[Federal Register Volume 89, Number 178 (Friday, September 13, 2024)]
[Notices]
[Pages 74891-74894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20888]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-167]


Certain Epoxy Resins From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, Preliminary 
Affirmative Determination of Critical Circumstances, and Alignment of 
Final Determination With Final Antidumping Duty 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 epoxy resins (epoxy resins) from the 
People's Republic of China (China) for the period of investigation 
(POI) January 1, 2023, through December 31, 2023. Interested parties 
are invited to comment on this preliminary determination.

DATES: Applicable September 13, 2024.

FOR FURTHER INFORMATION CONTACT: Nathan James, 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) 482-5305.

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 countervailing duty (CVD) 
investigation on April 29, 2024.\1\ On May 28, 2024, Commerce postponed 
the preliminary determination until September 3, 2024.\2\ On July 22, 
2024, Commerce tolled certain deadlines in this administrative 
proceeding by seven days.\3\ The deadline for the preliminary 
determination is now September 9, 2024.
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    \1\ See Certain Epoxy Resins from the People's Republic of 
China, India, the Republic of Korea, and Taiwan: Initiation of 
Countervailing Duty Investigations, 89 FR 33319 (April 29, 2024) 
(Initiation Notice).
    \2\ See Certain Epoxy Resins from the People's Republic of 
China, India, the Republic of Korea, and Taiwan: Postponement of 
Preliminary Determinations in the Countervailing Duty 
Investigations, 89 FR 46061 (May 28, 2024).
    \3\ See Memorandum, ``Tolling of Deadlines for Antidumping and 
Countervailing Duty Proceedings,'' dated July 22, 2024.
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    For a complete description of events that followed the initiation 
of this investigation, see the Preliminary Decision Memorandum.\4\ 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 https://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.
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    \4\ See Memorandum, ``Decision Memorandum for the Preliminary 
Affirmative Determination of the Countervailing Duty Investigation 
of Certain Epoxy Resins 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 products covered by this investigation are epoxy resins. For a 
complete description of the scope of this investigation, see Appendix 
I.

Scope Comments

    In accordance with the Preamble to Commerce's regulations,\5\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product

[[Page 74892]]

coverage (i.e., scope).\6\ We received several comments concerning the 
scope of this investigation, as well as in the companion less-than-fair 
value (LTFV) and CVD investigations of epoxy resins, as it appeared in 
the Initiation Notice. We are currently evaluating the scope comments 
filed by the interested parties. We intend to issue our preliminary 
decision regarding the scope of the LTFV and CVD investigations in the 
preliminary determinations of the companion LTFV investigations, the 
deadline for which is November 6, 2024.\7\ We will incorporate the 
scope decisions from the LTFV investigations into the scope of the 
final CVD determination for this investigation after considering any 
relevant comments submitted in scope case and rebuttal briefs.\8\
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    \5\ See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27323 (May 19, 1997) (Preamble).
    \6\ See Initiation Notice.
    \7\ See Certain Epoxy Resins from the People's Republic of 
China, India, the Republic of Korea, Taiwan, and Thailand: 
Postponement of Preliminary Determinations in the Less-Than-Fair-
Value Investigations, 89 FR 65583 (August 12, 2024) (LTFV 
Preliminary Postponement).
    \8\ The deadline for interested parties to submit scope case and 
rebuttal briefs will be established in the preliminary scope 
decision memorandum.
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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.\9\ Commerce notes that, in making these findings, it relied 
on facts available and, because it finds that the Government of China 
and both mandatory respondents did not act to the best of their 
abilities to respond to Commerce's requests for information, Commerce 
has drawn an adverse inference where appropriate in selecting from 
among the facts otherwise available. For a full description of the 
methodology underlying our preliminary conclusions, see the Preliminary 
Decision Memorandum.
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    \9\ 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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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 for Jiangsu Sanmu Group Co., Ltd. (Sanmu), Shandong 
Bluestar Dongda Chemical (Bluestar), 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.

