Notice2024-14458
Vanillin From the People's Republic of China: Initiation of Countervailing Duty Investigation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 1, 2024
Issuing agencies
Commerce DepartmentInternational Trade Administration
Full Text
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<title>Federal Register, Volume 89 Issue 126 (Monday, July 1, 2024)</title>
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[Federal Register Volume 89, Number 126 (Monday, July 1, 2024)]
[Notices]
[Pages 54421-54424]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-14458]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-173]
Vanillin From the People's Republic of China: Initiation of
Countervailing Duty Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATES: Applicable June 25, 2024.
FOR FURTHER INFORMATION CONTACT: Jeff Pedersen, AD/CVD Operations,
Office IV, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone: (202) 482-2769.
SUPPLEMENTARY INFORMATION:
The Petition
On June 5, 2024, the U.S. Department of Commerce (Commerce)
received a countervailing duty (CVD) petition concerning imports of
vanillin from the People's Republic of China (China) filed in proper
form on behalf of Solvay USA LLC (the petitioner), a domestic producer
of vanillin.\1\ The Petition was accompanied by an antidumping duty
(AD) petition concerning imports of vanillin from China.\2\
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\1\ See Petitioner's Letter, ``Petitions for the Imposition of
Antidumping and Countervailing Duties'' dated June 5, 2024
(Petition).
\2\ Id.
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On June 7, 14, and 18, 2024, Commerce requested supplemental
information from the petitioner regarding the Petition, to which the
petitioner responded on June 11, 18, and 21, 2024, respectively.\3\
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\3\ See Commerce's Letters, ``Supplemental Questions,'' dated
June 7, 2024 (First General Issues Questionnaire); ``Supplemental
Questions,'' dated June 14, 2024, and ``Supplemental Questions,''
dated June 18, 2024; see also Memorandum, ``Phone Call with Counsel
to the Petitioner,'' dated June 17, 2024 (June 17 Memorandum); see
also Petitioner's Letters, ``Petitioner's Response to Supplemental
Questions Regarding Common Issues and Injury Volume I of the
Petitions,'' dated June 11, 2024 (First General Issues Supplement);
``Petitioner's Response to Supplemental Questions Regarding Common
Issues and Injury Volume I of the Petitions'' dated June 18, 2024
(Second General Issues Supplement); and ``Petitioner's Response to
Supplemental Questions Regarding Countervailing Duties Allegations
Volume III of the Petitions,'' dated June 21, 2024.
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In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), the petitioner alleges that the Government of China
(GOC) is providing countervailable subsidies, within the meaning of
sections 701 and 771(5) of the Act, to Chinese producers of vanillin,
and that such imports are materially injuring, or threatening material
injury to, the industry producing vanillin in the United States.
Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), the
alleged programs for which we are initiating this CVD investigation are
supported by information in the Petition that is reasonably available
to the petitioner.
Commerce finds that the petitioner filed the Petition on behalf of
the domestic industry because the petitioner is an interested party as
defined in section 771(9)(C) of the Act. Commerce also finds that the
petitioner demonstrated sufficient industry support with respect to the
initiation of the requested CVD investigation.\4\
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\4\ See section on ``Determination of Industry Support for the
Petition,'' infra.
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Period of Investigation
Because the Petition was filed on June 5, 2024, the period of
investigation (POI) is January 1, 2023, through December 31, 2023.\5\
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\5\ See 19 CFR 351.204(b)(2).
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Scope of the Investigation
The merchandise covered by this investigation is vanillin from
China. For a full description of the scope of this investigation, see
the appendix to this notice.
Comments on Scope of the Investigation
Between June 7 and June 17, 2024, Commerce requested information
and clarification from the petitioner regarding the proposed scope to
ensure that the scope language in the Petition is an accurate
reflection of the products for which the domestic industry is seeking
relief.\6\ Between June 11 and 18, 2024, the petitioner provided
clarifications and revised the scope language.\7\ The description of
merchandise covered by this investigation, as described in the appendix
to this notice, reflects these clarifications.
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\6\ See First General Issues Questionnaire; see also June 17
Memorandum.
