[Federal Register Volume 87, Number 44 (Monday, March 7, 2022)]
[Notices]
[Pages 12662-12664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04692]


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DEPARTMENT OF COMMERCE

International Trade Administration


Freight Rail Coupler Systems and Certain Components Thereof: 
Preliminary Affirmative Countervailing Duty Determination

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that countervailable subsidies are being provided to producers and 
exporters of freight rail coupler systems and certain components 
thereof (freight rail couplers) from the People's Republic of China 
(China) during the period of investigation January 1, 2020, through 
December 31, 2020. Interested parties are invited to comment on this 
preliminary determination.

DATES: Applicable March 7, 2022.

FOR FURTHER INFORMATION CONTACT: Whitley Herndon or Robert Scully, AD/
CVD Operations, Office V, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-6274, or (202) 
482-0572, respectively.

SUPPLEMENTARY INFORMATION:

Background

    This preliminary determination is made in accordance with section 
703(b) of the Tariff Act of 1930, as amended (the Act). Commerce 
published the notice of initiation of this investigation on October 25, 
2021.\1\ On December 9, 2021, Commerce postponed the preliminary 
determination to February 28, 2022.\2\ For a complete description of 
the events that followed the initiation of this investigation, see the 
Preliminary Decision Memorandum.\3\ A list of topics discussed in the 
Preliminary Decision Memorandum is included as Appendix II to this 
notice. The Preliminary 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 Preliminary Decision Memorandum can 
be accessed directly at http://enforcement.trade.gov/frn/.
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    \1\ See Freight Rail Coupler Systems and Certain Components 
Thereof from the People's Republic of China: Initiation of 
Countervailing Duty Investigation, 86 FR 58878 (October 25, 2021) 
(Initiation Notice).
    \2\ See Freight Rail Coupler Systems and Certain Components 
Thereof from the People's Republic of China: Postponement of 
Preliminary Determination in the Countervailing Duty Investigation, 
86 FR 70113 (December 9, 2021).
    \3\ See Memorandum, ``Decision Memorandum for the Preliminary 
Determination in the Countervailing Duty Investigation of Freight 
Rail Coupler Systems and Certain Components Thereof from the 
People's Republic of China,'' dated concurrently with, and hereby 
adopted by, this notice (Preliminary Decision Memorandum).
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Scope of the Investigation

    The product covered by this investigation is freight rail couplers 
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,\4\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (i.e., scope).\5\ We received several 
comments concerning the scope of the antidumping duty (AD) and 
countervailing duty (CVD) investigations of freight rail couplers as it 
appeared in the Initiation Notice. On February 11, 2022, we requested 
additional scope comments from interested parties regarding merchandise 
under consideration attached to rail cars.\6\ On February 22, 2022, we 
received comments from several interested parties; with rebuttal 
comments due March 1, 2022. Because these comments were submitted in 
close proximity to the preliminary determinations, we intend to issue 
our preliminary decision regarding the scope of the AD and CVD 
investigations after the preliminary determination of the companion AD 
investigation, the deadline for which is March 8, 2022.\7\ We will 
incorporate the scope decisions from the AD investigation into the 
scope of the final CVD determination for this investigation after 
considering any relevant comments submitted in scope case and rebuttal 
briefs.
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    \4\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997) (Preamble).
    \5\ See Initiation Notice, 86 FR 58879.
    \6\ See Memorandum, ``Countervailing Duty Investigation of 
Freight Rail Coupler Systems and Certain Components Thereof from the 
People's Republic of China: Request for Additional Scope Comments,'' 
dated February 11, 2022.
    \7\ See Freight Rail Coupler Systems and Certain Components 
Thereof from the People's Republic of China: Initiation of Less-
Than-Fair-Value Investigation, 86 FR 58864 (October 25, 2021).
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Methodology

    Commerce is conducting this investigation in accordance with 
section 701 of the Act. For each of the subsidy programs found 
countervailable, Commerce preliminarily 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.\8\
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    \8\ 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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    Commerce notes that, in making these findings, it relied on facts 
available and, because Commerce finds that necessary information was 
missing from the record and because respondents did not act to the best 
of their ability to respond to Commerce's requests for information, 
Commerce drew an adverse inference in selecting from among the facts 
otherwise available.\9\ For further information, see ``Use of Facts 
Otherwise Available and Adverse Inferences'' in the Preliminary 
Decision Memorandum.
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    \9\ See sections 776(a) and (b) of the Act.

