[Federal Register Volume 85, Number 108 (Thursday, June 4, 2020)]
[Notices]
[Pages 34416-34419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12004]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-028]


Hydrofluorocarbon Blends From the People's Republic of China: 
Final Scope Ruling on Unpatented R-421A; Affirmative Final 
Determination of Circumvention of the Antidumping Duty Order for 
Unpatented R-421A

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) determines that imports 
of unpatented R-421A from the People's Republic of China (China) are 
circumventing the antidumping duty (AD) order on HFC blends from China.

DATES: Applicable June 4, 2020.

FOR FURTHER INFORMATION CONTACT: Manuel Rey or Benjamin Luberda, 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) 482-5518 or (202) 482-2185, 
respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On March 3, 2020, Commerce published the Preliminary Determination 
\1\ of circumvention of the AD order on HFC blends from China with 
respect to unpatented R-421A which is imported from China and further 
processed into HFC blends subject to the Order. \2\ We invited parties 
to comment on the Preliminary Determination, and received case and 
rebuttal briefs from the HFC Coalition (the petitioners), BMP,\3\ and 
Choice Refrigerants (Choice).
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    \1\ See Hydrofluorocarbon Blends from the People's Republic of 
China: Scope Ruling on Unpatented R-421A; Affirmative Preliminary 
Determination of Circumvention of the Antidumping Duty Order for 
Unpatented R-421A; and Extension of Time Limit for Final 
Determination, 85 FR 12511 (March 3, 2020) (Preliminary 
Determination).
    \2\ See Hydrofluorocarbon Blends from the People's Republic of 
China: Antidumping Duty Order, 81 FR 55436 (August 19, 2016) 
(Order).
    \3\ LM Supply Inc., Cool Master USA, LLC, and their affiliated 
blenders, BMP USA Inc. and IGas Inc. (collectively, BMP).
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    A summary of the events that occurred since Commerce published the 
Preliminary Determination, as well as a full discussion of the issues 
raised by the parties for this final determination are discussed in the 
Issues and Decision Memorandum.\4\ 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 
http://access.trade.gov. In addition, a complete version of the Issues 
and Decision Memorandum can be accessed directly at http://enforcement.trade.gov.frn/. The signed and electronic versions of the 
Issues and Decision Memorandum are identical in content.
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    \4\ See Memorandum, ``Final Decision Memorandum for Scope Ruling 
and Anti-Circumvention Inquiry of the Antidumping Duty Order on 
Hydrofluorocarbon Blends from the People's Republic of China; 
Unpatented R-421A,'' dated concurrently with, and hereby adopted by, 
this notice (Issues and Decision Memorandum).
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    Commerce conducted this anti-circumvention inquiry in accordance 
with section 781(a) of the Tariff Act of 1930, as amended (the Act).

Scope of the Order

    The products subject to the Order are HFC blends. HFC blends 
covered by the scope are R-404A, R-407A, R-407C, R-410A, and R-507A.\5\ 
HFC blends covered by the scope of the Order are currently classified 
in the Harmonized Tariff Schedule of the United States (HTSUS) at 
subheadings 3824.78.0020 and 3824.78.0050. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope is dispositive.
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    \5\ For a complete description of the scope of the order, see 
Issues and Decision Memorandum.
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Merchandise Subject to the Anti-Circumvention Inquiry

    This anti-circumvention inquiry covers imports of unpatented R-
421A, a blend of HFC components R-125 (also known as Pentafluoroethane) 
and R-134a (also known as 1,1,1,2-Tetrafluoroethane), from China that 
are further processed in the United States to create an HFC blend that 
would be subject to the Order. \6\
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    \6\ The scope of the order explicitly excludes Choice[supreg] R-
421A (also referred to as ``patented R-421A''). The scope also only 
covers five HFC blends; R-421A is not one of the covered blends. 
Patented R-421A is a blend of 58 percent R-125, and 42 percent R-
134a, with a lubricant added to it. The patent holder for R-421A is 
Choice.
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Final Scope Ruling and Final Determination