\7\ See First General Issues Supplement at 2-4 and Exhibits I-
Supp-2 and I-Supp-3; see also Second General Issues Supplement at 2-
3.
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As discussed in the Preamble to Commerce's regulations, we are
setting aside a period for parties to raise issues
[[Page 54422]]
regarding product coverage (i.e., scope).\8\ Commerce will consider all
scope comments received from interested parties and, if necessary, will
consult with interested parties prior to the issuance of the
preliminary determination. If scope comments include factual
information, all such factual information should be limited to public
information.\9\ To facilitate preparation of its questionnaires,
Commerce requests that scope comments be submitted by 5:00 p.m. Eastern
Time (ET) on July 15, 2024, which is 20 calendar days from the
signature date of this notice. Any rebuttal scope comments, which may
include factual information, must be filed by 5:00 p.m. ET on July 25,
2024, which is 10 calendar days from the initial comment deadline.
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\8\ See Antidumping Duties; Countervailing Duties, 62 FR 27296,
27323 (May 19, 1997) (Preamble); see also 19 CFR 351.312.
\9\ See 19 CFR 351.102(b)(21) (defining ``factual
information'').
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Commerce requests that any factual information that the parties
consider relevant to the scope of the investigation be submitted during
the time period identified above. However, if a party subsequently
finds that additional factual information pertaining to the scope of
the investigation may be relevant, the party may contact Commerce and
request permission to submit the additional information. All scope
comments must also be filed on the records of the concurrent AD and CVD
investigations.
Filing Requirements
All submissions to Commerce must be filed electronically via
Enforcement and Compliance's Antidumping Duty and Countervailing Duty
Centralized Electronic Service System (ACCESS), unless an exception
applies.\10\ An electronically filed document must be received
successfully in its entirety by the time and date it is due.
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\10\ See Antidumping and Countervailing Duty Proceedings:
Electronic Filing Procedures; Administrative Protective Order
Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and
Compliance; Change of Electronic Filing System Name, 79 FR 69046
(November 20, 2014), for details of Commerce's electronic filing
requirements, effective August 5, 2011. Information on using ACCESS
can be found at: <a href="https://access.trade.gov/help.aspx">https://access.trade.gov/help.aspx</a> and <a href="https://access.trade.gov/help/Handbook_on_Electronic_Filing_Procedures.pdf">https://access.trade.gov/help/Handbook_on_Electronic_Filing_Procedures.pdf</a>.
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Consultations
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce
notified the GOC of the receipt of the Petition and provided an
opportunity for consultations with respect to the Petition.\11\ The GOC
did not request consultations.
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\11\ See Commerce's Letter ``Invitation for Consultations to
Discuss the Countervailing Duty Petition on Vanillin from the
People's Republic of China,'' dated June 12, 2024.
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Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) at least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, Commerce shall: (i)
poll the industry or rely on other information in order to determine if
there is support for the petition, as required by subparagraph (A); or
(ii) determine industry support using a statistically valid sampling
method to poll the ``industry.''
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs Commerce to look to producers and workers who produce the
domestic like product. The U.S. International Trade Commission (ITC),
which is responsible for determining whether ``the domestic industry''
has been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both Commerce and the
ITC must apply the same statutory definition regarding the domestic
like product,\12\ they do so for different purposes and pursuant to a
separate and distinct authority. In addition, Commerce's determination
is subject to limitations of time and information. Although this may
result in different definitions of the like product, such differences
do not render the decision of either agency contrary to law.\13\
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\12\ See section 771(10) of the Act.
\13\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F.
Supp. 639, 644 (CIT 1988), aff'd 865 F. 2d 240 (Fed. Cir. 1989)).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, the petitioner does not
offer a definition of the domestic like product distinct from the scope
of the investigation.\14\ Based on our analysis of the information
submitted on the record, we have determined that vanillin, as defined
in the scope, constitutes a single domestic like product, and we have
analyzed industry support in terms of that domestic like product.\15\
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\14\ See Petition at Volume I (pages 7-9 and Exhibit I-8); see
also First General Issues Supplement at 7-8 and Exhibits I-Supp-3.
