[Federal Register Volume 86, Number 24 (Monday, February 8, 2021)]
[Notices]
[Pages 8589-8593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02530]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-138]
Pentafluoroethane (R-125) From the People's Republic of China:
Initiation of Countervailing Duty Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATES: Applicable February 1, 2021.
FOR FURTHER INFORMATION CONTACT: Joshua Tucker or Peter Skarlatos, 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) 482-2044 or (202)
482-0324, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On January 12, 2021, the U.S. Department of Commerce (Commerce)
received a countervailing duty (CVD) petition concerning imports of
pentafluoroethane (R-125) from the People's Republic of China (China)
filed in proper form on behalf of Honewell International, Inc. (the
petitioner).\1\ The Petition was accompanied by an antidumping duty
(AD) petition concerning imports of R-125 from China.
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\1\ See Petitioner's Letter, ``Petitions for the Imposition of
Antidumping and Countervailing Duties: R-125 (Pentafluoroethane)
from the People's Republic of China,'' dated January 12, 2021 (the
Petition).
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Between January 14 and 27, 2021, Commerce requested supplemental
information pertaining to certain aspects
[[Page 8590]]
of the Petition,\2\ to which the petitioner filed responses between
January 19 and 28, 2021.\3\
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\2\ See Commerce's Letter, ``Petition for the Imposition of
Countervailing Duties on Imports of Pentafluoroethane (R-125) from
the People's Republic of China: Supplemental Questions,'' dated
January 14, 2021; see also Commerce's Letter, ``Petitions for the
Imposition of Antidumping and Countervailing Duties on Imports of
Pentafluoroethane (R-125) from the People's Republic of China:
Supplemental Questions,'' dated January 14, 2021 (General Issues
Supplemental); Memorandum, ``Phone Call with Counsel to the
Petitioner,'' dated January 22, 2021 (Phone Call with Petitioner's
Counsel); and Memorandum, ``Phone Call with Counsel to the
Petitioner,'' dated January 27, 2021 (Second Phone Call with
Petitioner's Counsel).
\3\ See Petitioner's Letter, ``R-125 (Pentafluoroethane) from
the People's Republic of China: Honeywell International Inc.'s CVD
Supplemental Questionnaire Response,'' dated January 19, 2021; see
also Petitioner's Letter, ``R-125 (Pentafluoroethane) from the
People's Republic of China: Honeywell International Inc.'s
Supplemental Questionnaire Response,'' dated January 21, 2021
(Petitioner's First Supplemental Questionnaire Response);
Petitioner's Letter, ``R-125 (Pentafluoroethane) from the People's
Republic of China: Honeywell International Inc.'s Second
Supplemental Questionnaire Response,'' dated January 25, 2021; and
Petitioner's Letter, ``R-125 (Pentafluoroethane) from the People's
Republic of China: Honeywell International Inc.'s Third Supplemental
Questionnaire Response,'' dated January 28, 2021 (Petitioner's Third
Supplemental Questionnaire Response).
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In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), the petitioner alleges that the Government of China
(GOC) is providing countervailable subsidies, within the meaning of
sections 701 and 771(5) of the Act, to producers of R-125 in China and
that such imports are materially injuring, or threatening material
injury to, the domestic industry producing R-125 in the United States.
Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for
those alleged programs on which we are initiating a CVD investigation,
the Petition is supported by information reasonably available to the
petitioner.
Commerce finds that the petitioner filed the Petition on behalf of
the domestic industry because the petitioner is an interested party as
defined in section 771(9)(C) of the Act. Commerce also finds that the
petitioner demonstrated sufficient industry support with respect to the
initiation of the requested CVD investigation.\4\
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\4\ See ``Determination of Industry Support for the Petition''
section, infra.
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Period of Investigation
Because the Petition was filed on January 12, 2021, the period of
investigation is January 1, 2020, through December 31, 2020.\5\
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\5\ See 19 CFR 351.204(b)(2).
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Scope of the Investigation
The merchandise covered by this investigation is R-125 from China.
For a full description of the scope of this investigation, see the
appendix to this notice.
Comments on Scope of the Investigation
On January 14, 22, and 27, 2021, Commerce requested further
information from the petitioner regarding the proposed scope to ensure
that the scope language in the Petition is an accurate reflection of
the products for which the domestic industry is seeking relief.\6\ On
January 19 and 28, 2021, the petitioner revised the scope.\7\ The
description of the merchandise covered by this investigation, as
described in the appendix to this notice, reflects these
clarifications.
