[Federal Register Volume 87, Number 79 (Monday, April 25, 2022)]
[Notices]
[Pages 24280-24282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08698]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-124, C-570-125]


Certain Vertical Shaft Engines Between 99cc and Up To 225cc, and 
Parts Thereof, From the People's Republic of China: Initiation of 
Circumvention Inquiry of the Antidumping and Countervailing Duty 
Orders--Dual-Piston Engines

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

SUMMARY: In response to a circumvention inquiry request from Briggs & 
Stratton, LLC, the Department of Commerce (Commerce) is initiating a 
country-wide circumvention inquiry to determine whether dual-piston 
engines exported from the People's Republic of China (China) will 
circumvent the antidumping (AD) and countervailing duty (CVD) orders on 
certain vertical shaft engines between 99cc and up to 225cc, and parts 
thereof (small vertical engines) from China.

DATES: Applicable April 25, 2022.

FOR FURTHER INFORMATION CONTACT: Paul Gill, 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) 482-5673.

SUPPLEMENTARY INFORMATION:

Background

    On March 4, 2022, Briggs & Stratton, LLC, the petitioner in the 
less-than-fair-value (LTFV) and CVD investigations, requested that 
Commerce initiate a circumvention inquiry with respect to dual-piston 
engines produced in and exported from China.\1\ The petitioner alleges 
that dual-piston engines constitute merchandise altered in form or 
appearance in such minor respects that they should be included within 
the scope of the Orders,\2\ pursuant to section 781(c) of the Tariff 
Act of 1930, as amended (the Act), and 19 CFR 351.226(j). In addition, 
the petitioner alleges that dual-piston engines are later-developed 
merchandise and should be included within the scope of the Orders, 
pursuant to section 781(d) of the Act and 19 CFR 351.226(k).
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    \1\ See Petitioner's Letter, ``Request for Anti-Circumvention 
Inquiry Pursuant to Section 781(c) and/or Section 781(d) of the 
Tariff Act of 1930,'' dated March 4, 2022.
    \2\ See Certain Vertical Shaft Engines Between 99cc and Up to 
225cc, and Parts Thereof from the People's Republic of China: 
Antidumping and Countervailing Duty Orders, 86 FR 23675 (May 4, 
2021) (Orders).
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    On March 28, 2022, we extended the deadline to initiate this 
circumvention inquiry by 15 days, in accordance with the 19 CFR 
351.226(d)(1), to April 18, 2022.\3\ On April 7, 2022, FNA Group, Inc. 
(FNA) submitted comments asking that Commerce reject the petitioner's 
request that Commerce initiate a country-wide circumvention inquiry.\4\
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    \3\ See Memorandum, ``Correction to Extended Date to Determine 
Whether to Initiate Circumvention Inquiry,'' dated April 7, 2022. 
Commerce initially submitted a memorandum on March 28, 2022 to 
extend the initiation deadline, but the extended deadline was 
incorrectly listed as April 19, 2022. See Memorandum, ``Extension of 
Time to Determine Whether to Initiate Circumvention Inquiry,'' dated 
March 28, 2022.
    \4\ See FNA's Letter, ``Request to Reject Anti-Circumvention 
Inquiry Request,'' dated April 7, 2022. FNA initially submitted 
comments on March 29, 2022, but Commerce rejected these comments 
because they contained untimely new factual information. See 
Commerce's Letter, ``Rejection Letter,'' dated April 6, 2022. We 
intend to address FNA's comments from its April 7, 2022 letter post-
initiation because they relate to the substance of the petitioner's 
allegation.

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[[Page 24281]]

Scope of the Orders

    The products subject to the Orders are small vertical engines from 
China. For a complete description of the scope of the Orders, see the 
appendix to this notice.

Merchandise Subject to the Circumvention Inquiry

    This circumvention inquiry covers dual-piston engines produced in 
China and exported to the United States.

