[Federal Register Volume 86, Number 47 (Friday, March 12, 2021)]
[Notices]
[Pages 14071-14074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05185]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-125]


Certain Vertical Shaft Engines Between 99cc and Up To 225cc, and 
Parts Thereof 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/or 
exporters of certain vertical shaft engines between

[[Page 14072]]

99cc and up to 225cc, and parts thereof (small vertical engines) from 
the People's Republic of China (China). The period of investigation is 
January 1, 2019, through December 31, 2019.

DATES: Applicable March 12, 2021.

FOR FURTHER INFORMATION CONTACT: Ajay Menon or Adam Simons, 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) 482-1993 or (202) 482-6172, 
respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On August 24, 2020, Commerce published the Preliminary 
Determination.\1\ The petitioner in this investigation is Briggs & 
Stratton, Corporation. In addition to the Government of China (GOC), 
the mandatory respondents in this investigation are Chongqing Kohler 
Engines Ltd. (Chongqing Kohler) and Chongqing Zongshen General Power 
Machine Co. (Chongqing Zongshen).
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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: 
Preliminary Affirmative Countervailing Duty Determination and 
Alignment of Final Determination With Final Antidumping Duty 
Determination, 85 FR 52086 (August 24, 2020) (Preliminary 
Determination), and accompanying Preliminary Decision Memorandum.
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    A summary of the events that occurred since Commerce published the 
Preliminary Determination and a full discussion of the issues raised by 
parties for this final determination are provided in the Issues and 
Decision Memorandum.\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 Issues and 
Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/index.html. The signed and electronic 
versions of the Issues and Decision Memorandum are identical in 
content.
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    \2\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Determination in the Countervailing Duty 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 (Issues and 
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,\3\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (i.e., scope).\4\ Certain interested 
parties commented on the scope of the investigation as it appeared in 
the Initiation Notice and we addressed these comments in the 
Preliminary Determination, preliminarily modifying the scope of this 
and the companion antidumping duty (AD) investigation to exclude 
commercial engines.\5\ We established a period of time for parties to 
address scope issues in scope case and rebuttal briefs,\6\ and we 
received such comments, which we addressed in the Final Scope Decision 
Memorandum.\7\
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    \3\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997).
    \4\ See Certain Vertical Shaft Engines between 99cc and up to 
225cc, and Parts Thereof from the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 85 FR 20667 (April 
14, 2020) (Initiation Notice).
    \5\ See Preliminary Determination, 85 FR at 52087; see also 
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).
    \6\ See Preliminary Scope Decision Memorandum.
    \7\ See Memorandum, ``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 Final 
Determination,'' dated concurrently with, and hereby adopted by, 
this notice (Final Scope Decision Memorandum).
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    On November 6, 2020, we issued a memorandum providing parties an 
opportunity to comment on the overlap in the scopes of this and the 
concurrent AD investigation on small vertical engines and that of the 
AD and countervailing duty (CVD) investigations on certain walk-behind 
lawn mowers and parts thereof (lawn mowers).\8\ After analyzing 
interested parties' comments, we modified the scope of the lawn mowers 
investigations to address the overlap.\9\ We have not made any changes 
to the scope of this and the concurrent AD investigation from that 
published in the Preliminary Determination. See Appendix I to this 
notice.
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    \8\ 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; 
Antidumping and Countervailing Duty Investigations of Certain Walk-
Behind Lawn Mowers and Parts Thereof from the People's Republic of 
China; and Antidumping Duty Investigation of Certain Walk-Behind 
Lawn Mowers from the Socialist Republic of Vietnam,'' dated November 
6, 2020.
    \9\ See Memorandum, ``Antidumping and Countervailing Duty 
Investigations of Lawn Mowers from the People's Republic of China 
and the Socialist Republic of Vietnam: Preliminary Scope Decision 
Memorandum,'' dated December 22, 2020.
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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 
that parties raised is attached to this notice as 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.\10\ For a full description of the methodology underlying our 
final determination, see the Issues and Decision Memorandum.
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    \10\ 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 was unable to conduct on-site verification of the 
information relied upon in making its final determination in this 
investigation. However, we took additional steps in lieu of an on-site 
verification to verify the information relied upon in making this final 
determination, in accordance with section 782(i) of the Act.\11\
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    \11\ See Chongqing Kohler's Letter, ``Certain Vertical Shaft 
Engines Between 99cc and up to 225cc, and Parts Thereof, from the 
People's Republic of China: Response of Chongqing Kohler Engines 
Ltd. and Kohler (China) Investment Co. Ltd. to in Lieu of 
Verification Questionnaire,'' dated November 25, 2020; and Chongqing 
Zongshen's Letter, ``Certain Vertical Shaft Engines Between 225cc 
and 999cc, and Parts Thereof, from China; CVD Investigation; 
Zongshen Verification Questionnaire Response,'' dated November 25, 
2020.
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Changes Since the Preliminary Determination

    Based on our review and analysis of the comments received from 
parties, we made certain changes to the subsidy rate calculations for 
Chongqing Kohler and Chongqing Zongshen. As a result of these changes, 
Commerce also revised the all-others rate. For a discussion of these 
changes, see the Issues and Decision Memorandum.