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\6\ See General Issues Supplemental at 3; see also Phone Call
with Petitioner's Counsel at 1; and Second Phone Call with
Petitioner's Counsel at 1.
\7\ See Petitioner's First Supplemental Questionnaire Response
at 1-2; see also Petitioner's Third Supplemental Questionnaire
Response at 1-2.
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As discussed in the Preamble to Commerce's regulations, we are
setting aside a period for interested parties to raise issues regarding
product coverage (i.e., scope).\8\ Commerce will consider all comments
received from interested parties and, if necessary, will consult with
interested parties prior to the issuance of the preliminary
determination. If scope comments include factual information,\9\ all
such factual information should be limited to public information. To
facilitate preparation of its questionnaires, Commerce requests that
all interested parties submit scope comments by 5:00 p.m. Eastern Time
(ET) on February 22, 2021, which is the next business day after 20
calendar days from the signature date of this notice.\10\ Any rebuttal
comments, which may include factual information, must be filed by 5:00
p.m. ET on March 4, 2021, which is 10 calendar days from the initial
comment deadline.
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\8\ See Antidumping Duties; Countervailing Duties, 62 FR 27296,
27323 (May 19, 1997) (Preamble).
\9\ See 19 CFR 351.102(b)(21) (defining ``factual
information'').
\10\ See 19 CFR 351.303(b). Commerce's practice dictates that
where a deadline falls on a weekend or Federal holiday, the
appropriate deadline is the next business day (in this instance,
February 22, 2021). See Notice of Clarification: Application of
``Next Business Day'' Rule for Administrative Determination
Deadlines Pursuant to the Tariff Act of 1930, As Amended, 70 FR
24533 (May 10, 2005).
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Commerce requests that any factual information the parties consider
relevant to the scope of the investigation be submitted during this
time period. However, if a party subsequently finds that additional
factual information pertaining to the scope of the investigation may be
relevant, the party may contact Commerce and request permission to
submit the additional information. All scope comments must also be
filed on the record of the concurrent AD investigation.
Filing Requirements
All submissions to Commerce must be filed electronically using
Enforcement and Compliance (E&C)'s Antidumping Duty and Countervailing
Duty Centralized Electronic Service System (ACCESS), unless an
exception applies.\11\ An electronically filed document must be
received successfully in its entirety by the time and date it is due.
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\11\ See Antidumping and Countervailing Duty Proceedings:
Electronic Filing Procedures; Administrative Protective Order
Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and
Compliance; Change of Electronic Filing System Name, 79 FR 69046
(November 20, 2014), for details of Commerce's electronic filing
requirements, effective August 5, 2011. Information on using ACCESS
can be found at https://access.trade.gov/help.aspx and a handbook
can be found at https://access.trade.gov/help/Handbook_on_Electronic_Filing_Procedures.pdf.
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Consultations
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce
notified the GOC of the receipt of the Petition and provided it the
opportunity for consultations with respect to the CVD Petition.\12\ The
GOC did not request consultations.
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\12\ See Commerce's Letter, ``Pentafluoroethane (R-125) from the
People's Republic of China: Invitation for Consultation to Discuss
the Countervailing Duty Petition,'' dated January 14, 2021.
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Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) At least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, Commerce shall: (i)
Poll the industry or rely on other information in order to determine if
there is support for the petition, as required by subparagraph (A); or
(ii) determine industry support
[[Page 8591]]
using a statistically valid sampling method to poll the ``industry.''
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs Commerce to look to producers and workers who produce the
domestic like product. The International Trade Commission (ITC), which
is responsible for determining whether ``the domestic industry'' has
been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both Commerce and the
ITC must apply the same statutory definition regarding the domestic
like product,\13\ they do so for different purposes and pursuant to a
separate and distinct authority. In addition, Commerce's determination
is subject to limitations of time and information. Although this may
result in different definitions of the like product, such differences
do not render the decision of either agency contrary to law.\14\
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\13\ See section 771(10) of the Act.
\14\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F.
Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, the petitioner does not
offer a definition of the domestic like product distinct from the scope
of the investigation.\15\ Based on our analysis of the information
submitted on the record, we have determined that R-125, as defined in
the scope, constitutes a single domestic like product, and we have
analyzed industry support in terms of that domestic like product.\16\
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\15\ See Volume I of the Petition at 11-14 and Exhibit I-3.
