[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80020-80022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27330]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-116]


Forged Steel Fluid End Blocks From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers and exporters 
of forged steel fluid end blocks (fluid end blocks) from the People's 
Republic of China (China).

DATES: Applicable December 11, 2020.

FOR FURTHER INFORMATION CONTACT: Jaron Moore or Janae Martin, AD/CVD 
Operations, Office VIII, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-3640 or (202) 
482-0238, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 26, 2020, Commerce published the Preliminary Determination 
of this countervailing duty (CVD) investigation, which also aligned the 
final determination of this CVD investigation with the final 
determination of the concurrent antidumping duty (AD) investigation.\1\ 
A summary of the events that occurred since Commerce published the 
Preliminary Determination, as well as a full discussion of the issues 
raised by parties for this final determination, may be found in the 
Issues and Decision Memorandum which is hereby adopted by this 
notice.\2\ 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 Final 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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    \1\ See Forged Steel Fluid End Blocks from the People's Republic 
of China: Preliminary Affirmative Countervailing Duty Determination, 
and Alignment of Final Determination With Final Antidumping Duty 
Determination, 85 FR 31457 (May 26, 2020) (Preliminary 
Determination).
    \2\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Affirmative Determination of the Countervailing Duty 
Investigation of Forged Steel Fluid End Blocks from the People's 
Republic of China,'' dated concurrently with, and hereby adopted by, 
this notice (Issues and Decision Memorandum).
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Period of Investigation

    The period of investigation is January 1, 2018 through December 31, 
2018.

Scope of the Investigation

    The products covered by this investigation are fluid end blocks 
from China. For a complete description of the scope of this 
investigation, see Appendix I.

Scope Comments

    During the course of this investigation, Commerce received scope 
comments from interested parties. Commerce issued a Preliminary Scope 
Decision Memorandum to address these comments.\3\ We received comments 
from interested parties on the Preliminary Scope Memorandum, which we 
address in the Final Scope Decision Memorandum, dated concurrently 
with, and hereby adopted by, this final determination.\4\ Commerce is 
not modifying the scope language as it appeared in the Preliminary 
Determination. See Appendix I for the final scope of the investigation.
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    \3\ See Memorandum to the File, ``Forged Steel Fluid End Blocks 
from the Federal Republic of Germany, India, Italy, and the People's 
Republic of China: Scope Comments Decision Memorandum for the 
Preliminary Determinations,'' dated May 18, 2020 (Preliminary Scope 
Decision Memorandum).
    \4\ See Memorandum, ``Forged Steel Fluid End Blocks from the 
Federal Republic of Germany, India, Italy, and the People's Republic 
of China: Scope Comments Decision Memorandum for the Final 
Determinations,'' dated December 7, 2020 (Final Scope Decision 
Memorandum).
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Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in the Issues and Decision Memorandum. A list of the issues 
raised by parties is attached to this notice at Appendix II.

Methodology

    Commerce conducted this investigation in accordance with section 
701 of the Tariff Act of 1930, as amended (the Act). For each of the 
subsidy programs found countervailable, Commerce determines that there 
is a subsidy, i.e., a financial contribution by an ``authority'' that 
gives rise to a benefit to the recipient, and that the subsidy is 
specific.\5\ For a

[[Page 80021]]

full description of the methodology underlying our final determination, 
see the Issues and Decision Memorandum.
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    \5\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    In making this final determination, Commerce relied, in part, on 
facts available pursuant to section 776(a) of the Act. Additionally, as 
discussed in the Issues and Decision Memorandum, because one or more 
respondents did not act to the best of their ability in responding to 
our requests for information, we drew adverse inferences, where 
appropriate, in selecting from among the facts otherwise available, 
pursuant to section 776(b) of the Act.\6\
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    \6\ See Issues and Decision Memorandum at ``Use of Facts 
Otherwise Available and Adverse Inferences'' section.
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Verification

    Commerce normally verifies information relied upon in making its 
final determination, pursuant to section 782(i)(1) of the Tariff Act of 
1930, as amended (the Act). However, during the course of this 
investigation, we were unable to conduct on-site verification due to 
travel restrictions.\7\ Consistent with section 776(a)(2)(D) of the 
Act, Commerce relied on the information submitted on the record, which 
we used in making our Preliminary Determination and Post-Preliminary 
Determination,\8\ as facts available in making our final determination.
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    \7\ See Memorandum, ``Cancellation of Verification and Setting 
of Briefing Schedule,'' dated October 5, 2020.
    \8\ See Memorandum, ``Post-Preliminary Analysis of 
Countervailing Duty Investigation: Forged Steel Fluid End Blocks 
from the People's Republic of China,'' dated September 18, 2020 
(Post-Preliminary Determination).
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All-Others Rate

