[Federal Register Volume 85, Number 32 (Tuesday, February 18, 2020)]
[Notices]
[Pages 8809-8814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03103]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-119]


Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts 
Thereof From the People's Republic of China: Initiation of Less-Than-
Fair-Value Investigation

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

DATES: Applicable February 4, 2020.

FOR FURTHER INFORMATION CONTACT: Leo Ayala, AD/CVD Operations, Office 
VII, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, 
DC 20230; telephone: (202) 482-3945.

SUPPLEMENTARY INFORMATION:

The Petition

    On January 15, 2020, the U.S. Department of Commerce (Commerce) 
received an antidumping duty (AD) petition concerning imports of 
certain vertical shaft engines between 225cc and 999cc, and parts 
thereof (vertical shaft engines) from the People's Republic of China 
(China), filed in proper form on behalf of the Coalition of American 
Vertical Engine Producers (the petitioner or the Coalition).\1\ The 
Petition was accompanied by a countervailing duty (CVD) petition 
concerning imports of vertical shaft engines from China.
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    \1\ See Petitioner's Letter, ``Petitions for the Imposition of 
Antidumping and Countervailing Duties on Certain Vertical Shaft 
Engines between 225cc and 999cc, and Parts Thereof from the People's 
Republic of China,'' dated January 15, 2020 (the Petition).
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    On January 17, 2020, Commerce requested supplemental information 
pertaining to certain aspects of the Petition,\2\ to which the 
petitioner filed its response on January 22, 2020.\3\ On January 27, 
2020, Commerce had a phone conversation with the petitioner requesting 
that it address certain issues.\4\ The petitioner filed responses to 
these requests on January 29, 2020.\5\
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    \2\ See Commerce's Letter, ``Petitions for the Imposition of 
Antidumping and Countervailing Duties on Imports of certain vertical 
shaft engines between 225cc and 999cc, and parts thereof from the 
People's Republic of China: Supplemental Questions Concerning Volume 
II,'' dated January 17, 2020.
    \3\ See Petitioner's Letter, ``Responses to Supplemental 
Questions Concerning Volume II of the Petitions for the Imposition 
of Antidumping and Countervailing Duties Pursuant to Sections 701 
and 731 of the Tariff Act of 1930, As Amended on Certain Vertical 
Shaft Engines Between 225cc and 999cc, and Parts Thereof from the 
People's Republic of China,'' dated January 22, 2020 (AD 
Supplement); see also Petitioner's Letter, ``Responses to 
Supplemental Questions Concerning Volume I of the Petitions for the 
Imposition of Antidumping and Countervailing Duties Pursuant to 
Sections 701 and 731 of the Tariff Act of 1930, As Amended on 
Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts 
Thereof from the People's Republic of China,'' dated January 22, 
2020 (General Issues Supplement).
    \4\ See Memorandum, ``Certain Vertical Shaft Engines Between 
225cc and 999cc, and Parts Thereof from The People's Republic of 
China: Call to Counsel,'' dated January 27, 2020.
    \5\ See Petitioner's Letter, ``Certain Vertical Shaft Engines 
Between 225cc and 999cc, and Parts Thereof from the People's 
Republic of China: Responses to Second Supplemental Questions 
Concerning Volume II of the Petitions,'' dated January 29, 2020 (AD 
Second Supplement); see also Petitioner's Letter, ``Certain Vertical 
Shaft Engines Between 225cc and 999cc, and Parts Thereof from the 
People's Republic of China: Responses to Second Supplemental 
Questions Concerning Volume I of the Petitions,'' dated January 29, 
2020 (Second General Issues Supplement).
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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 vertical 
shaft engines from China 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 such imports are materially injuring, 
or threatening material injury to, the domestic industry producing 
vertical shaft engines in the United States. Consistent with section 
732(b)(1) of the Act, the Petition is accompanied by information 
reasonably available to the petitioner supporting its allegations.
    Commerce finds that the petitioner filed the Petition on behalf of 
the domestic industry, because the petitioner is an interested party, 
as defined in sections 771(9)(C) and (F) of the Act. Commerce also 
finds that the

[[Page 8810]]

petitioner demonstrated sufficient industry support with respect to the 
initiation of the requested AD investigation.\6\
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    \6\ See ``Determination of Industry Support for the Petition'' 
section, infra.
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Period of Investigation

    Because China is a non-market economy (NME) country, pursuant to 19 
CFR 351.204(b)(1), and because the Petition was filed on January 15, 
2020, the period of investigation (POI) is July 1, 2019 through 
December 31, 2020.

