Notice2025-23825
Hard Empty Capsules From the People's Republic of China: Final Affirmative Countervailing Duty Determination
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
December 29, 2025
Issuing agencies
Commerce DepartmentInternational Trade Administration
Abstract
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from the People's Republic of China (China). The period of investigation is January 1, 2023, through December 31, 2023.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 245 (Monday, December 29, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 245 (Monday, December 29, 2025)]
[Notices]
[Pages 60628-60631]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23825]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-185]
Hard Empty Capsules From the People's Republic of China: Final
Affirmative Countervailing Duty Determination
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (Commerce) determines that
countervailable subsidies are being provided to producers and exporters
of hard empty capsules (capsules) from the People's Republic of China
(China). The period of investigation is January 1, 2023, through
December 31, 2023.
DATES: Applicable December 29, 2025.
FOR FURTHER INFORMATION CONTACT: Laura Delgado or John Conniff, AD/CVD
Operations, Office III, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone: (202) 482-1468 or (202) 482-1009,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On March 31, 2025, Commerce published the Preliminary Determination
in the Federal Register, invited interested parties to comment.\1\ In
the Preliminary Determination, and in accordance with section 705(a)(1)
of the Tariff Act of 1930, as amended (the Act), and 19 CFR
351.210(b)(4), Commerce aligned the final CVD determination with the
final determination in the less-than-fair-value investigation of
capsules from China.\2\
---------------------------------------------------------------------------
\1\ See Hard Empty Capsules from the People's Republic of China:
Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Determination with Final Antidumping Duty
Determination, 90 FR 14244 (March 31, 2025) (Preliminary
Determination), and accompanying Preliminary Decision Memorandum
(PDM).
\2\ Id.
---------------------------------------------------------------------------
Due to the lapse in appropriations and Federal Government shutdown,
on November 14, 2025, Commerce tolled all deadlines in administrative
proceedings by 47 days.\3\ Additionally, due to a backlog of documents
that were electronically filed via Enforcement and Compliance's
Antidumping and Countervailing Duty Centralized Electronic Service
System (ACCESS) during the Federal Government shutdown, on November 24,
2025,
[[Page 60629]]
Commerce tolled all deadlines in administrative proceedings by an
additional 21 days.\4\ Accordingly, the deadline for this final
determination is now December 18, 2025.
---------------------------------------------------------------------------
\3\ See Memorandum, ``Deadlines Affected by the Shutdown of the
Federal Government,'' dated November 14, 2025.
\4\ See Memorandum, ``Tolling of all Case Deadlines,'' dated
November 24, 2025.
---------------------------------------------------------------------------
For a complete discussion of the events that followed the
Preliminary Determination, see the Issues and Decision Memorandum.\5\
The Issues and Decision Memorandum is a public document and is made
available to the public via ACCESS. ACCESS is available to registered
users at <a href="https://access.trade.gov">https://access.trade.gov</a>. In addition, a complete version of
the Issues and Decision Memorandum can be accessed directly at <a href="https://access.trade.gov/public/FRNoticesListLayout.aspx">https://access.trade.gov/public/FRNoticesListLayout.aspx</a>.
---------------------------------------------------------------------------
\5\ See Memorandum, ``Issues and Decision Memorandum for the
Final Affirmative Determination of the Countervailing Duty
Investigation of Hard Empty Capsules from the People's Republic of
China,'' dated concurrently with, and hereby adopted by, this notice
(Issues and Decision Memorandum).
---------------------------------------------------------------------------
Scope of the Investigation
The products covered by this investigation are capsules from China.
For a complete description of the scope of this investigation, see
Appendix I.
Scope Comments
In the Preliminary Scope Memorandum, we set aside a period of time
for parties to raise issues regarding product coverage (i.e., scope) in
scope-specific case briefs or other written comments.\6\ We received
scope case and rebuttal briefs from multiple interested parties. For a
summary of the product coverage comments and rebuttal response
submitted to the record for this final determination, and accompanying
discussion and analysis of all comments timely received, see the Final
Scope Memorandum.\7\ In the Final Scope Memorandum, Commerce determined
that it is modifying the scope language as it appeared in the
Initiation Notice.\8\ See Appendix I.
