Certain Vertical Shaft Engines Between 99cc and Up to 225cc, and Parts Thereof From the People's Republic of China: Preliminary Affirmative Determination of Critical Circumstances, in Part, in the Countervailing Duty Investigation, 68851-68852 [2020-24135]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 85, Number 211 (Friday, October 30, 2020)]
[Notices]
[Pages 68851-68852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24135]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-125]


Certain Vertical Shaft Engines Between 99cc and Up to 225cc, and 
Parts Thereof From the People's Republic of China: Preliminary 
Affirmative Determination of Critical Circumstances, in Part, in the 
Countervailing Duty Investigation

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that critical circumstances exist, in part, with respect to imports of 
certain vertical shaft engines between 99cc and up to 225cc, and parts 
thereof (small vertical engines) from certain producers and exporters 
from the People's Republic of China (China).

DATES: Applicable October 30, 2020.

FOR FURTHER INFORMATION CONTACT: Ajay Menon or Adam Simons, AD/CVD 
Operations, Office II, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW, Washington, DC 20230; telephone: (202) 482-1993 or (202) 482-6172, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 18, 2020, Commerce received a countervailing duty (CVD) 
petition concerning imports of small vertical engines from China filed 
in proper form on behalf of the petitioner, Briggs & Stratton 
Corporation.\1\ On April 7, 2020, we initiated this investigation,\2\ 
and on August 24, 2020, we published an affirmative Preliminary 
Determination.\3\
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    \1\ See Petitioner's Letter, ``Petitions for the Imposition of 
Antidumping and Countervailing Duties on Imports of Certain Vertical 
Shaft Engines Between 99cc and up to 225cc, and Parts Thereof, from 
the People's Republic of China,'' dated March 18, 2020 (the 
Petition).
    \2\ See Certain Vertical Shaft Engines Between 99cc and Up To 
225cc, and Parts Thereof from the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 85 FR 20667 (April 
14, 2020).
    \3\ See Certain Vertical Shaft Engines Between 99cc and up to 
225cc, and Parts Thereof, from the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination and 
Alignment of Final Determination With Final Antidumping Duty 
Determination, 85 FR 52086 (August 24, 2020) (Preliminary 
Determination), and accompanying Preliminary Decision Memorandum 
(PDM).
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    Commerce selected Chongqing Kohler Engines Ltd. (Chongqing Kohler) 
and Chongqing Zongshen General Power Machine Co. (Chongqing Zongshen) 
as the individually-examined respondents in this investigation.
    On September 24, 2020, the petitioner alleged that critical 
circumstances exist with respect to imports of small vertical engines 
from China, pursuant to section 703(e)(1) of the Tariff Act of 1930, as 
amended (the Act), and 19 CFR 351.206.\4\
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    \4\ See Petitioner's Letter, ``Certain Vertical Shaft Engines 
Between 99cc and Up To 225cc, and Parts Thereof, from the People's 
Republic of China: Critical Circumstances Allegation,'' dated 
September 24, 2020 (Critical Circumstances Allegation).
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    In accordance with section 703(e)(1) of the Act and 19 CFR 
351.206(c)(1), because the petitioner submitted its critical 
circumstance allegations more than 30 days before the scheduled date of 
the final determination,\5\ Commerce will make a preliminary finding as 
to whether there is a reasonable basis to believe or suspect that 
critical circumstances exist. Commerce will issue its preliminary 
finding of critical circumstances within 30 days after the petitioner 
submits the allegation.\6\
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    \5\ The final determination for this CVD investigation is 
currently due no later than December 28, 2020.
    \6\ See 19 CFR 351.206(c)(2)(ii). In this case, 30 days after 
the petitioner submitted the allegation would place the deadline on 
Saturday, October 24, 2020. Commerce's practice dictates that where 
a deadline falls on a weekend or federal holiday, the appropriate 
deadline is the next business day. See Notice of Clarification: 
Application of ``Next Business Day'' Rule for Administrative 
Determination Deadlines Pursuant to the Tariff Act of 1930, As 
Amended, 70 FR 24533 (May 10, 2005).
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Period of Investigation (POI)

    The POI is January 1, 2019 through December 31, 2019.

