Certain Steel Racks and Parts Thereof From the People's Republic of China: Final Affirmative Countervailing Duty Determination, 35592-35595 [2019-15717]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 84, Number 142 (Wednesday, July 24, 2019)]
[Notices]
[Pages 35592-35595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15717]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-089]


Certain Steel Racks and Parts Thereof From the People's Republic 
of China: Final Affirmative Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers and exporters 
of certain steel racks and parts thereof (steel racks) from the 
People's Republic of China (China).

DATES: Applicable July 24, 2019.

FOR FURTHER INFORMATION CONTACT: Robert Galantucci, Eli Lovely, or 
Aleksandras Nakutis, 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) 482-2923, (202) 482-1593, or (202) 482-3147, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    The petitioner in this investigation is the Coalition for Fair Rack 
Imports (the petitioner). In addition to the Government of China (GOC), 
the mandatory respondents in this investigation are Jiangsu Kingmore 
Storage Equipment Manufacturing Co., Ltd. (Kingmore), Nanjing Dongsheng 
Shelf Manufacturing Co., Ltd. (Dongsheng), Nanjing Huade Storage 
Equipment Manufacture Co., Ltd. (Huade), Tangshan Apollo Energy 
Equipment Company, Ltd. (Apollo), and Xiamen Aifei Metal Manufacturing 
Co., Ltd. (Aifeimetal). Apollo, Huade, and Kingmore did not respond to 
our requests for information.
    On December 3, 2018, Commerce published in the Federal Register the 
Preliminary Determination of this investigation.\1\ On April 22, 2019, 
Commerce published an Amended Preliminary Determination to revise the 
scope of this investigation to conform with the modified scope 
published in the preliminary determination of the companion antidumping 
duty (AD) investigation.\2\
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    \1\ See Certain Steel Racks from the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, and 
Alignment of Final Determination with Final Antidumping Duty 
Determination, 83 FR 62297 (December 3, 2018) (Preliminary 
Determination) and accompanying Preliminary Decision Memorandum.
    \2\ See Steel Racks from the People's Republic of China: Amended 
Preliminary Countervailing Duty Determination, 84 FR 16640 (April 
22, 2019) (Amended Preliminary Determination).
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    Additional background on this case, including a summary of events 
that occurred since Commerce published the Preliminary Determination 
and a discussion of comments from interested parties, is provided in 
the Issues and Decision Memorandum.\3\ The Issues and Decision 
Memorandum is a public document and is on file electronically via 
Enforcement and Compliance's Antidumping and Countervailing Duty 
Centralized Electronic Service System (ACCESS). ACCESS is available to 
registered users at https://access.trade.gov and is available to all 
parties in the Central Records Unit, Room B8024 of the main Commerce 
building. In addition, a complete version of the Issues and Decision 
Memorandum can be accessed directly at https://enforcement.trade.gov. 
The signed and electronic versions of the Issues and Decision 
Memorandum are identical in content.
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    \3\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Determination in the Countervailing Duty Investigation of 
Certain Steel Racks from the People's Republic of China,'' dated 
concurrently with, and hereby adopted by, this notice (Issues and 
Decision Memorandum).
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Period of Investigation

    The period of investigation (POI) is January 1, 2017 through 
December 31, 2017.

Scope Comments

    During the course of this investigation and the concurrent AD 
investigation of steel racks from China, Commerce received scope 
comments from interested parties. Commerce issued a Preliminary Scope 
Memorandum to address these comments and set aside a period of time for 
parties to comment on scope issues in case and rebuttal briefs.\4\ We 
received comments from interested parties on the Preliminary Scope 
Memorandum, which we address in our Issues and Decision Memorandum.\5\ 
For this final determination, we have made no changes to the scope of 
this investigation, as published in the Amended Preliminary 
Determination.\6\
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    \4\ See Memorandum, ``Steel Racks from the People's Republic of 
China: Preliminary Scope Decision,'' dated February 25, 2019 
(Preliminary Scope Memorandum).
    \5\ See Issues and Decision Memorandum, at Comment 7.
    \6\ See Amended Preliminary Determination, 84 FR at 16640-41.
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Scope of the Investigation

    The products covered by this investigation are steel racks and 
parts thereof. For a complete description of the scope of this 
investigation, see Appendix I.

