Notice2024-27009
Hard Empty Capsules From Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Initiation of Less-Than-Fair-Value Investigations
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
November 20, 2024
Issuing agencies
Commerce DepartmentInternational Trade Administration
Full Text
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<title>Federal Register, Volume 89 Issue 224 (Wednesday, November 20, 2024)</title>
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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91684-91690]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27009]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-864, A-570-184, A-533-934, A-552-847]
Hard Empty Capsules From Brazil, the People's Republic of China,
India, and the Socialist Republic of Vietnam: Initiation of Less-Than-
Fair-Value Investigations
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATES: Applicable November 13, 2024.
FOR FURTHER INFORMATION CONTACT: Gemma Larsen at (202) 482-8125
(Brazil), Rebecca Janz at (202) 482-2972 (the People's Republic of
China (China)), Luke Caruso at (202) 482-2081 (India), and Jinny Ahn at
(202) 482-0239 (the Socialist Republic of Vietnam (Vietnam)), AD/CVD
Operations, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
The Petitions
On October 24, 2024, the U.S. Department of Commerce (Commerce)
received antidumping duty (AD) petitions concerning imports of hard
empty capsules from Brazil, China, India, and Vietnam filed in proper
form on behalf of Lonza Greenwood LLC (the petitioner), a U.S. producer
of hard empty capsules.\1\ The AD Petitions were accompanied by
countervailing duty (CVD) petitions concerning imports of hard empty
capsules from Brazil, China, India, and Vietnam.\2\
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\1\ See Petitioner's Letter, ``Petitions for the Imposition of
Antidumping and Countervailing Duties,'' dated October 24, 2024
(Petitions).
\2\ Id.
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Between October 28 and November 5, 2024, Commerce requested
supplemental information pertaining to certain aspects of the Petitions
in supplemental questionnaires.\3\ The petitioner responded to
Commerce's supplemental questionnaires between October 30 and November
6, 2024.\4\
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\3\ See Commerce's Letters, ``Supplemental Questions,'' dated
October 28, 2024; see also Country-Specific AD Supplemental
Questionnaires: Brazil Supplemental, China Supplemental, India
Supplemental, and Vietnam Supplemental, dated October 28, 2024; and
Memorandum, ``Phone Call,'' dated November 5, 2024 (November 5,
2024, Memorandum).
\4\ See Petitioner's Letters, ``Petitioner's Response to the
Department's General Issues Questionnaire,'' dated October 30, 2024
(General Issues Supplement); see also Country-Specific AD
Supplemental Responses: Brazil AD Supplement, China AD Supplement,
India AD Supplement, and Vietnam AD Supplement, dated November 1 and
5, 2024; Petitioner's Letter, ``Petitioner's Response to the
Department's General Issues Scope Questionnaire,'' dated November 6,
2024 (Scope Supplement); and Country-Specific Second AD Supplemental
Responses: Second Brazil AD Supplement and Second India AD
Supplement, dated November 6, 2024.
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In accordance with section 732(b) of the Tariff Act of 1930, as
amended (the Act), the petitioner alleges that imports of hard empty
capsules from Brazil, China, India, and Vietnam are being, or are
likely to be, sold in the United States at less than fair value (LTFV)
within the meaning of section 731 of the Act, and that imports of such
products are materially injuring, or threatening material injury to,
the hard empty capsules industry in the United States. Consistent with
section 732(b)(1) of the Act, the Petitions were accompanied by
information reasonably available to the petitioner supporting its
allegations.
[[Page 91685]]
Commerce finds that the petitioner filed the Petitions 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 for the
initiation of the requested LTFV investigations.\5\
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\5\ See section on ``Determination of Industry Support for the
Petitions,'' infra.
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Periods of Investigation
Because the Petitions were filed on October 24, 2024, pursuant to
19 CFR 351.204(b)(1), the period of investigation (POI) for the Brazil
and India LTFV investigations is October 1, 2023, through September 30,
2024. Because China and Vietnam are non-market economy (NME) countries,
pursuant to 19 CFR 351.204(b)(1), the POI for the China and Vietnam
LTFV investigations is April 1, 2024, through September 30, 2024.