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[[Page 12663]]

All-Others Rate

    Sections 703(d) and 705(c)(5)(A) of the Act provide that in the 
preliminary determination, Commerce shall determine an estimated all-
others rate for companies not individually examined. This rate shall be 
an amount equal to the weighted average of the estimated subsidy rates 
established for those companies individually examined, excluding any 
zero and de minimis rates and any rates based entirely under section 
776 of the Act.
    Pursuant to section 705(c)(5)(A)(ii) of the Act, if the individual 
estimated countervailable subsidy rates established for all exporters 
and producers individually examined are zero, de minimis or determined 
based entirely on facts otherwise available, Commerce may use ``any 
reasonable method'' to establish the estimated subsidy rate for all-
other producers or exporters. In this investigation, Commerce 
preliminarily determined the individually estimated subsidy rate for 
the individually examined respondent based entirely on facts available 
under section 776 of the Act. Consequently, pursuant to sections 703(d) 
and 705(c)(5)(A)(ii) of the Act, we established the all-others rate by 
applying the countervailable subsidy rate assigned to the mandatory 
respondent.

Preliminary Determination

    Commerce preliminarily determines that the following estimated 
countervailable subsidy rates exist:

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                           (ad valorem)
                                                             (percent)
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Chongqing Tongyao Transportation Equipment Co...........          265.99
CRRC Corporation Limited................................          265.99
CRRC Qiqihar Co., Ltd...................................          265.99
China Railway Materials Group Co., Ltd..................          265.99
Shaanxi Haiduo Railway Technology Development Co., Ltd..          265.99
All Others..............................................          265.99
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Suspension of Liquidation

    In accordance with section 703(d)(1)(B) and (d)(2) of the Act, 
Commerce will direct U.S. Customs and Border Protection (CBP) to 
suspend liquidation of entries of subject merchandise as described in 
the scope of the investigation entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. Further, pursuant to 19 CFR 351.205(d), Commerce 
will instruct CBP to require a cash deposit equal to the rates 
indicated above.

Disclosure

    Normally, Commerce discloses its calculations and analysis 
performed in connection with the preliminary determination to 
interested parties within five days of its public announcement, or if 
there is no public announcement, within five days of the date of 
publication of this notice, in accordance with 19 CFR 351.224(b). 
However, because Commerce preliminarily applied total AFA rates to the 
individually examined company, Chongqing Tongyao, and to the companies 
that did not respond to Commerce's quantity and value questionnaire, 
and the applied AFA rates are based on rates calculated in prior 
proceedings, there are no calculations to disclose.

Verification

    Because the examined respondent in this investigation did not 
provide information requested by Commerce and Commerce preliminarily 
determines that the examined respondent to have been uncooperative, we 
will not conduct verification.

Public Comment

    All interested parties will have the opportunity to submit case and 
rebuttal briefs on the preliminary scope determination. The deadline to 
submit case briefs on the preliminary scope determination will be seven 
days after the signature date of the preliminary scope decision 
memorandum. Scope rebuttal briefs (which are limited to issues raised 
in the scope briefs) may be submitted no later than seven days after 
the deadline for the scope briefs. For all scope briefs and rebuttals 
thereto, parties must file identical documents simultaneously on the 
records of the ongoing AD and CVD freight rail coupler investigations. 
No new factual information or business proprietary information may be 
included in either scope briefs or rebuttal scope briefs.
    Case briefs or other written comments on non-scope matters may be 
submitted to the Assistant Secretary for Enforcement and Compliance no 
later than 20 days after the date of publication of the preliminary 
determination. Rebuttal briefs, limited to issues raised in case 
briefs, may be submitted no later than seven days after the deadline 
date for case briefs.\10\ Pursuant to 19 CFR 351.309(c)(2) and (d)(2), 
parties who submit case briefs or rebuttal briefs in this investigation 
are encouraged to submit with each argument: (1) A statement of the 
issue; (2) a brief summary of the argument; and (3) a table of 
authorities. Commerce has modified certain of its requirements for 
serving documents containing business proprietary information until 
further notice.\11\
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    \10\ See 19 CFR 351.309; see also 19 CFR 351.303 (for general 
filing requirements).
    \11\ 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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    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, limited to issues raised in the case and rebuttal 
briefs, must submit a written request to the Assistant Secretary for 
Enforcement and Compliance, U.S. Department of Commerce within 30 days 
after the date of publication of this notice. Requests should contain 
the party's name, address, and telephone number, the number of 
participants, whether any participant is a foreign national, and a list 
of the issues to be discussed. If a request for a hearing is made, 
Commerce intends to hold the hearing at a date and time to be 
determined. Parties should confirm by telephone the date, time, and 
location of the hearing two days before the scheduled date.