Use of Adverse Facts Available

    Commerce relied on ``facts otherwise available,'' including adverse 
facts available (AFA), for several findings in the Preliminary 
Determination. We are continuing to apply AFA for the final 
determination. For a full discussion of our application of AFA, see the 
Preliminary Determination and the Issues and Decision Memorandum.\7\
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    \7\ See Preliminary Determination and accompanying Preliminary 
Decision Memorandum, at ``Use of Facts Otherwise Available and 
Adverse Inferences''; see also Issues and Decision Memorandum, at 
``Use of Facts Otherwise Available and Adverse Inferences'' and 
Comment 4.

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[[Page 35593]]

Analysis of Comments Received

    In the Issues and Decision Memorandum, we address all issues raised 
in parties' case and rebuttal briefs, including those issues related to 
scope. A list of the issues that parties raised, and to which we 
responded, is attached to this notice as Appendix II.

Changes Since the Preliminary Determination

    Following the Preliminary Determination, the petitioner and other 
interested parties agreed to modify the scope of this investigation. As 
a result of this modification, Aifeimetal did not have shipments of 
subject merchandise to the United States during the POI. Accordingly, 
Aifeimetal will not receive a subsidy rate in this final determination. 
We note that, because the total AFA rate was based, in part, on 
Aifeimetal's questionnaire response, we have made adjustments to the 
total AFA rate.\8\
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    \8\ Compare Preliminary Decision Memorandum at 47-52, with 
Issues and Decision Memorandum at 22-24.
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    With respect to Dongsheng, Commerce has corrected its calculation 
of benefits received under the hot-rolled steel for less than adequate 
remuneration program. Apart from this correction, we have not modified 
our methodology for calculating a subsidy rate for Dongsheng.

All-Others Rate

    In accordance with section 705(c)(5)(A) of the Tariff Act of 1930, 
as amended (the Act), Commerce shall determine an estimated all-others 
rate for companies not individually examined. Generally, under section 
705(c)(5)(A)(i) of the Act, this rate shall be an amount equal to the 
weighted-average of the estimated subsidy rates established for those 
companies individually examined, excluding any zero and de minimis 
rates and any rates based entirely on AFA under section 776 of the Act.
    In the final determination of this investigation, Commerce assigned 
rates for Apollo, Huade, and Kingmore in accordance with section 776 of 
the Act, and Aifeimetal did not receive a subsidy rate because it did 
not have shipments of subject merchandise during the POI. Therefore, 
the only rate that is not zero, de minimis, or based entirely on facts 
otherwise available is the rate calculated for Dongsheng. Consequently, 
in accordance with section 705(c)(5)(A)(i) of the Act, the rate 
calculated for Dongsheng is also assigned as the rate for ``All-Other'' 
producers and exporters.

Final Determination

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we 
calculated an individual estimated subsidy rate for Dongsheng, and 
established subsidy rates for Apollo, Huade, Kingmore, and the 13 
companies that failed to respond to Commerce's quantity and value 
questionnaire by applying AFA.
    Commerce determines the total estimated net countervailable subsidy 
rates to be the following:

------------------------------------------------------------------------
                                                                Subsidy
                           Company                               rate
                                                               (percent)
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Designa Inc.................................................      102.23
Dongguan Baike Electronic Co., Ltd..........................      102.23
Ezidone Display Corp. Ltd...................................      102.23
Fenghua Huige Metal Products Co., Ltd.......................      102.23
Formost Plastic Metal Works (Jiaxing) Co., Ltd..............      102.23
Jiangsu Kingmore Storage Equipment Manufacturing Co., Ltd...      102.23
Nanjing Dongsheng Shelf Manufacturing Co., Ltd..............        1.50
Nanjing Huade Storage Equipment Manufacture Co., Ltd........      102.23
Ningbo Bocheng Home Products Co., Ltd.......................      102.23
Ningbo Joys Imp. & Exp. Co., Ltd............................      102.23
Ningbo Li Zhan Import & Export Co...........................      102.23
Qingdao Haineng Hardware Products Co., Ltd..................      102.23
Qingdao Huatian Hand Truck Co., Ltd.........................      102.23
Qingdao Zeal-Line Stainless Steel Products Co., Ltd.........      102.23
Seven Seas Furniture Industrial (Xiamen) Co., Ltd...........      102.23
Shijiazhuang Wells Trading & Mfg. Co., Ltd..................      102.23
Tangshan Apollo Energy Equipment Company....................      102.23
All-Others..................................................        1.50
------------------------------------------------------------------------