Alignment

    As noted in the Preliminary Decision Memorandum, in accordance with 
section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is 
aligning the final CVD determination with the final determination in 
the companion LTFV investigation of epoxy resins from China based on a 
request made by the petitioner.\10\ Consequently, the final CVD 
determination will be issued on the same date as the final LTFV 
determination, which is currently scheduled to be issued no later than 
January 21, 2025, unless postponed.\11\
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    \10\ See Petitioner's Letter, ``Petitioner's Request to Align 
Countervailing Duty Investigation Final Determination with 
Antidumping Duty Investigation Final Determination,'' dated August 
15, 2024. The petitioner is the U.S. Epoxy Resin Producers Ad Hoc 
Coalition.
    \11\ LTFV Preliminary Postponement.
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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 
rates that are zero, de minimis, or 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)
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Jiangsu Sanmu Group Co., Ltd............................        * 108.64
Shandong Bluestar Dongda Chemical.......................        * 108.64
All Others..............................................        * 108.64
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* Rate based on an adverse inference.

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.
    Section 703(e)(2) of the Act provides that, given an affirmative 
determination of critical circumstances, any suspension of liquidation 
shall apply to unliquidated entries of merchandise entered, or 
withdrawn from warehouse, for consumption on or after the later of: (a) 
the date which is 90 days before the date on which the suspension of 
liquidation was first ordered; or (b) the date on which notice of 
initiation of the investigation was published. Commerce preliminarily 
finds that critical circumstances exist for imports of subject 
merchandise produced and/or exported by Bluestar, Sanmu, and all other 
producers and/or exporters. In accordance with section 703(e)(2)(A) of 
the Act, the suspension of liquidation shall apply to unliquidated 
entries of merchandise from the exporters/producers identified in this 
paragraph that were entered, or withdrawn from warehouse, for 
consumption on or after the date which is 90 days before the 
publication of this notice.

Disclosure

    Normally, Commerce discloses its calculations 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 the 
notice, in accordance with 19 CFR 351.224(b). However, because Commerce 
preliminarily applied facts available

[[Page 74893]]

with adverse inferences in the assignment of a subsidy rate for 
Bluestar and Sanmu, 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 has 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 LTFV 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 LTFV and CVD epoxy resins 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 at 
a time to be determined.\12\ Rebuttal briefs, limited to issues raised 
in the case briefs, may be submitted no later than five days after the 
deadline date for filing case briefs.\13\ Interested parties who submit 
case briefs or rebuttal briefs in this proceeding must submit: (1) a 
table of contents listing each issue; and (2) a table of 
authorities.\14\
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    \12\ See 19 CFR 351.309(c)(1)(i); see also 19 CFR 351.303 (for 
general filing requirements).
    \13\ See 19 CFR 351.309(d); see also Administrative Protective 
Order, Service, and Other Procedures in Antidumping and 
Countervailing Duty Proceedings, 88 FR 67069, 67077 (September 29, 
2023) (APO and Service Final Rule).
    \14\ See 19 CFR 351.309(c)(2) and (d)(2).
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    As provided under 19 CFR 351.309(c)(2) and (d)(2), in prior 
proceedings we have encouraged interested parties to provide an 
executive summary of their brief that should be limited to five pages 
total, including footnotes. In this investigation, we instead request 
that interested parties provide at the beginning of their briefs a 
public, executive summary for each issue raised in their briefs.\15\ 
Further, we request that interested parties limit their executive 
summary of each issue to no more than 450 words, not including 
citations. We intend to use the executive summaries as the basis of the 
comment summaries included in the issues and decision memorandum that 
will accompany the final determination in this investigation. We 
request that interested parties include footnotes for relevant 
citations in the executive summary of each issue. Note that Commerce 
has amended certain of its requirements pertaining to the service of 
documents in 19 CFR 351.303(f).\16\
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    \15\ We use the term ``issue'' here to describe an argument that 
Commerce would normally address in a comment of the Issues and 
Decision Memorandum.
    \16\ See APO and Service Final Rule, 88 FR at 67069.
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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, via ACCESS 
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.\17\ Parties should confirm by 
telephone the date, time, and location of the hearing two days before 
the scheduled date.
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    \17\ See 19 CFR 351.310(d).
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U.S. 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 epoxy 
resins from China are materially injuring, or threaten material injury 
to, the U.S. industry.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 703(f) and 777(i)(1) of the Act, and 19 CFR 351.205(c).

