[Federal Register Volume 85, Number 204 (Wednesday, October 21, 2020)]
[Notices]
[Pages 66932-66935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23269]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-124]


Certain Vertical Shaft Engines Between 99cc and Up to 225cc, and 
Parts Thereof, From the People's Republic of China: Preliminary 
Affirmative Determination of Sales at Less Than Fair Value, and 
Preliminary Affirmative Determination of Critical Circumstances, in 
Part

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that certain vertical shaft engines between 99cc and up to 225cc, and 
parts thereof (small vertical 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 October 21, 2020.

FOR FURTHER INFORMATION CONTACT: Benjamin A. Luberda or Whitley 
Herndon, 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) 482-2185 
or (202) 482-6274, 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 April 7, 
2020.\1\ On August 5, 2020, Commerce postponed the preliminary 
determination of this investigation and the revised deadline is now 
October 14, 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 99cc and Up To 
225cc, and Parts Thereof from the People's Republic of China: 
Initiation of Less-Than-Fair-Value Investigation, 85 FR 20670 (April 
14, 2020) (Initiation Notice).
    \2\ See Certain Vertical Shaft Engines Between 99cc and Up To 
225cc, and Parts Thereof from the People's Republic of China: 
Postponement of Preliminary Determination in the Less-Than-Fair-
Value Investigation, 85 FR 47357 (August 5, 2020).
    \3\ See Memorandum, ``Decision Memorandum for the Preliminary 
Determination in the Less-Than-Fair-Value Investigation of Certain 
Vertical Shaft Engines Between 99cc and Up To 225cc, and Parts 
Thereof, from the People's Republic of China'' dated concurrently 
with, and hereby adopted by, this notice (Preliminary Decision 
Memorandum).
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Scope of the Investigation

    The product covered by this investigation is small vertical 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

[[Page 66933]]

investigation as it appeared in the Initiation Notice, as well as 
additional language proposed by Briggs & Stratton Corporation (the 
petitioner).\6\ 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.\7\ Commerce has 
preliminarily modified the scope language that appeared in the 
Initiation Notice. See the revised scope in Appendix I to this 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 Petitioner's Letter, ``Small Vertical Shaft Engines 
Between 99cc and Up To 225cc, and Parts Thereof, from the People's 
Republic of China: Petitioner's Additional Comments on Scope,'' 
dated June 18, 2020.
    \7\ See Memorandum, ``Antidumping and Countervailing Duty 
Investigations of Certain Vertical Shaft Engines Between 99cc and Up 
To 225cc, and Parts Thereof from the People's Republic of China: 
Scope Comments Decision Memorandum for the Preliminary 
Determination,'' dated August 17, 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 price in 
accordance with section 772(a) of the Act. Commerce has calculated 
constructed export price 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 (NV) 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 the facts otherwise available, with adverse inferences, in 
determining the estimated weighted-average dumping margin for 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 
Part

    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 small vertical engines from China for 
Chongqing Zongshen General Power Machine Co., Ltd./Chongqing Dajiang 
Power Equipment Co., Ltd./Chongqing Zongshen Power Machinery Co., Ltd 
(collectively, the Zongshen Companies),\8\ and the China-wide entity, 
but do not exist for Chongqing Kohler Engines Ltd. (Chongqing Kohler) 
and the separate-rate companies. For a full description of the 
methodology and results of Commerce's critical circumstances analysis, 
see the Preliminary Decision Memorandum.
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    \8\ Commerce preliminarily determines that Chongqing Zongshen 
General Power Machine Co., Ltd./Chongqing Dajiang Power Equipment 
Co., Ltd./Chongqing Zongshen Power Machinery Co., Ltd. should be 
treated as a single entity. See Memorandum, ``Whether to Collapse 
Chongqing Zongshen General Power Machine Co., Ltd. and Two 
Affiliates in the Less-Than-Fair-Value Investigation of Certain 
Vertical Shaft Engines Between 99cc and Up To 225cc, and Parts 
Thereof, from the People's Republic of China,'' dated October 14, 
2020.
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Combination Rates

    In the Initiation Notice,\9\ 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.\10\
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    \9\ See Initiation Notice, 85 FR 20674.
    \10\ 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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Separate Rates