Disclosure

    We intend to disclose to interested parties under Administrative 
Protective Order (APO), the calculations performed in connection with 
this final determination within five days of any public announcement 
or, if there is no public announcement, within five days of the date of 
publication of the notice of final determination in the Federal 
Register, in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination, and pursuant to 
sections 703(d)(1)(B) and (2) of the Act, we instructed U.S. Customs 
and Border Protection (CBP) to suspend liquidation of all entries of 
merchandise under consideration from China that were entered or 
withdrawn from warehouse, for consumption, on or after December 3, 
2018, i.e., the date of publication of the Preliminary Determination in 
the Federal Register. In accordance with section 703(d) of the Act, we 
issued instructions to CBP to discontinue the suspension of liquidation 
for countervailing duty purposes for subject merchandise entered, or 
withdrawn from warehouse, on or after April 3, 2019, but to continue 
the suspension of liquidation of all entries from December 3, 2018 
through April 2, 2019.
    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a countervailing duty 
order, reinstate the suspension of liquidation under section 706(a) of 
the Act, and will

[[Page 35594]]

require a cash deposit of estimated countervailing duties for entries 
of subject merchandise in the amounts indicated above. 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 as a result of the suspension of the suspension of 
liquidation will be refunded.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. Because Commerce's final determination in 
this proceeding is affirmative, in accordance with section 705(b) of 
the Act, the ITC will make its final determination as to whether the 
domestic industry in the United States is materially injured, or 
threatened with material injury, by reason of imports of steel racks 
from China no later than 45 days after our final determination. If the 
ITC determines that material injury or threat of material injury does 
not exist, the proceeding will be terminated, and all cash deposits 
will be refunded. If the ITC determines that such injury does exist, 
Commerce will issue a countervailing duty order directing CBP to 
assess, upon further instruction by Commerce, countervailing duties on 
all imports of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the effective date of the 
suspension of liquidation, as discussed above in the ``Continuation of 
Suspension of Liquidation'' section.

Notification Regarding Administrative Protective Orders

    This notice serves as a reminder to the parties subject to an APO 
of their responsibility concerning the disposition 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, alternatively, conversion to judicial protective 
order, is hereby requested. Failure to comply with the regulations and 
terms of an APO is a violation that is subject to sanction.

Notification to Interested Parties

    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act and 19 CFR 351.210(c).

    Dated: July 17, 2019.
James Maeder,
Deputy Assistant Secretary for Antidumping and Countervailing Duty 
Operations.

