[Federal Register Volume 88, Number 42 (Friday, March 3, 2023)]
[Notices]
[Pages 13425-13428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04438]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-146]


Certain Freight Rail Couplers and Parts Thereof From the People's 
Republic of China: Preliminary Affirmative Countervailing Duty 
Determination and Preliminary Affirmative Critical Circumstances 
Determination

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

SUMMARY: The U.S. Department of Commerce (Commerce) preliminarily 
determines that countervailable subsidies are being provided to 
producers and exporters of certain freight rail couplers and parts 
thereof (freight rail couplers) From the People's Republic of China 
(China) during the period of investigation January 1, 2021, through 
December 31, 2021.

DATES: Applicable March 3, 2023.

FOR FURTHER INFORMATION CONTACT: Terre Keaton Stefanova or Paul Gill, 
AD/CVD Operations, Office IX, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-1280 or (202) 
482-5673, 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). On October 18, 
2022,

[[Page 13426]]

Commerce published the notice of initiation of this investigation.\1\ 
On December 2, 2022, Commerce postponed the preliminary determination 
of this investigation until February 27, 2023.\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 https://access.trade.gov/public/FRNoticesListLayout.aspx.
---------------------------------------------------------------------------

    \1\ See Certain Freight Rail Couplers and Parts Thereof from the 
People's Republic of China: Initiation of Countervailing Duty 
Investigation, 87 FR 64440 (October 25, 2022) (Initiation Notice).
    \2\ See Certain Freight Rail Couplers and Parts Thereof from the 
People's Republic of China: Postponement of Preliminary 
Determination, 87 FR 74128 (December 2, 2022).
    \3\ See Memorandum, ``Decision Memorandum for the Preliminary 
Determination in the Countervailing Duty Investigation of Certain 
Freight Rail Couplers and Parts Thereof from the People's Republic 
of China,'' dated concurrently with, and hereby adopted by, this 
notice (Preliminary Decision Memorandum).
---------------------------------------------------------------------------

Scope of the Investigation

    The products covered by this investigation are 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 
comments from several parties concerning the scope of the antidumping 
duty (AD) and countervailing duty (CVD) investigations of freight rail 
couplers as it appeared in the Initiation Notice, which are listed in 
the Preliminary Decision Memorandum.\6\ We are currently evaluating the 
scope comments filed by the interested parties and intend to issue our 
preliminary decision regarding the scope of the AD and CVD 
investigations shortly. We will incorporate the scope decisions from 
the AD investigations into the scope of the final CVD determination for 
this investigation, after considering any relevant comments submitted 
in scope case and rebuttal briefs.
---------------------------------------------------------------------------

    \4\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997).
    \5\ See Initiation Notice, 87 FR 64441.
    \6\ See Preliminary Decision Memorandum at 1-22.
---------------------------------------------------------------------------

Preliminary Affirmative Determination of Critical Circumstances

    In accordance with section 703(e)(1) of the Act, we preliminarily 
find that critical circumstances exist with respect to imports of 
subject merchandise from Chongqing Tongyao, Qingdao Sanheshan, the non-
responsive companies,\7\ and all other producers and/or exporters. For 
a full discussion of our preliminary critical circumstances 
determination, see the ``Critical Circumstances'' section of the 
Preliminary Decision Memorandum.
---------------------------------------------------------------------------

    \7\ The non-responsive companies are: (1) Chongqing Changzheng 
Heavy Industry Co., Ltd.; (2) CRRC Qiqihar Co., Ltd.; (3) NanJing 
Zhongsheng Rolling Stock Components Co. Ltd.; (4) Ningbo Minghui 
Metal Technology Co., Ltd.; (5) Qingdao Lianshan Casting Co., Ltd.; 
(6) Shaanxi Haiduo Railway Technology Development Co., Ltd.; and (7) 
Shanghai Voith Xiagujin Chuang Coupler Technology Co., Ltd.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 the ``Use of Facts 
Otherwise Available and Adverse Inferences'' section in the Preliminary 
Decision Memorandum.
---------------------------------------------------------------------------

    \9\ See sections 776(a) and (b) of the Act.
---------------------------------------------------------------------------

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 
each of the individually examined respondents based entirely on facts 
available under section 776 of the Act. This is the only rate available 
in this proceeding for deriving the all-others rate. Consequently, 
pursuant to sections 703(d) and 705(c)(5)(A)(ii) of the Act, Commerce 
established the all-others rate by applying the countervailable subsidy 
rate assigned to the mandatory respondents.

