[Federal Register Volume 86, Number 6 (Monday, January 11, 2021)]
[Notices]
[Pages 1936-1939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00213]


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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: Final Affirmative 
Determination of Sales at Less Than Fair Value and Final Affirmative 
Critical Circumstances Determination

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

SUMMARY: The Department of Commerce (Commerce) determines that imports 
of 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.

DATES: Applicable January 11, 2021.

FOR FURTHER INFORMATION CONTACT: Leo Ayala and Jacqueline Arrowsmith, 
AD/CVD Operations, Office VII, U.S. Department of Commerce, 1401 
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3945 
and (202) 482-5255, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 19, 2020, Commerce published its Preliminary 
Determination of sales at LTFV of from China.\1\ For a complete 
description of the events that followed the Preliminary Determination, 
see the Issues and Decision Memorandum.\2\ A list of topics included in 
the Issues and Decision Memorandum is included as Appendix II to this 
notice. 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 https://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 the electronic versions of the Issues and Decision Memorandum are 
identical in content.
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    \1\ See 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, 85 FR 51015 (August 19, 2020) (Preliminary Determination), 
and accompanying Preliminary Decision Memorandum.
    \2\ See Memorandum, ``Certain Vertical Shaft Engines Between 
225cc and 999cc, and Parts Thereof from the People's Republic of 
China: Decision Memorandum for the Final Affirmative Determination 
of Sales at Less Than Fair Value and Final Affirmative Critical 
Circumstances Determination,'' dated concurrently with, and hereby 
adopted by, this notice (Issues and Decision Memorandum).
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Scope Comments

    On September 18, 2020, the Toro Company/Toro Purchasing Company 
(Toro) submitted scope comments.\3\ On September 25, 2020, Kohler Co. 
(Kohler) filed rebuttal scope comments.\4\ Commerce addressed these 
comments in its Final Scope Determination Memorandum.\5\ We have not 
changed the scope of the investigation.
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    \3\ See Toro's Letter, ``Certain Vertical Shaft Engines from the 
People's Republic of China: Letter in Lieu of Brief on Scope 
Issues,'' dated September 18, 2020.
    \4\ See Kohler's Letter, ``Certain Vertical Shaft Engines 
Between 225cc and 999cc from the People's Republic of China: Letter 
in Lieu of Scope Rebuttal Brief,'' dated September 25, 2020.
    \5\ See Memorandum, ``Certain Vertical Shaft Engines Between 
225cc and 999cc, and Parts Thereof, from China:
    Final Scope Decision Memorandum,'' dated concurrently with this 
final determination.
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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 the 
investigation, see Appendix I.

Analysis of Comments Received

    All 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 in the Issues and Decision Memorandum is 
attached to this notice as Appendix II.

Changes Since the Preliminary Determination

    Based on our analysis of the comments received, we made certain 
changes to the margin calculations. For a discussion of these changes, 
see the Issues and Decision Memorandum.

Final Affirmative Determination of Critical Circumstances

    We find that critical circumstances exist for imports of vertical 
shaft engines from China for Loncin Motor Co., Ltd. (Loncin), Chongqing 
Zongshen General Power Machine Co., Ltd. (Zongshen), all non-
individually investigated companies, and the China-wide entity pursuant 
to sections 735(a)(3)(A) and (B) of the Act and 19 CFR 351.206.\6\
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    \6\ See Issues and Decision Memorandum at 7 and Comment 16.
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Separate Rate Companies

    For this Final Determination, we determine that the evidence placed 
on the record of this investigation by Loncin, Zongshen, Chongqing Rato 
Technology Co., Ltd., Jialing-Honda Motors Co., Ltd., and Yamaha Motor 
Powered Products demonstrates an absence of de jure and de facto 
government control under the criteria identified in Sparklers and 
Silicon Carbide.\7\ Accordingly, Commerce

[[Page 1937]]

continues to grant separate rates to each of these companies.
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    \7\ See Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991) (Sparklers); see also Notice of Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide from the People's Republic 
of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide).
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China-Wide Rate