Scope of the Investigation

    The merchandise covered by this investigation is vertical shaft 
engines from China. For a full description of the scope of this 
investigation, see the appendix to this notice.

Comments on Scope of the Investigation

    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).\7\ Commerce will consider all comments 
received from interested parties and, if necessary, will consult with 
interested parties prior to the issuance of the preliminary 
determination. If scope comments include factual information,\8\ all 
such factual information should be limited to public information. To 
facilitate preparation of its questionnaires, Commerce requests that 
all interested parties submit scope comments by 5:00 p.m. Eastern Time 
(ET) on February 24, 2020, which is 20 calendar days from the signature 
date of this notice. Any rebuttal comments, which may include factual 
information, must be filed by 5:00 p.m. ET on March 5, 2020, which is 
10 calendar days from the initial comment deadline.\9\
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    \7\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997) (Preamble).
    \8\ See 19 CFR 351.102(b)(21) (defining ``factual 
information'').
    \9\ See 19 CFR 351.303(b).
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    Commerce requests that any factual information the parties consider 
relevant to the scope of the investigation be submitted during this 
time period. However, if a party subsequently finds that additional 
factual information pertaining to the scope of the investigation may be 
relevant, the party may contact Commerce and request permission to 
submit the additional information. All such comments must also be filed 
on the record of the concurrent AD and CVD investigations.

Filing Requirements

    All submissions to Commerce must be filed electronically using 
Enforcement and Compliance's Antidumping Duty and Countervailing Duty 
Centralized Electronic Service System (ACCESS).\10\ An electronically 
filed document must be received successfully in its entirety by the 
time and date it is due. Documents exempted from the electronic 
submission requirements must be filed manually (i.e., in paper form) 
with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. 
Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 
20230, and stamped with the date and time of receipt by the applicable 
deadlines.
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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 https://access.trade.gov/help.aspx and a handbook 
can be found at https://access.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Comments on Product Characteristics for AD Questionnaires

    Commerce is providing interested parties an opportunity to comment 
on the appropriate physical characteristics of vertical shaft engines 
to be reported in response to Commerce's AD questionnaire. This 
information will be used to identify the key physical characteristics 
of the subject merchandise in order to report the relevant factors of 
production (FOPs) accurately, as well as to develop appropriate 
product-comparison criteria.
    Interested parties may provide any information or comments that 
they believe are relevant to the development of an accurate list of 
physical characteristics. In order to consider the suggestions of 
interested parties in developing and issuing the AD questionnaire, all 
comments must be filed by 5:00 p.m. ET on February 24, 2020, which is 
20 calendar days from the signature date of this notice. Any rebuttal 
comments, which may include factual information, must be filed by 5:00 
p.m. ET on March 5, 2020, which is 10 calendar days from the initial 
comment deadline.\11\ All comments and submissions to Commerce must be 
filed electronically using ACCESS, as explained above, on the record of 
this AD investigation.
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    \11\ See 19 CFR 351.303(b).
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Determination of Industry Support for the Petition

    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 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 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 must apply the same statutory definition regarding the domestic 
like product,\12\ 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.\13\
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    \12\ See section 771(10) of the Act.
    \13\ 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 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