Scope of the Investigations
The products covered by these investigations are hard empty
capsules from Brazil, China, India, and Vietnam. For a full description
of the scope of these investigations, see the appendix to this notice.
Comments on the Scope of the Investigations
On November 5, 2024, Commerce requested information and
clarification from the petitioner regarding the proposed scope to
ensure that the scope language in the Petitions is an accurate
reflection of the products for which the domestic industry is seeking
relief.\6\ On November 6, 2024, the petitioner provided clarifications
and revised the scope.\7\ The description of merchandise covered by
these investigations, as described in the appendix to this notice,
reflects these clarifications.
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\6\ See November 5, 2024, Memorandum.
\7\ See Scope Supplement at 1-8 and Exhibit I-92.
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As discussed in the Preamble to Commerce's regulations, we are
setting aside a period for interested parties to raise issues 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 determinations. If scope comments include factual
information,\9\ all such factual information should be limited to
public information. To facilitate preparation of its questionnaires,
Commerce requests that scope comments be submitted by 5:00 p.m. Eastern
Time (ET) on December 3, 2024, which is 20 calendar days from the
signature date of this notice. Any rebuttal comments, which may include
factual information, and should also be limited to public information,
must be filed by 5:00 p.m. ET on December 13, 2024, which is 10
calendar days from the initial comment deadline.
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\8\ See Antidumping Duties; Countervailing Duties, Final Rule,
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 parties
consider relevant to the scope of these investigations be submitted
during that period. However, if a party subsequently finds that
additional factual information pertaining to the scope of the
investigations may be relevant, the party must contact Commerce and
request permission to submit the additional information. All scope
comments must be filed simultaneously on the records of the concurrent
LTFV 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 handbook
can be found at <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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Comments on Product Characteristics
Commerce is providing interested parties an opportunity to comment
on the appropriate physical characteristics of hard empty capsules to
be reported in response to Commerce's AD questionnaires. This
information will be used to identify the key physical characteristics
of the subject merchandise in order to report the relevant factors of
production (FOP) or cost of production (COP) accurately, as well as to
develop appropriate product comparison criteria.
Interested parties may provide any information or comments that
they feel are relevant to the development of an accurate list of
physical characteristics. Specifically, they may provide comments as to
which characteristics are appropriate to use as: (1) general product
characteristics; and (2) product comparison criteria. We note that it
is not always appropriate to use all product characteristics as product
comparison criteria. We base product comparison criteria on meaningful
commercial differences among products. In other words, although there
may be some physical product characteristics utilized by manufacturers
to describe hard empty capsules, it may be that only a select few
product characteristics take into account commercially meaningful
physical characteristics. In addition, interested parties may comment
on the order in which the physical characteristics should be used in
matching products. Generally, Commerce attempts to list the most
important physical characteristics first and the least important
characteristics last.
In order to consider the suggestions of interested parties in
developing and issuing the AD questionnaires, all product
characteristics comments must be filed by 5:00 p.m. ET on December 3,
2024, which is 20 calendar days from the signature date of this notice.
Any rebuttal comments must be filed by 5:00 p.m. ET on December 13,
2024, which is 10 calendar days from the initial comment deadline. All
comments and submissions to Commerce must be filed electronically using
ACCESS, as explained above, on the record of each of the LTFV
investigations.
Determination of Industry Support for the Petitions
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(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 732(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
[[Page 91686]]
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 apply the same
statutory definition regarding the domestic like product,\11\ 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.\12\
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\11\ See section 771(10) of the Act.
\12\ 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 Algoma Steel Corp., Ltd. v. United
States, 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 investigations.\13\ Based on our analysis of the information
submitted on the record, we have determined that hard empty capsules,
as defined in the scope, constitute a single domestic like product, and
we have analyzed industry support in terms of that domestic like
product.\14\
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\13\ For a discussion of the domestic like product analysis as
applied to these cases and information regarding industry support,
see Checklists, ``Antidumping Duty Investigation Initiation
Checklists: Hard Empty Capsules from Brazil, the People's Republic
of China, India, and the Socialist Republic of Vietnam,'' dated
concurrently with, and hereby adopted by, this notice (Country-
Specific AD Initiation Checklists), at Attachment II, Analysis of
Industry Support for the Antidumping and Countervailing Duty
Petitions Covering Hard Empty Capsules from Brazil, the People's
Republic of China, India, and the Socialist Republic of Vietnam
(Attachment II). These checklists are on file electronically via
ACCESS.