    In the Preliminary Determination we determined, pursuant to 19 CFR 
351.225(k), that because the scope only covers five HFC blends, and 
unpatented R-421A is not one of the five blends, that consequently, 
unpatented R-421A is not covered by the scope of the Order within the 
meaning of 19 CFR 351.225(k). Accordingly, because unpatented R-421A is 
not specifically excluded from the Order, a circumvention analysis and 
determination is warranted for the unpatented R-421A blends, under 19 
CFR 351.225(g). Our final determination remains unchanged from the 
Preliminary Determination.
    In the Preliminary Determination, we determined that imports of 
unpatented R-421A from China are circumventing the Order. Specifically, 
we determined that imports of unpatented R-421A from China are being 
finished and sold in the United States pursuant to the statutory and 
regulatory criteria laid out in section 781(a) of the Act and 19 CFR 
351.225(g). We based our Preliminary Determination upon record evidence 
submitted by the petitioners, BMP and Choice. For a complete discussion 
of the evidence which led to our preliminary determination, see the 
Preliminary Determination and accompanying Preliminary Decision 
Memorandum.
    All issues raised in the case and rebuttal briefs by parties to 
this inquiry are addressed in the Issues and Decision Memorandum. A 
list of the issues raised is attached to this notice as Appendix I. Our 
final determination remains unchanged from the Preliminary 
Determination. Accordingly, we determine, pursuant to section 781(a) of 
the Act and 19 CFR 351.225(g), that imports of unpatented R-421A from 
China are circumventing the Order.

Continuation of Suspension of Liquidation

    As a result of this determination, and consistent with 19 CFR 
351.225(l)(3), we intend to direct CBP to continue to suspend 
liquidation and to require a cash deposit of estimated antidumping 
duties at the applicable rate on unliquidated entries of merchandise

[[Page 34417]]

subject to this inquiry that are entered, or withdrawn from warehouse, 
for consumption on or after June 18, 2019, the date of initiation of 
this anti-circumvention inquiry.\7\
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    \7\ See Hydrofluorocarbon Blends from the People's Republic of 
China: Initiation of Anti-Circumvention Inquiry of Antidumping Duty 
Order; Unpatented R-421A, 84 FR 28281 (June 18, 2019) (Notice of 
Initiation).
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    Patented Choice[supreg] R-421A produced in China is not subject to 
this inquiry. Therefore, cash deposits are not required for such 
merchandise. However, as a result of this anti-circumvention 
proceeding, unpatented R-421A produced in China is subject to the AD 
order on HFC blends from China. Accordingly, in order to prevent 
evasion, if an importer imports patented Choice[supreg] R-421A from 
China, in order not to be subject to cash deposit requirements, the 
importer and exporter are required to meet the certification and 
documentation requirements described in Appendix II. Exporters of 
patented Choice[supreg] R-421A produced in China must prepare and 
maintain an Exporter Certification and documentation supporting the 
Exporter Certification (see Appendix IV). In addition, importers of 
such patented Choice[supreg] R-421A must prepare and maintain an 
Importer Certification (see Appendix III) as well as documentation 
supporting the Importer Certification. In addition to the Importer 
Certification, the importer must also maintain a copy of the Exporter 
Certification (see Appendix IV) and relevant supporting documentation 
from its exporter of patented Choice[supreg] R-421A.

Notification to CBP of Covered Merchandise Referral

    In our Notice of Initiation, we stated that, as part of this anti-
circumvention inquiry, we would also address a covered merchandise 
referral from U.S. Customs and Border Protection (CBP).\8\ In the 
Covered Merchandise Referral, we stated that, based upon allegations by 
Choice, CBP requested that Commerce issue a determination as to whether 
certain merchandise imported by LM Supply, Inc. (LM Supply) is subject 
to the AD order on HFCs from China. Specifically, CBP asked Commerce to 
clarify: (1) If the scope exclusion for Choice[supreg] R-421A is 
limited to only merchandise that is licensed by the rights holder or 
does it apply to any HFC blends that satisfy the terms of the patents, 
and (2) if the scope exclusion is limited to only that merchandise that 
also carries the trademarks indicated in the scope exclusion.
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    \8\ See Hydrofluorocarbon Blends from the People's Republic of 
China: Notice of Covered Merchandise Referral, 83 FR 9277 (March 5, 
2018) (Covered Merchandise Referral).
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    Therefore, we intend to inform CBP of our findings in this inquiry: 
(1) That the scope only covers five HFCs blends (i.e., R-404A, R-407A, 
R-407C, R-410A, and R-507A) and that unpatented R-421A is not one of 
those five blends; (2) based upon Commerce's anti-circumvention 
proceeding, unpatented R-421A, is circumventing the order on HFC blends 
from China, retroactive to June 18, 2019; and (3) that the exclusion 
for patented Choice[supreg] R-421A (applicable on or after June 18, 
2019) is limited to only that merchandise which carries the trademarks 
indicated in the scope exclusion, and which is licensed by the rights 
holder, and for which the exporter and importer have prepared 
certifications, as explained in Appendix II of this notice.