[[Page 8811]]

definition of the domestic like product distinct from the scope of the 
investigation.\14\ Based on our analysis of the information submitted 
on the record, we have determined that vertical shaft engines, as 
defined in the scope, constitute a single domestic like product, and we 
have analyzed industry support in terms of that domestic like 
product.\15\
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    \14\ See Volume I of the Petition, at 16-17; see also General 
Issues Supplement at 3-5.
    \15\ For a discussion of the domestic like product analysis as 
applied to this case and information regarding industry support, see 
Antidumping Duty Investigation Initiation Checklist: Certain 
Vertical Shaft Engines Between 225cc and 999cc, and Parts Thereof 
from the People's Republic of China (China AD Initiation Checklist) 
at Attachment II, ``Analysis of Industry Support for the Antidumping 
and Countervailing Duty Petitions Covering Certain Vertical Shaft 
Engines Between 225cc and 999cc, and Parts Thereof from the People's 
Republic of China'' (Attachment II), dated concurrently with this 
notice and on file electronically via ACCESS. Access to documents 
filed via ACCESS is also available in the Central Records Unit, Room 
B8024 of the main Commerce building.
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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 Petition with reference to the domestic like product 
as defined in the ``Scope of the Investigation,'' in the appendix to 
this notice. To establish industry support, the petitioner provided 
2019 shipments of the domestic like product for members of the 
Coalition.\16\ The petitioner estimated the production of the domestic 
like product for the entire domestic industry based on U.S. shipment 
data, export data, and its own knowledge of the industry, because 
shipments and production of vertical shaft engines correlate with one 
another and shipments are a reasonable proxy for production in the 
vertical shaft engines industry.\17\ The petitioner compared the 2019 
shipments of the Coalition to the estimated total shipments of the 
domestic like product for the entire domestic industry.\18\ We relied 
on data provided by the petitioner for purposes of measuring industry 
support.\19\
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    \16\ See Volume I of the Petition, at 2-3 and Exhibits I-5 and 
I-6; see also General Issues Supplement at 6-9 and Exhibits Supp-I-2 
and Supp-I-3; and Second General Issues Supplement, at Exhibit Supp-
I-2.
    \17\ See Volume I of the Petition, at Exhibit I-6; see also 
General Issues Supplement, at 6-9 and Exhibits Supp-I-2 and Supp-I-
3; and Second General Issues Supplement, at Exhibit 2Supp-I-2.
    \18\ See General Issues Supplement, at 6-9 and Exhibits Supp-I-2 
and Supp-I-3.
    \19\ See Volume I of the Petition, at 2-3 and Exhibits I-5 and 
I-6; see also General Issues Supplement at 6-9 and Exhibits Supp-I-2 
and Supp-I-3; and Second General Issues Supplement, at Exhibit Supp-
I-2. For further discussion, see China AD Initiation Checklist, at 
Attachment II.
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    Our review of the data provided in the Petition, the General Issues 
Supplement, the Second General Issues Supplement, and other information 
readily available to Commerce indicates that the petitioner has 
established industry support for the Petition.\20\ First, the Petition 
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).\21\ 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 Petition account for at 
least 25 percent of the total production of the domestic like 
product.\22\ 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 
Petition 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 Petition.\23\ 
Accordingly, Commerce determines that the Petition was filed on behalf 
of the domestic industry within the meaning of section 732(b)(1) of the 
Act.\24\
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    \20\ See China AD Initiation Checklist, at Attachment II.
    \21\ See section 732(c)(4)(D) of the Act; see also China AD 
Initiation Checklist, at Attachment II.
    \22\ See China AD Initiation Checklist, at Attachment II.
    \23\ Id.
    \24\ 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 exceed the negligibility threshold provided for under 
section 771(24)(A) of the Act.\25\
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    \25\ See Volume I of the Petition, at 23-24.
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    The petitioner contends that the industry's injured condition is 
illustrated by a significant and increasing volume of subject imports; 
reduced market share; underselling and price depression or suppression; 
lost sales and revenues; and a decline in the domestic industry's 
financial performance and profitability.\26\ We have assessed the 
allegations and supporting evidence regarding material injury, threat 
of material injury, causation, 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\ See Volume I of the Petition, at 13-15, 22-35 and Exhibits 
I-5 and I-11 through I-24.
    \27\ See China AD Initiation Checklist, at Attachment III, 
``Analysis of Allegations and Evidence of Material Injury and 
Causation for the Antidumping and Countervailing Duty Petitions 
Covering Vertical Shaft Engines Between 225cc and 999cc, and Parts 
thereof from the People's Republic of China'' (Attachment III).
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Allegations of Sales at Less Than Fair Value

    The following is a description of the allegation of sales at LTFV 
upon which Commerce based its decision to initiate an AD investigation 
of vertical shaft engines from China. 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 AD Initiation Checklist.

