Notice2021-14755
Pentafluoroethane (R-125) From the People's Republic of China: Preliminary Affirmative Determination of Critical Circumstances, in Part, in the Countervailing Duty Investigation
Primary source
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Published
July 12, 2021
Issuing agencies
Commerce DepartmentInternational Trade Administration
Abstract
The Department of Commerce (Commerce) preliminarily determines that critical circumstances exist, in part, with respect to imports of pentafluoroethane (R-125) from certain producers and exporters from the People's Republic of China (China).
Full Text
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<title>Federal Register, Volume 86 Issue 130 (Monday, July 12, 2021)</title>
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[Federal Register Volume 86, Number 130 (Monday, July 12, 2021)]
[Notices]
[Pages 36526-36529]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14755]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-138]
Pentafluoroethane (R-125) From the People's Republic of China:
Preliminary Affirmative Determination of Critical Circumstances, in
Part, in the Countervailing Duty Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
[[Page 36527]]
SUMMARY: The Department of Commerce (Commerce) preliminarily determines
that critical circumstances exist, in part, with respect to imports of
pentafluoroethane (R-125) from certain producers and exporters from the
People's Republic of China (China).
DATES: Applicable July 12, 2021.
FOR FURTHER INFORMATION CONTACT: Joshua Tucker 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) 482-2044 or (202) 482-6172,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On January 11, 2021, Commerce received a countervailing duty (CVD)
petition concerning imports of R-125 from China filed in proper form on
behalf of the petitioner, Honeywell International, Inc.\1\ On February
1, 2021, we initiated this investigation,\2\ and on June 25, 2021, we
published an affirmative Preliminary Determination.\3\
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\1\ See Petitioner's Letter, ``Petition for the Imposition of
Antidumping and Countervailing Duties Pursuant to sections 701 and
731 of the Tariff Act of 1930, as Amended, on Behalf of Honeywell
International, Inc.,'' dated January 11, 2021 (Petition).
\2\ See Pentafluoroethane (R-125) from the People's Republic of
China: Initiation of Countervailing Duty Investigation, 86 FR 8589
(February 8, 2021) (Initiation Notice).
\3\ See Pentafluoroethane (R-125) from the People's Republic of
China: Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Determination with Final Antidumping
Determination, 86 FR 33648 (June 25, 2020) (Preliminary
Determination), and accompanying Preliminary Decision Memorandum
(PDM).
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Commerce selected Zhejiang Quzhou Juxin Fluorine Chemical Co., Ltd.
(Juxin) and Zhejiang Sanmei Chemical Ind. Co., Ltd. (Sanmei) as the
individually-examined respondents in this investigation.
On June 4, 2021, the petitioner alleged that critical circumstances
exist with respect to imports of R-125 from China, pursuant to section
703(e)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR
351.206.\4\ On June 10, 2021, Commerce requested monthly shipment data
from Juxin and Sanmei for subject merchandise for the period August
2020 to May 2021, which Commerce received on June 17, 2021.\5\
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\4\ See Petitioner's Letter, ``Petitioner's Critical
Circumstances Allegation,'' dated June 4, 2021 (Critical
Circumstances Allegation).
\5\ See Juxin's Letter, ``Juxin Critical Circumstances
Response,'' dated June 17, 2021 (Juxin Critical Circumstances Data);
and Sanmei's Letter, ``Submission of Zhejiang Sanmei's Critical
Circumstances Information,'' dated June 17, 2021 (Sanmei Critical
Circumstances Data).
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In accordance with section 703(e)(1) of the Act and 19 CFR
351.206(c)(1), because the petitioner submitted its critical
circumstance allegation more than 30 days before the scheduled date of
the final determination,\6\ Commerce will make a preliminary finding as
to whether there is a reasonable basis to believe or suspect that
critical circumstances exist. Commerce will issue its preliminary
finding of critical circumstances within 30 days after the petitioner
submits the allegation.\7\
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\6\ The final determination for this CVD investigation is
currently due no later than October 21, 2021.