---------------------------------------------------------------------------
\6\ See Memorandum, ``Less-Than-Fair-Value Investigations of
Hard Empty Capsules from Brazil, the People's Republic of China,
India, and the Socialist Republic of Vietnam and Countervailing Duty
Investigations from Brazil, the People's Republic of China, India,
and the Socialist Republic of Vietnam: Preliminary Scope Decision
Memorandum,'' dated March 24, 2025 (Preliminary Scope Memorandum).
\7\ See Memorandum, ``Less-Than-Fair-Value Investigations of
Hard Empty Capsules from Brazil, the People's Republic of China,
India, and the Socialist Republic of Vietnam and Countervailing Duty
Investigations from Brazil, the People's Republic of China, India,
and the Socialist Republic of Vietnam: Final Scope Decision
Memorandum,'' dated concurrently with this notice (Final Scope
Memorandum).
\8\ See Hard Empty Capsules from Brazil, the People's Republic
of China, India, and the Socialist Republic of Vietnam: Initiation
of Countervailing Duty Investigations, 89 FR 91680 (November 20,
2024) (Initiation Notice).
---------------------------------------------------------------------------
Verification
As provided in section 782(i) the Act, in April 2025, Commerce
verified the information reported by Jiangsu Lefan Capsule Co., Ltd.
(Jiangsu Lefan) and Shanxi JC Biological Technology Co., Ltd. (Shanxi
JC) for use in our final determination. We used standard verification
procedures, including an examination of relevant accounting records and
original source documents provided at verification.\9\
---------------------------------------------------------------------------
\9\ See Memoranda, ``Verification of the Questionnaire Responses
of Jiangsu Lefan Capsule Co., Ltd.,'' dated May 29, 2025; and
``Verification of the Questionnaire Responses of Shanxi JC
Biological Technology,'' dated May 28, 2025.
---------------------------------------------------------------------------
Analysis of Subsidy Programs and Comments Received
The subsidy programs under investigation and the issues raised in
the case and rebuttal briefs that were submitted by interested parties
in this investigation are discussed in the Issues and Decision
Memorandum. For a list of the issues raised by interested parties and
addressed in the Issues and Decision Memorandum, see Appendix II to
this notice.
Methodology
Commerce conducted this investigation in accordance with section
701 of the Act. For each of the subsidy programs found to be
countervailable, Commerce determines that there is a subsidy, i.e., a
financial contribution by an ``authority'' that gives rise to a benefit
to the recipient, and that the subsidy is specific.\10\ For a full
description of the methodology underlying our final determination, see
the Issues and Decision Memorandum.
---------------------------------------------------------------------------
\10\ See sections 771(5)(B) and (D) of the Act regarding
financial contribution; see also section 771(5)(E) of the Act
regarding benefit; and section 771(5A) of the Act regarding
specificity.
---------------------------------------------------------------------------
In making this final determination, Commerce relied, in part, on
facts otherwise available, including with an adverse inference,
pursuant to sections 776(a) and (b) of the Act. For a full discussion
of our application of adverse facts available (AFA), see the
Preliminary Determination \11\ and the Issues and Decision Memorandum
at the section entitled ``Use of Facts Available and Application of
Adverse Inferences.''
---------------------------------------------------------------------------
\11\ See Preliminary Determination PDM at 6-16.
---------------------------------------------------------------------------
Changes Since the Preliminary Determination
Based on our review and analysis of the information received during
verification and comments received from parties, for this final
determination, we made certain changes to the countervailable subsidy
rate calculations for Jiangsu Lefan, Shanxi JC, and for all other
producers/exporters.\12\ For a discussion of these changes, see the
Issues and Decision Memorandum.