Export Price

    The petitioner based export price (EP) on sales offers to customers 
in the United States for the sale of vertical shaft engines produced in 
and exported from China.\28\ In order to calculate ex-factory U.S. 
prices, where appropriate, the petitioner made deductions from U.S. 
prices for foreign inland freight and foreign brokerage and 
handling.\29\
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    \28\ See Volume II of the Petition, at 1-2 and Exhibits II-1.
    \29\ See Volume II of the Petition, at 4-8 and Exhibits II-2, 
II-4, II-5A, II-5B, II-6, and II-7; see also AD Supplement, at 1 and 
Exhibits II-Supp-3.
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Normal Value

    Commerce considers China to be a non-market economy (NME) 
country.\30\ 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 
as an NME country for purposes of the initiation of this investigation. 
Accordingly, NV in China is appropriately based on FOPs valued in a 
surrogate market economy country,

[[Page 8812]]

in accordance with section 773(c) of the Act.\31\
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    \30\ See Antidumping Duty Investigation of Certain Aluminum Foil 
from the People's Republic of China: Affirmative Preliminary 
Determination of Sales at Less-Than-Fair Value and Postponement of 
Final Determination, 82 FR 50858, 50861 (November 2, 2017), and 
accompanying Preliminary Decision Memorandum at ``China's Status as 
a Non-Market Economy,'' unchanged in Certain Aluminum Foil from the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 83 FR 9282 (March 5, 2018).
    \31\ See China AD Initiation Checklist.
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    The petitioner claims that Turkey is an appropriate surrogate 
country for China, because it is a market economy country that is at a 
level of economic development comparable to that of China and it is a 
significant producer of comparable merchandise.\32\ The petitioner 
valued direct material inputs and packing materials using Trade Data 
Monitor, data from the International Energy Agency to value electricity 
and natural gas, and data from the International Labor Organization to 
value labor.\33\ Based on the information provided by the petitioner, 
we determine that it is appropriate to use Turkey as a surrogate 
country for purposes of initiation.\34\
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    \32\ See Volume II of the Petition, at 2 and 9 and Exhibits II-
8.
    \33\ Id. at Exhibit II-15, Exhibit II-16, Exhibit II-17, Exhibit 
II-18, and Exhibit II-20.
    \34\ See China AD Initiation Checklist.
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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 determination.

Factors of Production

    Because information regarding the volume of inputs consumed by 
Chinese producers/exporters were not reasonably available, the 
petitioner used the product-specific consumption rates of a U.S. 
vertical shaft engines producer as a surrogate to estimate a Chinese 
manufacturer's FOPs.\35\ The petitioner valued the estimated FOPs using 
surrogate values from Turkey.\36\ The petitioner calculated factory 
overhead, selling, general and administrative expenses, and profit 
based on the experience of a Turkish producer of comparable merchandise 
(i.e., radiators, boilers, heat pumps, motors, and other products).\37\
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    \35\ Id. at 10 and 13 and Exhibits II-10.
    \36\ Id. at 10 and Exhibits II-10.
    \37\ See Volume II of the Petition, at 16-18 and Exhibits II-
21A, II-21B, and II-11; see also AD Supplement, at 5-8 and Exhibits 
II-Supp-11 and II-Supp-21A.
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Fair Value Comparisons

    Based on the data provided in the Petition, there is reason to 
believe that imports of vertical shaft engines from China 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 vertical shaft engines from 
China range from 324.73 percent to 637.73 percent.\38\
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    \38\ See AD supplement at 2 and Exhibit II-Supp-4; see also 
China AD Initiation Checklist.
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Initiation of LTFV Investigation

    We find that the Petition on vertical shaft engines from China, we 
find that the Petition meets the requirements of section 732 of the 
Act. Therefore, we are initiating an AD investigation to determine 
whether imports of vertical shaft engines from China 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 determination no later than 140 
days after the date of this initiation.