    Dated: September 9, 2024.
Abdelali Elouaradia,
Deputy Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The merchandise subject to this investigation is fully or 
partially uncured epoxy resins, also known as epoxide resins, 
polyepoxides, oxirane resins, ethoxyline resins, diglycidyl ether of 
bisphenol, (chloromethyl)oxirane, or aromatic diglycidyl, which are 
polymers or prepolymers containing epoxy groups (i.e., three-
membered ring structures comprised of two carbon atoms and one 
oxygen atom). Epoxy resins range in physical form from low viscosity 
liquids to solids. All epoxy resins are covered by the scope of this 
investigation irrespective of physical form, viscosity, grade, 
purity, molecular weight, or molecular structure, and packaging.
    Epoxy resins may contain modifiers or additives, such as 
hardeners, curatives, colorants, pigments, diluents, solvents, 
thickeners, fillers, plasticizers, softeners, flame retardants, 
toughening agents, catalysts, Bisphenol F, and ultraviolet light 
inhibitors, so long as the modifier or additive has not chemically 
reacted so as to cure the epoxy resin or convert it into a different 
product no longer containing epoxy groups. Such epoxy resins with 
modifiers or additives are included in the scope where the epoxy 
resin component comprises no less than 30 percent of the total 
weight of the product. The scope also includes blends of epoxy 
resins with different types of epoxy resins, with or without the 
inclusion of modifiers and additives, so long as the combined epoxy 
resin component comprises at least 30 percent of the total weight of 
the blend.
    Epoxy resins that enter as part of a system or kit with 
separately packaged co-reactants, such as hardeners or curing 
agents, are within the scope. The scope does not include any 
separately packaged co-reactants that would not fall within the 
scope if entered on their own.
    The scope includes merchandise matching the above description 
that has been processed in a third country, including by 
commingling, diluting, introducing, or removing modifiers or 
additives, or performing any other processing that would not 
otherwise remove the merchandise from the scope of the investigation 
if performed in the subject country.
    The scope also includes epoxy resin that is commingled or 
blended with epoxy resin from sources not subject to this 
investigation. Only the subject component of such commingled 
products is covered by the scope of this investigation.
    Excluded from the scope are phenoxy resins, which are polymers 
with a weight greater than 11,000 Daltons, a Melt Flow Index (MFI) 
at 200 [deg]C (392 [deg]F) no less than 4 grams and no greater than 
70 grams per 10 min, Glass-Transition Temperatures (Tg) no less than 
80 [deg]C (176 [deg]F) and no greater than 100 [deg]C (212 [deg]F), 
and which contain no epoxy groups other than at the terminal ends of 
the molecule.
    Excluded from the scope are certain paint and coating products, 
which are blends, mixtures, or other formulations of epoxy resin, 
curing agent, and pigment, in any form, packaged in one or more 
containers, wherein (1) the pigment represents a minimum of 10 
percent of the total weight of the product, (2) the epoxy resin 
represents a maximum of 80 percent of the total weight of the 
product,

[[Page 74894]]

and (3) the curing agent represents 5 to 40 percent of the total 
weight of the product.
    Excluded from the scope are preimpregnated fabrics or fibers, 
often referred to as ``pre-pregs,'' which are composite materials 
consisting of fabrics or fibers (typically carbon or glass) 
impregnated with epoxy resin.
    This merchandise is currently classifiable under Harmonized 
Tariff Schedule of the United States (HTSUS) subheading 
3907.30.0000. Subject merchandise may also be entered under 
subheadings 3907.29.0000, 3824.99.9397, 3214.10.0020, 2910.90.9100, 
2910.90.9000, 2910.90.2000, and 1518.00.4000. The HTSUS subheadings 
are provided for convenience and customs purposes only; the written 
description of the scope is dispositive.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Injury Test
IV. Analysis of China's Financial System
V. Diversification of China's Economy
VI. Use of Facts Otherwise Available and Adverse Inferences
VII. Critical Circumstances
VIII. Recommendation

[FR Doc. 2024-20888 Filed 9-12-24; 8:45 am]
BILLING CODE 3510-DS-P