\15\ For a discussion of the domestic like product analysis as
applied to this case and information regarding industry support, see
Checklist, ``Vanillin from the People's Republic of China,'' dated
concurrently with, and hereby adopted by, this notice (China CVD
Initiation Checklist), at Attachment II, Analysis of Industry
Support for the Antidumping and Countervailing Duty Petitions
Covering Vanillin from the People's Republic of China. This
checklist is on file electronically via ACCESS.
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In determining whether the petitioner has standing under section
702(c)(4)(A) of the Act, we considered the industry support data
contained in the Petition with reference to the domestic like product
as defined in the ``Scope of the Investigation,'' in the appendix to
this notice. To establish industry support, the petitioner provided its
2023 production of the domestic like product.\16\ The petitioner
estimated the production of the domestic like product for the remaining
U.S. producers of vanillin based on its knowledge of the industry.\17\
We relied on data provided by the petitioner for purposes of measuring
industry support.\18\
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\16\ See Petition at Volume I (Exhibits I-2 and I-11); see also
First General Issues Supplement at 5, 8, and Exhibits I-Supp-4 and
I-Supp-7.
\17\ See Petition at Volume I (page 2 and Exhibit I-2); see also
First General Issues Supplement at 5-7 and Exhibits I-Supp-4, I-
Supp-5, I-Supp-8 and I-Supp-9; and Second General Issues Supplement
at 1-2.
\18\ See Petition at Volume I (page 2 and Exhibits I-2 and I-
11); see also First General Issues Supplement at 5-8 and Exhibits I-
Supp-4 and I-Supp-7; and Second General Issues Supplement at 1-2.
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Our review of the data provided in the Petition, the First General
Issues Supplement, the Second General Issues Supplement, and other
information readily available to Commerce indicates that the petitioner
has established
[[Page 54423]]
industry support for the Petition.\19\ First, the Petition established
support from domestic producers (or workers) accounting for more than
50 percent of the total production of the domestic like product and, as
such, Commerce is not required to take further action in order to
evaluate industry support (e.g., polling).\20\ Second, the domestic
producers (or workers) have met the statutory criteria for industry
support under section 702(c)(4)(A)(i) of the Act because the domestic
producers (or workers) who support the Petition account for at least 25
percent of the total production of the domestic like product.\21\
Finally, the domestic producers (or workers) have met the statutory
criteria for industry support under section 702(c)(4)(A)(ii) of the Act
because the domestic producers (or workers) who support the Petition
account for more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the Petition.\22\ Accordingly, Commerce
determines that the Petition was filed on behalf of the domestic
industry within the meaning of section 702(b)(1) of the Act.\23\
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\19\ See Attachment II of the China CVD Initiation Checklist.
\20\ Id.; see also section 702(c)(4)(D) of the Act.
\21\ See Attachment II of the China CVD Initiation Checklist.
\22\ Id.
\23\ Id.
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Injury Test
Because China is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) of the Act
applies to this investigation. Accordingly, the ITC must determine
whether imports of the subject merchandise from China materially
injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges that imports of the subject merchandise are
benefitting from countervailable subsidies and that such imports are
causing, or threaten to cause, material injury to the U.S. industry
producing the domestic like product. In addition, the petitioner
alleges that subject imports exceed the negligibility threshold
provided for under section 771(24)(A) of the Act.\24\
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\24\ See Petition at Volume I (pages 11-12 and Exhibit I-10).
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The petitioner contends that the industry's injured condition is
illustrated by a significant volume of subject imports; significant
market share of subject imports; underselling and price depression and/
or suppression; decline in financial performance and operating income;
declines in production, shipments, capacity utilization, and employment
variables; and lost sales and revenues.\25\ We assessed the allegations
and supporting evidence regarding material injury, threat of material
injury, causation, as well as negligibility, and we have determined
that these allegations are properly supported by adequate evidence, and
meet the statutory requirements for initiation.\26\
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\25\ Id. at 10-21 and Exhibits I-5 and I-9 through I-15.
\26\ See China CVD Initiation Checklist at Attachment III,
Analysis of Allegations and Evidence of Material Injury and
Causation for the Antidumping and Countervailing Duty Petitions
Covering Vanillin from the People's Republic of China.