Preliminary Determination

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

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                            (percent ad
                                                             valorem)
------------------------------------------------------------------------
Chongqing Changzheng Heavy Industry Co., Ltd............          265.99
Chongqing Tongyao Transportation Equipment Co...........          265.99
CRRC Qiqihar Co., Ltd...................................          265.99
NanJing Zhongsheng Rolling Stock Components Co. Ltd.....          265.99
Ningbo Minghui Metal Technology Co., Ltd................          265.99
Qingdao Lianshan Casting Co., Ltd.......................          265.99
Qingdao Sanheshan Precision Casting Co., Ltd............          265.99

[[Page 13427]]

 
Shaanxi Haiduo Railway Technology Development Co., Ltd..          265.99
Shanghai Voith Xiagujin Chuang Coupler Technology Co.,            265.99
 Ltd....................................................
All Others..............................................          265.99
------------------------------------------------------------------------

Suspension of Liquidation

    In accordance with section 703(e)(2)(A) of the Act, because we find 
that critical circumstances exist for Chongqing Tongyao, Qingdao 
Sanheshan, the non-responsive companies, and all other producers and/or 
exporters, 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 90 days prior to 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 in the 
calculation of the benefit for Chongqing Tongyao, Qingdao Sanheshan, 
and the non-responsive companies, and the applied AFA rates are based 
on rates calculated in prior proceedings, there are no calculations to 
disclose.

Verification

    Because the examined respondents in this investigation did not 
provide information Commerce requested and Commerce preliminarily 
determines that each of the examined respondents have been 
uncooperative, it will not conduct verification.

Public Comment

    All interested parties will have the opportunity to submit scope 
case and rebuttal briefs on the preliminary decision regarding the 
scope of the AD and CVD investigations. The deadlines to submit scope 
case and rebuttal briefs will be provided in the preliminary scope 
decision memorandum. For all scope case and rebuttal briefs, parties 
must file identical documents simultaneously on the records of the 
ongoing AD and CVD freight rail couplers investigations. No new factual 
information or business proprietary information may be included in 
either scope case or rebuttal briefs.
    Case briefs or other written comments on non-scope issues 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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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, and a list of the issues to be discussed. Oral 
presentations at 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 time and date for the hearing.\12\
---------------------------------------------------------------------------

    \12\ See 19 CFR 351.310(d).
---------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 703(f) of the Act, Commerce will notify 
the U.S. International Trade Commission (ITC) of its determination. If 
the final determination is affirmative, 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 27, 2023.
Abdelali Elouaradia,
Deputy Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The scope of this investigation covers certain freight railcar 
couplers (also known as ``fits'' or ``assemblies'') and parts 
thereof. Freight railcar couplers are composed of two main parts, 
namely knuckles and coupler bodies but may also include other items 
(e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle 
throwers, and rotors). The parts of couplers that are covered by the 
investigation include: (1) E coupler bodies, (2) E/F coupler bodies, 
(3) F coupler bodies, (4) E knuckles, and (5) F knuckles, as set 
forth by the Association of American Railroads (AAR). The freight 
rail coupler parts (i.e., knuckles and coupler bodies) are included 
within the scope of the investigation when imported separately. 
Coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, 
and rotors are covered merchandise when imported in an assembly but 
are not covered by the scope when imported separately.
    Subject freight railcar couplers and parts are included within 
the scope whether finished or unfinished, whether imported 
individually or with other subject or non-subject parts, whether 
assembled or unassembled, whether mounted or unmounted, or if joined 
with non-subject merchandise, such as other non-subject parts or a 
completed railcar. Finishing includes, but is not limited to, arc 
washing, welding, grinding, shot blasting, heat treatment, 
machining, and assembly of various parts. When a subject coupler or 
subject parts are mounted on or to other non-subject merchandise, 
such as a railcar, only the coupler or subject parts 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

[[Page 13428]]

Parts'' and/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 couplers and parts thereof, 
whether fully assembled, unfinished or finished, or attached to a 
railcar, is the country where the subject coupler parts were cast or 
forged. Subject merchandise includes coupler parts as defined above 
that have been further processed or further assembled, including 
those coupler parts attached to a railcar 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 parts. The inclusion, 
attachment, joining, or assembly of non-subject parts with subject 
parts or couplers either in the country of manufacture of the in-
scope product or in a third country does not remove the subject 
parts or couplers from the scope.
    The couplers 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 railcars 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. 
Subject merchandise may also be imported under HTSUS statistical 
reporting number 7325.99.5000. 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 of the Investigation
IV. Injury Test
V. Diversification of China's Economy
VI. Use of Facts Otherwise Available and Adverse Inferences
VII. Analysis of Programs
VIII. Critical Circumstances
IX. Recommendation

[FR Doc. 2023-04438 Filed 3-2-23; 8:45 am]
BILLING CODE 3510-DS-P