Notification Regarding Administrative Protective Order

    This notice also serves as a reminder to parties subject to the 
administrative protective order (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 return/destruction of APO materials or conversion to 
judicial protective order is hereby requested. Failure to comply with 
the regulations and the terms of an APO is a sanctionable violation.

Notification to Interested Parties

    We are issuing and publishing this notice in accordance with 
sections 781(a) of the Act, and 19 CFR 351.225(g).

    Dated: May 28, 2020.
Joseph Laroski,
Deputy Assistant Secretary for Policy and Negotiations.

APPENDIX I

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Merchandise Subject to the Scope and Anti-Circumvention Inquiry
IV. Scope of the Order
V. Discussion of the Issues
    Comment 1: Preliminary Scope Ruling
    Comment 2: Whether the Process of Assembly or Completion of R-
421A into HFC Blends in the United States is Minor and Insignificant
    Comment 3: Value Analysis
    Comment 4: Use of Surrogate Values to Value Material Inputs
    Comment 5: Certification Requirements
VI. Recommendation

APPENDIX II

Certification Requirements

    In order to import R-421A from China and declare it as patented 
and eligible for the exclusion specified in the scope for 
Choice[supreg] R-421A, and hence free of AD duties, the importer and 
the exporter must complete and maintain certifications, along with 
proof that the goods are properly patented, and identifying the 
license agreement authorizing the production of the goods being 
entered. The importer is required to complete and maintain the 
importer certification attached hereto as Appendix III, and all 
supporting documentation. Where the importer uses a broker to 
facilitate the entry process, it should obtain the entry summary 
number from the broker. Agents of the importer, such as brokers, 
however, are not permitted to make this certification on behalf of 
the importer.
    The exporter is required to complete and maintain the exporter 
certification, attached as Appendix IV, and is further required to 
provide the importer a copy of that certification and all supporting 
documentation.
    For shipments and/or entries on or after June 18, 2019 through 
June 26, 2020, for which certifications are required, importers and 
exporters should complete the required certification, as soon as 
practicable but not later than 30 days after the publication of this 
notice in the Federal Register. Accordingly, where appropriate, the 
relevant bullet in the certification should be edited to reflect 
that the certification was completed within the time frame specified 
above. For example, the bullet in the importer certification that 
reads: ``This certification was completed at or prior to the time of 
Entry Summary,'' could be edited as follows: ``The imports 
referenced herein entered before June 27, 2020. This certification 
was completed on mm/dd/yyyy, within 30 days of the Federal Register 
notice publication of the final determination of circumvention.'' 
Similarly, the bullet in the exporter certification that reads, 
``This certification was completed at or prior to the time of 
shipment,'' could be edited as follows: ``The shipments/products 
referenced herein shipped before June 27, 2020. This certification 
was completed on mm/dd/yyyy, within 30 days of the Federal Register 
notice publication of the final determination of circumvention.'' 
For such entries/shipments, importers and exporters each have the 
option to complete a blanket certification covering multiple 
entries/shipments, individual certifications for each entry/
shipment, or a combination thereof.
    For shipments and/or entries on or after June 27, 2020, for 
which certifications are required, importers should complete the 
required certification at, or prior to, the date of entry summary 
and exporters should complete the required certification and provide 
it to the importer at, or prior to, the date of shipment.
    The importer and exporter are also required to maintain 
sufficient documentation supporting their certifications. The 
importer will not be required to submit the certifications or 
supporting documentation to U.S. Customs

[[Page 34418]]

and Border Protection (CBP) as part of the entry process at this 
time. However, the importer and the exporter will be required to 
present the certifications and supporting documentation, to Commerce 
and/or CBP, as applicable, upon request by the respective agency. 
Additionally, the claims made in the certifications and any 
supporting documentation are subject to verification by Commerce 
and/or CBP. The importer and exporter are required to maintain the 
certifications (the importer must retain both certifications) and 
supporting documentation for the later of (1) a period of five years 
from the date of entry or (2) a period of three years after the 
conclusion of any litigation in United States courts regarding such 
entries.
    In the situation where no certification is provided for an entry 
of R-421A, and the AD China HFC blends order potentially applies to 
that entry, Commerce intends to instruct CBP to suspend the entry 
and collect cash deposits at the AD rate for the exporter, or if 
none exists, at the rate for the China-wide entity (216.37 percent).

