, non-road, vertical shaft engines, whether finished or
unfinished, whether assembled or unassembled, primarily for riding
lawn mowers and zero-turn radius lawn mowers. Engines meeting this
physical description may also be for other non-hand-held outdoor
power equipment such as, including but not
[[Page 37063]]
limited to, tow-behind brush mowers, grinders, and vertical shaft
generators. The subject engines are spark ignition, single or
multiple cylinder, air cooled, internal combustion engines with
vertical power take off shafts with a minimum displacement of 225
cubic centimeters (cc) and a maximum displacement of 999cc.
Typically, engines with displacements of this size generate gross
power of between 6.7 kilowatts (kw) to 42 kw.
Engines covered by this scope normally must comply with and be
certified under Environmental Protection Agency (EPA) air pollution
controls title 40, chapter I, subchapter U, part 1054 of the Code of
Federal Regulations standards for small non-road spark-ignition
engines and equipment. Engines that otherwise meet the physical
description of the scope but are not certified under 40 CFR part
1054 and are not certified under other parts of subchapter U of the
EPA air pollution controls are not excluded from the scope of this
proceeding. Engines that may be certified under both 40 CFR part
1054 as well as other parts of subchapter U remain subject to the
scope of this proceeding.
For purposes of this investigation, an unfinished engine covers
at a minimum a sub-assembly comprised of, but not limited to, the
following components: Crankcase, crankshaft, camshaft, piston(s),
and connecting rod(s). Importation of these components together,
whether assembled or unassembled, and whether or not accompanied by
additional components such as an oil pan, manifold, cylinder
head(s), valve train, or valve cover(s), constitutes an unfinished
engine for purposes of this investigation. The inclusion of other
products such as spark plugs fitted into the cylinder head or
electrical devices (e.g., ignition modules, ignition coils) for
synchronizing with the motor to supply tension current does not
remove the product from the scope. The inclusion of any other
components not identified as comprising the unfinished engine
subassembly in a third-country does not remove the engine from the
scope.
The engines subject to this investigation are typically
classified in the Harmonized Tariff Schedule of the United States
(HTSUS) at subheadings: 8407.90.1020, 8407.90.1060, and
8407.90.1080. The engine subassemblies that are subject to this
investigation enter under HTSUS 8409.91.9990. Engines subject to
this investigation may also enter under HTSUS 8407.90.9060 and
8407.90.9080. The HTSUS subheadings are provided for convenience and
customs purposes only, and the written description of the
merchandise under investigation is dispositive.
Appendix II
List of Topics Discussed in the Preliminary Decision Memorandum
I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. Injury Test
VI. Preliminary Negative Determination of Critical Circumstances
VII. New Subsidy Allegation
VIII. Alignment
IX. Diversification of China's Economy
X. Subsidies Valuation
XI. Benchmarks and Interest Rates
XII. Use of Facts Otherwise Available and Adverse Inferences
XIII. Analysis of Programs
XIV. Calculation of the All-Others Rate
XV. ITC Notification
XVI. Verification
XVII. Disclosure and Public Comment
XVIII. Recommendation
[FR Doc. 2020-13270 Filed 6-18-20; 8:45 am]
BILLING CODE 3510-DS-P