    In selecting the adverse facts available (AFA) rate for the China-
wide entity, Commerce's practice is to select a rate that is 
sufficiently adverse to ensure that the uncooperative party does not 
obtain a more favorable result by failing to cooperate than if it had 
fully cooperated.\8\ Specifically, it is Commerce's practice to select, 
as an AFA rate, the higher of: (a) The highest dumping margin alleged 
in the petition; or (b) the highest calculated dumping margin of any 
respondent in the investigation.\9\
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    \8\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: 
Purified Carboxymethyl Cellulose from Finland, 69 FR 77216 (December 
27, 2004), unchanged in Notice of Final Determination of Sales at 
Less Than Fair Value: Purified Carboxymethyl Cellulose from Finland, 
70 FR 28279 (May 17, 2005).
    \9\ See, e.g., Certain Stilbenic Optical Brightening Agents from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 77 FR 17436, 17438 (March 26, 2012); Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon Quality Steel Products from the People's Republic 
of China, 65 FR 34660 (May 31, 2000), and accompanying Issues and 
Decision Memorandum.
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    In the Preliminary Determination, we relied on AFA in determining 
the dumping margin for the China-wide entity.\10\ As explained in the 
Preliminary Determination, Zhejiang Xingyu Industry Trade, Suzhou 
Honbase MAC, and Wenling Jennfeng Industries Inc. did not respond to 
our requests for information.\11\ We have relied on AFA to determine 
the dumping margin of 468.33 percent for the China-wide entity for this 
final determination.\12\
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    \10\ See Preliminary Decision Memorandum at 15-18.
    \11\ Id.
    \12\ See Memorandum, ``Corroboration of the Adverse Facts 
Available Rate for the Final Determination in the Antidumping Duty 
Investigation of Certain Vertical Shaft Engines Between 225cc and 
999cc, and Parts Thereof, from the People's Republic of China,'' 
dated concurrently with this notice.
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Combination Rates

    In the Initiation Notice, Commerce stated that it would calculate 
producer/exporter combination rates for the respondents that are 
eligible for a separate rate in this investigation.\13\ Accordingly, we 
have assigned combination rates to certain companies, as provided in 
the ``Final Determination'' section below.
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    \13\ See Certain Vertical Shaft Engines Between 225cc 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).
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Final Determination

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

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                                                                                                   Cash deposit
                                                                                     Estimated    rate (adjusted
                                                                                     weighted-      for export
                   Producer                                 Exporter                  average         subsidy
                                                                                  dumping margin      offset)
                                                                                     (percent)       (percent)
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Loncin Motor Co., Ltd.........................  Loncin Motor Co. Ltd............          177.65          165.42
Chongqing Zongshen General Power Machine Co.,   Chongqing Zongshen General Power          336.26          324.93
 Ltd.                                            Machine Co., Ltd.
Chongqing Rato Technology Co., Ltd............  Chongqing Rato Technology Co.,            270.95          259.17
                                                 Ltd.
Jialing-Honda Motors Co., Ltd.................  Jialing-Honda Motors Co., Ltd...          270.95          259.17
Yamaha Motor Powered Products Jiangsu Co., Ltd  Yamaha Motor Powered Products             270.95          259.17
                                                 Jiangsu Co., Ltd.
China-Wide Entity.............................  ................................          468.33          457.00
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Disclosure

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

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we will 
instruct U.S. Customs and Border Protection (CBP) to continue to 
suspend liquidation of all appropriate entries of vertical shaft 
engines from China, as described in the appendix to this notice, which 
were entered, or withdrawn from warehouse, for consumption on or after 
August 19, 2019, the date of publication of the Preliminary 
Determination of this investigation in the Federal Register. Further, 
Commerce will instruct CBP to require a cash deposit equal to the 
estimated amount by which the normal value exceeds the U.S. price as 
shown above.
    Section 735(c)(4) 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. As discussed in the 
Issues and Decision Memorandum, Commerce finds that critical 
circumstances exist for Loncin, Zongshen, all non-individually 
investigated companies, and the China-wide entity. In accordance with 
section 733(c)(4) of the Act, the suspension of liquidation shall 
continue to apply to all unliquidated entries of merchandise from 
Loncin, all non-individually investigated companies, and the China-wide 
entity that were entered, or withdrawn from warehouse, for consumption 
on or after May 21, 2020, which is 90 days before the publication of 
the Preliminary Determination. In addition, based on our final 
affirmative critical circumstances determination for Zongshen,\14\ 
suspension of liquidation shall apply to all unliquidated entries of 
merchandise from Zongshen, that were entered, or withdrawn from 
warehouse, for consumption on or after May 21, 2020, which is 90 days 
before the publication of the Preliminary Determination.
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    \14\ See Issues and Decision Memorandum at 38-39.
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    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

