Vanillin from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination with Final Antidumping Duty Determination

<NOTICE> DEPARTMENT OF COMMERCE <SUBAGY>International Trade Administration</SUBAGY> <DEPDOC>[C-570-173]</DEPDOC> <SUBJECT>Vanillin from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination with Final Antidumping Duty Determination</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Enforcement and Compliance, International Trade Administration, Department of Commerce. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The U.S. Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of vanillin from the People's Republic of China (China). The period of investigation is January 1, 2023, through December 31, 2023. Interested parties are invited to comment on this preliminary determination. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Applicable November 18, 2024. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Jeff Pedersen, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2769. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> 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 July 1, 2024. <SU>1</SU> <FTREF/> On July 22, 2024, Commerce tolled certain deadlines in this administrative proceeding by seven days. <SU>2</SU> <FTREF/> On August 13, 2024, Commerce postponed the preliminary determination of this investigation until November 12, 2024. <SU>3</SU> <FTREF/> For a complete description of the events that followed the initiation of this investigation, <E T="03">see</E> the Preliminary Decision Memorandum. <SU>4</SU> <FTREF/> <FTNT> <SU>1</SU>   <E T="03">See Vanillin from the People's Republic of China: Initiation of Countervailing Duty Investigation,</E> 89 FR 54421 (July 1, 2024) ( <E T="03">Initiation Notice</E> ). </FTNT> <FTNT> <SU>2</SU>   <E T="03">See</E> Memorandum, “Tolling of Deadlines for Antidumping and Countervailing Duty Proceedings,” dated July 22, 2024. </FTNT> <FTNT> <SU>3</SU>   <E T="03">See Vanillin from the People's Republic of China: Postponement of Preliminary Determination in the Countervailing Duty Investigation,</E> 89 FR 65845 (August 13, 2024). </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Memorandum, “Decision Memorandum for the Preliminary Affirmative Determination in the Countervailing Duty Investigation of Vanillin from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Preliminary Decision Memorandum). </FTNT> 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 <E T="03">https://access.trade.gov</E> . In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at <E T="03">https://access.trade.gov/public/FRNoticesListLayout.aspx.</E> <HD SOURCE="HD1">Scope of the Investigation</HD> The product covered by this investigation is vanillin from China. For a complete description of the scope of this investigation, <E T="03">see</E> Appendix I. <HD SOURCE="HD1">Scope Comments</HD> In accordance with the <E T="03">Preamble</E> to Commerce's regulations, <SU>5</SU> <FTREF/> the <E T="03">Initiation Notice</E> set aside a period of time for parties to raise issues regarding product coverage, ( <E T="03">i.e.,</E> scope). <SU>6</SU> <FTREF/> No interested party commented on the scope of the investigation as it appeared in the <E T="03">Initiation Notice.</E> <FTNT> <SU>5</SU>   <E T="03">See Antidumping Duties; Countervailing Duties, Final Rule,</E> 62 FR 27296, 27323 (May 19, 1997) ( <E T="03">Preamble</E> ). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See Initiation Notice,</E> 89 FR at 54421-22. </FTNT> <HD SOURCE="HD1">Methodology</HD> 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, <E T="03">i.e.,</E> a financial contribution by an “authority” that gives rise to a benefit to the recipient, and that the subsidy is specific. <SU>7</SU> <FTREF/> <FTNT> <SU>7</SU>   <E T="03">See</E> 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. </FTNT> Commerce notes that, in making these findings, it relied, in part, on facts available and, because it finds that one or more respondents did not act to the best of their ability to respond to Commerce's requests for information, it drew an adverse inference where appropriate in selecting from among the facts otherwise available. <SU>8</SU> <FTREF/> For further information, <E T="03">see</E> the “Use of Facts Otherwise Available and Adverse Inferences” section in the Preliminary Decision Memorandum. <FTNT> <SU>8</SU>   <E T="03">See</E> sections 776(a) and (b) of the Act. </FTNT> <HD SOURCE="HD1">Alignment</HD> In accordance with section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is aligning the final CVD determination in this investigation with the final determination in the companion antidumping duty (AD) investigation of vanillin from China based on a request made by Solvay USA LLC (the petitioner). <SU>9</SU> <FTREF/> Consequently, the final CVD determination will be issued on the same date as the final AD determination, which is currently scheduled to be issued no later than March 24, 2025, unless postponed. <FTNT> <SU>9</SU>   <E T="03">See</E> Petitioner's Letter, “Request to Align Final Countervailing Duty Determination with the Companion Antidumping Duty Final Determination,” dated October 17, 2024. </FTNT> <HD SOURCE="HD1">All-Others Rate</HD> 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, <E T="03">de minimis,</E> or based entirely under section 776 of the Act. In this investigation, Commerce preliminarily calculated an individual estimated countervailable subsidy rate for Jiaxing Guihua Chemical Import and Export Co., Ltd. (Guihua), the only individually examined exporter/producer in this investigation. Because the only individually calculated rate is not zero, <E T="03">de minimis,</E> or based entirely on facts otherwise available, the estimated weighted-average rate calculated for Guihua is the rate preliminarily assigned to all other producers and exporters, pursuant to section 705(c)(5)(A)(i) of the Act. <HD SOURCE="HD1">Preliminary Determination</HD> Commerce preliminarily determines that the following estimated countervailable subsidy rates exist: <GPOTABLE COLS="2" OPTS="L2,tp0,i1" CDEF="s100,12"> <TTITLE> </TTITLE> <CHED H="1">Company</CHED> <CHED H="1"> Subsidy rate (percent <E T="03">ad valorem</E> Jiaxing Guihua Chemical Import and Export Co., Ltd. <SU>10</SU> </ENT> <ENT>27.33</ENT> </ROW> <ROW> <ENT I="01">All Others</ENT> <ENT>27.33</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">  As discussed in the Preliminary Decision Memorandum, Commerce preliminarily finds Guihua to be cross owned with the following companies: Jiaxing Zhongua Chemical Co. Ltd., Zhejiang Zonghua Flavor Co., Ltd., and Jiaxing Zhonghua Thermal Power Development Co., Ltd. </FTNT> Commerce intends to disclose its calculations and analysis performed to interested parties in this preliminary determination 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 the <E T="04">Federal Register</E> , accordance with 19 CFR 351.224(b). Consistent with 19 CFR 351.224(e), Commerce will analyze and, if appropriate, correct any timely allegations of significant ministerial errors by amending the preliminary determination. However, consistent with 19 CFR 351.224(d), Commerce will not consider incomplete allegations that do not address the significance standard under 19 CFR 351.224(g) following the preliminary determination. Instead, Commerce will address such allegations in the final determination together with issues raised in the case briefs or other written comments. <HD SOURCE="HD1">Suspension of Liquidation</HD> 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 section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the <E T="04">Federal Register.</E> Further, pursuant to 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the rates indicated above. <HD SOURCE="HD1">Verification</HD> As provided in section 782(i)(1) of the Act, Commerce intends to verify the information relied upon in making its final determination. <HD SOURCE="HD1">Public Comment</HD> ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. 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