\7\ See 19 CFR 351.206(c)(2)(ii). In this case, 30 days after
the petitioner submitted the allegation would place the deadline on
Sunday, July 4, 2021. Commerce's practice dictates that where a
deadline falls on a weekend or federal holiday, the appropriate
deadline is the next business day. See Notice of Clarification:
Application of ``Next Business Day'' Rule for Administrative
Determination Deadlines Pursuant to the Tariff Act of 1930, As
Amended, 70 FR 24533 (May 10, 2005).
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Period of Investigation (POI)
The POI is January 1, 2020, through December 31, 2020.
Critical Circumstances Allegation
The petitioner alleges that there was a massive increase of imports
of R-125 from China and provided monthly import data for the period
October 2020 through March 2021.\8\ The petitioner states that a
comparison of total imports, by quantity, for the base period October
2020 through December 2020 to the comparison period January 2021
through March 2021, shows that imports of R-125 from China increased by
45.5 percent,\9\ which is ``massive'' under 19 CFR 351.206(h)(2). The
petitioner also alleges that there is a reasonable basis to believe
that there are subsidies in this investigation which are inconsistent
with the Subsidies and Countervailing Measures Agreement of the World
Trade Organization (SCM Agreement).\10\
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\8\ See Critical Circumstances Allegation at 8 and Exhibit 1.
\9\ Id.
\10\ Id. at 4-5.
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Critical Circumstances Analysis
Section 703(e)(1) of the Act provides that Commerce will
preliminarily determine that critical circumstances exist in a CVD
investigation if there is a reasonable basis to believe or suspect
that: (A) The alleged countervailable subsidy is inconsistent with the
SCM Agreement; \11\ and (B) there have been massive imports of the
subject merchandise over a relatively short period.
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\11\ Commerce limits its critical circumstances findings to
those subsidies contingent upon export performance or use of
domestic over imported goods (i.e., those prohibited under Article 3
of the SCM Agreement). See, e.g., Final Affirmative Countervailing
Duty Determination and Final Negative Critical Circumstances
Determination: Carbon and Certain Alloy Steel Wire from Germany, 67
FR 55808, 55809-10 (August 30, 2002).
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In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section 703(e)(1)(B) of the
Act and 19 CFR 351.206(h) and (i), Commerce 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). However, the
regulations also provide that if Commerce 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, Commerce
may consider a period of not less than three months from the earlier
time.\12\ Imports must increase by at least 15 percent during the
comparison period to be considered massive.\13\
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\12\ See 19 CFR 351.206(i).
\13\ See 19 CFR 351.206(h)(2).
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Alleged Countervailable Subsidies Are Inconsistent With the SCM
Agreement
Juxin, Sanmei, and All Other Companies
On May 3, 2021, the petitioner filed a New Subsidies Allegation,
alleging that Chinese producers of subject merchandise benefited from
additional subsidies provided by the Government of China, including the
Export Buyer's Credit Program and the Export Seller's Credit
Program.\14\ To determine whether there exists a reasonable basis to
believe or suspect that an alleged countervailable subsidy is
inconsistent with the SCM Agreement, in accordance with section
703(e)(1)(A) of the Act, Commerce considered the evidence on the record
pertaining to the petitioner's allegation that the Export Buyer's
Credit Program and the Export Seller's Credit Program are inconsistent
with the SCM Agreement. Specifically, with regard to these programs,
the petitioner has alleged the elements of a subsidy,\15\ supported
with information reasonably available to the petitioner,\16\ that
appear to be export contingent, which would render them inconsistent
with the SCM Agreement. Therefore, Commerce preliminarily determines
that there is a
[[Page 36528]]
reasonable basis to believe or suspect that alleged subsidies in the
New Subsidies Allegation are inconsistent with the SCM Agreement. As a
result, we preliminarily find that the criterion under section
703(e)(1)(A) of the Act has been met for Juxin, Sanmei, and all other
exporters or producers not individually examined.
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\14\ See Petitioner's Letter, ``New Subsidies Allegation,''
dated May 3, 2021 (New Subsidies Allegation).
\15\ See New Subsidies Allegation at 2-5.