\14\ See Attachment II of the Country-Specific AD Initiation
Checklists.
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In determining whether the petitioner has standing under section
732(c)(4)(A) of the Act, we considered the industry support data
contained in the Petitions with reference to the domestic like product
as defined in the ``Scope of the Investigations,'' in the appendix to
this notice. To establish industry support, the petitioner provided its
own production of the domestic like product in 2023 and compared this
to the estimated total 2023 production of the domestic like product for
the entire industry.\15\ We relied on data provided by the petitioner
for purposes of measuring industry support.\16\
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\15\ Id.
\16\ For further discussion, see Attachment II of the Country-
Specific AD Initiation Checklists.
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Our review of the data provided in the Petitions, the General
Issues Supplement, and other information readily available to Commerce
indicates that the petitioner has established industry support for the
Petitions.\17\ First, the Petitions 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).\18\ Second, the domestic producers (or workers) have
met the statutory criteria for industry support under section
732(c)(4)(A)(i) of the Act because the domestic producers (or workers)
who support the Petitions account for at least 25 percent of the total
production of the domestic like product.\19\ Finally, the domestic
producers (or workers) have met the statutory criteria for industry
support under section 732(c)(4)(A)(ii) of the Act because the domestic
producers (or workers) who support the Petitions 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 Petitions.\20\ Accordingly, Commerce determines that the Petitions
were filed on behalf of the domestic industry within the meaning of
section 732(b)(1) of the Act.\21\
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\17\ Id.
\18\ Id.; see also section 732(c)(4)(D) of the Act.
\19\ See Attachment II of the Country-Specific AD Initiation
Checklists.
\20\ Id.
\21\ Id.
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Allegations and Evidence of Material Injury and Causation
The petitioner alleges that the U.S. industry producing the
domestic like product is being materially injured, or is threatened
with material injury, by reason of the imports of the subject
merchandise sold at LTFV. In addition, the petitioner alleges that
subject imports from China, India, and Vietnam exceed the negligibility
threshold provided for under section 771(24)(A) of the Act.\22\ With
respect to Brazil, while the allegedly dumped imports do not exceed the
statutory requirements for negligibility,\23\ the petitioner alleges
and provides supporting evidence that: (1) there is a reasonable
indication that the data obtained in the ITC's investigation will
establish that imports exceed the negligibility threshold; \24\ and (2)
there is the potential that imports from Brazil will imminently exceed
the negligibility threshold and, therefore, are not negligible for
purposes of a threat determination.\25\ The petitioner's arguments
regarding the limitations of publicly available import data and the
collection of scope-specific import data in the ITC's investigation are
consistent with the SAA. Furthermore, the petitioner's arguments
regarding the potential for imports from Brazil to imminently exceed
the negligibility threshold are consistent with the statutory criteria
for ``negligibility in threat analysis'' under section 771(24)(A)(iv)
of the Act, which provides that imports shall not be treated as
negligible if there is a potential that subject imports from a country
will imminently exceed the statutory requirements for negligibility.
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\22\ For further information regarding negligibility and the
injury allegation, see Country-Specific AD Initiation Checklists at
Attachment III, Analysis of Allegations and Evidence of Material
Injury and Causation for the Antidumping and Countervailing Duty
Petitions Covering Hard Empty Capsules from Brazil, the People's
Republic of China, India, and the Socialist Republic of Vietnam
(Attachment III).
\23\ Id.
\24\ Id.; see also Statement of Administrative Action
Accompanying the Uruguay Round Agreements Act, H.R. Doc 103-316,
Vol. 1 (1994) (SAA).
\25\ See Attachment III of the Country-Specific AD Initiation
Checklists; see also section 771(24)(A)(iv) of the Act.