    We continue to calculate the all-others rate using a weighted 
average of the individual estimated subsidy rates calculated for the 
examined respondents (Shanghai Qinghe Machinery Co., Ltd. and Nanjing 
Develop Advanced Manufacturing Co., Ltd.) using each company's 
publicly-ranged data for the value of their exports to the United 
States of subject merchandise.\9\
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    \9\ See Preliminary Determination, 85 FR 31457; see also 
Memorandum, ``AFA Calculation Memorandum for the Final Determination 
in the Investigation of Forged Steel Fluid End Blocks from the 
People's Republic of China,'' dated December 7, 2020.
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Final Determination

    Commerce determines that the following estimated countervailable 
subsidy rates exist:
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    \10\ Commerce has found the following company to be cross-owned 
with Nanjing Develop Advanced Manufacturing Co., Ltd.: Nanjing 
Develop Industrial and Commercial Co., Ltd.
    \11\ Commerce has found the following companies to be cross-
owned with Shanghai Qinghe Machinery Co., Ltd.: Haimo Technologies 
Group Corp. and Lanzhou Chenglin Oil Drilling Equipment Co., Ltd.
    \12\ For discussion of the calculation of this rate, see 
Memorandum, ``Countervailing Duty Investigation of Forged Steel 
Fluid End Blocks from the People's Republic of China: Final 
Determination Calculation of AFA Rate,'' dated December 7, 2020.
    \13\ For discussion of the calculation of this rate, see 
Memorandum, ``Countervailing Duty Investigation of Forged Steel 
Fluid End Blocks from the People's Republic of China: Final 
Determination Calculation of All-Other's Rate,'' dated December 7, 
2020.

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                            ad valorem
                                                             (percent)
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Nanjing Develop Advanced Manufacturing Co., Ltd \10\....           16.80
Shanghai Qinghe Machinery Co., Ltd \11\.................           19.88
China Machinery Industrial Products Co., Ltd............     \12\ 337.07
Anhui Tianyu Petroleum Equipment Manufacturing Co., Ltd.  ..............
CNCCC Sichuan Imp & Exp Co., Ltd........................  ..............
GE Petroleum Equipment (Beijing) Co., Ltd...............  ..............
Jiaxing Shenghe Petroleum Machinery Co., Ltd............  ..............
Ningbo Minmetals & Machinery Imp & Exp Co., Ltd.........  ..............
Qingdao RT G&M Co., Ltd.................................  ..............
Shandong Fenghuang Foundry Co., Ltd.....................  ..............
Shandongshengjin Ruite Energy Equipment Co., Ltd (part    ..............
 of Shengli Oilfield R&T Group).........................
Shanghai Baisheng Precision Machine.....................  ..............
Shanghai Boss Petroleum Equipment.......................  ..............
Shanghai CP Petrochemical and General Machinery Co., Ltd  ..............
Suzhou Douson Drilling & Production Equipment Co., Ltd..  ..............
Zhangjiagang Haiguo New Energy Equipment Manufacturing    ..............
 Co., Ltd...............................................
Anhui Yingliu Electromechanical Co., Ltd................  ..............
Daye Special Steel Co., Ltd, (Citic Specific Steel        ..............
 Group).................................................
Suzhou Fujie Machinery Co., Ltd., (Fujie Group).........  ..............
All Others..............................................      \13\ 19.52
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Disclosure

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

Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination and pursuant to 
sections 703(d)(1)(B) and (d)(2) of the Act, we instructed U.S. Customs 
and Border Protection (CBP) to suspend liquidation of entries of 
subject merchandise as described in the scope of the investigation 
section entered, or withdrawn from warehouse, for consumption on May 
26, 2020, the date of publication of the Preliminary Determination in 
the Federal Register. In accordance with section 703(d) of the Act, 
effective September 23, 2020, we instructed CBP to discontinue the 
suspension of liquidation of all entries at that time, but to continue 
the suspension of liquidation of all entries between May 26, 2020 and 
September 22, 2020.
    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a CVD order and require 
a cash deposit of estimated countervailing duties for entries of 
subject merchandise in the amounts indicated above, in accordance with 
section 706(a) of the Act. If the ITC determines that material injury, 
or threat of material injury, does not exist, this proceeding will be 
terminated, and all estimated duties deposited or securities posted as 
a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, Commerce will notify 
the ITC of its final affirmative determination that countervailable 
subsidies are being provided to producers and exporters of fluid end 
blocks from China. As Commerce's final determination is affirmative, in 
accordance with section 705(b) of the Act, the ITC will determine, 
within 45 days, whether the domestic industry in the United States is 
materially injured, or threatened with material injury. In addition, we 
are making available to the ITC all non-privileged and nonproprietary 
information related to this investigation. We will allow the ITC access 
to all privileged and business proprietary information in our files, 
provided the ITC confirms that it will not disclose such information, 
either publicly or under an administrative protective order (APO), 
without the written consent of the Assistant Secretary for Enforcement 
and Compliance.

