[Federal Register Volume 83, Number 100 (Wednesday, May 23, 2018)]
[Notices]
[Pages 23888-23890]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10566]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-072]


Sodium Gluconate, Gluconic Acid and Derivative Products From the 
People's Republic of China: Preliminary Affirmative Countervailing Duty 
Determination and Alignment of Final Determination With Final 
Antidumping Duty Determination

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that countervailable subsidies are being provided to producers and 
exporters of sodium gluconate, gluconic acid and derivative products 
(GNA products) from the People's Republic of China (China). The period 
of investigation is January 1, 2016, through December 31, 2016. 
Interested parties are invited to comment on this preliminary 
determination.

DATES: Applicable May 23, 2018.

FOR FURTHER INFORMATION CONTACT: Robert Galantucci or Jonathan Hill, 
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 or 202-482-
3518, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    This preliminary determination is made in accordance with section 
703(b) of the Tariff Act of 1930, as amended (the Act). Commerce 
published the notice of initiation of this investigation on January 4, 
2018.\1\ Commerce exercised its discretion to toll all deadlines 
affected by the closure of the Federal Government from January 20 
through January 22, 2018.\2\ On February 7, 2018, Commerce published 
its postponement of the deadline for the preliminary determination of 
the investigation for the full 130 days permitted under section 
703(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) until May 2, 2018.\3\
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    \1\ See Sodium Gluconate, Gluconic Acid, and Derivative Products 
From the People's Republic of China: Initiation of Countervailing 
Duty Investigation, 83 FR 499 (January 4, 2018) (Initiation Notice).
    \2\ See Memorandum, ``Deadlines Affected by the Shutdown of the 
Federal Government,'' dated January 23, 2018. (Tolling Memorandum). 
All deadlines in this segment of the proceeding have been extended 
by 3 days.
    \3\ See Sodium Gluconate, Gluconic Acid and Derivative Products 
From the People's Republic of China: Postponement of Preliminary 
Determination in the Countervailing Duty Investigation, 83 FR 5401 
(February 7, 2018).
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    For a complete description of the events that followed the 
initiation of this investigation, see the Preliminary Decision 
Memorandum.\4\ A list of topics discussed in the Preliminary Decision 
Memorandum is included as Appendix II to this notice. The Preliminary 
Decision Memorandum is a public document and is on file electronically 
via Enforcement and Compliance's Antidumping (AD) and Countervailing 
Duty (CVD) Centralized Electronic Service System (ACCESS). ACCESS is 
available to registered users at http://access.trade.gov, and is 
available to all parties in the Central Records Unit, Room B8024 of the 
main Department of Commerce building. In addition, a complete version 
of the Preliminary Decision Memorandum can be accessed directly at 
http://enforcement.trade.gov/frn/. The signed and electronic versions 
of the Preliminary Decision Memorandum are identical in content.
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    \4\ See Memorandum, ``Decision Memorandum for the Preliminary 
Affirmative Determination: Countervailing Duty Investigation of 
Sodium Gluconate, Gluconic Acid and Derivative Products from the 
People's Republic of China,'' dated concurrently with, and hereby 
adopted by, this notice (Preliminary Decision Memorandum).
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Scope of the Investigation

    The products covered by this investigation are sodium gluconate, 
gluconic acid and derivative products from China. For a complete 
description of the scope of this investigation, see Appendix I.

Scope Comments

    In accordance with the preamble to Commerce's regulations, we set 
aside a period of time in our Initiation Notice for parties to raise 
issues regarding product coverage, and encouraged all parties to submit 
comments within 20 calendar days of the signature date of that notice. 
We received several comments concerning the scope of the AD and CVD 
investigations of GNA products from China.
    We are currently evaluating the scope comments filed by interested 
parties. We intend to issue our preliminary decision regarding the 
scope of the AD and CVD investigations in the preliminary determination 
of the companion AD investigation, which is due for signature on July 
2, 2018. We will incorporate the scope decisions from the AD 
investigation into the scope of the final CVD determination after 
considering any relevant comments submitted in case and rebuttal 
briefs.