\16\ Id. see also Petitioner's Letter, ``New Subsidies
Allegation Supplemental Response,'' dated May 17, 2021.
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Non-Responsive Companies
As explained in our Preliminary Determination, we preliminarily
applied total adverse facts available (AFA) to Arkema Daikin Advanced
Fluorochemicals (Changsu) Co., Ltd. (Arkema); Daikin Fluorochemicals
(China) Co., Ltd. (Daikin); Hongkong Richmax Ltd. (Hongkong); and
Weitron International Refrigeration Equipment (Kunshan) Co., Ltd.
(Weitron), pursuant to section 776(b) of the Act. In applying total AFA
to these four companies, we preliminarily determined that each
benefited from countervailable subsidies under the ``Export Loans from
Chinese State-Owned Commercial Banks (SOCBs)'' program.\17\ Although we
did not make a preliminary finding as to whether the ``Export Loans
from SOCBs'' program was inconsistent with the SCM Agreement in the
Preliminary Determination, we now preliminarily find, pursuant to
section 776(b) of the Act, that there is a reasonable basis to believe
or suspect that the program, as alleged in the Petition and supported
by information reasonably available to the petitioner, is export-
contingent within the meaning of section 771(5A)(B) of the Act and,
thus, inconsistent with the SCM Agreement.\18\ We are making the
inconsistency determination with regard to this program, which is the
only program which we countervailed in the Preliminary Determination
alleged to be inconsistent with the SCM Agreement. In so doing, we
intend to limit the corresponding offset to the dumping margin (if one
is found) in the companion antidumping duty investigation, which best
fulfills our statutory mandate ``to ensure that the party does not
obtain a more favorable result by failing to cooperate than if it had
cooperated fully,'' \19\ and induce future cooperation by companies in
investigations where the petitioners allege the existence of programs
potentially inconsistent with the SCM Agreement.
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\17\ See Preliminary Determination PDM at ``Application of AFA:
Non-Responsive Q&V Questionnaire Recipients.''
\18\ See Countervailing Duty Investigation Initiation Checklist:
Pentafluoroethane (R-125) from the People's Republic of China, dated
February 1, 2021.
\19\ See Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. 103-316, Vol.1 (1994) at
870, reprinted in 1994 U.S.C.C.A.N. 4040, 4199.
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Thus, because we preliminarily find that the ``Export Loans from
Chinese SOCBs'' program is export-contingent, we preliminarily find
that the criterion under section 703(e)(1)(A) of the Act has been met
for Arkema, Daikin, Hongkong, and Weitron.
Massive Imports
Commerce compared the import volumes of Juxin's and Sanmei's
reported shipments of subject merchandise for the five months
immediately preceding and following the filing of the petition. Because
the petition was filed on January 11, 2021, and in order to determine
whether there was a massive surge in imports for the mandatory
respondents, Commerce compared the total volume of shipments during the
period of August 2020 through December 2020 (the base period) with the
volume of shipments during the period of January 2021 through May 2021
(the comparison period).\20\ We preliminarily determine that imports
from both Juxin and Sanmei increased by more than 15 percent between
the base and comparison periods.\21\
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\20\ See Juxin Critical Circumstances Data; see also Sanmei
Critical Circumstances Data.
\21\ See Memorandum, ``Critical Circumstances Analysis,'' dated
July 6, 2021.
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However, for purposes of our ``massive imports'' determination, we
received information on the record about seasonality with respect to
Sanmei's imports which we considered as part of our analysis. Sanmei
stated that, while it did experience a massive surge of imports of R-
125 between the base and comparison periods, this surge was seasonal in
nature. Sanmei also provided its shipment data for comparable periods
in 2018-2019 and 2019-2020.\22\ Based on our analysis of Sanmei's
shipment data reported for 2018 through 2021, we find that there is a
consistent pattern of seasonality evidenced by a significant increase
in shipments during the months of January through May (in 2019, 2020,
and 2021), when compared to August through December (in 2018, 2019, and
2020) . As a result, we preliminarily find that the record reflects
that any surge in Sanmei's imports between the base and comparison
periods in this investigation can be explained by seasonal trends.