Statutory and Regulatory Framework

    Section 351.226(d) of Commerce's regulations states that if 
Commerce determines that a request for a circumvention inquiry 
satisfies the requirements of 19 CFR 351.226(c), then Commerce ``will 
accept the request and initiate a circumvention inquiry.'' Section 
351.226(c)(1) of Commerce's regulations, in turn, requires that each 
request for a circumvention inquiry allege ``that the elements 
necessary for a circumvention determination under section 781 of the 
Act exist'' and be ``accompanied by information reasonably available to 
the interested party supporting these allegations.'' The petitioner 
alleges circumvention pursuant to sections 781(c) (merchandise altered 
in form or appearance in minor respects) and 781(d) (merchandise 
developed after an investigation is initiated) of the Act.
    Section 351.226(m)(2) of Commerce's regulations states, for 
companion AD and CVD duty proceedings, that ``the Secretary will 
initiate and conduct a single inquiry with respect to the product at 
issue for both orders only on the record of the antidumping 
proceeding.'' Further, once ``the Secretary issues a final 
circumvention determination on the record of the antidumping duty 
proceeding, the Secretary will include a copy of that determination on 
the record of the countervailing duty proceeding.'' Accordingly, once 
Commerce concludes this circumvention inquiry, Commerce intends to 
place its final circumvention determination on the record of the 
companion CVD proceeding.
    Section 781(c)(1) of the Act provides that the class or kind of 
merchandise subject to an AD or CVD order shall include articles that 
have been ``altered in form or appearance in minor respects . . . 
whether or not included in the same tariff classification.'' Section 
781(c)(2) of the Act provides an exception that section 781(c)(1) of 
the Act ``shall not apply with respect to altered merchandise if the 
administering authority determines that it would be unnecessary to 
consider the altered merchandise within the scope of the 
{order{time} .'' Concerning the allegation of minor alteration under 
section 781(c) of the Act and 19 CFR 351.226(j), Commerce may consider 
criteria including, but not limited to: (1) Overall physical 
characteristics of the merchandise; (2) expectations of ultimate users; 
(3) use of the merchandise; (4) channels of marketing; and (5) cost of 
any modification relative to the value of the imported products.
    Section 781(d) of the Act provides that Commerce may find 
circumvention of an AD or CVD order when merchandise is developed after 
an investigation is initiated. In conducting a later-developed 
merchandise inquiry under section 781(d)(1) of the Act and 19 CFR 
351.226(k), Commerce will consider whether: (1) The later-developed 
merchandise has the same general physical characteristics as the 
merchandise with respect to which the order was originally issued; (2) 
the expectations of the ultimate purchasers of the later-developed 
merchandise are the same as for the earlier product; (3) the ultimate 
use of the earlier product and the later-developed merchandise are the 
same; (4) the later-developed merchandise is sold through the same 
channels of trade as the earlier product; and (5) the later-developed 
merchandise is advertised and displayed in a manner similar to the 
earlier product.\5\ First, however, Commerce determines whether the 
merchandise subject to the inquiry was commercially available at the 
time of the initiation of the underlying LTFV or CVD investigation 
(i.e., the product was present in the commercial market or the product 
was tested and ready for commercial production).\6\
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    \5\ See section 781(d)(1) of the Act.
    \6\ See 19 CFR 351.226(k).
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Analysis