Critical Circumstances

    The petitioner alleges, based on trade statistics and documented 
prior knowledge of an impending trade case, that there is a reasonable 
basis to believe or suspect that critical circumstances exist with 
regard to imports of vertical shaft engines from China.\39\
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    \39\ See Volume IV of the Petition, at 1-11.
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    Section 733(e)(1) of the Act states that if a petitioner alleges 
critical circumstances, Commerce will find that such circumstances 
exist, at any time after the date of initiation, when there is a 
reasonable basis to believe or suspect that under, subparagraph (A)(i), 
there is a history of dumping and there is material injury by reason of 
dumped imports in the United States or elsewhere of the subject 
merchandise, or (ii) the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value and 
that there was likely to be material injury by reason of such sales, 
and (B) that ``there have been massive imports of the subject 
merchandise over a relatively short period.'' Section 351.206(h)(2) of 
Commerce's regulations provides that, generally, imports must increase 
by at least 15 percent during the ``relatively short period'' to be 
considered ``massive'' and section 351.206(i) defines a ``relatively 
short period'' as normally being the period beginning on the date the 
proceeding begins (i.e., the date the petition is filed) \40\ and 
ending at least three months later.\41\ The regulations also provide, 
however, that if Commerce ``finds that importers, or exporters and 
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 that earlier 
time.'' \42\
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    \40\ See 19 CFR 351.102(b)(40) (providing that a proceeding 
begins on the date of the filing of a petition).
    \41\ See 19 CFR 351.206(i).
    \42\ Id.
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    The petitioner alleges that there is a history of dumping and 
material injury by reason of dumped imports of vertical shaft engines, 
and that U.S. importers knew or should have known that vertical shaft 
engines were being sold at LTFV and that there was likely to be 
material injury by reason of such sales.\43\ The petitioner notes that 
the dumping margins calculated in Volume II of the Petition range from 
approximately 320% to over 630%, which exceed the 25 percent threshold 
used by Commerce to impute knowledge of dumping.\44\
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    \43\ See Volume IV of the Petition, at 7.
    \44\ Id. at 7-8.
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    The petitioner also asserts that there have been massive imports of 
vertical shaft engines over a relatively short period. Based on the 
petitioner's calculation, the imports of engines in the classification 
that most closely approximates vertical shaft engines surged 35.7 
percent between June 2019 through November 2019 against the same period 
in calendar year 2018.\45\ The petitioner chose these base and 
comparison periods in order to account for seasonality and the unusual 
circumstances caused by the imposition of 25 percent Section 301 
duties, in accordance with 19 CFR 351.206(h)(1)(ii). The petitioner 
asserts that, because the surge in imports constituted more than a 15 
percent change, import volumes of vertical shaft engines are massive, 
as defined in Commerce's regulations.
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    \45\ Id. at 5-6.
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    The petitioner requests that Commerce make a preliminary finding of 
critical circumstances within 45 days of the filing of the 
Petition.\46\ Section 732(e) of the Act states that when there is a 
reasonable basis to believe or suspect (1) there is a history of 
dumping in the United States or elsewhere of the subject merchandise, 
or (2) the person by whom, or for whose account, the merchandise was 
imported knew, or should have known, that the exporter was selling the 
subject merchandise at LTFV, Commerce may request that U.S. Customs and 
Border Protection (CBP) compile information on an expedited basis 
regarding entries of the subject merchandise.
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    \46\ Id. at 11.
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    Taking into consideration the foregoing, we will analyze this 
matter further. We will monitor imports of

[[Page 8813]]

vertical shaft engines from China and may request that CBP compile 
information on an expedited basis regarding entries of subject 
merchandise.\47\ If, at any time, the criteria for a finding of 
critical circumstances are established, we will issue a critical 
circumstances determination at the earliest possible date.\48\
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    \47\ See section 732(e) of the Act.
    \48\ See Change in Policy Regarding Timing of Issuance of 
Critical Circumstances Determinations, 63 FR 55364 (October 15, 
1998).
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Respondent Selection

