[Federal Register Volume 85, Number 164 (Monday, August 24, 2020)]
[Notices]
[Pages 52086-52089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18529]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-125]
Certain Vertical Shaft Engines Between 99cc and up to 225cc, and
Parts Thereof, From the People's Republic of China: Preliminary
Affirmative Countervailing Duty 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
[[Page 52087]]
that countervailable subsidies are being provided to producers and
exporters of certain vertical shaft engines between 99cc and up to
225cc, and parts thereof (small vertical engines), from the People's
Republic of China (China). The period of investigation is January 1,
2019 through December 31, 2019. Interested parties are invited to
comment on this preliminary determination.
DATES: Applicable August 24, 2020.
FOR FURTHER INFORMATION CONTACT: Ajay Menon or Adam Simons, AD/CVD
Operations, Office II, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone: (202) 482-1993 or (202) 482-6172,
respectively.
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 April 14,
2020.\1\ On May 20, 2020, Commerce postponed the preliminary
determination of this investigation to August 17, 2020.\2\ 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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\1\ See Certain Vertical Shaft Engines between 99cc and up to
225cc, and Parts Thereof from the People's Republic of China:
Initiation of Countervailing Duty Investigation, 85 FR 20667 (April
14, 2020) (Initiation Notice).
\2\ See Certain Vertical Shaft Engines between 99cc and up to
225cc, and Parts Thereof, from the People's Republic of China:
Postponement of Preliminary Determination in the Countervailing Duty
Investigation, 85 FR 30683 (May 20, 2020).
\3\ See Memorandum, ``Decision Memorandum for the Preliminary
Determination of the Countervailing Duty Investigation of Certain
Vertical Shaft Engines Between 99cc and up to 225cc, 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 small vertical
engines between 99cc and up to 225cc, and parts thereof, from China.
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 scope comments
submitted on the record of this preliminary determination, and
accompanying discussion and analysis of all comments timely received,
see the Preliminary Scope Memorandum.\6\ Commerce is preliminarily
modifying the scope language as it appeared in the Initiation Notice to
exclude commercial engines. See revised scope in 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.
\6\ See Memorandum, ``Antidumping and Countervailing Duty
Investigations of Certain Vertical Shaft Engines Between 99cc and Up
To 225cc, and Parts Thereof from the People's Republic of China:
Scope Comments Decision Memorandum for the Preliminary
Determination,'' dated August 17, 2020.
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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 gives
rise to a benefit to the recipient, and that the subsidy is
specific.\7\
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\7\ 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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Commerce notes that, in making these findings, it relied, in part,
on facts available and, because it finds that one or more respondents
did not act to the best of their ability to respond to Commerce's
requests for information, it drew an adverse inference where
appropriate in selecting from among the facts otherwise available.\8\
For further information, see ``Use of Facts Otherwise Available and
Adverse Inferences'' in the Preliminary Decision Memorandum.
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\8\ See sections 776(a) and (b) of the Act.
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Alignment
As noted in the Preliminary Decision Memorandum, in accordance with
section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is
aligning the final countervailing duty (CVD) determination in this
investigation with the final determination in the companion antidumping
duty (AD) investigation of small vertical engines from China based on a
request made by the petitioner.\9\ 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
December 28, 2020, unless postponed.
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\9\ See Petitioner's Letter, ``Certain Vertical Shaft Engines
Between 99cc and Up To 225cc, and Parts Thereof, From the People's
Republic of China: Petitioner's Request for Alignment of the Final
Countervailing Duty and Antidumping Duty Final Determinations,''
dated August 4, 2020.
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All-Others Rate
Sections 703(d) 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
zero and de minimis rates and any rates based entirely under section
776 of the Act.
In this investigation, Commerce calculated individual estimated
countervailable subsidy rates for Chongqing Kohler Engines Ltd.
(Chongqing Kohler) and Chongqing Zongshen General Power Machine Co.