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Initiation of CVD Investigation
Based upon our examination of the Petition and supplemental
responses, we find that they meet the requirements of section 702 of
the Act. Therefore, we are initiating a CVD investigation to determine
whether imports of vanillin from China benefit from countervailable
subsidies conferred by the GOC. In accordance with section 703(b)(1) of
the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our
preliminary determination no later than 65 days after the date of this
initiation.
Based on our review of the Petition, we find that there is
sufficient information to initiate a CVD investigation on all 56
programs alleged by the petitioner. For a full discussion of the basis
for our decision to initiate an investigation of each program, see the
CVD Initiation Checklist. A public version of the initiation checklist
for this investigation is available in ACCESS.
Respondent Selection
The petitioner identified 42 companies in China as producers and/or
exporters of vanillin.\27\ Commerce intends to follow its standard
practice in CVD investigations and calculate company-specific subsidy
rates in this investigation. In the event that Commerce determines that
the number of companies identified is large, and it cannot individually
examine each company based upon Commerce's resources, Commerce intends
to select mandatory respondents based on U.S. Customs and Border
Protection (CBP) data for U.S. imports of vanillin from China during
the POI under the appropriate Harmonized Tariff Schedule of the United
States subheading(s) listed in the ``Scope of the Investigation'' in
the appendix.
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\27\ See Petition at Exhibit I-7.
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On June 20, 2024, Commerce released CBP data on imports of vanillin
from China under administrative protective order (APO) to all parties
with access to information protected by APO and indicated that
interested parties wishing to comment on CBP data and/or respondent
selection must do so within three business days of the date of
publication of this notice in the Federal Register.\28\ Comments must
be filed electronically using ACCESS. An electronically filed document
must be received successfully in its entirety via ACCESS by 5:00 p.m.
ET on the specified deadline. Commerce will not accept rebuttal
comments regarding the CBP data or respondent selection.
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\28\ See Memorandum, ``Release of U.S. Customs and Border
Protection Entry Data,'' dated June 20, 2024.
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Interested parties must submit applications for disclosure under
APO in accordance with 19 CFR 351.305(b). Instructions for filing such
applications may be found on Commerce's website at <a href="https://www.trade.gov/administrative-protective-orders">https://www.trade.gov/administrative-protective-orders</a>.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR
351.202(f), a copy of the public version of the Petition has been
provided to the GOC via ACCESS. Furthermore, to the extent practicable,
Commerce will attempt to provide a copy of the public version of the
Petition to each exporter named in the Petition, as provided under 19
CFR 351.203(c)(2).
ITC Notification
Commerce will notify the ITC of its initiation, as required by
section 702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 45 days after the date
on which the Petition was filed, whether there is a reasonable
indication that subject imports are materially injuring, or threatening
material injury to, a U.S. industry.\29\ A negative ITC determination
will result in the investigation being terminated.\30\ Otherwise, this
CVD investigation will proceed according to statutory and regulatory
time limits.
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\29\ See section 703(a)(1) of the Act.
\30\ Id.
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Submission of Factual Information
Factual information is defined in 19 CFR 351.102(b)(21) as: (i)
evidence submitted in response to questionnaires; (ii) evidence
submitted in support of
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allegations; (iii) publicly available information to value factors of
production under 19 CFR 351.408(c) or to measure the adequacy of
remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the
record by Commerce; and (v) evidence other than factual information
described in (i)-(iv). Section 351.301(b) of Commerce's regulations
requires any party, when submitting factual information, to specify
under which subsection of 19 CFR 351.102(b)(21) the information is
being submitted \31\ and, if the information is submitted to rebut,
clarify, or correct factual information already on the record, to
provide an explanation identifying the information already on the
record that the factual information seeks to rebut, clarify, or
correct.\32\ Time limits for the submission of factual information are
addressed in 19 CFR 351.301, which provides specific time limits based
on the type of factual information being submitted. Interested parties
should review the regulations prior to submitting factual information
in this investigation.
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\31\ See 19 CFR 351.301(b).
