[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Notices]
[Pages 51015-51018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18157]


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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: Preliminary Affirmative 
Determination of Sales at Less Than Fair Value, Preliminary Affirmative 
Determination of Critical Circumstances, Postponement of Final 
Determination, and Extension of Provisional Measures

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that certain vertical shaft engines between 225cc and 999cc, and parts 
thereof (vertical shaft engines) from the People's Republic of China 
(China) are being, or are likely to be, sold in the United States at 
less than fair value (LTFV). The period of investigation is July 1, 
2019 through December 31, 2019. Interested parties are invited to 
comment on this preliminary determination.

DATES: Applicable August 19, 2020.

FOR FURTHER INFORMATION CONTACT: Leo Ayala or Alex Cipolla, 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 or (202) 482-4956, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    This preliminary determination is made in accordance with section 
733(b) of the Tariff Act of 1930, as amended (the Act). Commerce 
published the notice of initiation of this investigation on February 
18, 2020.\1\ On June 2, 2020, Commerce postponed the preliminary 
determination of this investigation, and the revised deadline is now 
August 12, 2020.\2\ For a complete description of the events that 
followed the initiation of this investigation, see the Preliminary 
Decision Memorandum.\3\ A list of topics included 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 and 
Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov. In 
addition, a complete version of the Preliminary Decision Memorandum can 
be accessed directly at http://enforcement.trade.gov/frn/. The signed 
and the electronic versions of the Preliminary Decision Memorandum are 
identical in content.
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    \1\ See Certain Vertical Shaft Engines Between 223cc and 999cc, 
and Parts Thereof from the People's Republic of China: Initiation of 
Antidumping Duty Investigation, 85 FR 8809 (February 18, 2020) 
(Initiation Notice), and accompanying AD Initiation Checklist.
    \2\ See Certain Vertical Shaft Engines Between 225cc and 999cc, 
and Parts Thereof from the People's Republic of China: Postponement 
of Preliminary Determination in the Antidumping Duty Investigation, 
85 FR 33622 (June 2, 2020).
    \3\ See Memorandum, ``Certain Vertical Shaft Engines Between 
225cc and 999cc, and Parts Thereof from the People's Republic of 
China: Decision Memorandum for the Preliminary Affirmative 
Determination of Sales at Less Than Fair Value and Preliminary 
Affirmative Critical Circumstances Determination,'' 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 vertical shaft 
engines 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,\4\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (scope).\5\ Certain interested 
parties commented on the scope of the investigation as it appeared in 
the Initiation Notice. For a summary of the product coverage comments 
and rebuttal responses submitted to the record for this investigation, 
and accompanying discussion and analysis of all comments timely 
received, see the Preliminary Scope Decision Memorandum.\6\ Commerce is 
not preliminarily modifying the scope language as it appeared in the 
Initiation Notice.
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    \4\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997).
    \5\ See Initiation Notice.
    \6\ See Memorandum, ``Certain Vertical Shaft Engines Between 
223cc and 999cc, and Parts Thereof from the People's Republic of 
China: Scope Comments Decision Memorandum for the Preliminary 
Determination'' dated June 4, 2020 (Preliminary Scope Decision 
Memorandum).
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Methodology

    Commerce is conducting this investigation in accordance with 
section 731 of the Act. Commerce has calculated export prices in 
accordance with section 772(a) of the Act. In addition, Commerce has 
calculated constructed export prices in accordance with section 772(b) 
of the Act. Because China is a non-market economy, within the meaning 
of section 771(18) of the Act, Commerce has calculated normal value in 
accordance with section 773(c) of the Act. Furthermore, pursuant to 
section 776(a) and (b) of the Act, Commerce has preliminarily relied 
upon facts otherwise available, with adverse inferences, with respect 
to the China-wide entity. For a full description of the methodology 
underlying Commerce's preliminary determination, see the Preliminary 
Decision Memorandum.

Preliminary Affirmative Determination of Critical Circumstances

    In accordance with section 733(e) of the Act and 19 CFR 351.206, 
Commerce preliminarily determines that critical circumstances exist 
with respect to imports of vertical shaft engines from China for: 
Loncin Motor Co., Ltd. (Loncin); Chongqing Zongshen General Power 
Machine Co., Ltd. (Zongshen); the separate rate companies, and the 
China-wide entity. For a full description of the methodology and 
results of Commerce's critical circumstances analysis, see the 
Preliminary Decision Memorandum.