APPENDIX III

Importer Certification

    I hereby certify that:
    (A) My name is {IMPORTING COMPANY OFFICIAL'S NAME{time}  and I 
am an official of {NAME OF IMPORTING COMPANY{time} , located at 
{ADDRESS of IMPORTING COMPANY{time} ;
    (B) I have direct personal knowledge of the facts regarding the 
importation into the Customs territory of the United States of the 
hydrofluorocarbon (HFC) blend Choice[supreg] R-421A produced in 
China that entered under the entry summary number(s) identified 
below, and which are covered by this certification. ``Direct 
personal knowledge'' refers to facts the certifying party is 
expected to have in its own records. For example, the importer 
should have direct personal knowledge of the importation of the 
product (e.g., the name of the exporter) in its records.
    (C) The HFC blend Choice[supreg] R-421A covered by this 
certification was exported by {NAME OF EXPORTING COMPANY{time} , 
located at {ADDRESS OF EXPORTING COMPANY{time} .
    If the importer is acting on behalf of the first U.S. customer, 
complete this paragraph:
    (D) The HFC blend Choice[supreg] R-421A covered by this 
certification was imported by {NAME OF IMPORTING COMPANY{time}  on 
behalf of {NAME OF U.S. CUSTOMER{time} , located at {ADDRESS OF U.S. 
CUSTOMER{time} .
    (E) The HFC blend Choice[supreg] R-421A covered by this 
certification was shipped to {NAME OF PARTY TO WHOM MERCHANDISE WAS 
FIRST SHIPPED IN THE UNITED STATES{time} , located at {ADDRESS OF 
SHIPMENT{time} .
    (F) I have personal knowledge of the facts regarding the 
production of the imported products covered by this certification. 
``Personal knowledge'' includes facts obtained from another party, 
(e.g., correspondence received by the importer (or exporter) from 
the producer regarding the source of the inputs used to produce the 
imported products).
    (G) The HFC blend Choice[supreg] R-421A covered by this 
certification was produced by {NAME OF PRODUCING COMPANY{time} , 
located at {ADDRESS OF PRODUCING COMPANY{time} ; for each additional 
company, repeat: {NAME OF PRODUCING COMPANY{time} , located at 
{ADDRESS OF PRODUCING COMPANY{time} .
    (H) This certification applies to the following entries:

{Repeat this block as many times as necessary{time} 
Producer:
Entry Summary #:
Entry Summary Line Item #:
Invoice #:
Invoice Line Item #:

    (I) I understand that {NAME OF IMPORTING COMPANY{time}  is 
required to maintain a copy of this certification and sufficient 
documentation supporting this certification (i.e., documents 
maintained in the normal course of business, or documents obtained 
by the certifying party, for example, product data sheets, chemical 
testing specifications, productions records, invoices, license 
agreements, etc.) for the later of (1) a period of five years from 
the date of entry or (2) a period of three years after the 
conclusion of any litigation in the United States courts regarding 
such entries;
    (J) I understand that {NAME OF IMPORTING COMPANY{time}  is 
required to, upon request, provide proof that the imported goods are 
properly patented, and identify the license agreement authorizing 
the production of the goods being entered;
    (K) I understand that {NAME OF IMPORTING COMPANY{time} is 
required to provide this certification and supporting records, upon 
request, to U.S. Customs and Border Protection (CBP) and/or the 
Department of Commerce (Commerce);
    (L) I understand that {NAME OF IMPORTING COMPANY{time}  is 
required to maintain a copy of the exporter's certification 
(attesting to the production and/or export of the imported 
merchandise identified above), and any supporting records provided 
by the exporter to the importer, for the later of (1) a period of 
five years from the date of entry or (2) a period of three years 
after the conclusion of any litigation in United States courts 
regarding such entries.
    (M) I understand that {NAME OF IMPORTING COMPANY{time} is 
required to maintain, and upon request, provide a copy of the 
exporter's certification and any supporting records provided by the 
exporter to the importer, to CBP and/or Commerce;
    (N) I understand that the claims made herein, and the 
substantiating documentation, are subject to verification by CBP 
and/or Commerce;
    (O) I understand that failure to maintain the required 
certifications, and/or failure to substantiate the claims made 
herein, and/or failure to allow CBP and/or Commerce to verify the 
claims made herein, may result in a de facto determination that all 
entries to which this certification applies are within the scope if 
the antidumping duty (AD) order on HFC blends from China. I 
understand that such a finding will result in:
    (i) Suspension of liquidation of all unliquidated entries (and 
entries for which liquidation has not become final) for which these 
requirements were not met;
    (ii) The requirement that the importer post applicable AD cash 
deposits equal to the rates as determined by Commerce; and
    (iii) the revocation of {NAME OF IMPORTING COMPANY{time} 's 
privilege to certify future imports of HFC blend R-421A are patented 
Choice[supreg] R-421A.
    (P) I understand that agents of the importer, such as brokers, 
are not permitted to make this certification;
    (Q) This certification was completed at or prior to the time of 
Entry Summary; and
    (R) I am aware that U.S. law (including, but not limited to, 18 
U.S.C. 1001) imposes criminal sanctions on individuals who knowingly 
and willfully make material false statements to the U.S. government.
    Signature
    NAME OF COMPANY OFFICIAL
    TITLE
    DATE