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The petitioner contends that the industry's injured condition is
illustrated by the significant and increasing volume of subject
imports; reduced market share; underselling and price depression and/or
suppression; lost sales and revenues; and decline in the domestic
industry's production, U.S. shipments, net sales, and financial
performance.\26\ We assessed the allegations and supporting evidence
regarding material injury, threat of material injury, causation,
cumulation, as well as negligibility, and we have determined that these
allegations are properly supported by adequate evidence and meet the
statutory requirements for initiation.\27\
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\26\ Id.
\27\ Id.
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[[Page 91687]]
Allegations of Sales at LTFV
The following is a description of the allegations of sales at LTFV
upon which Commerce based its decision to initiate LTFV investigations
of imports of hard empty capsules from Brazil, China, India, and
Vietnam. The sources of data for the deductions and adjustments
relating to U.S. price and normal value (NV) are discussed in greater
detail in the Country-Specific AD Initiation Checklists.
U.S. Price
For Brazil, China, India, and Vietnam, the petitioner based export
price (EP) on POI average unit values derived from official U.S. import
statistics for imports of hard empty capsules produced in and exported
from each country.\28\ For each country, the petitioner made certain
adjustments to U.S. price to calculate a net ex-factory U.S. price,
where applicable.\29\
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\28\ See Country-Specific AD Initiation Checklists.
\29\ Id.
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Normal Value \30\
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\30\ In accordance with section 773(b)(2) of the Act, for the
Brazil and India investigations, Commerce will request information
necessary to calculate the constructed value (CV) and COP to
determine whether there are reasonable grounds to believe or suspect
that sales of the foreign like product have been made at prices that
represent less than the COP of the product.
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For Brazil and India, the petitioner stated that it was unable to
obtain home market or third country pricing information for hard empty
capsules to use as a basis for NV.\31\ Therefore, for Brazil and India,
the petitioner calculated NV based on CV.\32\ For further discussion of
CV for Brazil and India, see the section ``Normal Value Based on
Constructed Value,'' below.
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\31\ See Country-Specific AD Initiation Checklists.
\32\ Id.
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Commerce considers China and Vietnam to be NME countries.\33\ In
accordance with section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by Commerce. Therefore, we continue to treat China and Vietnam
as NME countries for purposes of the initiation of the China and
Vietnam LTFV investigations. Accordingly, we base NV on FOPs valued in
a surrogate market economy country in accordance with section 773(c) of
the Act.
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\33\ See, e.g., Certain Freight Rail Couplers and Parts Thereof
from the People's Republic of China: Preliminary Affirmative
Determination of Sales at Less Than Fair Value and Preliminary
Affirmative Determination of Critical Circumstances, 88 FR 15372
(March 13, 2023), and accompanying Preliminary Decision Memorandum
at 5, unchanged in Certain Freight Rail Couplers and Parts Thereof
from the People's Republic of China: Final Affirmative Determination
of Sales at Less-Than-Fair Value and Final Affirmative Determination
of Critical Circumstances, 88 FR 34485 (May 30, 2023); see also,
e.g., Raw Honey from the Socialist Republic of Vietnam: Final
Results of Antidumping Duty Changed Circumstances Review, 89 FR
64411 (August 7, 2024), and accompanying NME Analysis Memorandum at
5.
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The petitioner claims that the Republic of T[uuml]rkiye
(T[uuml]rkiye) is an appropriate surrogate country for China because it
is a market economy that is at a level of economic development
comparable to that of China and is a significant producer of comparable
merchandise.\34\ The petitioner provided publicly available information
from T[uuml]rkiye to value all FOPs.\35\ Based on the information
provided by the petitioner, we believe it is appropriate to use
T[uuml]rkiye as a surrogate country for China to value all FOPs for
initiation purposes.
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\34\ See China AD Initiation Checklist.
\35\ Id.
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The petitioner claims that Indonesia is an appropriate surrogate
country for Vietnam because it is a market economy that is at a level
of economic development comparable to that of Vietnam and is a
significant producer of comparable merchandise.\36\ The petitioner
provided publicly available information from Indonesia to value all
FOPs.\37\ Based on the information provided by the petitioner, we
believe it is appropriate to use Indonesia as a surrogate country for
Vietnam to value all FOPs for initiation purposes.