Combination Rates

    In the Initiation Notice,\7\ Commerce stated that it would 
calculate producer/exporter combination rates for the respondents that 
are eligible for a separate rate in this investigation. Policy Bulletin 
05.1 describes this practice.\8\
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    \7\ See Initiation Notice, 85 FR at 8813.
    \8\ See Enforcement and Compliance's Policy Bulletin No. 05.1, 
regarding, ``Separate-Rates Practice and Application of Combination 
Rates in Antidumping Investigations involving Non-Market Economy 
Countries,'' (April 5, 2005) (Policy Bulletin 05.1), available on 
Commerce's website at http://enforcement.trade.gov/policy/bull05-1.pdf.

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[[Page 51016]]

Preliminary Determination

    Commerce preliminarily determines that the following estimated 
weighted-average dumping margins exist:

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                                                                                     Estimated     Cash deposit
                                                                                     weighted-    rate (adjusted
                                                                                      average       for export
                   Producer                                 Exporter                  dumping         subsidy
                                                                                      margin          offset)
                                                                                     (percent)       (percent)
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Loncin Motor Co., Ltd.........................  Loncin Motor Co., Ltd...........          219.07          206.82
Chongqing Zongshen General Power Machine Co.,   Chongqing Zongshen General Power          401.14          380.46
 Ltd.                                            Machine Co., Ltd.
Chongqing Rato Technology Co., Ltd............  Chongqing Rato Technology Co.,            326.17          308.64
                                                 Ltd.
Jialing-Honda Motors Co., Ltd.................  Jialing-Honda Motors Co., Ltd...          326.17          308.64
Yamaha Motor Powered Products Jiangsu Co., Ltd  Yamaha Motor Powered Products             326.17          308.64
                                                 Jiangsu Co., Ltd.
China-Wide Entity.............................  ................................          543.18          530.93
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Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, Commerce will 
direct U.S. Customs and Border Protection (CBP) to suspend liquidation 
of subject merchandise as described in the scope of the investigation 
section entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of this notice in the Federal Register, 
as discussed below. Further, pursuant to section 733(d)(1)(B) of the 
Act and 19 CFR 351.205(d), Commerce will instruct CBP to require a cash 
deposit equal to the weighted average amount by which normal value 
exceeds U.S. price, as indicated in the chart above as follows: (1) For 
the producer/exporter combinations listed in the table above, the cash 
deposit rate is equal to the estimated weighted-average dumping margin 
listed for that combination in the table; (2) for all combinations of 
Chinese producers/exporters of merchandise under consideration that 
have not established eligibility for their own separate rates, the cash 
deposit rate will be equal to the estimated weighted-average dumping 
margin established for the China-wide entity; and (3) for all third-
county exporters of merchandise under consideration not listed in the 
table above, the cash deposit rate is the cash deposit rate applicable 
to the Chinese producer/exporter combination (or China-wide entity) 
that supplied that third-country exporter.
    Section 733(e)(2) of the Act provides that, given an affirmative 
determination of critical circumstances, any suspension of liquidation 
shall apply to unliquidated entries of merchandise entered, or 
withdrawn from warehouse, for consumption on or after the later of: (a) 
The date which is 90 days before the date on which the suspension of 
liquidation was first ordered; or (b) the date on which notice of 
initiation of the investigation was published. Commerce preliminarily 
finds that critical circumstances exist for Loncin, Zongshen, all 
separate rate companies, and the China-wide entity. In accordance with 
section 733(e)(2)(A) of the Act, the suspension of liquidation shall 
apply to all unliquidated entries of merchandise from Loncin, Zongshen, 
all separate rate companies, and the China-wide entity that were 
entered, or withdrawn from warehouse, for consumption on or after the 
date which is 90 days before the publication of this notice.
    To determine the cash deposit rate, Commerce normally adjusts the 
estimated weighted-average dumping margin by the amount of domestic 
subsidy pass-through and export subsidies determined in a companion CVD 
proceeding when CVD provisional measures are in effect. As explained in 
the Preliminary Decision Memorandum, Commerce has made a preliminary 
affirmative determination not to grant a domestic subsidy pass-through. 
However, we have granted export subsidy offsets. Specifically, Commerce 
has offset the calculated estimated weighted-average dumping margin by 
the appropriate export subsidy rate(s). Any such, adjusted rates may be 
found in the Preliminary Determination section's chart of estimated 
weighted-average dumping margins above.
    Should provisional measures in the companion CVD investigation 
expire prior to the expiration of provisional measures in this LTFV 
investigation, Commerce will direct CBP to begin collecting cash 
deposits at a rate equal to the estimated weighted-average dumping 
margins calculated in this preliminary determination unadjusted for the 
export subsidies at the time the CVD provisional measures expire.
    These suspension of liquidation instructions will remain in effect 
until further notice.