Methodology

    Commerce is conducting this investigation in accordance with 
section 701 of the Act. For each of the subsidy programs found 
countervailable, We preliminarily determine that there is a subsidy, 
i.e., a financial contribution by an ``authority'' that confers a 
benefit on the recipient, and that the subsidy is specific.\5\ For a 
full description of the methodology underlying our

[[Page 23889]]

preliminary conclusions, see the Preliminary Decision Memorandum.
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    \5\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    We note that, in making these findings, we relied on facts 
otherwise available. Additionally, because we find that the mandatory 
respondents did not act to the best of their ability to respond to our 
requests for information, and therefore impeded this investigation, we 
drew an adverse inference where appropriate in selecting from among the 
facts otherwise available.\6\
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    \6\ See sections 776(a) and (b) of the Act.
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Alignment

    As noted in the Preliminary Decision Memorandum, in accordance with 
section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is 
aligning the final CVD determination in this investigation with the 
final determination in the companion AD investigation of GNA products 
from China, based on a request made by PMP Fermentation Products, Inc. 
(the petitioner).\7\ Consequently, the final CVD determination will be 
issued on the same date as the final AD determination, which is 
currently scheduled to be issued no later than September 17, 2018.\8\
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    \7\ See Letter from the petitioner, ``Countervailing Duty 
Investigation of Sodium Gluconate, Gluconic Acid and Derivative 
Products From the People's Republic of China: PMP's Request to Align 
the Countervailing Duty Final Determination with the Companion 
Antidumping Final Determination,'' dated April 12, 2018.
    \8\ See Sodium Gluconate, Gluconic Acid, and Derivative Products 
From the People's Republic of China: Postponement of Preliminary 
Determination in the Less-Than-Fair-Value Investigation, 83 FR 19050 
(May 1, 2018).
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Adverse Facts Available

    In accordance with sections 776(a)(1), 776(a)(2), and 776(b) of the 
Act, we applied facts otherwise available with an adverse inference to 
assign countervailable subsidy rates to non-cooperative mandatory 
respondents Qingdao Dongxiao Enterprise Co., Ltd. (Qingdao Dongxiao), 
Shandong Fuyang Biotechnology Co. (Fuyang), Shandong Kaison Biochemical 
Co Ltd (Kaison), and Tongxiang Hongyu Chemical Co., Ltd. (Hongyu 
Chemical). Hongyu Chemical, Kaison and Qingdao Dongxiao did not respond 
to Commerce's request for necessary information, and therefore impeded 
this investigation. Accordingly, we drew an adverse inference where 
appropriate in selecting from among the facts otherwise available.
    With respect to Fuyang, we find that certain of Fuyang's 
submissions remain incomplete, or conflict with other record evidence. 
We find the use of facts available is appropriate because Fuyang did 
not provide Commerce with necessary information in the form and manner 
requested and otherwise impeded the proceeding. Furthermore, we find 
that Fuyang failed to act to the best of its ability in providing 
Commerce with the requested information, thereby warranting the 
application of an adverse inference. For further information, see ``Use 
of Facts Otherwise Available and Adverse Inferences'' in the 
Preliminary Decision Memorandum.\9\
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    \9\ Section 782(i) of the Act requires Commerce to verify a 
respondent's data as part of an investigation. However, because we 
are preliminarily applying adverse facts available, pursuant to 
sections 776(a) and (b) of the Act, to each of the respondents, we 
do not intend to conduct verification in this investigation.
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All-Others Rate

    With respect to the all-others rate, section 705(c)(5)(A) of the 
Act provides that if the countervailable subsidy rates established for 
all exporters and producers individually investigated are determined 
entirely in accordance with section 776 of the Act, Commerce may use 
any reasonable method to establish an all-others rate for exporters and 
producers not individually investigated. In this case, as noted above, 
the rates assigned to Fuyang, Hongyu Chemical, Kaison and Qingdao 
Dongxiao are based entirely on facts otherwise available, with an 
adverse inference, pursuant to section 776 of the Act. There is no 
other information on the record with which to determine an all-others 
rate. Accordingly, pursuant to section 705(c)(5)(A)(ii) of the Act, we 
are using ``any reasonable method'' to establish the all-others rate, 
and have established the all-others rate by applying the 
countervailable subsidy rates assigned to mandatory respondents Fuyang, 
Hongyu Chemical, Kaison and Qingdao Dongxiao.
    Commerce summarizes its preliminary countervailable subsidy rates 
in the table below:

------------------------------------------------------------------------
                                                                Subsidy
                      Producer/exporter                          rate
                                                               (percent)
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Qingdao Dongxiao Enterprise Co., Ltd........................      194.67
Shandong Fuyang Biotechnology Co............................      194.67
Shandong Kaison Biochemical Co Ltd..........................      194.67
Tongxiang Hongyu Chemical Co., Ltd..........................      194.67
All-Others..................................................      194.67
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Suspension of Liquidation

    In accordance with section 703(d)(1)(B) and (d)(2) of the Act, 
Commerce will direct U.S. Customs and Border Protection (CBP) to 
suspend liquidation of all entries of GNA products from China as 
described in the scope of the investigation entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. Further, pursuant to 19 CFR 351.205(d), 
Commerce will instruct CBP to require a cash deposit equal to the rates 
indicated above.