[[Page 14073]]

Final Determination

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we 
calculated individual estimated subsidy rates for Chongqing Kohler and 
Chongqing Zongshen. Section 705(c)(5)(A)(i) of the Act states that, for 
companies not individually investigated, Commerce will determine an 
all-others rate equal to the weighted-average countervailable subsidy 
rates established for exporters and/or producers individually 
investigated, excluding any zero and de minimis countervailable subsidy 
rates, and any rates determined entirely under section 776 of the Act. 
Therefore, Commerce calculated the all-others rate using a simple 
average of the individual estimated subsidy rates calculated for the 
examined respondents.\12\
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    \12\ As complete publicly ranged sales data was unavailable, we 
calculated the all-others rate using the simple average of Chongqing 
Kohler and Chongqing Zongshen's subsidy rates. See e.g., Certain 
Corrosion Inhibitors from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination, 86 FR 7537 (January 
29, 2021) (relying on a simple average because complete publicly 
ranged sales data was unavailable).
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    Commerce determines the total estimated net countervailable subsidy 
rates to be the following:

------------------------------------------------------------------------
                                                           Subsidy rate
                    Producer/exporter                        (percent)
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Chongqing Kohler Engines Ltd............................            2.84
Chongqing Zongshen General Power Machine Co.............           18.13
All Others..............................................           10.46
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Disclosure

    Commerce intends to disclose the calculations performed in 
connection with this final determination within five days of the date 
of public announcement or, if there is no public announcement, within 
five days of the date of publication of this notice to parties in this 
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, Commerce 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 or 
after August 24, 2020, the date of publication of the Preliminary 
Determination in the Federal Register.
    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we intend to issue a CVD order, 
reinstate the suspension of liquidation under section 706(a) of the 
Act, and require a cash deposit of estimated countervailing duties for 
such entries of subject merchandise in the amounts indicated above. 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, we will notify the 
ITC of our determination. Because the final determination in this 
proceeding is affirmative, in accordance with section 705(b) 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 of small vertical 
engines from China no later than 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 a CVD order directing CBP to assess, upon further 
instruction by Commerce, countervailing 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, as discussed above in the ``Continuation of Suspension of 
Liquidation'' section.

Notification Regarding Administrative Protective Order (APO)

    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 disposition 
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: March 5, 2021.
Christian Marsh,
Acting 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 
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 these 
proceedings. 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 these proceedings.
    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

[[Page 14074]]

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 this investigation are 
``Commercial'' or ``Heavy Commercial'' engines under 40 CFR 1054.107 
and 40 CFR 1054.135 that have (1) a displacement of 160cc or 
greater, (2) a cast iron cylinder liner, (3) an automatic 
compression release, and (4) and a muffler with at least three 
chambers and volume greater than 400cc.
    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 Issues and Decision Memorandum

I. Summary
II. Background
III. Final Affirmative Determination of Critical Circumstances
IV. Subsidies Valuation Information
V. Use of Facts Otherwise Available and Adverse Inferences
VI. Analysis of Programs
VII. Analysis of Comments
    Comment 1: Income Tax Deduction for Research and Development 
(R&D) Expenses Under the Enterprise Income Tax Law
    Comment 2: Export Buyer's Credit Program
    Comment 3: Whether the Electricity for Less-Than-Adequate-
Remuneration (LTAR) Program is Specific
    Comment 4: Whether Commerce Should Revise Its Critical 
Circumstances Analysis
    Comment 5: Whether Commerce Should Find Critical Circumstances 
for Chongqing Kohler and Companies Covered by the All-Others Rate
    Comment 6: Whether Commerce Should Countervail Certain of 
Chongqing Kohler's Bank Acceptance Notes
    Comment 7: Whether Chongqing Zongshen's Input Suppliers are 
Government Authorities
    Comment 8: Whether Commerce Should Rely on Consolidated Sales 
Data in Attributing Subsidies Received by Zongshen Group or Zongshen 
Power
    Comment 9: Whether Commerce Should Adjust Chongqing Zongshen's 
Policy Loans Calculations
    Comment 10: Whether Commerce Should Adjust Chongqing Zongshen's 
Land-Use Rights for LTAR Calculation
    Comment 11: Whether Commerce Should Reverse Its 
Uncreditworthiness Determination for Chongqing Zongshen
VIII. Recommendation

[FR Doc. 2021-05185 Filed 3-11-21; 8:45 am]
BILLING CODE 3510-DS-P