Therefore, we preliminarily determine that, although the surge in
imports of R-125 from Sanmei during the comparison period was massive,
the import surge was massive as a result of seasonal trends and,
therefore, critical circumstances do not exist for Sanmei, in
accordance with section 733(e)(1)(B) of the Act.\23\
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\22\ See Sanmei Critical Circumstances Data. Juxin did not argue
that its surge in imports between the base and comparison periods
was due to seasonal trends nor did it provide data to permit
Commerce to perform a seasonality analysis.
\23\ Id.
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To determine whether imports were massive for all other exporters
or producers, Commerce's normal practice is to subtract shipments
reported by the cooperating mandatory respondents from shipment data
for subject merchandise from Global Trade Atlas.\24\ However, as
discussed in the Initiation Notice,\25\ the Harmonized Tariff Schedule
of the United States number under which the subject merchandise enters
is a basket category under which non-subject merchandise may enter.
Therefore, consistent with our practice, we preliminarily relied on the
data of the mandatory respondents as ``facts available,'' in accordance
with section 776(a)(1) of the Act, to determine whether imports from
all other exporters or producers were massive.\26\ Because we
preliminary determine that imports from both Juxin and Sanmei increased
by more than 15 percent between the base and comparison periods, we
also preliminarily determine that imports from all other exporters or
producers were massive.
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\24\ See, e.g., Antidumping Duty Investigation on Refillable
Stainless Steel Kegs from Mexico: Preliminary Affirmative
Determination of Critical Circumstances, 84 FR 18796, 18798 (May 2,
2019) (Kegs from Mexico Preliminary Critical Circumstances
Determination).
\25\ See Checklist, ``Countervailing Duty Investigation
Initiation Checklist: Pentafluoroethane (R-125) from the People's
Republic of China,'' dated February 3, 2021 (Initiation Checklist);
see also Initiation Notice.
\26\ See, e.g., Kegs from Mexico Preliminary Critical
Circumstances Determination, 84 FR at 18798.
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Finally, for Arkema, Daikin, Hongkong, and Weitron, we
preliminarily determine, pursuant to section 776(b) of the Act, that
there was a massive surge in imports between the base and comparison
periods.
Accordingly, consistent with section 703(e)(1) of the Act, we
preliminarily determine that critical circumstances exist with respect
to Arkema, Daikin, Hongkong, Juxin, Weitron, and all other exporters
and producers not individually examined.
Final Determination
We will make a final determination concerning critical
circumstances in the final determination of this investigation, which
is currently scheduled for October 25, 2021.
[[Page 36529]]
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Enforcement and Compliance. Interested parties
will be notified of the timeline for the submission of case briefs and
written comments at a later date. Rebuttal briefs, limited to issues
raised in case briefs, may be submitted no later than seven days after
the deadline date for case briefs.\27\ 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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\27\ See 19 CFR 351.309(d)(1).
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Suspension of Liquidation
In accordance with section 703(e)(2)(A) of the Act, for Arkema,
Daikin, Hongkong, Juxin, Weitron, and all other exporters and
producers, we intend to direct U.S. Customs and Border Protection (CBP)
to suspend liquidation of any unliquidated entries of subject
merchandise from China entered, or withdrawn from warehouse for
consumption, on or after March 27, 2021, which is 90 days prior to the
date of publication of the Preliminary Determination in the Federal
Register. For such entries, CBP shall require a cash deposit equal to
the estimated preliminary subsidy rates established in the Preliminary
Determination. This suspension of liquidation will remain in effect
until further notice.
U.S. International Trade Commission (ITC) Notification
In accordance with section 703(f) of the Act, we intend to notify
the ITC of this preliminary determination of critical circumstances.
This determination is issued and published pursuant to sections
703(f) and 777(i)(1) of the Act.
Dated: July 6, 2021.
James Maeder,
Deputy Assistant Secretary for Antidumping and Countervailing Duty
Operations.
[FR Doc. 2021-14755 Filed 7-9-21; 8:45 am]
BILLING CODE 3510-DS-P
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