    In addition to the mandatory respondents Chongqing Kohler and the 
Zongshen Companies, we have preliminarily granted certain non-
individually examined respondents a separate rate. Also, we have 
preliminarily denied a separate rate to Loncin Motor Co., Ltd., and are 
treating it as part of the China-wide entity. See the Preliminary 
Decision Memorandum for details.
    In calculating the rate for non-individually examined separate rate 
respondents in a non-market economy antidumping duty (AD) 
investigation, Commerce normally looks to section 735(c)(5)(A) of the 
Act, which pertains to the calculation of the all-others rate in a 
market economy AD investigation. Pursuant to section 735(c)(5)(A) of 
the Act, normally this rate shall be an amount equal to the weighted 
average of the estimated AD rates established for those companies 
individually examined, excluding zero and de minimis rates and any 
rates based entirely under section 776 of the Act. Pursuant to the 
guidance in section 735(c)(5)(A) of the Act, we based the separate rate 
respondents' dumping margin on the dumping margins that we calculated 
for the mandatory respondents Chongqing Kohler and the Zongshen 
Companies. See the table in the ``Preliminary Determination'' section 
of this notice.

Preliminary Determination

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

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                                                                                Estimated      Cash deposit rate
                                                                             weighted-average    (adjusted for
                  Producer                              Exporter              dumping margin    subsidy offsets)
                                                                                (percent)          (percent)
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Chongqing Kohler Engines Ltd...............  Chongqing Kohler Engines Ltd.             374.31             363.77
Chongqing Zongshen General Power Machine     Chongqing Zongshen General                316.88             305.12
 Co., Ltd./Chongqing Dajiang Power            Power Machine Co., Ltd./
 Equipment Co., Ltd./Chongqing Zongshen       Chongqing Dajiang Power
 Power Machinery Co., Ltd.                    Equipment Co., Ltd./
                                              Chongqing Zongshen Power
                                              Machinery Co., Ltd.
Producers Supplying the Non-Individually-    Non-Individually-Examined                 342.88             331.73
 Examined Exporters Receiving Separate        Exporters Receiving Separate
 Rates (see Appendix III).                    Rates (see Appendix III).
China-Wide Entity..........................  .............................             541.75             530.60
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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 NV 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

[[Page 66934]]

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 the 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 imports of subject 
merchandise from the Zongshen 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 
the Zongshen Companies and the China-wide entity that were entered, or 
withdrawn from warehouse, for consumption on or after the date that 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 
countervailing duty (CVD) proceeding when CVD provisional measures are 
in effect. Accordingly, where Commerce has made a preliminary 
affirmative determination for domestic subsidy pass-through or export 
subsidies, Commerce has offset the calculated estimated weighted-
average dumping margin by the appropriate 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 
passed-through domestic subsidies or for 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

    Commerce is currently unable to conduct on-site verification of the 
information relied upon in making its final determination in this 
investigation. Accordingly, we intend to take additional steps in lieu 
of on-site verification. Commerce will notify interested parties of any 
additional documentation or information required.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Enforcement and Compliance. Interested parties 
will be notified of the timeline for the submission of case briefs and 
written comments at a later date. Rebuttal briefs, limited to issues 
raised in case briefs, may be submitted no later than seven days after 
the deadline for case briefs.\11\ Commerce has modified certain of its 
requirements for serving documents containing business proprietary 
information until further notice.\12\ Pursuant to 19 CFR 351.309(c)(2) 
and (d)(2), parties who submit case briefs or rebuttal briefs in this 
investigation are encouraged to submit with each argument: (1) A 
statement of the issue; (2) a brief summary of the argument; and (3) a 
table of authorities.
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    \11\ See 19 CFR 351.309; see also 19 CFR 351.303 (for general 
filing requirements).
    \12\ 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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    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 date and time to be 
determined. Parties should confirm by telephone the date, time, and 
location of the hearing two days before the scheduled date.

Final Determination

    Section 735(a)(1) of the Act and 19 CFR 351.210(b)(1) provide that 
Commerce will issue the final determination within 75 days after the 
date of its preliminary determination. Accordingly, Commerce will make 
its final determination no later than 75 days after the signature date 
of this preliminary determination.