Critical Circumstances Allegation

    The petitioner alleges that there was a massive increase of imports 
of small vertical engines from China and provided monthly import data 
for the period January 2020 through June 2020.\7\ The petitioner states 
that a comparison of total imports, by quantity, for the base period 
January 2020 through March 2020 to the comparison period April 2020 
through June 2020, shows that imports of small vertical engines from 
China increased by 37.01 percent,\8\ which is ``massive'' under 19 CFR 
351.206(h)(2). The petitioner also alleges that there is a reasonable 
basis to believe that there are subsidies in this investigation which 
are inconsistent with the Subsidies and Countervailing Measures 
Agreement of the World Trade Organization (SCM Agreement).\9\
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    \7\ See Critical Circumstances Allegation at Exhibit 1.
    \8\ Id.
    \9\ Id. at 4-5.
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Critical Circumstances Analysis

    Section 703(e)(1) of the Act provides that Commerce will 
preliminarily determine that critical circumstances exist in a CVD 
investigation if there is a reasonable basis to believe or suspect 
that: (A) The alleged countervailable subsidy is inconsistent with the 
SCM Agreement; \10\ and (B) there have been massive imports of the 
subject merchandise over a relatively short period.
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    \10\ Commerce limits its critical circumstances findings to 
those subsidies contingent upon export performance or use of 
domestic over imported goods (i.e., those prohibited under Article 3 
of the SCM Agreement). See, e.g., Final Affirmative Countervailing 
Duty Determination and Final Negative Critical Circumstances 
Determination: Carbon and Certain Alloy Steel Wire from Germany, 67 
FR 55808, 55809-10 (August 30, 2002).
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    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to section 703(e)(1)(B) of the 
Act and 19 CFR 351.206(h) and (i), Commerce normally compares the 
import volumes of the subject merchandise for at least three months 
immediately preceding the filing of the petition (i.e., the base 
period) to a comparable period of at least three months following the 
filing of the petition (i.e., the comparison period). However, the 
regulations also provide that if Commerce finds that importers, or 
exporters or producers, had reason to believe, at some time prior to 
the beginning of the proceeding, that a proceeding was likely, Commerce 
may consider a period of not less than three months from the earlier 
time.\11\ Imports must increase by at least 15 percent during the 
comparison period to be considered massive.\12\
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    \11\ See 19 CFR 351.206(i).
    \12\ See 19 CFR 351.206(h)(2).
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Alleged Countervailable Subsidies Are Inconsistent With the SCM 
Agreement

Chongqing Kohler

    In the Preliminary Determination, we found that Chongqing Kohler 
received countervailable subsidies under the ``Export Buyer's Credit 
Program'' program, which was found to be export contingent in the 
Preliminary Determination.\13\ Thus, because we

[[Page 68852]]

preliminarily found that the ``Export Buyer's Credit Program'' program 
is export contingent, we preliminarily find that the criterion under 
section 703(e)(1)(A) of the Act has been met.\14\
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    \13\ See Preliminary Determination PDM at 29; see also 
Memorandum, ``Countervailing Duty Investigation of Certain Vertical 
Shaft Engines between 99cc and up to 225cc, and Parts Thereof from 
the People's Republic of China: Calculation Memorandum for Chongqing 
Kohler Engines Ltd. (Chongqing Kohler),'' dated August 17, 2020 at 
Attachment 1.
    \14\ See Preliminary Determination PDM at 25-37.
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Chongqing Zongshen

    In the Preliminary Determination, we found that Chongqing Zongshen 
received countervailable subsidies under the ``Export Sellers Credit 
Program'' program, which was found to be export contingent in the 
Preliminary Determination.\15\ Thus, because we preliminarily found 
that the ``Export Sellers Credit Program'' program is export 
contingent, we preliminarily find that the criterion under section 
703(e)(1)(A) of the Act has been met.
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    \15\ Id. at 28-29.
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Massive Imports