    The petitioner named 35 companies in China as producers/exporters 
of vertical shaft engines.\49\ In accordance with our standard practice 
for respondent selection in AD investigations involving NME countries, 
Commerce selects respondents based on quantity and value (Q&V) 
questionnaires in cases where it has determined that the number of 
companies is large and it cannot individually examine each company 
based upon its resources. After considering the large number of 
producers and exporters identified in the Petition, and considering the 
resources that must be used by Commerce to send Q&V questionnaires to 
all of these companies, Commerce has determined that it does not have 
sufficient administrative resources to send Q&V questionnaires to all 
35 identified producers and exporters. Therefore, Commerce has 
determined to limit the number of Q&V questionnaires that it will send 
out to exporters and producers based on CBP data for U.S. imports of 
vertical shaft engines during the POI under the appropriate Harmonized 
Tariff Schedule of the United States numbers listed in the ``Scope of 
the Investigation,'' in the appendix. Accordingly, Commerce will send 
Q&V questionnaires to the largest producers and exporters that are 
identified in the CBP data for which there is address information on 
the record.
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    \49\ See Volume I of the Petition, at Exhibit I-10.
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    On February 4, 2020, Commerce released CBP data on imports of 
vertical shaft engines from China under administrative protective order 
(APO) to all parties with access to information protected by APO, and 
indicated that interested parties wishing to comment on the CBP data 
must do so within three business days of the publication date of the 
notice of initiation of this investigation.\50\ We further stated that 
we will not accept rebuttal comments.
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    \50\ See Memorandum, ``Antidumping Duty Investigation of Certain 
Vertical Shaft Engines between 225cc and 999cc, and Parts Thereof 
From the People's Republic of China: Release of U.S. Customs and 
Border Protection Data,'' dated February 4, 2020.
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    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305(b). Instructions for filing such 
applications may be found on the Commerce website at http://enforcement.trade.gov/apo.
    Comments must be filed electronically using 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. Commerce intends to finalize its decisions regarding respondent 
selection within 20 days of publication of this notice.
    In addition, Commerce will post the Q&V questionnaire along with 
filing instructions on Enforcement and Compliance's website at http://www.trade.gov/enforcement/news.asp. In accordance with the standard 
practice for respondent selection in AD cases involving NME countries, 
Commerce intends to base respondent selection on the responses to the 
Q&V questionnaire that it receives.
    Producers/exporters of vertical shaft engines from China 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 
Enforcement & Compliance's website. The Q&V questionnaire response must 
be submitted by the relevant China exporters/producers no later than 
February 14, 2020. All Q&V questionnaire responses must be filed 
electronically via ACCESS.

Separate Rates

    In order to obtain separate-rate status in an NME investigation, 
exporters and producers must submit a separate-rate application.\51\ 
The specific requirements for submitting a separate-rate application in 
a China investigation are outlined in detail in the application itself, 
which is available on Commerce's website at http://enforcement.trade.gov/nme/nme-sep-rate.html. The separate-rate 
application will be due 30 days after publication of this initiation 
notice.\52\ 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 submit a 
response to both the Q&V questionnaire and the separate-rate 
application by the respective deadlines in order to receive 
consideration for separate-rate status. Companies not filing a timely 
Q&V questionnaire response will not receive separate rate 
consideration.
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    \51\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigation 
involving Non-Market Economy Countries (April 5, 2005), available at 
http://enforcement.trade.gov/policy/bull05-1.pdf (Policy Bulletin 
05.1).
    \52\ Although in past investigations this deadline was 60 days, 
consistent with 19 CFR 351.301(a), which states that ``the Secretary 
may request any person to submit factual information at any time 
during a proceeding,'' this deadline is now 30 days.
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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 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 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.\53\
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    \53\ See Policy Bulletin 05.1, at 6 (emphasis added).
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Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), a copy of the public version of the Petition has been 
provided to the Government of China via ACCESS.
    Furthermore, to the extent practicable, Commerce will attempt to 
provide a copy of the public version of the Petition to each exporter 
named in the Petition, as provided under 19 CFR 351.203(c)(2).