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\36\ See Vietnam AD Initiation Checklist.
\37\ Id.
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Interested parties will have the opportunity to submit comments
regarding surrogate country selection and, pursuant to 19 CFR
351.301(c)(3)(i), will be provided an opportunity to submit publicly
available information to value FOPs within 30 days before the scheduled
date of the preliminary determinations.
Factors of Production
Because information regarding the volume of inputs consumed by
Chinese and Vietnamese producers/exporters was not reasonably
available, the petitioner used its own production experience and
product-specific consumption rates as a surrogate to value Chinese and
Vietnamese manufacturers' FOPs.\38\ Additionally, the petitioner
calculated factory overhead, selling, general, and administrative
(SG&A) expenses, and profit based on the experience of Turkish and
Indonesian producers of comparable merchandise, respectively.\39\
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\38\ See Country-Specific AD Initiation Checklists.
\39\ Id.
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Normal Value Based on Constructed Value
As noted above for Brazil and India, the petitioner stated that it
was unable to obtain home market or third-country prices for hard empty
capsules to use as a basis for NV. Therefore, for Brazil and India, the
petitioner calculated NV based on CV.\40\
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\40\ Id.
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Pursuant to section 773(e) of the Act, the petitioner calculated CV
as the sum of the cost of manufacturing, SG&A expenses, financial
expenses, and profit.\41\ For Brazil and India, in calculating the cost
of manufacturing, the petitioner relied on its own production
experience and product-specific consumption rates, valued using
publicly available information applicable to the respective countries,
where applicable.\42\ For Brazil and India, in calculating SG&A
expenses, financial expenses, and profit ratios, the petitioner relied
on the fiscal year 2023 financial statements of producers of comparable
merchandise domiciled in the respective countries.\43\
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\41\ Id.
\42\ Id.
\43\ Id.
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Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of hard empty capsules from Brazil, China, India,
and Vietnam are being, or are likely to be, sold in the United States
at LTFV. Based on comparisons of EP to NV in accordance with sections
772 and 773 of the Act, the estimated dumping margins for hard empty
capsules for each of the countries covered by this initiation are as
follows: (1) Brazil--78.52 to 99.11 percent; (2) China--128.01 to
158.04 percent; (3) India--54.81 to 82.95 percent; (4) Vietnam--63.53
to 86.04 percent.\44\
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\44\ Id.
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Initiation of LTFV Investigations
Based upon the examination of the Petitions and supplemental
responses, we find that they meet the requirements of section 732 of
the Act. Therefore, we are initiating LTFV investigations to determine
whether imports of hard empty capsules from Brazil, China, India, and
Vietnam are being, or are likely to be, sold in the United States at
LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR
351.205(b)(1), unless postponed, we will make our preliminary
determinations no
[[Page 91688]]
later than 140 days after the date of these initiations.
Respondent Selection
Brazil
In the Petitions, the petitioner identified two companies in Brazil
(i.e., ACG do Brasil S.A. and Genix Industria Farmaceutica LTDA
(Qualicaps Brazil)) as producers/exporters of hard empty capsules and
provided independent third-party information as support.\45\ We
currently know of no additional producers/exporters of hard empty
capsules from Brazil. Accordingly, Commerce intends to individually
examine all known producers/exporters in the investigation from Brazil
(i.e., the companies cited above). We invite interested parties to
comment on this issue. Such comments may include factual information
within the meaning of 19 CFR 351.102(b)(21). Parties wishing to comment
must do so within three business days of the publication of this notice
in the Federal Register. 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.
Because we intend to examine all known producers/exporters in Brazil,
if no comments are received, or if comments received further support
the existence of only these two producers/exporters, we do not intend
to conduct respondent selection and will proceed to issuing the initial
AD questionnaires to the companies identified. However, if comments are
received which create a need for a respondent selection process, we
intend to finalize our decision regarding respondent selection for
Brazil within 20 days of publication of this notice.