[[Page 80022]]

Notification Regarding Administrative Protective Orders

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation which is subject to sanction.

Notification to Interested Parties

    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act and 19 CFR 351.210(c).

    Dated: December 7, 2020.
Jeffery I. Kessler,
Assistant Secretary for Enforcement and Compliance.

APPENDIX I

Scope of the Investigation

    The products covered by this investigation are forged steel 
fluid end blocks (fluid end blocks), whether in finished or 
unfinished form, and which are typically used in the manufacture or 
service of hydraulic pumps.
    The term ``forged'' is an industry term used to describe the 
grain texture of steel resulting from the application of localized 
compressive force. Illustrative forging standards include, but are 
not limited to, American Society for Testing and Materials (ASTM) 
specifications A668 and A788.
    For purposes of this investigation, the term ``steel'' denotes 
metal containing the following chemical elements, by weight: (i) 
Iron greater than or equal to 60 percent; (ii) nickel less than or 
equal to 8.5 percent; (iii) copper less than or equal to 6 percent; 
(iv) chromium greater than or equal to 0.4 percent, but less than or 
equal to 20 percent; and (v) molybdenum greater than or equal to 
0.15 percent, but less than or equal to 3 percent. Illustrative 
steel standards include, but are not limited to, American Iron and 
Steel Institute (AISI) or Society of Automotive Engineers (SAE) 
grades 4130, 4135, 4140, 4320, 4330, 4340, 8630, 15-5, 17-4, F6NM, 
F22, F60, and XM25, as well as modified varieties of these grades.
    The products covered by this investigation are: (1) Cut-to-
length fluid end blocks with an actual height (measured from its 
highest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), an 
actual width (measured from its widest point) of 8 inches (203.2 mm) 
to 40 inches (1,016.0 mm), and an actual length (measured from its 
longest point) of 11 inches (279.4 mm) to 75 inches (1,905.0 mm); 
and (2) strings of fluid end blocks with an actual height (measured 
from its highest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 
mm), an actual width (measured from its widest point) of 8 inches 
(203.2 mm) to 40 inches (1,016.0 mm), and an actual length (measured 
from its longest point) up to 360 inches (9,144.0 mm).
    The products included in the scope of this investigation have a 
tensile strength of at least 70 KSI (measured in accordance with 
ASTM A370) and a hardness of at least 140 HBW (measured in 
accordance with ASTM E10).
    A fluid end block may be imported in finished condition (i.e., 
ready for incorporation into a pump fluid end assembly without 
further finishing operations) or unfinished condition (i.e., forged 
but still requiring one or more finishing operations before it is 
ready for incorporation into a pump fluid end assembly). Such 
finishing operations may include: (1) Heat treating; (2) milling one 
or more flat surfaces; (3) contour machining to custom shapes or 
dimensions; (4) drilling or boring holes; (5) threading holes; and/
or (6) painting, varnishing, or coating.
    Excluded from the scope of this investigation are fluid end 
block assemblies which (1) include (a) plungers and related 
housings, adapters, gaskets, seals, and packing nuts, (b) valves and 
related seats, springs, seals, and cover nuts, and (c) a discharge 
flange and related seals, and (2) are otherwise ready to be mated 
with the ``power end'' of a hydraulic pump without the need for 
installation of any plunger, valve, or discharge flange components, 
or any other further manufacturing operations.
    The products included in the scope of this investigation may 
enter under Harmonized Tariff Schedule of the United States (HTSUS) 
subheadings 7218.91.0030, 7218.99.0030, 7224.90.0015, 7224.90.0045, 
7326.19.0010, 7326.90.8688, or 8413.91.9055. While these HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope of the investigation is 
dispositive.

APPENDIX II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Use of Facts Otherwise Available and Adverse Inferences
IV. Subsidies Valuation
V. Analysis of Programs
VI. Analysis of Comments
    Comment 1: Whether To Continue Applying Adverse Facts Available 
(AFA) to the Export Buyer's Credit (EBC) Program
    Comment 2: Whether the Provision of Electricity Is 
Countervailable
    Comment 3: Whether Commerce Should Revise the Electricity 
Benchmark
    Comment 4: Whether to Revise the Import Duty Rate in the 
Benchmark
    Comment 5: Whether Commerce Should Use Haimo's Unconsolidated 
Sales Value for Its Denominator
    Comment 6: Whether Commerce Should Include Other Revenue in the 
Sales Values of Qinghe and Lanzhou Chenglin
    Comment 7: Whether Commerce Correctly Calculated Qinghe's 
Benefit under the Income Tax Deduction for Research and Development 
(R&D) Expenses Under the Enterprise Income Tax Law
    Comment 8: Calculation of Qinghe's Other Subsidies Benefits
VII. Recommendation

[FR Doc. 2020-27330 Filed 12-10-20; 8:45 am]
BILLING CODE 3510-DS-P