[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80011-80014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27335]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-428-848]


Forged Steel Fluid End Blocks From the Federal Republic of 
Germany: 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 Federal 
Republic of Germany (Germany).

DATES: Applicable December 11, 2020.

FOR FURTHER INFORMATION CONTACT: Joseph Dowling or Robert Palmer, AD/
CVD Operations, Office VIII, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401

[[Page 80012]]

Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1646 
or (202) 482-9068, 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 in the companion antidumping duty investigation of fluid 
end blocks from Germany.\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 Federal Republic 
of Germany: Preliminary Affirmative Countervailing Duty 
Determination, and Alignment of Final Determination with Final 
Antidumping Duty Determination, 85 FR 31454 (May 26, 2020) 
(Preliminary Determination), and accompanying Preliminary Decision 
Memorandum.
    \2\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Affirmative Determination of the Countervailing Duty 
Investigation of Forged Steel Fluid End Blocks from Federal Republic 
of Germany,'' dated concurrently with, and hereby adopted by, this 
notice (Issues and Decision Memorandum).
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Period of Investigation

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

Scope of the Investigation

    The products covered by this investigation are fluid end blocks 
from Germany. For a full description of the scope of this 
investigation, see the ``Scope of the Investigation'' in 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 raised 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 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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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.\6\ 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,\7\ as facts available in making our final determination.
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    \6\ See Memorandum, ``Cancellation of Verification and 
Establishment of the Briefing Schedule,'' dated October 23, 2020.
    \7\ See Memorandum, ``Countervailing Duty Investigation of 
Forged Steel Fluid End Blocks from the Federal Republic of Germany: 
Post-Preliminary Analysis,'' dated October 26, 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 (BGH Edelstahl Siegen GmbH and Schmiedewerke 
Gr[ouml]ditz GmbH) using each company's publicly ranged data for the 
value of their exports of subject merchandise to the United States.\8\
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    \8\ See Preliminary Determination, 85 FR at 31454.
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Final Determination

    Commerce determines that the following estimated countervailable 
subsidy rates exist:
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    \9\ As discussed in the Preliminary Decision Memorandum, 
Commerce found the following companies to be cross-owned with BGH 
Edelstahl Siegen GmbH: Boschgotthardsh[uuml]tte O. Breyer GmbH, BGH 
Edelstahlwerke GmbH, Rohstoff-, Press- und Schneidbetrieb Siegen 
GmbH, and SRG Schrott und Recycling GmbH.
    \10\ As discussed in the Preliminary Decision Memorandum, 
Commerce found the following companies to be cross-owned with 
Schmiedewerke Gr[ouml]ditz GmbH: GMH Schmiedetechnik GmbH, 
Georgsmarienh[uuml]tte Holding GmbH, and GHM Recycling GmbH.
    \11\ See Memorandum, ``AFA Calculation Memorandum for the Final 
Determination,'' dated December 7, 2020.
    \12\ For discussion of the calculation of this rate, see 
Memorandum, ``Countervailing Duty Investigation of Forged Steel 
Fluid End Blocks from the Federal Republic of Gemany: Final 
Determination Calculation of All Other's Rate,'' dated December 7, 
2020.

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                             (percent)
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BGH Edelstahl Siegen GmbH \9\...........................            5.86
Schmiedewerke Gr[ouml]ditz GmbH \10\....................            6.71
voestalpine Bohler Group \11\...........................           14.81
All Others \12\.........................................            6.29
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Disclosure

    We intend to disclose to parties in this proceeding the 
calculations performed for this final determination within five days of 
the date of publication of this notice, 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, Commerce instructed U.S. 
Customs and Border Protection (CBP) to suspend liquidation of entries 
of subject merchandise from Germany that were

[[Page 80013]]

entered or withdrawn from warehouse, for consumption on or after 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 of subject merchandise, but to 
continue the suspension of liquidation of all entries of subject 
merchandise 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 Germany. 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.

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 the 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.
Jeffrey 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 this 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 Commerce Properly Initiated This 
Investigation
    Comment 2: Whether the Administrative Record of This 
Investigation Is Complete
    Comment 3: Whether Commerce Provided Sufficient Time To Review 
Its Post-Preliminary Determination and Submit Case Briefs
    Comment 4: Whether the Application of Adverse Facts Available 
(AFA) to the Federal Republic of Germany (FRG) for Certain Programs 
Is Warranted
    Comment 5: 2018 Special Equalization Scheme--Reduced EEG \13\ 
Surcharge
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    \13\ Erneuerbare-Energien-Gesetz (EEG) or Renewable Energy 
Resources Act.
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    5a: Whether the EEG Program Constitutes a Financial Contribution
    5b: Whether the EEG Program Is Specific
    5c: Whether Commerce's Calculation of the EEG Program Benefit Is 
Correct
    Comment 6: Special Equalization Scheme: Reduced Surcharge Under 
the Combined Heat and Power Act (KWKG) \14\
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    \14\ Combined Heat and Power Act or Kraft-W[auml]rme-
Kopplungsgesetz.
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    6a: Whether the KWKG Program Constitutes a Financial 
Contribution
    6b: Whether the KWKG Program Is Specific
    6c: Whether the KWKG Program Confers a Benefit
    Comment 7: Offshore Surcharge Relief Program

[[Page 80014]]

    7a: Whether the Offshore Surcharge Relief Program Constitutes a 
Financial Contribution
    7b: Whether the Offshore Surcharge Relief Program Is Specific
    7c: Whether the Offshore Surcharge Relief Program Confers a 
Benefit
    Comment 8: Whether the Concession Fee Ordinance \15\ Relief 
Program Is Countervailable
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    \15\ Concession Fee Ordinance (Konzessionsabgabenverordung or 
KAV) Relief.
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    Comment 9: The Energy Tax Act (EnergieStG) \16\ and Electricity 
Tax Act (StromStG) \17\ Programs
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    \16\ Energy Tax Act or Energiesteuergesetz (EnergieStG).
    \17\ Electricity Tax Act or Stromsteuergesetz (StromStG).
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    9a: Whether Section 9a of the StromStG and Section 51 of the 
EnergieStG Are Specific
    9b: Whether Section 9b and 10 of the StromStG Are Specific
    9c: Whether Section 37 of the EnergieStG Is Specific
    Comment 10: Whether Commerce Should Find European Union (EU) 
Emissions Trading System (ETS) Countervailable
    Comment 11: Whether the EU ETS--Compensation of Indirect CO2 
Costs Program Is Countervailable
    Comment 12: Whether the EU Research Fund for Coal and Steel 
(RFCS) Program Is Countervailable
    Comment 13: Whether Commerce Should Include Sales of Services in 
Calculating SWG's Subsidy Rate
    Comment 14: Whether Commerce Correctly Attributed BGH Siegen's 
Benefit
VII. Recommendation

[FR Doc. 2020-27335 Filed 12-10-20; 8:45 am]
BILLING CODE 3510-DS-P