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\45\ See Petitions at Volume I (page 30 and Exhibits I-46 and I-
57); see also General Issues Supplement at 1-2 and Exhibit I-46
(Revised).
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India
In the Petitions, the petitioner identified 14 companies in India
as producers/exporters of hard empty capsules.\46\ Following standard
practice in LTFV investigations involving market economy countries, in
the event Commerce determines that the number of companies is large,
and it cannot individually examine each company based upon Commerce's
resources, where appropriate, Commerce intends to select mandatory
respondents based on U.S. Customs and Border Protection (CBP) data for
imports under the appropriate Harmonized Tariff Schedule of the United
States (HTSUS) subheading(s) listed in the ``Scope of the
Investigations,'' in the appendix.
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\46\ See Petitions at Volume I (pages 10-11 and Exhibit I-8);
see also General Issues Supplement at 1-3 and Exhibit I-S1.
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On November 7, 2024, Commerce released CBP data on imports of hard
empty capsules from India 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
publication date of the notice of initiation of these
investigations.\47\ 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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\47\ See Country-Specific Memorandum, ``Release of U.S. Customs
and Border Protection Entry Data,'' dated November 7, 2024.
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China and Vietnam
In the Petitions, the petitioner identified 50 companies in China
and two companies in Vietnam as producers and/or exporters of hard
empty capsules.\48\ Our standard practice for respondent selection in
AD investigations involving NME countries is to select respondents
based on quantity and value (Q&V) questionnaires in cases where
Commerce has determined that the number of companies is large, and it
cannot individually examine each company based upon its resources.
Therefore, considering the number of producers and/or exporters
identified in the Petitions, Commerce will solicit Q&V information that
can serve as a basis for selecting exporters for individual examination
in the event that Commerce determines that the number is large and
decides to limit the number of respondents individually examined
pursuant to section 777A(c)(2) of the Act. Because there are 50 Chinese
producers and/or exporters identified in the Petitions, Commerce has
determined that it will issue Q&V questionnaires to the largest
producers and/or exporters in China that are identified in the CBP POI
entry data for which there is complete address information on the
record.\49\ For Vietnam, because there are two producers and/or
exporters identified in the Petitions, Commerce will issue a Q&V
questionnaire to each potential respondent in Vietnam for which there
is complete address information on the record.
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\48\ See Petitions at Volume I (page 30 and Exhibit I-46); see
also General Issues Supplement at 1 and Exhibit I-46 (Revised).
\49\ See Memorandum, ``Release of U.S. Customs and Border
Protection Entry Data,'' dated November 7, 2024.
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Commerce will post the Q&V questionnaires along with filing
instructions on Commerce's website at <a href="https://www.trade.gov/ec-adcvd-case-announcements">https://www.trade.gov/ec-adcvd-case-announcements</a>. Producers/exporters of hard empty capsules from
China and Vietnam that do not receive Q&V questionnaires may still
submit a response to the Q&V questionnaire and can obtain a copy of the
Q&V questionnaire from Commerce's website. Responses to the Q&V
questionnaire must be submitted by the relevant Chinese and Vietnamese
producers/exporters no later than 5:00 p.m. ET on November 27, 2024,
which is two weeks from the signature date of this notice. All Q&V
questionnaire responses must be filed electronically via ACCESS. An
electronically filed document must be received successfully, in its
entirety, by ACCESS no later than 5:00 p.m. ET on the deadline noted
above.
Interested parties must submit applications for disclosure under
APO in accordance with 19 CFR 351.305(b). As stated above, 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>.
Separate Rates
In order to obtain separate rate status in an NME investigation,
exporters and producers must submit a separate rate application. The
specific requirements for submitting a separate rate application in an
NME investigation are outlined in detail in the application itself,
which is available on Commerce's website at <a href="https://access.trade.gov/Resources/nme/nme-sep-rate.html">https://access.trade.gov/Resources/nme/nme-sep-rate.html</a>. The separate rate application will be
due 30 days after publication of this initiation notice. Exporters and
producers must file a timely separate rate application if they want to
be considered for individual examination. Exporters and producers who
submit a separate rate application and have been selected as mandatory
respondents will be eligible for consideration for separate rate status
only if they respond to all parts of Commerce's AD questionnaire as
mandatory respondents. Commerce requires that companies from China and
Vietnam submit a response both to the Q&V questionnaire and to the
separate rate application by the respective deadlines to receive
consideration for separate rate status. Companies not filing a timely
Q&V questionnaire response will not receive separate rate
consideration.