[[Page 1938]]

makes an affirmative determination for domestic subsidy pass-through or 
export subsidies, Commerce offsets the calculated estimated weighted-
average dumping margin by the appropriate rates. Commerce continues to 
find that neither Zongshen nor Loncin qualifies for a double-remedy 
adjustment.\15\ However, we have continued to adjust the cash deposit 
rates for Loncin, Zongshen, all non-individually-examined companies, 
and the China-wide entity for export subsidies in the companion CVD 
investigation by the appropriate export subsidy rates \16\ as indicated 
in the above chart. However, suspension of liquidation of provisional 
measures in the companion CVD case has been discontinued effective 
October 17, 2020; therefore, we are not instructing CBP to collect cash 
deposits based upon the adjusted estimated weighted-average dumping 
margin for those export subsidies at this time.
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    \15\ Id. at 37.
    \16\ See Certain Vertical Shaft Engines Between 225cc and 999cc, 
and Parts Thereof from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination and Final Negative 
Critical Circumstances Determination, dated concurrently with this 
notice.
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    Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 
351.210(d), Commerce will instruct CBP to require a cash deposit equal 
to the weighted-average amount by which NV exceeds U.S. price as 
follows: (1) For all combinations of exporters/producers of merchandise 
under consideration that have not received their own separate rate, the 
cash-deposit rate will be the cash deposit rate established for the 
China-wide entity; and (2) for all non-Chinese exporters of the 
merchandise under consideration which have not received their own 
separate rate above, the cash-deposit rate will be the cash deposit 
rate applicable to the Chinese exporter/producer combination that 
supplied that non-Chinese exporter. These suspension of liquidation 
instructions will remain in effect until further notice.

International Trade Commission (ITC) Notification

    In accordance with section 735(d) of the Act, we will notify the 
International Trade Commission (ITC) of the final affirmative 
determination of sales at LTFV. Because the final determination in this 
proceeding is affirmative, in accordance with section 735(b)(2) of the 
Act, the ITC will make its final determination as to whether the 
domestic industry in the United States is materially injured, or 
threatened with material injury, by reason of imports, or sales (or the 
likelihood of sales) for importation of vertical shaft engines from 
China before the later of 120 days after our preliminary determination 
or 45 days after our final determination. If the ITC determines that 
material injury or threat of material injury does not exist, the 
proceeding will be terminated, and all cash deposits will be refunded. 
If the ITC determines that such injury does exist, Commerce will issue 
an antidumping duty order directing CBP to assess, upon further 
instruction by Commerce, antidumping duties on all imports of the 
subject merchandise, entered, or withdrawn from warehouse, for 
consumption on or after the effective date of the suspension of 
liquidation.

Notification Regarding Administrative Protective Orders

    This notice serves as the only reminder to parties subject to an 
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 notification of the 
return or 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 violation subject to sanction.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).

    Dated: January 4, 2021.
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-turn 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 Issues and Decision Memorandum

I. Summary
II. Background
III. Period of Investigation
IV. Scope Comments
V. Scope of the Investigation
VI. Changes Since the Preliminary Determination
VII. China-Wide Entity and the Use of Facts Available and Adverse 
Inferences
VIII. Affirmative Determination of Critical Circumstances
IX. Discussion of Issues
    Comment 1: Whether Commerce Should Change the Surrogate Value 
for the Composite Magnetic Flywheel Input
    Comment 2: Whether Commerce Should Change the Surrogate Value 
for Polypropylene Plastic Material
    Comment 3: Whether Commerce Should Change the Surrogate Value 
for Cast Aluminum Crankcases
    Comment 4: Whether Commerce Should Change the Surrogate Value 
for Ignition Coils

[[Page 1939]]

    Comment 5: Whether Commerce Should Change the Surrogate Value 
for Balance Shafts
    Comment 6: Whether Commerce Should Change the Surrogate Values 
for Guide Hoods, Engine Shrouds, and Throttle Governors
    Comment 7: Whether Commerce Should Change the Surrogate Value 
for Cylinder Liners
    Comment 8: Whether Commerce Should Change the Surrogate Value 
for Governor Gears
    Comment 9: Whether Commerce Should Change the Surrogate Values 
for Throttle Linkages, Throttle Linkage Clamps, Cotter Pins, and 
Certain Other Inputs
    Comment 10: Whether Commerce should Continue to use the 
Financial Statements of Alarko Carrier Sanayi ve Ticaret A.S. to 
Calculate Surrogate Financial Ratios
    Comment 11: Whether Commerce Should Change the Surrogate Value 
for U.S. Inland Freight
    Comment 12: Whether Commerce Should Change the Surrogate Value 
for U.S. Rail Freight
    Comment 13: Whether Commerce Should Change the Surrogate Value 
for U.S. Brokerage
    Comment 14: Whether Commerce Should Change the Surrogate Value 
for Ocean Freight
    Comment 15: Whether Commerce Should Make a Double Remedy Pass-
Through Adjustment
    Comment 16: Whether Commerce Should Limit its Massive Surge 
Analysis to a Three-Month Relatively Short Period
X. Recommendation

[FR Doc. 2021-00213 Filed 1-8-21; 8:45 am]
BILLING CODE 3510-DS-P