---------------------------------------------------------------------------
\12\ See Issues and Decision Memorandum at 3.
---------------------------------------------------------------------------
All-Others Rate
Section 705(c)(5)(A)(i) of the Act states that, for companies not
individually investigated, Commerce will determine an all-others rate
equal to the weighted-average countervailable subsidy rates established
for exporters and/or producers individually investigated, excluding any
zero and de minimis countervailable subsidy rates, and any rates
determined entirely under section 776 of the Act.
Commerce calculated individual estimated countervailable subsidy
rates for Jiangsu Lefan and Shanxi JC that are not zero, de minimis, or
based entirely on facts otherwise available. Commerce calculated the
all-others rate using a weighted average of the individual estimated
subsidy rates calculated for the examined respondents using each
company's publicly-ranged values for the merchandise under
consideration.\13\
---------------------------------------------------------------------------
\13\ With two respondents under examination, Commerce normally
calculates: (A) a weighted-average of the estimated subsidy rates
calculated for the examined respondents; (B) a simple average of the
estimated subsidy rates calculated for the examined respondents; and
(C) a weighted-average of the estimated subsidy rates calculated for
the examined respondents using each company's publicly-ranged U.S.
sale values for the merchandise under consideration. Commerce then
compares (B) and (C) to (A) and selects the rate closest to (A) as
the most appropriate rate for all other producers and exporters.
See, e.g., Ball Bearings and Parts Thereof from France, Germany,
Italy, Japan, and the United Kingdom: Final Results of Antidumping
Duty Administrative Reviews, Final Results of Changed-Circumstances
Review, and Revocation of an Order in Part, 75 FR 53661, 53662
(September 1, 2010), and accompanying Issues and Decision Memorandum
at Comment 1. As complete publicly ranged sales data were available,
Commerce based the all-others rate on the publicly ranged sales data
of the mandatory respondents. For a complete analysis of the data,
see Memorandum, ``Calculation of Subsidy Rate for All Others,''
dated concurrently with this notice.
---------------------------------------------------------------------------
Final Determination
Commerce determines that the following estimated countervailable
subsidy rates exist for the period January 1, 2023, through December
31, 2023:
------------------------------------------------------------------------
Subsidy rate
Company (percent ad
valorem)
------------------------------------------------------------------------
Jiangsu Lefan Capsule Co., Ltd.......................... 3.14
Shanxi JC Biological Co. Ltd............................ 8.81
All Others.............................................. 6.90
------------------------------------------------------------------------
[[Page 60630]]
Disclosure
Commerce intends to disclose its calculations performed to
interested parties in this final determination within five days of its
public announcement or, if there is no public announcement, within five
days of the date of the publication of this notice in the Federal
Register, in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
As a result of our Preliminary Determination, and pursuant to
sections 703(d)(1)(B) and (d)(2) of the Act, we instructed U.S. Customs
and Border Protection (CBP) to collect cash deposits and suspend
liquidation of entries of subject merchandise from China that were
entered, or withdrawn from warehouse, for consumption, on or after
March 31, 2025, the date of the publication of the Preliminary
Determination in the Federal Register.\14\ In accordance with section
703(d) of the Act, we instructed CBP to discontinue the suspension of
liquidation of all entries of subject merchandise entered or withdrawn
from warehouse, on or after July 29, 2025 but to continue the
suspension of liquidation of all entries of subject merchandise on or
before July 28, 2025.
---------------------------------------------------------------------------
\14\ See Preliminary Determination, 90 FR at 14245.
---------------------------------------------------------------------------
If the U.S. International Trade Commission (ITC) issues a final
affirmative injury determination, we will issue a countervailing duty
(CVD) order, reinstate the suspension of liquidation under section
706(a) of the Act, and require a cash deposit of estimated
countervailing duties for entries of subject merchandise in the amounts
indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC
determines that material injury, or threat of material injury, does not
exist, this proceeding will be terminated, and all estimated duties
deposited or securities posted as a result of the suspension of
liquidation will be refunded or cancelled.