\32\ See 19 CFR 351.301(b)(2).
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Extensions of Time Limits
Parties may request an extension of time limits before the
expiration of a time limit established under 19 CFR 351.301(c), or as
otherwise specified by Commerce. In general, an extension request will
be considered untimely if it is filed after the expiration of the time
limit established under 19 CFR 351.301.\33\ For submissions that are
due from multiple parties simultaneously, an extension request will be
considered untimely if it is filed after 10:00 a.m. ET on the due date.
Under certain circumstances, Commerce may elect to specify a different
time limit by which extension requests will be considered untimely for
submissions which are due from multiple parties simultaneously. In such
a case, Commerce will inform parties in a letter or memorandum of the
deadline (including a specified time) by which extension requests must
be filed to be considered timely. An extension request must be made in
a separate, standalone submission; Commerce will grant untimely filed
requests for the extension of time limits only in limited cases where
we determine, based on 19 CFR 351.302(c), that extraordinary
circumstances exist. Parties should review Commerce's regulations
concerning time limits for submission of factual information prior to
submitting factual information in this investigation.\34\
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\33\ See 19 CFR 351.302.
\34\ See 19 CFR 351.301; see also Extension of Time Limits;
Final Rule, 78 FR 57790 (September 20, 2013), and Regulations
Improving and Strengthening the Enforcement of Trade Remedies
Through the Administration of the Antidumping and Countervailing
Duty Laws, 89 FR 20766 (March 25, 2024).
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Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\35\
Parties must use the certification formats provided in 19 CFR
351.303(g).\36\ Commerce intends to reject factual submissions if the
submitting party does not comply with the applicable certification
requirements.
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\35\ See section 782(b) of the Act.
\36\ See Certification of Factual Information to Import
Administration During Antidumping and Countervailing Duty
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also
frequently asked questions regarding the Final Rule, available at:
<a href="https://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf">https://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf</a>.
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Notification to Interested Parties
Interested parties must submit applications for disclosure under
administrative protective order in accordance with 19 CFR 351.305.
Parties wishing to participate in this investigation should ensure that
they meet the requirements of 19 CFR 351.103(d) (e.g., by filing the
required letters of appearance). Note that Commerce has amended certain
of its requirements pertaining to the service of documents in 19 CFR
351.303(f).\37\
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\37\ See Administrative Protective Order, Service, and Other
Procedures in Antidumping and Countervailing Duty Proceedings, 88 FR
67069 (September 29, 2023).
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This notice is issued and published pursuant to sections 702 and
777(i) of the Act, and 19 CFR 351.203(c).
Dated: June 25, 2024.
Ryan Majerus,
Deputy Assistant Secretary for Policy and Negotiations, performing the
non-exclusive functions and duties of the Assistant Secretary for
Enforcement and Compliance.
Appendix--Scope of the Investigation
The merchandise covered by the investigation is vanillin, with
the molecular formula C<INF>8</INF>H<INF>8</INF>O<INF>3</INF> or
C<INF>9</INF>H<INF>10</INF>O<INF>3</INF>. For purposes of this
investigation, vanillin consists of natural vanillin, synthetic
vanillin, bio-sourced synthetic vanillin (biovanillin) (each also
known as 4-Hydroxy-3-methoxybenzaldehyde), and ethylvanillin (also
known as 3-Ethoxy-4-hydroxybenzaldehyde). Vanillin covered by this
investigation is a chemical compound with the Chemical Abstracts
Service (CAS) number 121-33-5 or 121-32-4. Vanillin is covered by
the investigation regardless of whether it is in a crystalline
powder or crystal form. Vanillin is covered by the scope of the
investigation, irrespective of purity, particle size, or physical
form.
Merchandise subject to the investigation is specified within the
Harmonized Tariff Schedule of the United States (HTSUS) under
subheading 2912.41.0000 and 2912.42.0000. The HTSUS subheadings and
CAS registry numbers are provided for convenience and customs
purposes only. The written description of the merchandise covered by
the investigation is dispositive.
[FR Doc. 2024-14458 Filed 6-28-24; 8:45 am]
BILLING CODE 3510-DS-P
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