Public Comment

    Interested parties may submit case and rebuttal briefs, as well as 
request a hearing. Case briefs may be submitted no later than 30 days 
after the publication of this preliminary determination in the Federal 
Register, and rebuttal briefs, limited to issues raised in the case 
briefs, may be submitted no later than five days after the deadline for 
case briefs. 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.
    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, limited to issues raised in the case and rebuttal 
briefs, must submit a written request to the Assistant Secretary for 
Enforcement and Compliance, U.S. Department of Commerce, within 30 days 
after the date of publication of this notice. Requests should contain 
the party's name, address, and telephone number, the number of 
participants, whether any participant is a foreign national, and a list 
of the issues to be discussed. If a request for a hearing is made, 
Commerce intends to hold the hearing at the U.S. Department of 
Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time 
and date to be determined. Parties should confirm by telephone the 
date, time, and location of the hearing two days before the scheduled 
date.

International Trade Commission Notification

    In accordance with section 703(f) of the Act, Commerce will notify 
the International Trade Commission (ITC) of its determination. If 
Commerce's final determination is affirmative, the ITC will make its 
final determination before the later of 120 days after the date of this 
preliminary determination or 45 days after Commerce's final 
determination.

[[Page 23890]]

Notification to Interested Parties

    This determination is issued and published pursuant to sections 
703(f) and 777(i) of the Act and 19 CFR 351.205(c).

    Dated: May 2, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The scope of this investigation covers all grades of sodium 
gluconate, gluconic acid, liquid gluconate, and glucono delta 
lactone (GDL) (collectively, GNA products), regardless of physical 
form (including, but not limited to substrates; solutions; dry 
granular form or powders, regardless of particle size; or as a 
slurry). The scope also includes GNA products that have been blended 
or are in solution with other product(s) where the resulting mix 
contains 35 percent or more of sodium gluconate, gluconic acid, 
liquid gluconate, and/or GDL by dry weight.
    Sodium gluconate has a molecular formula of 
NaC6H11O7. Sodium gluconate has a 
Chemical Abstract Service (CAS) registry number of 527-07-1, and can 
also be called ``sodium salt of gluconic acid'' and/or sodium 2, 3, 
4, 5, 6 pentahydroxyhexanoate. Gluconic acid has a molecular formula 
of C6H12O7. Gluconic acid has a CAS 
registry number of 526-95-4, and can also be called 2, 3, 4, 5, 6 
pentahydroxycaproic acid. Liquid gluconate is a blend consisting 
only of gluconic acid and sodium gluconate in an aqueous solution. 
Liquid gluconate has CAS registry numbers of 527-07-1, 526-95-4, and 
7732-18-5, and can also be called 2, 3, 4, 5, 6-pentahydroxycaproic 
acid-hexanoate. GDL has a molecular formula of 
C6H10O6. GDL has a CAS registry 
number of 90-80-2, and can also be called d-glucono-1,5-lactone.
    The merchandise covered by the scope of this investigation is 
currently classified in the Harmonized Tariff Schedule of the United 
States (HTSUS) under subheadings 2918.16.1000, 2918.16.5010, and 
2932.20.5020. Merchandise covered by the scope may also enter under 
HTSUS subheadings 2918.16.5050, 3824.99.2890, and 3824.99.9295. 
Although the HTSUS subheadings and CAS registry numbers are provided 
for convenience and customs purposes, the written description of the 
merchandise is dispositive.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. New Subsidy Allegation
VI. Alignment
VII. Injury Test
VIII. Application of the CVD Law to Imports from China
IX. Attribution of Subsidies
X. Use of Facts Otherwise Available and Adverse Inferences
XI. Calculation of the All-Others Rate
XII. ITC Notification
XIII. Recommendation

[FR Doc. 2018-10566 Filed 5-22-18; 8:45 am]
 BILLING CODE 3510-DS-P