[[Page 91689]]
Use of Combination Rates
Commerce will calculate combination rates for certain respondents
that are eligible for a separate rate in an NME investigation. The
Separate Rates and Combination Rates Bulletin states:
{w{time} hile continuing the practice of assigning separate rates
only to exporters, all separate rates that {Commerce{time} will now
assign in its NME investigation will be specific to those producers
that supplied the exporter during the period of investigation. Note,
however, that one rate is calculated for the exporter and all of the
producers which supplied subject merchandise to it during the period
of investigation. This practice applies both to mandatory
respondents receiving an individually calculated separate rate as
well as the pool of non-investigated firms receiving the {weighted
average{time} of the individually calculated rates. This practice
is referred to as the application of ``combination rates'' because
such rates apply to specific combinations of exporters and one or
more producers. The cash-deposit rate assigned to an exporter will
apply only to merchandise both exported by the firm in question and
produced by a firm that supplied the exporter during the period of
investigation.\50\
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\50\ See Enforcement and Compliance's Policy Bulletin No. 05.1,
regarding, ``Separate-Rates Practice and Application of Combination
Rates in Antidumping Investigation involving NME Countries,'' (April
5, 2005) at 6 (emphasis added), available on Commerce's website at
<a href="https://access.trade.gov/Resources/policy/bull05-1.pdf">https://access.trade.gov/Resources/policy/bull05-1.pdf</a>.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act and 19 CFR
351.202(f), copies of the public version of the Petitions have been
provided to the governments of Brazil, China, India, and Vietnam via
ACCESS. To the extent practicable, we will attempt to provide a copy of
the public version of the Petitions to each exporter named in the
Petitions, as provided under 19 CFR 351.203(c)(2).
ITC Notification
Commerce will notify the ITC of our initiation, as required by
section 732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will preliminarily determine, within 45 days after the date
on which the Petitions were filed, whether there is a reasonable
indication that imports of hard empty capsules from Brazil, China,
India, and/or Vietnam are materially injuring, or threatening material
injury to, a U.S. industry.\51\ A negative ITC determination for any
country will result in the investigation being terminated with respect
to that country.\52\ Otherwise, these LTFV investigations will proceed
according to statutory and regulatory time limits.
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\51\ See section 733(a) of the Act.
\52\ 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 allegations; (iii) publicly available
information to value factors 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 \53\ 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.\54\ 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 these investigations.
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\53\ See 19 CFR 351.301(b).
\54\ See 19 CFR 351.301(b)(2).
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Particular Market Situation Allegation
Section 773(e) of the Act addresses the concept of particular
market situation (PMS) for purposes of CV, stating that ``if a
particular market situation exists such that the cost of materials and
fabrication or other processing of any kind does not accurately reflect
the cost of production in the ordinary course of trade, the
administering authority may use another calculation methodology under
this subtitle or any other calculation methodology.'' When an
interested party submits a PMS allegation pursuant to section 773(e) of
the Act (i.e., a cost-based PMS allegation), the submission must be
filed in accordance with the requirements of 19 CFR 351.416(b), and
Commerce will respond to such a submission consistent with 19 CFR
351.301(c)(2)(v). If Commerce finds that a cost-based PMS exists under
section 773(e) of the Act, then it will modify its dumping calculations
appropriately.
Neither section 773(e) of the Act, nor 19 CFR 351.301(c)(2)(v),
sets a deadline for the submission of cost-based PMS allegations and
supporting factual information. However, in order to administer section
773(e) of the Act, Commerce must receive PMS allegations and supporting
factual information with enough time to consider the submission. Thus,
should an interested party wish to submit a cost-based PMS allegation
and supporting new factual information pursuant to section 773(e) of
the Act, it must do so no later than 20 days after submission of a
respondent's initial section D questionnaire response.