\16\ For a discussion of the domestic like product analysis as
applied to this case and information regarding industry support, see
Countervailing Duty Investigation Initiation Checklist:
Pentafluoroethane (R-125) from the People's Republic of China (China
CVD Initiation Checklist) at Attachment II, Analysis of Industry
Support for the Antidumping and Countervailing Duty Petitions
Covering Pentafluoroethane (R-125) from the People's Republic of
China (Attachment II). This checklist is dated concurrently with
this notice and on file electronically via ACCESS.
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In determining whether the petitioner has standing under section
702(c)(4)(A) of the Act, we considered the industry support data
contained in the Petition with reference to the domestic like product
as defined in the ``Scope of the Investigation,'' in the appendix to
this notice. To establish industry support, the petitioner provided its
own production of the domestic like product in 2020.\17\ The petitioner
states that there are no other known U.S. producers of R-125;
therefore, the Petition is supported by 100 percent of the U.S.
industry.\18\ We relied on data provided by the petitioner for purposes
of measuring industry support.\19\
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\17\ See Petitioner's First Supplemental Questionnaire Response
at 2-3 and Exhibit Supp-I-10b.
\18\ See Volume I of the Petition at 2-4 and Exhibit I-1; see
also Petitioner's First Supplemental Questionnaire Response at
Exhibit Supp-I-1.
\19\ See Volume I of the Petition at 2-4 and Exhibit I-1; see
also Petitioner's First Supplemental Questionnaire Response at 2-3
and Exhibits Supp-I-1 and Supp-I-10b. For further discussion, see
Attachment II of the China CVD Initiation Checklist.
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Our review of the data provided in the Petition, the Petitioner's
First Supplemental Questionnaire Response, and other information
readily available to Commerce indicates that the petitioner has
established industry support for the Petition. First, the Petition
established support from domestic producers (or workers) accounting for
more than 50 percent of the total production of the domestic like
product and, as such, Commerce is not required to take further action
in order to evaluate industry support (e.g., polling).\20\ Second, the
domestic producers (or workers) have met the statutory criteria for
industry support under section 702(c)(4)(A)(i) of the Act because the
domestic producers (or workers) who support the Petition account for at
least 25 percent of the total production of the domestic like
product.\21\ Finally, the domestic producers (or workers) have met the
statutory criteria for industry support under section 702(c)(4)(A)(ii)
of the Act because the domestic producers (or workers) who support the
Petition account for more than 50 percent of the production of the
domestic like product produced by that portion of the industry
expressing support for, or opposition to, the Petition.\22\
Accordingly, Commerce determines that the Petition was filed on behalf
of the domestic industry within the meaning of section 702(b)(1) of the
Act.\23\
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\20\ See Attachment II of the China CVD Initiation Checklist;
see also section 702(c)(4)(D) of the Act.
\21\ See Attachment II of the China CVD Initiation Checklist.
\22\ Id.
\23\ Id.
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Injury Test
Because China is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) of the Act
applies to this investigation. Accordingly, the ITC must determine
whether imports of the subject merchandise from China materially
injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges that imports of the subject merchandise are
benefitting from countervailable subsidies and that such imports are
causing, or threaten to cause, material injury to the U.S. industry
producing the domestic like product. In addition, the petitioner
alleges that subject imports exceed the negligibility threshold
provided for under section 771(24)(A) of the Act.\24\
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\24\ See Volume I of the Petition at 14-15 and Exhibit I-8.
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The petitioner contends that the industry's injured condition is
illustrated by a significant and increasing volume of subject imports;
reduced market share; underselling and price depression and
suppression; lost sales and revenues; decline in employment variables;
declining profitability; and adverse impact on capital expenditures and
capacity utilization.\25\ We assessed the allegations and supporting
evidence regarding material injury, threat of material injury,
causation, as well as negligibility, and we have determined that these
allegations are properly supported by adequate evidence, and meet the
statutory requirements for initiation.\26\
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\25\ See Volume I of the Petition at 9-10, 14-26 and Exhibits I-
2 and I-7 through I-10.