Appendix I

Scope of the Investigation

    The merchandise covered by this investigation is steel racks and 
parts thereof, assembled, to any extent, or unassembled, including 
but not limited to, vertical components (e.g., uprights, posts, or 
columns), horizontal or diagonal components (e.g., arms or beams), 
braces, frames, locking devices (e.g., end plates and beam 
connectors), and accessories (including, but not limited to, rails, 
skid channels, skid rails, drum/coil beds, fork clearance bars, 
pallet supports, row spacers, and wall ties).
    Subject steel racks and parts thereof are made of steel, 
including, but not limited to, cold and/or hot-formed steel, 
regardless of the type of steel used to produce the components and 
may, or may not, include locking tabs, slots, or bolted, clamped, or 
welded connections. Subject steel racks have the following physical 
characteristics:
    (1) Each steel vertical and horizontal load bearing member 
(e.g., arms, beams, posts, and columns) is composed of steel that is 
at least 0.044 inches thick;
    (2) Each steel vertical and horizontal load bearing member 
(e.g., arms, beams, posts, and columns) is composed of steel that 
has a yield strength equal to or greater than 36,000 pounds per 
square inch;
    (3) The width of each steel vertical load bearing member (e.g., 
posts and columns) exceeds two inches; and
    (4) The overall depth of each steel roll-formed horizontal load 
bearing member (e.g., beams) exceeds two inches.
    In the case of steel horizontal load bearing members other than 
roll-formed (e.g., structural beams, Z-beams, or cantilever arms), 
only the criteria in subparagraphs (1) and (2) apply to these 
horizontal load bearing members. The depth limitation in 
subparagraph (4) does not apply to steel horizontal load bearing 
members that are not roll-formed.
    Steel rack components can be assembled into structures of 
various dimensions and configurations by welding, bolting, clipping, 
or with the use of devices such as clips, end plates, and beam 
connectors, including, but not limited to the following 
configurations: (1) Racks with upright frames perpendicular to the 
aisles that are independently adjustable, with positive-locking 
beams parallel to the aisle spanning the upright frames with braces; 
and (2) cantilever racks with vertical components parallel to the 
aisle and cantilever beams or arms connected to the vertical 
components perpendicular to the aisle. Steel racks may be referred 
to as pallet racks, storage racks, stacker racks, retail racks, pick 
modules, selective racks, or cantilever racks and may incorporate 
moving components and be referred to as pallet-flow racks, carton-
flow racks, push-back racks, movable-shelf racks, drive-in racks, 
and drive-through racks. While steel racks may be made to ANSI 
MH16.l or ANSI MH16.3 standards, all steel racks and parts thereof 
meeting the description set out herein are covered by the scope of 
this investigation, whether or not produced according to a 
particular standard.
    The scope includes all steel racks and parts thereof meeting the 
description above, regardless of
    (1) other dimensions, weight, or load rating;
    (2) vertical components or frame type (including structural, 
roll-form, or other);
    (3) horizontal support or beam/brace type (including but not 
limited to structural, roll-form, slotted, unslotted, Z-beam, C-
beam, L-beam, step beam, and cantilever beam);
    (4) number of supports;
    (5) number of levels;
    (6) surface coating, if any (including but not limited to paint, 
epoxy, powder coating, zinc, or other metallic coatings);
    (7) rack shape (including but not limited to rectangular, 
square, corner, and cantilever);
    (8) the method by which the vertical and horizontal supports 
connect (including but not limited to locking tabs or slots, 
bolting, clamping, and welding); and
    (9) whether or not the steel rack has moving components 
(including but not limited to rails, wheels, rollers, tracks, 
channels, carts, and conveyors).
    Subject merchandise includes merchandise matching the above 
description that has been finished or packaged in a third country. 
Finishing includes, but is not limited to, coating, painting, or 
assembly, including attaching the merchandise to another product, or 
any other finishing or assembly operation that would not remove the 
merchandise from the scope of the investigation if performed in the 
country of manufacture of the steel racks and parts thereof. 
Packaging includes packaging the merchandise with or without another 
product or any other packaging operation that would not remove the 
merchandise from the scope of the investigation if performed in the 
country of manufacture of the steel racks and parts thereof.
    Steel racks and parts thereof are included in the scope of this 
investigation whether or not imported attached to, or included with, 
other parts or accessories such as wire decking, nuts, and bolts. If 
steel racks and parts thereof are imported attached to, or included 
with, such non-subject merchandise, only the steel racks and parts 
thereof are included in the scope.
    The scope of this investigation does not cover: (1) Decks, i.e., 
shelving that sits on or fits into the horizontal supports to 
provide the horizontal storage surface of the steel racks; (2) wire 
shelving units, i.e., units made from wire that incorporate both a 
wire deck and wire horizontal supports (taking the place of the 
horizontal beams and braces) into a single piece with tubular 
collars that slide over the posts and onto plastic sleeves snapped 
on the posts to create a finished unit; (3) pins, nuts, bolts, 
washers, and clips used as connecting devices; and (4) non-steel 
components.
    Specifically excluded from the scope of this investigation are 
any products covered by Commerce's existing antidumping and 
countervailing duty orders on boltless steel shelving units 
prepackaged for sale from the

[[Page 35595]]