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: October 14, 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, whether mounted or 
unmounted, primarily for walk-behind lawn mowers. Engines meeting 
this physical description may also be for other non-hand-held 
outdoor power equipment, including but not limited to, pressure 
washers. The subject engines are spark ignition, single-cylinder, 
air cooled, internal combustion engines with vertical power take off 
shafts with a minimum displacement of 99 cubic centimeters (cc) and 
a maximum displacement of up to, but not including, 225cc. 
Typically, engines with displacements of this size generate gross 
power of between 1.95 kilowatts (kw) to 4.75 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

[[Page 66935]]

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.
    Certain small vertical shaft engines, whether or not mounted on 
non-hand-held outdoor power equipment, including but not limited to 
walk-behind lawn mowers and pressure washers, are included in the 
scope. However, if a subject engine is imported mounted on such 
equipment, only the engine is covered by the scope. Subject 
merchandise includes certain small vertical shaft engines produced 
in the subject country whether mounted on outdoor power equipment in 
the subject country or in a third country. Subject engines are 
covered whether or not they are accompanied by other parts.
    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 a sump, carburetor spacer, 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 coils) for synchronizing with the 
engine 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.
    Specifically excluded from the scope of the investigation are 
``Commercial'' or ``Heavy Commercial'' engines under 40 CFR 1054.107 
and 1054.135 that have (1) a displacement of 160 cc or greater, (2) 
a cast iron cylinder liner, (3) an automatic compression release, 
and (4) a muffler with at least three chambers and volume greater 
than 400 cc.
    The engines subject to this investigation are predominantly 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) at subheading 8407.90.1010. The engine subassemblies that 
are subject to this investigation enter under HTSUS 8409.91.9990. 
The mounted engines that are subject to this investigation enter 
under HTSUS 8433.11.0050, 8433.11.0060, and 8424.30.9000. Engines 
subject to this investigation may also enter under HTSUS 
8407.90.1020, 8407.90.9040, and 8407.90.9060. 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
III. Period of Investigation
IV. Scope Comments
V. Scope of the Investigation
VI. Discussion of the Methodology
VII. Currency Conversion
VIII. Adjustment Under Section 777(A)(f) of the Act
IX. Adjustments to Cash Deposit Rates for Export Subsidies
X. ITC Notification
XI. Recommendation

Appendix III

List of Separate Rate Companies

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                Exporter                             Producer
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                                           Producers supplying the non-
  Non-individually-examined exporters    individually-examined exporters
        receiving separate rates             receiving separate rates
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Changzhou Kawasaki and Kwang Yang        Changzhou Kawasaki and Kwang
 Engine Co., Ltd.                         Yang Engine Co., Ltd.
Chongqing Chen Hui Electric Machinery    CHONGQING AM PRIDE POWER &
 Co., Ltd.                                MACHINERY CO., LTD.
Chongqing Chen Hui Electric Machinery    Chongqing Kohler Motors Co.,
 Co., Ltd.                                Ltd.
Chongqing HWASDAN Power Technology Co.,  Chongqing HWASDAN Power
 Ltd.                                     Technology Co., Ltd.
Chongqing Rato Technology Co., Ltd.....  Chongqing Rato Technology Co.,
                                          Ltd.
CHONGQING SENCI IMPORT&EXPORT TRADE      CHONGQING AM PRIDE POWER &
 CO., LTD.                                MACHINERY CO., LTD.
CHONGQING SENCI IMPORT&EXPORT TRADE      Chongqing Zongshen General
 CO., LTD.                                Power Machines Co., Ltd.
Jialing-Honda Motors Co., Ltd..........  Jialing-Honda Motos Co., Ltd.
Wenling Qianjiang Imp. & Exp. Co., Ltd.  Chongqing Rato Technology Co.,
                                          Ltd.
Wenling Qianjiang Imp. & Exp. Co., Ltd.  QIANJIANG GROUP WENLING
                                          JENNFENG INDUSTRY INC.
Zhejiang Amerisun Technology Co., Ltd..  CHONGQING DINKING POWER
                                          MACHINERY CO., LTD.
Zhejiang Amerisun Technology Co., Ltd..  Chongqing Rato Technology Co.,
                                          Ltd.
Zhejiang Amerisun Technology Co., Ltd..  LONCIN MOTOR CO., LTD.
Zhejiang Amerisun Technology Co., Ltd..  Zhejiang Dobest Power Tools
                                          Co., Ltd.
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[FR Doc. 2020-23269 Filed 10-20-20; 8:45 am]
BILLING CODE 3510-DS-P