\26\ See China CVD Initiation Checklist at Attachment III,
Analysis of Allegations and Evidence of Material Injury and
Causation for the Antidumping and Countervailing Duty Petitions
Covering Pentafluoroethane (R-125) from the People's Republic of
China (Attachment III).
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Initiation of CVD Investigation
Based upon our examination of the Petition and supplemental
responses, we find that the Petition meets the requirements of section
702 of the Act. Therefore, we are initiating a CVD investigation to
determine whether imports of R-125 from China benefit from
countervailable subsidies conferred by the GOC. Based on our review of
the Petition, we find that there is sufficient information to initiate
a CVD investigation on all five alleged programs. For a full discussion
of the basis for our decision to initiate on each program, see China
CVD Initiation
[[Page 8592]]
Checklist. The initiation checklist for this investigation is available
on ACCESS. In accordance with section 703(b)(1) of the Act and 19 CFR
351.205(b)(1), unless postponed, we will make our preliminary
determination no later than 65 days after the date of this initiation.
Respondent Selection
The petitioner named 11 companies in China as producers/exporters
of R-125.\27\ Commerce intends to follow its standard practice in CVD
investigations and calculate company-specific subsidy rates in this
investigation. In the event Commerce determines that the number of
companies is large and it cannot individually examine each company
based upon Commerce's resources, where appropriate, Commerce intends to
select mandatory respondents based on quantity and value (Q&V)
questionnaires issued to the potential respondents. Commerce normally
selects mandatory respondents in CVD investigations using U.S. Customs
and Border Protection (CBP) entry data for U.S. imports under the
appropriate Harmonized Tariff Schedule of the United States (HTSUS)
numbers listed in the scope of the investigation. However, for this
investigation, the HTSUS number under which the subject merchandise
would enter (i.e., 2903.39.2035) is a basket category under which non-
subject merchandise may enter. Therefore, we cannot rely on CBP entry
data in selecting respondents. We intend instead to issue Q&V
questionnaires to each potential respondent for which the petitioner
has provided a complete address.
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\27\ See Volume I of the Petition at Exhibit I-11.
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Producers/exporters of R-125 from China that do not receive Q&V
questionnaires by mail may still submit a response to the Q&V
questionnaire and can obtain the Q&V questionnaire from E&C's website
at https://enforcement.trade.gov/questionnaires/questionnaires-ad.html.
Responses to the Q&V questionnaire must be submitted by the relevant
Chinese producers/exporters no later than 5:00 p.m. ET on February 16,
2021. All Q&V responses must be filed electronically via ACCESS. An
electronically filed document must be received successfully, in its
entirety, by ACCESS no later than 5:00 p.m. ET on the deadline noted
above. Commerce intends to finalize its decisions regarding respondent
selection within 20 days of publication of this notice.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A) of the Act and 19 CFR
351.202(f), a copy of the public version of the Petition has been
provided to the GOC via ACCESS. Furthermore, to the extent practicable,
Commerce will attempt to provide a copy of the public version of the
Petition to each exporter named in the Petition, as provided under 19
CFR 351.203(c)(2).
ITC Notification
Commerce will notify the ITC of its initiation, as required by
section 702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 45 days after the date
on which the Petition was filed, whether there is a reasonable
indication that imports of R-125 from China are materially injuring, or
threatening material injury to, a U.S. industry.\28\ A negative ITC
determination will result in the investigation being terminated.\29\
Otherwise, this investigation will proceed according to statutory and
regulatory time limits.
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\28\ See section 703(a)(1) of the Act.
\29\ Id.
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Submission of Factual Information
Factual information is defined in 19 CFR 351.102(b)(21) as: (i)
Evidence submitted in response to questionnaires; (ii) evidence
submitted in support of allegations; (iii) publicly available
information to value factors under 19 CFR 351.408(c) or to measure the
adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence
placed on the record by Commerce; and (v) evidence other than factual
information described in (i)-(iv). Section 351.301(b) of Commerce's
regulations requires any party, when submitting factual information, to
specify under which subsection of 19 CFR 351.102(b)(21) the information
is being submitted \30\ and, if the information is submitted to rebut,
clarify, or correct factual information already on the record, to
provide an explanation identifying the information already on the
record that the factual information seeks to rebut, clarify, or
correct.\31\ Time limits for the submission of factual information are
addressed in 19 CFR 351.301, which provides specific time limits based
on the type of factual information being submitted. Interested parties
should review the regulations prior to submitting factual information
in this investigation.