ITC Notification

    Commerce will notify the ITC of its 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 Petition was filed, whether there is a reasonable 
indication that imports of

[[Page 8814]]

vertical shaft engines from China are materially injuring or 
threatening material injury to a U.S. industry.\54\ A negative ITC 
determination will result in the investigation being terminated.\55\ 
Otherwise, this investigation will proceed according to statutory and 
regulatory time limits.
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    \54\ See section 733(a) of the Act.
    \55\ 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). Any party, when submitting factual 
information, must specify under which subsection of 19 CFR 
351.102(b)(21) the information is being submitted \56\ 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.\57\ 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. Please review the regulations prior to 
submitting factual information in this investigation.
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    \56\ See 19 CFR 351.301(b).
    \57\ See 19 CFR 351.301(b)(2).
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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. 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, Commerce 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 Commerce 
will grant untimely filed requests for the extension of time limits. 
Parties should review Extension of Time Limits; Final Rule, 78 FR 57790 
(September 20, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting extension requests 
or factual information in this investigation.

Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information.\58\ 
Parties must use the certification formats provided in 19 CFR 
351.303(g).\59\ Commerce intends to reject factual submissions if the 
submitting party does not comply with the applicable certification 
requirements.
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    \58\ See section 782(b) of the Act.
    \59\ See Certification of Factual Information to Import 
Administration During Antidumping and Countervailing Duty 
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule). Answers to 
frequently asked questions regarding the Final Rule are available at 
http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Commerce website at http://enforcement.trade.gov/apo.
    On January 22, 2008, Commerce published Antidumping and 
Countervailing Duty Proceedings: Documents Submission Procedures; APO 
Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to 
participate in this investigation should ensure that they meet the 
requirements of these procedures (e.g., the filing of letters of 
appearance as discussed in 19 CFR 351.103(d)).
    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: February 4, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.

Appendix

Scope of the Investigation

    The merchandise covered by this investigation consists of spark-
ignited, non-road, vertical shaft engines, whether finished or 
unfinished, whether assembled or unassembled, primarily for riding 
lawn mowers and zero-tum radius lawn mowers. Engines meeting this 
physical description may also be for other non-hand-held outdoor 
power equipment such as, including but not limited to, tow-behind 
brush mowers, grinders, and vertical shaft generators. The subject 
engines are spark ignition, single or multiple cylinder, air cooled, 
internal combustion engines with vertical power take off shafts with 
a minimum displacement of 225 cubic centimeters (cc) and a maximum 
displacement of 999cc. Typically, engines with displacements of this 
size generate gross power of between 6.7 kilowatts (kw) to 42 kw.
    Engines covered by this scope normally must comply with and be 
certified under Environmental Protection Agency (EPA) air pollution 
controls title 40, chapter I, subchapter U, part 1054 of the Code of 
Federal Regulations standards for small non-road spark-ignition 
engines and equipment. Engines that otherwise meet the physical 
description of the scope but are not certified under 40 CFR part 
1054 and are not certified under other parts of subchapter U of the 
EPA air pollution controls are not excluded from the scope of this 
proceeding. Engines that may be certified under both 40 CFR part 
1054 as well as other parts of subchapter U remain subject to the 
scope of this proceeding.
    For purposes of this investigation, an unfinished engine covers 
at a minimum a sub-assembly comprised of, but not limited to, the 
following components: crankcase, crankshaft, camshaft, piston(s), 
and connecting rod(s). Importation of these components together, 
whether assembled or unassembled, and whether or not accompanied by 
additional components such as an oil pan, manifold, cylinder 
head(s), valve train, or valve cover(s), constitutes an unfinished 
engine for purposes of this investigation. The inclusion of other 
products such as spark plugs fitted into the cylinder head or 
electrical devices (e.g., ignition modules, ignition coils) for 
synchronizing with the motor to supply tension current does not 
remove the product from the scope. The inclusion of any other 
components not identified as comprising the unfinished engine 
subassembly in a third country does not remove the engine from the 
scope.
    The engines subject to this investigation are typically 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) at subheadings: 8407.90.1020, 8407.90.1060, and 
8407.90.1080. The engine subassemblies that are subject to this 
investigation enter under HTSUS 8409.91.9990. Engines subject to 
this investigation may also enter under HTSUS 8407.90.9060 and 
8407.90.9080. The HTSUS subheadings are provided for convenience and 
customs purposes only, and the written description of the 
merchandise under investigation is dispositive.

[FR Doc. 2020-03103 Filed 2-14-20; 8:45 am]
BILLING CODE 3510-DS-P