    Commerce compared the import volumes of subject merchandise, as 
provided by the mandatory respondents, for the five months immediately 
preceding and following the filing of the petition. Because the 
petition was filed on March 18, 2020, in order to determine whether 
there was a massive surge in imports for the mandatory respondents, 
Commerce compared the total volume of shipments during the period of 
November 2019 through March 2020 with the volume of shipments during 
the period from April 2020 through August 2020.\16\ With respect to 
Chongqing Kohler, we preliminarily determine that there was no massive 
surge in imports between the base and comparison periods.\17\ However, 
with respect to Chongqing Zongshen, we preliminarily determine that 
there was a massive surge in imports between the base and comparison 
periods.\18\
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    \16\ See Chongqing Kohler's Letter, ``Certain Vertical Shaft 
Engines Between 99cc and 225cc, and Parts Thereof from the People's 
Republic of China: Chongqing Kohler's Monthly Quantity and Value 
Data,'' dated October 2, 2020; see also Chongqing Zongshen's Letter, 
``Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts 
Thereof, from China; CVD Investigation; Chongqing Zongshen Monthly 
Q&V Data,'' dated October 2, 2020.
    \17\ See Memorandum, ``Critical Circumstances Shipment Data 
Analysis,'' dated concurrently with this memorandum at Attachment 1 
(Critical Circumstances Analysis Memo).
    \18\ Id.
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    For all other exporters and producers, we examined monthly shipment 
data for the same time periods, using import data from Global Trade 
Atlas (GTA), adjusted to remove the mandatory respondents' shipment 
data.\19\ However, the quantity of shipments reported by the mandatory 
respondents was greater than the quantity of imports recorded in the 
GTA data for U.S. harmonized tariff schedule number 8407.90.10.10. 
Therefore, we determine that the record does not support a 
determination that there is a massive surge in imports between the base 
and comparison periods for all other exporters and producers.\20\
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    \19\ Id.
    \20\ See Prestressed Concrete Steel Wire from the Republic of 
Turkey: Preliminary Affirmative Countervailing Duty Determination, 
Preliminary Affirmative Critical Circumstances Determination in 
Part, 85 FR 59287 (September 21, 2020).
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    Accordingly, consistent with section 703(e)(1) of the Act, Commerce 
preliminarily determines that critical circumstances exist for imports 
of small vertical engines from China with respect to Chongqing 
Zongshen, but do not exist with respect to Chongqing Kohler and all 
other exporters or producers not individually examined. For the 
underlying data and results of Commerce's analysis, see the Critical 
Circumstances Analysis Memo.

Final Determination

    We will make a final determination concerning critical 
circumstances in the final determination of this investigation, which 
is currently scheduled for December 28, 2020.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Enforcement and Compliance. Interested parties 
will be notified of the timeline for the submission of case briefs and 
written comments at a later date. Rebuttal briefs, limited to issues 
raised in case briefs, may be submitted no later than seven days after 
the deadline date for case briefs.\21\ Pursuant to 19 CFR 351.309(c)(2) 
and (d)(2), parties who submit case briefs or rebuttal briefs in this 
investigation are encouraged to submit with each argument: (1) A 
statement of the issue; (2) a brief summary of the argument; and (3) a 
table of authorities.
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    \21\ See 19 CFR 351.309(d)(1).
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Suspension of Liquidation

    In accordance with section 703(e)(2)(A) of the Act, for Chongqing 
Zongshen, we intend to direct U.S. Customs and Border Protection (CBP) 
to suspend liquidation of any unliquidated entries of subject 
merchandise from the China entered, or withdrawn from warehouse for 
consumption, on or after May 26, 2020, which is 90 days prior to the 
date of publication of the Preliminary Determination in the Federal 
Register. For such entries, CBP shall require a cash deposit equal to 
the estimated preliminary subsidy rates established in the Preliminary 
Determination. This suspension of liquidation will remain in effect 
until further notice.

ITC Notification

    In accordance with section 703(f) of the Act, we intend to notify 
the ITC of this preliminary determination of critical circumstances.
    This determination is issued and published pursuant to sections 
703(f) and 777(i)(1) of the Act.

    Dated: October 26, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2020-24135 Filed 10-29-20; 8:45 am]
BILLING CODE 3510-DS-P