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\30\ See 19 CFR 351.301(b).
\31\ See 19 CFR 351.301(b)(2).
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Extensions of Time Limits
Parties may request an extension of time limits before the
expiration of a time limit established under 19 CFR 351.301, or as
otherwise specified by Commerce. In general, an extension request will
be considered untimely if it is filed after the expiration of the time
limit established under 19 CFR 351.301.\32\ For submissions that are
due from multiple parties simultaneously, an extension request will be
considered untimely if it is filed after 10:00 a.m. ET on the due date.
Under certain circumstances, Commerce may elect to specify a different
time limit by which extension requests will be considered untimely for
submissions which are due from multiple parties simultaneously. In such
a case, Commerce will inform parties in a letter or memorandum of the
deadline (including a specified time) by which extension requests must
be filed to be considered timely. An extension request must be made in
a separate, stand-alone submission; under limited circumstances we will
grant untimely-filed requests for the extension of time limits. Parties
should review Commerce's regulations concerning the extension of time
limits prior to submitting extension requests or factual information in
this investigation.\33\
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\32\ See 19 CFR 351.302.
\33\ See 19 CFR 351; see also Extension of Time Limits; Final
Rule, 78 FR 57790 (September 20, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm.
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Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\34\
Parties must use the certification formats provided in 19 CFR
351.303(g).\35\ Commerce intends to reject factual submissions if the
submitting party does not comply with the applicable certification
requirements.
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\34\ See section 782(b) of the Act.
\35\ See Certification of Factual Information to Import
Administration During Antidumping and Countervailing Duty
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also
frequently asked questions regarding the Final Rule, available at
http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Notification to Interested Parties
Interested parties must submit applications for disclosure under
administrative protective order in accordance with 19 CFR 351.305.
Parties wishing to participate in this investigation should ensure that
they
[[Page 8593]]
meet the requirements of document submission procedures (e.g., the
filing of letters of appearance as discussed at 19 CFR 351.103(d)).\36\
Note that Commerce has temporarily modified certain of its requirements
for serving documents containing business proprietary information,
until further notice.\37\
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\36\ See Antidumping and Countervailing Duty Proceedings:
Documents Submission Procedures; APO Procedures, 73 FR 3634 (January
22, 2008).
\37\ 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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This notice is issued and published pursuant to sections 702 and
777(i) of the Act, and 19 CFR 351.203(c).
Dated: February 1, 2021.
Christian Marsh,
Acting Assistant Secretary for Enforcement and Compliance.
Appendix
Scope of the Investigation
The merchandise covered by this investigation is
pentafluoroethane (R-125), or its chemical equivalent, regardless of
form, type or purity level. R-125 has the Chemical Abstracts Service
(CAS) registry number of 354-33-6 and the chemical formula
C2HF5. R-125 is also referred to as
Pentafluoroethane, Genetron HFC 125, Khladon 125, Suva 125, Freon
125, and Fc-125. Subject merchandise includes R-125, whether or not
incorporated into a blend. When R-125 is blended with other
products, only the R-125 component of the mixture is covered by the
scope of this investigation. Subject merchandise also includes R-125
and unpurified R-125 that is processed in a third country or
otherwise outside the customs territory of the United States,
including, but not limited to, purifying, blending, or any other
processing that would not otherwise remove the merchandise from the
scope of this investigation if performed in the country of
manufacture of the in-scope R-125. The scope also includes R-125
that is commingled with R-125 from sources not subject to this
investigation. Only the subject component of such commingled
products is covered by the scope of this investigation.
Excluded from the current scope is merchandise covered by the
scope of the antidumping order on Hydrofluorocarbon Blends from the
People's Republic of China. See Hydrofluorocarbon Blends from the
People's Republic of China: Antidumping Duty Order, 81 FR 55436
(August 19, 2016) (the Blends Order).
R-125 is classified under Harmonized Tariff Schedule of the
United States (HTSUS) subheading 2903.39.2035. Merchandise subject
to the scope may also be entered under HTSUS subheadings
2903.39.2045 and 3824.78.0020. The HTSUS subheadings and CAS
registry number are provided for convenience and customs purposes.
The written description of the scope of the investigation is
dispositive.
[FR Doc. 2021-02530 Filed 2-5-21; 8:45 am]
BILLING CODE 3510-DS-P