APPENDIX IV

Exporter Certification

    I hereby certify that:
    (A) My name is {COMPANY OFFICIAL'S NAME{time}  and I am an 
official of {NAME OF EXPORTING COMPANY{time} , located at {ADDRESS 
OF EXPORTING COMPANY{time} ;
    (B) I am a producer of HFC blend Choice[supreg] R-421A and am 
under a license agreement with RMS of Georgia, LLC to produce 
Choice[supreg] R-421A.
    (C) I have direct personal knowledge of the facts regarding the 
production and exportation of the hydrofluorocarbon (HFC) blend 
Choice[supreg] R-421A identified below. ``Direct personal 
knowledge'' refers to facts the certifying party is expected to have 
in its own books and records. For example, an exporter should have 
direct personal knowledge of the producer's identity and location.
    (D) The HFC blends, and the individual components thereof, 
covered this certification were produced by {NAME OF PRODUCING 
COMPANY{time} , located at {ADDRESS OF PRODUCING COMPANY{time} ; for 
each additional company, repeat: {NAME OF PRODUCING COMPANY{time} , 
located at {ADDRESS OF PRODUCING COMPANY{time} .
    (E) This certification applies to the following sales:

{Repeat this block as many times as necessary{time} 
Producer
Invoice No.
Invoice Line Item No.

    (F) The HFC blend Choice[supreg] R-421A covered by this 
certification was sold to {NAME OF U.S. CUSTOMER{time} , located at 
{ADDRESS OF U.S. CUSTOMER{time} .
    (G) The HFC blend Choice[supreg] R-421A covered by this 
certification was shipped to {NAME OF PARTY TO WHOM MERCHANDISE WAS 
SHIPPED{time} , located at {ADDRESS OF SHIPMENT{time} .
    (H) I understand that {NAME OF EXPORTING COMPANY{time}  is 
required to maintain a copy of this certification and sufficient 
documentation supporting this certification (i.e., documents 
maintained in the normal course of business, license agreement, or 
documents obtained by the certifying party, for example, product 
data

[[Page 34419]]

sheets, chemical testing specifications, productions records, 
invoices, etc.) for the later of (1) a period of five years from the 
date of entry or (2) a period of three years after the conclusion of 
any litigation in the United States courts regarding such entries;
    (I) I understand that {NAME OF EXPORTING COMPANY{time}  must 
provide this Exporter Certification to the U.S. importer by the time 
of shipment;
    (J) I understand that {NAME OF EXPORTING COMPANY{time}  is 
required to provide a copy of this certification and supporting 
records, upon request, to U.S. Customs and Border Protection (CBP) 
and/or the Department of Commerce (Commerce);
    (K) I understand that the claims made herein, and the 
substantiating documentation are subject to verification by CBP and/
or Commerce;
    (L) I understand that failure to maintain the required 
certifications, and/or failure to substantiate the claims made 
herein, and/or failure to allow CBP and/or Commerce to verify the 
claims made herein, may result in a de facto determination that all 
sales to which this certification applies are within the scope of 
the antidumping duty (AD) order on HFC blends from China. I 
understand that such finding will result in:
    (i) Suspension of all unliquidated entries (and entries for 
which liquidation has not become final) for which these requirements 
were not met;
    (ii) The requirement that the importer post applicable AD cash 
deposits equal to the rates as determined by Commerce; and
    (iii) the revocation of {NAME OF EXPORTING COMPANY{time} 's 
privilege to certify future shipments of HFC blend R-421A are 
patented Choice[supreg] R-421A;
    (M) This certification was completed at or prior to the time of 
shipment; and
    (N) I am aware that U.S. law (including, but not limited to, 18 
U.S.C. 1001) imposes criminal sanctions on individuals who knowingly 
and willfully make material false statements to the U.S. government.
    Signature
    NAME OF COMPANY OFFICIAL
    TITLE
    DATE
[FR Doc. 2020-12004 Filed 6-3-20; 8:45 am]
 BILLING CODE 3510-DS-P