U.S. International Trade Commission Notification
In accordance with section 705(d) of the Act, Commerce will notify
the ITC of its final affirmative determination that countervailable
subsidies are being provided to producers and exporters of capsules
from China. As Commerce's final determination is affirmative, in
accordance with section 705(b) of the Act, the ITC will determine,
within 45 days, whether the domestic industry in the United States is
materially injured, or threatened with material injury, by reason of
import of capsules from China. In addition, we are making available to
the ITC all non-privileged and non-proprietary information in our
files, provided the ITC confirms that it will not disclose such
information, either publicly or under administrative protective order
(APO), without the written consent of the Assistant Secretary for
Enforcement and Compliance. If the ITC determines that material injury
or threat of material injury does not exist, this proceeding will be
terminated, and all cash deposits will be refunded. If the ITC
determines that such injury does exist, Commerce will issue a CVD order
directing CBP to assess, upon further instruction by Commerce,
countervailing duties on all imports of the subject merchandise that
are entered, or withdrawn from warehouse, for consumption on or after
the effective date of the suspension of liquidation, as discussed above
in the ``Suspension of Liquidation'' section.
Administrative Protective Order
This notice will serve as the final reminder to parties subject to
an APO of their responsibility concerning the destruction of
proprietary information disclosed under APO, in accordance with 19 CFR
351.305(a)(3). Timely written notification of the return or destruction
of APO materials or conversion to judicial protective order is hereby
requested. Failure to comply with the regulations and terms of an APO
is a violation which is subject to sanction.
Notification to Interested Parties
This determination is issued and published in accordance with
sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
Dated: December 18, 2025.
Christopher Abbott,
Deputy Assistant Secretary for Policy and Negotiations, performing the
non-exclusive functions and duties of the Assistant Secretary for
Enforcement and Compliance.
Appendix I
Scope of the Investigation
The merchandise subject to the scope of this investigation 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 this
investigation regardless of polymer material, additives,
transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this
investigation 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 this investigation 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 this investigation
are those that disintegrate in water, simulated intestinal fluid,
simulated gastric fluid, or other similar water-based (i.e.,
aqueous) fluids 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 this investigation is
dispositive.
Appendix II
List of Topics Discussed in the Preliminary Decision Memorandum
I. Summary
II. Background
III. Scope of the Investigation
IV. Subsidies Valuation
V. Use of Facts Otherwise Available and Application of Adverse
Inferences
VI. Changes Since the Preliminary Determination
VII. Analysis of Programs
VIII. Discussion of the Issues
Comment 1: Whether Commerce Should Apply Total Adverse Facts
Available (AFA) to Shanxi JC
Comment 2: Whether Commerce Should Apply AFA in Determining the
Benefit to Shanxi JC from the Provision of Land-Use Rights for Less
Than Adequate Remuneration (LTAR)
Comment 3: Whether Commerce Should Continue to Countervail the
Provision of Electricity for LTAR
[[Page 60631]]
Comment 4: Whether Commerce Should Change the Benchmarks for
Electricity for LTAR
Comment 5: Whether Commerce Miscalculated Electricity for LTAR
for Jiangsu Lefan
Comment 6: Whether Commerce Should Continue to Countervail the
Provision of Land-Use Rights for LTAR
Comment 7: Whether Commerce Should Continue to Countervail Other
Subsidies
Comment 8: Whether Commerce Has or Should Countervail Grants
Received Before the Average Useful Life Period
Comment 9: Whether Commerce Should Correct an Erroneously
Deducted Benchmark Payment When Calculating Loan Benefits
IX. Recommendation
[FR Doc. 2025-23825 Filed 12-23-25; 8:45 am]
BILLING CODE 3510-DS-P
</pre></body>
</html>Indexed from Federal Register on December 29, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.