International Trade Commission Notification

    In accordance with section 703(f) of the Act, Commerce will notify 
the International Trade Commission (ITC) of its determination. If the 
final determination is affirmative, then the ITC will determine before 
the later of 120 days after the date of this preliminary determination 
or 45 days after the final determination whether imports of freight 
rail couplers from China are materially injuring, or threaten material 
injury to, the U.S. industry.

Notification to Interested Parties

    This determination is issued and published pursuant to sections 
703(f) and 777(i) of the Act, and 19 CFR 351.205(c).

    Dated: February 28, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The scope of this investigation covers freight rail car coupler 
systems and certain components thereof. Freight rail car coupler 
systems are composed of, at minimum, four main components (knuckles, 
coupler bodies, coupler yokes, and follower blocks, as specified 
below) but may also include other items (e.g., coupler locks, lock 
lift assemblies, knuckle pins, knuckle throwers, and rotors). The 
components covered by the investigation include: (1) E coupler 
bodies; (2) E/F coupler

[[Page 12664]]

bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E 
knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type 
follower blocks, as set forth by the Association of American 
Railroads (AAR). The freight rail coupler components are included 
within the scope of the investigation when imported individually, or 
in some combination thereof, such as in the form of a coupler fit (a 
coupler body and knuckle assembled together), independent from a 
coupler system.
    Subject freight rail car coupler systems and components are 
included within the scope whether finished or unfinished, whether 
imported individually or with other subject or non-subject 
components, whether assembled or unassembled, whether mounted or 
unmounted, or if joined with non-subject merchandise, such as other 
non-subject system parts or a completed rail car. Finishing 
includes, but is not limited to, arc washing, welding, grinding, 
shot blasting, heat treatment, machining, and assembly of various 
components. When a subject coupler system or subject components are 
mounted on or to other non-subject merchandise, such as a rail car, 
only the coupler system or subject components are covered by the 
scope.
    The finished products covered by the scope of this investigation 
meet or exceed the AAR specifications of M-211, ``Foundry and 
Product Approval Requirements for the Manufacture of Couplers, 
Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts'' or AAR 
M-215 ``Coupling Systems,'' or other equivalent domestic or 
international standards (including any revisions to the 
standard(s)).
    The country of origin for subject coupler systems and 
components, whether fully assembled, unfinished or finished, or 
attached to a rail car, is the country where the subject coupler 
components were cast or forged. Subject merchandise includes coupler 
components as defined above that have been further processed or 
further assembled, including those coupler components attached to a 
rail car in third countries. Further processing includes, but is not 
limited to, arc washing, welding, grinding, shot blasting, heat 
treatment, painting, coating, priming, machining, and assembly of 
various components. The inclusion, attachment, joining, or assembly 
of non-subject components with subject components or coupler systems 
either in the country of manufacture of the in-scope product or in a 
third country does not remove the subject components or coupler 
systems from the scope.
    The coupler systems that are the subject of this investigation 
are currently classifiable in the Harmonized Tariff Schedule of the 
United States (HTSUS) statistical reporting number 8607.30.1000. 
Unfinished subject merchandise may also enter under HTSUS 
statistical reporting number 7326.90.8688. Subject merchandise 
attached to finished rail cars may also enter under HTSUS 
statistical reporting numbers 8606.10.0000, 8606.30.0000, 
8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under 
subheading 9803.00.5000 if imported as an Instrument of 
International Traffic. These HTSUS subheadings are provided for 
convenience and customs purposes only; the written description of 
the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. Use of Facts Otherwise Available and Adverse Inferences
VI. Analysis of Programs
VII. Recommendation

[FR Doc. 2022-04692 Filed 3-4-22; 8:45 am]
BILLING CODE 3510-DS-P