People's Republic of China. See Boltless Steel Shelving Units 
Prepackaged for Sale From the People's Republic of China: 
Antidumping Duty Order, 80 FR 63,741 (October 21, 2017); and 
Boltless Steel Shelving Units Prepackaged for Sale From the People's 
Republic of China: Amended Final Affirmative Countervailing Duty 
Determination and Countervailing Duty Order, 80 FR 63,745 (October 
21, 2017).
    Also excluded from the scope of this investigation are bulk-
packed parts or components of boltless steel shelving units that 
were specifically excluded from the scope of the Boltless Steel 
Shelving Orders because such bulk-packed parts or components do not 
contain the steel vertical supports (i.e., uprights and posts) and 
steel horizontal supports (i.e., beams, braces) packaged together 
for assembly into a completed boltless steel shelving unit.
    Such excluded components of boltless steel shelving are defined 
as:
    (1) Boltless horizontal supports (beams, braces) that have each 
of the following characteristics: (a) A length of 95 inches or less, 
(b) made from steel that has a thickness of 0.068 inches or less, 
and (c) a weight capacity that does not exceed 2500 lbs per pair of 
beams for beams that are 78'' or shorter, a weight capacity that 
does not exceed 2200 lbs per pair of beams for beams that are over 
78'' long but not longer than 90'', and/or a weight capacity that 
does not exceed 1800 lbs per pair of beams for beams that are longer 
than 90'';
    (2) shelf supports that mate with the aforementioned horizontal 
supports; and
    (3) boltless vertical supports (upright welded frames and posts) 
that have each of the following characteristics: (a) A length of 95 
inches or less, (b) with no face that exceeds 2.90 inches wide, and 
(c) made from steel that has a thickness of 0.065 inches or less.
    Excluded from the scope of this investigation are: (1) Wall-
mounted shelving and racks, defined as shelving and racks that 
suspend all of the load from the wall, and do not stand on, or 
transfer load to, the floor; (2) ceiling-mounted shelving and racks, 
defined as shelving and racks that suspend all of the load from the 
ceiling and do not stand on, or transfer load to, the floor; and (3) 
wall/ceiling mounted shelving and racks, defined as shelving and 
racks that suspend the load from the ceiling and the wall and do not 
stand on, or transfer load to, the floor. The addition of a wall or 
ceiling bracket or other device to attach otherwise subject 
merchandise to a wall or ceiling does not meet the terms of this 
exclusion.
    Also excluded from the scope of this investigation is 
scaffolding that complies with ANSI/ASSE A10.8--2011--Scaffolding 
Safety Requirements, CAN/CSA S269.2-M87 (Reaffirmed 2003)--Access 
Scaffolding for Construction Purposes, and/or Occupational Safety 
and Health Administration regulations at 29 CFR part 1926 subpart 
L--Scaffolds.
    Also excluded from the scope of this investigation are tubular 
racks such as garment racks and drying racks, i.e., racks in which 
the load bearing vertical and horizontal steel members consist 
solely of: (1) Round tubes that are no more than two inches in 
diameter; (2) round rods that are no more than two inches in 
diameter; (3) other tubular shapes that have both an overall height 
of no more than two inches and an overall width of no more than two 
inches; and/or (4) wire.
    Also excluded from the scope of this investigation are portable 
tier racks. Portable tier racks must meet each of the following 
criteria to qualify for this exclusion:
    (1) They are freestanding, portable assemblies with a fully 
welded base and four freely inserted and easily removable corner 
posts;
    (2) They are assembled without the use of bolts, braces, 
anchors, brackets, clips, attachments, or connectors;
    (3) One assembly may be stacked on top of another without 
applying any additional load to the product being stored on each 
assembly, but individual portable tier racks are not securely 
attached to one another to provide interaction or interdependence; 
and
    (4) The assemblies have no mechanism (e.g., a welded foot plate 
with bolt holes) for anchoring the assembly to the ground.
    Also excluded from the scope of this investigation are 
accessories that are independently bolted to the floor and not 
attached to the rack system itself, i.e., column protectors, corner 
guards, bollards, and end row and end of aisle protectors.
    Merchandise covered by this investigation is currently 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) under the following subheadings: 7326.90.8688, 9403.20.0080, 
and 9403.90.8041. Subject merchandise may also enter under 
subheadings 7308.90.3000, 7308.90.6000, 7308.90.9590, and 
9403.20.0090. The HTSUS subheadings are provided for convenience and 
U.S. Customs purposes only. The written description of the scope is 
dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. Use of Facts Otherwise Available and Adverse Inferences
VI. Subsidies Valuation Information
VII. Analysis of Programs
VIII. Analysis of Comments
    Comment 1: Commerce's Treatment of Aifeimetal in this 
Investigation
    Comment 2: Whether Commerce's Benchmarks Properly Take into 
Account Prevailing Market Conditions
    Comment 3: Whether Commerce Used the Correct Tariff Rate in 
Constructing the Cold-Rolled and Hot-Rolled Steel Benchmarks
    Comment 4: Whether to Countervail Subsidies for Which There Was 
No Formal Initiation of an Investigation
    Comment 5: Whether to Revise Dongsheng's Benefit Calculation 
under the Electricity for Less than Adequate Remuneration (LTAR) 
Program
    Comment 6: Whether to Include Dongsheng's Purchases of 
Structural Steel in the Calculation of a Benefit under the Hot-
Rolled Steel for LTAR Program
    Comment 7: Commerce's Treatment of the Petitioner's 
International Shipping for LTAR Allegation
    Comment 8: The Preliminary Scope Determination
IX. Recommendation

[FR Doc. 2019-15717 Filed 7-23-19; 8:45 am]
 BILLING CODE 3510-DS-P