[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Notices]
[Pages 54672-54674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19310]


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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: Affirmative 
Preliminary Determination of Circumvention of the Antidumping and 
Countervailing Duty Orders

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

SUMMARY: The U.S. Department of Commerce (Commerce) preliminarily 
determines that vertical shaft engines with displacements between 60cc 
and up to 99cc produced in the People's Republic of China (China) and 
exported to the United States, are circumventing the antidumping duty 
(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. Interested parties are invited to comment on 
these preliminary results.

DATES: Applicable September 7, 2022.

FOR FURTHER INFORMATION CONTACT: Benjamin A. Luberda, AD/CVD 
Operations, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW, Washington, DC 20230; telephone: (202) 482-2185.

SUPPLEMENTARY INFORMATION:

Background

    On May 4, 2021, the Department of Commerce (Commerce) published AD 
and CVD orders on small vertical engines from China.\1\ On September 
17, 2021, in response to a request from Briggs & Stratton, LLC (the 
petitioner),\2\ Commerce initiated a circumvention inquiry to determine 
whether imports of engines with displacements between 60cc and up to 
99cc produced in China and exported to the United States are ``altered 
in form or appearance in minor respects'' from in-scope merchandise 
such that they should be considered subject to the Orders.\3\ For a 
complete

[[Page 54673]]

description of events that followed initiation of this inquiry, see the 
Preliminary Decision Memorandum.\4\
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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: 
Antidumping and Countervailing Duty Orders, 86 FR 23675 (May 4, 
2021) (Orders).
    \2\ 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 July 30, 2021.
    \3\ See Certain Vertical Shaft Engines Between 99cc and up to 
225cc, and Parts Thereof, from the People's Republic of China: 
Initiation of Anti-Circumvention Inquiry of Antidumping and 
Countervailing Duty Orders--60cc up to 99cc Engines; 86 FR 51866 
(September 17, 2021) (Initiation Notice), and accompanying Issues 
and Decision Memorandum.
    \4\ See Memorandum, ``Preliminary Decision Memorandum for the 
Circumvention Inquiry,'' dated concurrently with, and hereby adopted 
by, this notice (Preliminary Decision Memorandum).
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Scope of the Orders

    The merchandise subject to the Orders is small vertical engines 
from China. For a complete description of the scope of the Orders, see 
the Preliminary Decision Memorandum.

Scope of the Circumvention Inquiry

    This circumvention inquiry covers small vertical engines with 
displacements between 60cc and up to 99cc produced in China and 
exported to the United States.