We note that a PMS allegation filed pursuant to sections
773(a)(1)(B)(ii)(III) or 773(a)(1)(C)(iii) of the Act (i.e., a sales-
based PMS allegation) must be filed within 10 days of submission of a
respondent's initial section B questionnaire response, in accordance
with 19 CFR 351.301(c)(2)(i) and 19 CFR 351.404(c)(2).
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, 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, or as otherwise specified by
Commerce.\55\ 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, we
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; under limited circumstances we will
grant untimely filed requests for the extension of time limits, where
we determine, based on 19 CFR 351.302, that extraordinary circumstances
exist. Parties should review Commerce's regulations concerning the
extension of time limits and the Time Limits Final Rule prior to
submitting factual information in these investigations.\56\
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\55\ See 19 CFR 351.301; see also Extension of Time Limits;
Final Rule, 78 FR 57790 (September 20, 2013) (Time Limits Final
Rule), available at <a href="https://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm">https://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm</a>.
\56\ See 19 CFR 351.302; see also, e.g., Time Limits Final Rule.
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[[Page 91690]]
Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\57\
Parties must use the certification formats provided in 19 CFR
351.303(g).\58\ Commerce intends to reject factual submissions if the
submitting party does not comply with the applicable certification
requirements.
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\57\ See section 782(b) of the Act.
\58\ See Certification of Factual Information to Import
Administration During Antidumping and Countervailing Duty
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule). Additional
information regarding the Final Rule is available at <a href="https://access.trade.gov/Resources/filing/index.html">https://access.trade.gov/Resources/filing/index.html</a>.
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Notification to Interested Parties
Interested parties must submit applications for disclosure under
APO in accordance with 19 CFR 351.305. Parties wishing to participate
in these investigations should ensure that they meet the requirements
of 19 CFR 351.103(d) (e.g., by filing the required letter of
appearance). Note that Commerce has amended certain of its requirements
pertaining to the service of documents in 19 CFR 351.303(f).\59\
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\59\ 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 732(c)(2)
and 777(i) of the Act, and 19 CFR 351.203(c).
Dated: November 13, 2024.
Abdelali Elouaradia,
Deputy Assistant Secretary for Enforcement and Compliance.
Appendix
Scope of the Investigations
The merchandise subject to the scope of these investigations is
hard empty capsules, which are comprised of two prefabricated,
hollowed cylindrical sections (cap and body). The cap and body
pieces each have one closed and rounded end and one open end, and
are constructed with different or equal diameters at their open
ends.
Hard empty capsules are unfilled cylindrical shells composed of
at least 80 percent by weight of a water soluble polymer that is
considered non-toxic and appropriate for human or animal consumption
by the United States Pharmacopeia--National Formulary (USP-NF), Food
Chemical Codex (FCC), or equivalent standards. The most common
polymer materials in hard empty capsules are gelatin derived from
animal collagen (including, but not limited to, pig, cow, or fish
collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such
as opacifiers, colorants, processing aids, controlled release
agents, plasticizers, and preservatives. Hard empty capsules may
also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of these
investigations regardless of polymer material, additives,
transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of these
investigations regardless of their size, weight, length, diameter,
thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the
scope of these investigations regardless of whether they are
imported together or separately, and regardless of whether they are
imported in attached or detached form.
Hard empty capsules covered by the scope of these investigations
are those that disintegrate in water within 2 hours under tests
specified in Chapter 701 of the USP-NF, or equivalent disintegration
tests.
Hard empty capsules are classifiable under subheadings
9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of
the United States (HTSUS). In addition, hard empty capsules may be
imported under HTSUS subheading 1905.90.9090; gelatin hard empty
capsules may be imported under HTSUS subheading 3503.00.5510; HPMC
hard empty capsules may be imported under HTSUS subheading
3923.90.0080; and pullulan hard empty capsules may be imported under
HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are
provided for convenience and customs purposes, the written
description of the merchandise covered by these investigations is
dispositive.
[FR Doc. 2024-27009 Filed 11-19-24; 8:45 am]
BILLING CODE 3510-DS-P
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</html>Indexed from Federal Register on November 20, 2024.
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