Disclosure

    Commerce intends to disclose to interested parties the calculations 
performed in connection with this preliminary determination within five 
days of its public announcement or, if there is no public announcement, 
within five days of the date of publication of this notice in 
accordance with 19 CFR 351.224(b).

Verification

    As provided in section 782(i)(1) of the Act, Commerce intends to 
verify the information relied upon in making its final determination.

Public Comment

    Case briefs or other written comments for all non-scope issues may 
be submitted to Enforcement and Compliance's Antidumping and 
Countervailing Duty Centralized Electronic Service System (ACCESS) no 
later than seven days after the date on which the final verification 
report is issued in this proceeding, and rebuttal briefs, limited to 
issues raised in case briefs, may be submitted no later than seven days 
after the deadline date for case briefs.\9\ Case briefs or other 
written comments on scope issues 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

[[Page 51017]]

submitted no later than seven days after the deadline for the case 
briefs. For any briefs filed on scope issues, parties must file 
separate and identical documents on the record for the concurrent CVD 
investigations. Parties who submit case briefs or rebuttal briefs in 
this proceeding 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.\10\ This summary should be limited to five pages 
total, including footnotes.
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    \9\ See 19 CFR 351.309(c)-(d); see also 19 CFR 351.303 (for 
general filing requirements).
    \10\ See 19 CFR 351.309(c)(2) and (d)(2).
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    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 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.
    Parties must file their case and rebuttal briefs, and any requests 
for a hearing, electronically using Commerce's electronic records 
system, ACCESS.\11\ Electronically filed documents must be received 
successfully in their entirety by 5:00 p.m. Eastern Time,\12\ on the 
due dates established above. Note that Commerce has temporarily 
modified certain of its requirements for serving documents containing 
business proprietary information, until further notice.\13\
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    \11\ See 19 CFR 351.303(b)(2)(i).
    \12\ See 19 CFR 351.303(b)(1).
    \13\ See Temporary Rule Modifying AD/CVD Service Requirements 
Due to COVID-19; Extension of Effective Period, 85 FR 41363 (July 
10, 2020).
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Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. Pursuant to 19 CFR 351.210(e)(2), Commerce requires 
that requests by respondents for postponement of a final antidumping 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to a period not more than six months 
in duration.
    Pursuant to 19 CFR 351.210(e), Loncin requested that Commerce 
postpone the final determination and extend provisional measures to a 
period not more than six months in duration.\14\ In accordance with 
section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because: 
(1) The preliminary determination is affirmative; (2) the requesting 
exporter accounts for a significant proportion of exports of the 
subject merchandise; and (3) no compelling reasons for denial exist, 
Commerce is postponing the final determination and extending the 
provisional measures from a four-month period to a period not greater 
than six months. Accordingly, Commerce's final determination will be 
issued no later than 135 days after the date of publication of this 
preliminary determination.
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    \14\ See Loncin's Letter, ``Loncin Request for Postponement of 
Final Determination and Extension of Provisional Measures Period: 
Antidumping Duty Investigation on Certain Vertical Shaft Engines 
from the People's Republic of China (A-570-119),'' dated August 10, 
2020.
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International Trade Commission Notification

    In accordance with section 733(f) of the Act, Commerce will notify 
the International Trade Commission (ITC) of its preliminary 
determination of sales at LTFV. If the final determination is 
affirmative, the ITC will determine before the later of 120 days after 
the date of this preliminary determination or 45 days after the final 
determination whether imports of the subject merchandise are materially 
injuring, or threaten material injury to, the U.S. industry.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: August 12, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.

Appendix I

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.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
    A. Initiation and Case History

[[Page 51018]]

    B. Postponement of Preliminary Determination
III. Period of Investigation
IV. Scope Comments
V. Scope of the Investigation
VI. Discussion of the Methodology
    A. Non-Market Economy
    B. Surrogate Country
    C. Separate Rates
    D. Separate Rate Recipients
    E. Companies Not Receiving Separate Rates
    F. Margin for the Separate Rate Companies
    G. Combination Rates
    H. The China-wide Entity
    I. Date of Sale
    J. Fair Value Comparisons
    K. U.S. Prices
    L. Value Added Tax (VAT)
    M. Normal Value
VII. Currency Conversion
VIII. Adjustments Adjustments Under Section 777A(f) of the Act
IX. Adjustments to Cash Deposit Rates for Export Subsidies
X. Preliminary Affirmative Determination of Critical Circumstances
XI. ITC Notification
XII. Recommendation

[FR Doc. 2020-18157 Filed 8-18-20; 8:45 am]
BILLING CODE 3510-DS-P