Statutory and Regulatory Framework

    Section 781(c) of the Tariff Act of 1930, as amended (the Act), 
provides that Commerce may find circumvention of an AD or CVD order 
when merchandise of the same class or kind as subject merchandise has 
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 ``{p{time} aragraph 1 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} .''
    While the Act is silent as to what factors to consider in 
determining whether alterations are properly considered ``minor,'' the 
legislative history of this provision indicates that there are certain 
factors that should be considered before reaching a circumvention 
determination. In conducting a circumvention inquiry under section 
781(c) of the Act, Commerce has generally relied upon ``such criteria 
as the overall physical characteristics of the merchandise, the 
expectations of the ultimate users, the use of the merchandise, the 
channels of marketing and the cost of any modification relative to the 
total value of the imported products.'' \5\ Concerning the allegation 
of minor alteration under section 781(c) of the Act and 19 CFR 
351.225(i), Commerce examines such factors as: (1) overall physical 
characteristics; (2) expectations of ultimate users; (3) use of 
merchandise; (4) channels of marketing; and (5) cost of any 
modification relative to the value of the imported products.\6\ Each 
inquiry is highly dependent on the facts on the record and must be 
analyzed in light of those specific facts.\7\ Thus, along with the five 
factors enumerated above, Commerce may also consider the circumstances 
under which the products enter the United States, including, but not 
limited to, the timing of the entries and the quantity of merchandise 
entered during the circumvention review period.\8\
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    \5\ See Carbon and Certain Alloy Steel Wire Rod from Mexico: 
Initiation of Anti-Circumvention Inquiry of Antidumping Duty Order, 
83 FR 5405 (February 7, 2018) (citing S. Rep. No. 71, 100th Cong., 
1st Sess. 100 (1987)).
    \6\ Id.; see also Deacero S.A. de C.V. v. United States, 817 
F.3d 1332 (Fed. Cir. 2016).
    \7\ See, e.g., Certain Uncoated Paper from Australia, Brazil, 
the People's Republic of China, Indonesia, and Portugal: Affirmative 
Preliminary Determination of Circumvention of the Antidumping and 
Countervailing Duty Orders, 82 FR 26778 (June 9, 2017), and 
accompanying Preliminary Decision Memorandum, at ``IV. Statutory and 
Regulatory Framework.''
    \8\ Id.; see also, e.g., Affirmative Preliminary Determination 
of Circumvention of the Antidumping Duty Order on Certain Cut-to-
Length Steel Plate from the People's Republic of China, 74 FR 33991, 
33992-93 (July 14, 2009); Brass Sheet and Strip from West Germany; 
Negative Preliminary Determination of Circumvention of Antidumping 
Duty Order, 55 FR 32655 (August 10, 1990), unchanged in Brass Sheet 
and Strip from Germany; Negative Final Determination of 
Circumvention of Antidumping Duty Order, 56 FR 65884 (December 19, 
1991); and Small Diameter Graphite Electrodes from the People's 
Republic of China: Initiation of Anticircumvention Inquiry, 77 FR 
37873 (June 25, 2012).
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Preliminary Determination

    We preliminarily determine that small vertical engines with 
displacements between 60cc and up to 99cc and engines with 
displacements of 99cc up to 225cc are not dissimilar in terms of 
overall physical characteristics of the merchandise, the expectations 
of the ultimate users, the use of the merchandise, channels of 
marketing, and the timing and circumstances under which the Zongshen 
Companies exported the engines with displacements between 60cc and up 
to 99cc.\9\ Because we find that the merchandise subject to this 
inquiry is not dissimilar to subject merchandise, we preliminarily 
determine that the engines at issue constitute merchandise ``altered in 
form or appearance in minor respects'' from in-scope merchandise, 
within the meaning of section 781(c)(1) of the Act. Also, we 
preliminarily determine that the affirmative circumvention finding 
should be applied on a countrywide basis.
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    \9\ In the less-than-fair-value investigation, Commerce found 
that Chongqing Zongshen General Power Machine Co., Ltd.; Chongqing 
Dajiang Power Equipment Co., Ltd.; and Chongqing Zongshen Power 
Machinery Co., Ltd. (collectively, the Zongshen Companies) should be 
treated as a single entity. See Certain Vertical Shaft Engines 
Between 99cc and Up to 225cc, and Parts Thereof, from the People's 
Republic of China: Preliminary Affirmative Determination of Sales at 
Less Than Fair Value, and Preliminary Affirmative Determination of 
Critical Circumstances, in Part, 85 FR 66932 (October 21, 2020), 
unchanged in Certain Vertical Shaft Engines Between 99cc and Up To 
225cc, and Parts Thereof, from the People's Republic of China: Final 
Affirmative Determination of Sales at Less Than Fair Value and Final 
Affirmative Determination of Critical Circumstances in Part, 86 FR 
14077 (March 12, 2021). Absent information to the contrary, we 
continue to treat the Zongshen Companies as a single entity for the 
purposes of this inquiry.
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    For a full description of the methodology underlying our 
conclusions, see the Preliminary Decision Memorandum. 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 https://access.trade.gov/public/FRNoticesListLayout.aspx. A list of 
the topics discussed in the Preliminary Decision Memorandum is attached 
at the appendix to this notice.

