Certain Brake Drums 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-570-175]</DEPDOC> <SUBJECT>Certain Brake Drums 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 certain brake drums (brake drums) 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 February 3, 2024. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Nathan James or Olivia Woolverton, 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 or (202) 482-7452, respectively. </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 17, 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 September 6, 2024, Commerce postponed the preliminary determination until November 25, 2024. <SU>3</SU> <FTREF/> <FTNT> <SU>1</SU>   <E T="03">See Certain Brake Drums from the People's Republic of China and the Republic of Türkiye: Initiation of Countervailing Duty Investigations,</E> 89 FR 58106 (July 17, 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 Certain Brake Drums from the People's Republic of China and the Republic of Türkiye: Postponement of Preliminary Determinations in the Countervailing Duty Investigations,</E> 89 FR 72827 (September 6, 2024). </FTNT> For a complete description of events that followed the initiation of this investigation, <E T="03">see</E> the Preliminary Decision Memorandum. <SU>4</SU> <FTREF/> 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> <FTNT> <SU>4</SU>   <E T="03">See</E> Memorandum, “Decision Memorandum for the Preliminary Affirmative Determination of the Countervailing Duty Investigation of Certain Brake Drums from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Preliminary Decision Memorandum). </FTNT> <HD SOURCE="HD1">Scope of the Investigation</HD> The products covered by this investigation are brake drums 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/> Certain interested parties commented on the scope of the investigation as it appeared in the <E T="03">Initiation Notice.</E> Commerce intends to issue its preliminary decision regarding comments concerning the scope of the antidumping (AD) and CVD investigations in the preliminary determination of the companion AD investigations. 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. <SU>7</SU> <FTREF/> <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 58109. </FTNT> <FTNT> <SU>7</SU>  The deadline for interested parties to submit scope case and rebuttal briefs will be established in the preliminary scope decision memorandum. </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 to be 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>8</SU> <FTREF/> For a full description of the methodology underlying our preliminary determination, <E T="03">see</E> the Preliminary Decision Memorandum. <FTNT> <SU>8</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 certain companies that failed to timely respond to Commerce's quantity and value (Q&V) questionnaire, as well as the Government of China, did not act to the best of their abilities to respond to Commerce's requests for information, it drew an adverse inference where appropriate in selecting from among the facts otherwise available. <SU>9</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>9</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 concurrent AD investigation of brake drums from China, based on a request made by the petitioner. <SU>10</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 April 8, 2025, unless postponed. <SU>11</SU> <FTREF/> <FTNT> <SU>10</SU>   <E T="03">See</E> Petitioner's Letter, “Request to Align Final Antidumping and Countervailing Duty Determination,” dated November 7, 2024. </FTNT> <FTNT> <SU>11</SU>   <E T="03">See Certain Brake Drums from the Republic of Türkiye and the People's Republic of China: Postponement of Preliminary Determinations in the Less-Than-Fair-Value Investigations,</E> 89 FR 91675 (November 20, 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 total net subsidy rates for CAIEC Trailer Master Co., Ltd. (CAIEC Trailer) and Shandong ConMet Mechanical, Ltd. (Shandong ConMet) that are not zero, <E T="03">de minimis,</E> or based entirely on the facts otherwise available. Because Commerce calculated individual estimated countervailable subsidy rates for CAIEC Trailer and Shandong ConMet that are not zero, <E T="03">de minimis,</E> or based entirely on the facts otherwise available, we have preliminarily calculated the all-others rate using a weighted-average of the individual estimated subsidy rates calculated for the examined respondents using each company's publicly-ranged sales values. <SU>12</SU> <FTREF/> <FTNT> <SU>12</SU>   <E T="03">See</E> Memorandum, “Calculation of Subsidy Rate for All Others,” dated concurrently with this notice. </FTNT> <HD SOURCE="HD1">Rate for Non-Responsive Companies</HD> Thirteen potential exporters and/or producers of brake drums from China did not timely respond to Commerce's Q&V questionnaire. <SU>13</SU> <FTREF/> We find that, by not timely responding to the Q&V questionnaire, these companies withheld requested information and significantly impeded this proceeding. Thus, in reaching our preliminary determination, pursuant to sections 776(a)(2)(A) and (C) of the Act, we are basing the subsidy rate for the non-responsive companies on facts otherwise available. <FTNT> <SU>13</SU>  These companies are: (1) Guangzhou Joyhand Import & Export Co.; (2) Hebei Iruijin Auto Parts Co., Ltd.; (3) Henan Broad Top Metal Work, Llc.; (4) Henan Valiant Braking System Co.; (5) HTS (Tianjin) Supply Chain Co., Ltd.; (6) Panasia CVS (HK), Ltd.; (7) Raw King Brake Parts C ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━