    After analyzing the record evidence and the petitioner's 
allegation, we determine that there is sufficient information to 
warrant initiation of a circumvention inquiry based on both 
allegations: (1) Minor alterations, pursuant to section 781(c) of the 
Act and 19 CFR 351.226(j); and (2) later-developed merchandise, 
pursuant to section 781(d) of the Act and 19 CFR 351.226(k). For a full 
discussion of the basis for our decision to initiate a circumvention 
inquiry regarding both the later-developed merchandise and minor 
alterations allegations, see the Initiation Decision Memorandum.\7\
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    \7\ See Memorandum, ``Decision Memorandum for Initiation of 
Circumvention Inquiry,'' dated concurrently with, and hereby adopted 
by, this notice (Initiation Decision Memorandum), available at 
https://access.trade.gov/public/FRNoticesListLayout.aspx.
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    As explained in the Initiation Decision Memorandum, the information 
provided by the petitioner also warrants initiating this circumvention 
inquiry on a country-wide basis. Commerce has taken this approach in 
prior circumvention inquiries, when the facts warranted initiation on a 
country-wide basis.\8\
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    \8\ See, e.g., Aluminum Extrusions from the People's Republic of 
China: Affirmative Final Determination of Circumvention of the 
Antidumping and Countervailing Duty Orders and Rescission of Minor 
Alterations Anti-Circumvention Inquiry, 82 FR 4630 (July 26, 2017), 
and accompanying Issues and Decision Memorandum at Comment 4.
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    Commerce intends to establish a schedule for questionnaires and 
comments on the issues related to this inquiry. A company's failure to 
respond completely to Commerce's requests for information may result in 
the application of partial or total facts available, pursuant to 
section 776(a) of the Act, which may include adverse inferences, 
pursuant to section 776(b) of the Act.

Suspension of Liquidation

    Pursuant to 19 CFR 351.226(l)(1), Commerce intends to notify U.S. 
Customs and Border Protection (CBP) of this initiation and direct CBP 
to continue the suspension of liquidation of entries of products 
subject to this circumvention inquiry that were already subject to the 
suspension of liquidation under the Orders and to apply the cash 
deposit rates that would be applicable if the products were determined 
to be covered by the scope of the Orders. Should Commerce issue 
preliminary or final circumvention determinations, Commerce will follow 
the suspension of liquidation rules under 19 CFR 351.226(l)(2)-(4).

Notification to Interested Parties

    In accordance with 19 CFR 351.226(d) and sections 781(c) and (d) of 
the Act, Commerce determines that the petitioner's request for a 
circumvention inquiry satisfies the requirements of 19 CFR 351.226(c). 
Accordingly, Commerce is notifying all interested parties of the 
initiation of this circumvention inquiry to determine whether dual-
piston engines produced in and exported from China will circumvent the 
Orders. In addition, we have included a description of the products 
that are the

[[Page 24282]]

subject to this inquiry and an explanation of Commerce's decision to 
initiate this inquiry as provided in the accompanying Initiation 
Decision Memorandum. In accordance with 19 CFR 351.226(e)(1), Commerce 
intends to issue its preliminary circumvention determination no later 
than 150 days from the date of publication of the notice of initiation 
of this circumvention inquiry in the Federal Register.
    This notice is published in accordance with sections 781(c) and (d) 
of the Act, and 19 CFR 351.226(d)(1)(ii).

    Dated: April 18, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix

Scope of the Orders

    The merchandise covered by these Orders 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 these Orders 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 the 
orders. 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 
the orders.
    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 these Orders, 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 these orders. 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 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 these orders are 
``Commercial'' or ``Heavy Commercial'' engines under 40 CFR 1054.107 
and 1054.135 that have (1) a displacement of 160 cc or greater, (2) 
a cast iron cylinder liner, (3) an automatic compression release, 
and (4) a muffler with at least three chambers and volume greater 
than 400 cc.
    The engines subject to these Orders are predominantly classified 
under the Harmonized Tariff Schedule of the United States (HTSUS) 
subheading 8407.90.1010. The engine subassemblies that are subject 
to these Orders are classified under HTSUS subheading 8409.91.9990. 
The mounted engines that are subject to these Orders are classified 
under HTSUS subheadings 8433.11.0050, 8433.11.0060, and 
8424.30.9000. Engines subject to these Orders may also be classified 
under HTSUS subheadings 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 is dispositive.

[FR Doc. 2022-08698 Filed 4-22-22; 8:45 am]
BILLING CODE 3510-DS-P