Ltd. (Chongqing Zongshen) that are not zero, de minimis , or based
entirely on facts otherwise available. Commerce calculated the all-
others rate using a simple average of the individual estimated subsidy
rates calculated for the examined respondents.\10\
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\10\ We calculated the all-others rate using the simple average
of Chongqing Kohler and Chongqing Zongshen's subsidy rates.
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Preliminary Determination
Commerce preliminarily determines that the following estimated
countervailable subsidy rates exist:
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\11\ As discussed in the Preliminary Decision Memorandum,
Commerce has found the following company to be cross-owned with
Chongqing Kohler: Kohler (China) Investment Company.
\12\ As discussed in the Preliminary Decision Memorandum,
Commerce has found the following companies to be cross-owned with
Chongqing Zongshen: Chongqing Zongshen Power Machinery Co., Ltd.;
Zong Shen Industrial Group; Chongqing Zongshen Automobile Air Intake
System Manufacturing Co., Ltd.; Chongqing Zongshen High Speed Boat
Development Co., Ltd.; Chongqing Zong Shen Electrical Appliance Co.,
Ltd.; and Chongqing Dajiang Power Equipment Co., Ltd.
[[Page 52088]]
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Subsidy rate
Company (percent)
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Chongqing Kohler Engines Ltd.\11\....................... 13.45
Chongqing Zongshen General Power Machine Co.\12\........ 21.29
All Others.............................................. 17.37
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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.\13\ 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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\13\ 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 a date and time to be
determined. Parties should confirm by telephone the date, time, and
location of the hearing two days before 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 further notice.\14\
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\14\ See Temporary Rule Modifying AD/CVD Service Requirements
Due to COVID-19; Extension of Effective Period, 85 FR 41363 (July
10, 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 the
final determination is affirmative, the ITC will determine before the
later of 120 days after the date of this preliminary determination or
45 days after the 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: August 17, 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, whether mounted or
unmounted, primarily for walk-behind lawn mowers. Engines meeting
this physical description may also be for other non-hand-held
outdoor power equipment, including but not limited to, pressure
washers. The subject engines are spark ignition, single-cylinder,
air cooled, internal combustion engines with vertical power take off
shafts with a minimum displacement of 99 cubic centimeters (cc) and
a maximum displacement of up to, but not including, 225cc.
Typically, engines with displacements of this size generate gross
power of between 1.95 kilowatts (kw) to 4.75 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.
Certain small vertical shaft engines, whether or not mounted on
non-hand-held outdoor power equipment, including but not limited to
walk-behind lawn mowers and pressure washers, are included in the
scope. However, if a subject engine is imported mounted on such
equipment, only the engine is covered by the scope. Subject
merchandise includes certain small vertical shaft engines produced
in the subject country whether mounted on outdoor power equipment in
the subject country or in a third country. Subject engines are
covered whether or not they are accompanied by other parts.
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 a sump, carburetor spacer, 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 coils) for synchronizing with
the engine 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.
Specifically excluded from the scope of the investigation are
``Commercial'' or ``Heavy Commercial'' engines under 40 CFR 1054.107
and 1054.135 that have (1) a displacement of 160 cc or greater, (2)
a cast iron cylinder liner, (3) an automatic compression release,
and (4) a muffler with at least three chambers and volume greater
than 400 cc.
The engines subject to this investigation are predominantly
classified in the Harmonized Tariff Schedule of the United States
(HTSUS) at subheading 8407.90.1010. The engine subassemblies that
are subject to this investigation enter under HTSUS 8409.91.9990.
The mounted engines that are subject to this investigation enter
under HTSUS 8433.11.0050, 8433.11.0060, and 8424.30.9000. Engines
subject to this investigation may also enter under HTSUS
8407.90.1020, 8407.90.9040, and 8407.90.9060. The HTSUS subheadings
are
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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 of the Investigation
IV. Injury Test
V. Diversification of China's Economy
VI. Use of Facts Otherwise Available and Adverse Inferences
VII. Subsidies Valuation
VIII. Benchmarks and Interest Rates
IX. Analysis of Programs
X. Conclusion
[FR Doc. 2020-18529 Filed 8-21-20; 8:45 am]
BILLING CODE 3510-DS-P