Suspension of Liquidation

    In accordance with 19 CFR 351.225(l)(2), we will direct U.S. 
Customs and Border Protection (CBP) to suspend liquidation of small 
vertical engines between 60cc and up to 99cc produced in China and 
exported to the United States that are entered, or withdrawn from 
warehouse, for consumption on or after September 17, 2021 (i.e., the 
date of the initiation of this inquiry).\10\ Pursuant to 19 CFR 
351.225(l)(2), we will also instruct CBP to require cash deposits of 
estimated duties equal to the AD and CVD rates in effect for small 
vertical engines for each unliquidated entry of small vertical engines 
between 60cc and up to 99cc produced in China and exported to the 
United States that are entered, or withdrawn from warehouse, for 
consumption on or after September 17, 2021. The suspension of 
liquidation instructions will remain in effect until further notice.
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    \10\ See Initiation Notice.
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Public Comment

    Interested parties are invited to comment on this preliminary 
determination of circumvention and may submit case briefs and/or 
written comments within 14 days of the

[[Page 54674]]

publication of this notice.\11\ Rebuttal briefs, limited to issues 
raised in the case briefs, may be filed no later than seven days after 
the date on which the case briefs are due.\12\ Parties who submit case 
briefs of rebuttal briefs in this inquiry 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.\13\ Case and rebuttal briefs 
should be filed electronically via ACCESS.\14\ Note that Commerce has 
modified certain of its requirements for serving documents containing 
business proprietary information, until further notice.\15\
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    \11\ Commerce is exercising its discretion, under 19 CFR 
351.309(c)(1)(ii), to alter the time limit for filing of case 
briefs.
    \12\ Commerce is exercising its discretion, under 19 CFR 
351.309(d)(1), to alter the time limit for filing of rebuttal 
briefs.
    \13\ See 19 CFR 351.309(c)(2) and (d)(2).
    \14\ See 19 CFR 351.303.
    \15\ 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 must submit a written request to the Assistant 
Secretary for Enforcement and Compliance, filed electronically and 
received successfully in its entirety via ACCESS by 5:00 p.m. Eastern 
Time within 14 days after the date of publication of this notice.\16\ 
Hearing requests should contain: (1) the party's name, address, and 
telephone number; (2) the number of participants; and (3) a list of 
issues to be discussed. Issues raised in the hearing will be limited to 
issues raised in the briefs. If a request for a hearing is made, 
parties will be notified of the date and time for the hearing at a 
later date.
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    \16\ See 19 CFR 351.310(c).
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Postponement of Final Determination

    Section 781(f) of the Act provides that, to the maximum extent 
practicable, Commerce shall make its circumvention determinations 
within 300 days from the date of initiation of the inquiry. On July 14, 
2022, we extended the final determination until August 25, 2022.\17\ We 
determine that it is not practicable to make a final determination in 
this circumvention inquiry by the current deadline of August 25, 2022, 
because Commerce will require additional time to review and analyze 
case and rebuttal briefs. Therefore, we are extending the time period 
for issuing the final determination in this inquiry by 103 days, to 
December 6, 2022.
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    \17\ See Memorandum, ``Extension of Anti-Circumvention Final 
Determination,'' dated July 14, 2022.
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Notification to Interested Parties

    This affirmative preliminary circumvention determination is in 
accordance with section 781(c) of the Act and 19 CFR 351.225(i).

    Dated: August 25, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Scope of the Orders
IV. Merchandise Subject to the Circumvention Inquiry
V. Statutory and Regulatory Framework
VI. Use of Facts Available With an Adverse Inference
VII. Allegation of Circumvention
VIII. Analysis
IX. Preliminary Affirmative Determination of Circumvention
X. Country-Wide Circumvention Finding
XI. Recommendation

[FR Doc. 2022-19310 Filed 9-6-22; 8:45 am]
BILLING CODE 3510-DS-P