Hard Empty Capsules From the People's Republic of China: Final Affirmative Countervailing Duty Determination

<NOTICE> DEPARTMENT OF COMMERCE <SUBAGY>International Trade Administration</SUBAGY> <DEPDOC>[C-570-185]</DEPDOC> <SUBJECT>Hard Empty Capsules From the People's Republic of China: Final Affirmative Countervailing 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) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from the People's Republic of China (China). The period of investigation is January 1, 2023, through December 31, 2023. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Applicable December 29, 2025. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Laura Delgado or John Conniff, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1468 or (202) 482-1009, respectively. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> On March 31, 2025, Commerce published the <E T="03">Preliminary Determination</E> in the <E T="04">Federal Register</E> , invited interested parties to comment. <SU>1</SU> <FTREF/> In the <E T="03">Preliminary Determination,</E> and in accordance with section 705(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.210(b)(4), Commerce aligned the final CVD determination with the final determination in the less-than-fair-value investigation of capsules from China. <SU>2</SU> <FTREF/> <FTNT> <SU>1</SU>   <E T="03">See Hard Empty Capsules from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination with Final Antidumping Duty Determination,</E> 90 FR 14244 (March 31, 2025) ( <E T="03">Preliminary Determination</E> ), and accompanying Preliminary Decision Memorandum (PDM). </FTNT> <FTNT> <SU>2</SU>   <E T="03">Id.</E> </FTNT> Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days. <SU>3</SU> <FTREF/> Additionally, due to a backlog of documents that were electronically filed via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS) during the Federal Government shutdown, on November 24, 2025, Commerce tolled all deadlines in administrative proceedings by an additional 21 days. <SU>4</SU> <FTREF/> Accordingly, the deadline for this final determination is now December 18, 2025. <FTNT> <SU>3</SU>   <E T="03">See</E> Memorandum, “Deadlines Affected by the Shutdown of the Federal Government,” dated November 14, 2025. </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Memorandum, “Tolling of all Case Deadlines,” dated November 24, 2025. </FTNT> For a complete discussion of the events that followed the <E T="03">Preliminary Determination,</E> see the Issues and Decision Memorandum. <SU>5</SU> <FTREF/> The Issues and Decision Memorandum is a public document and is made available to the public via ACCESS. ACCESS is available to registered users at <E T="03">https://access.trade.gov.</E> In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at <E T="03">https://access.trade.gov/public/FRNoticesListLayout.aspx.</E> <FTNT> <SU>5</SU>   <E T="03">See</E> Memorandum, “Issues and Decision Memorandum for the Final Affirmative Determination of the Countervailing Duty Investigation of Hard Empty Capsules from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Issues and Decision Memorandum). </FTNT> <HD SOURCE="HD1">Scope of the Investigation</HD> The products covered by this investigation are capsules 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 the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage ( <E T="03">i.e.,</E> scope) in scope-specific case briefs or other written comments. <SU>6</SU> <FTREF/> We received scope case and rebuttal briefs from multiple interested parties. For a summary of the product coverage comments and rebuttal response submitted to the record for this final determination, and accompanying discussion and analysis of all comments timely received, <E T="03">see</E> the Final Scope Memorandum. <SU>7</SU> <FTREF/> In the Final Scope Memorandum, Commerce determined that it is modifying the scope language as it appeared in the <E T="03">Initiation Notice.</E> <SU>8</SU> <FTREF/> <E T="03">See</E> Appendix I. <FTNT> <SU>6</SU>   <E T="03">See</E> Memorandum, “Less-Than-Fair-Value Investigations of Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam and Countervailing Duty Investigations from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Preliminary Scope Decision Memorandum,” dated March 24, 2025 (Preliminary Scope Memorandum). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Memorandum, “Less-Than-Fair-Value Investigations of Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam and Countervailing Duty Investigations from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Final Scope Decision Memorandum,” dated concurrently with this notice (Final Scope Memorandum). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Initiation of Countervailing Duty Investigations,</E> 89 FR 91680 (November 20, 2024) ( <E T="03">Initiation Notice</E> ). </FTNT> <HD SOURCE="HD1">Verification</HD> As provided in section 782(i) the Act, in April 2025, Commerce verified the information reported by Jiangsu Lefan Capsule Co., Ltd. (Jiangsu Lefan) and Shanxi JC Biological Technology Co., Ltd. (Shanxi JC) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided at verification. <SU>9</SU> <FTREF/> <FTNT> <SU>9</SU>   <E T="03">See</E> Memoranda, “Verification of the Questionnaire Responses of Jiangsu Lefan Capsule Co., Ltd.,” dated May 29, 2025; and “Verification of the Questionnaire Responses of Shanxi JC Biological Technology,” dated May 28, 2025. </FTNT> <HD SOURCE="HD1">Analysis of Subsidy Programs and Comments Received</HD> The subsidy programs under investigation and the issues raised in the case and rebuttal briefs that were submitted by interested parties in this investigation are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum, <E T="03">see</E> Appendix II to this notice. <HD SOURCE="HD1">Methodology</HD> Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce 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>10</SU> <FTREF/> For a full description of the methodology underlying our final determination, <E T="03">see</E> the Issues and Decision Memorandum. <FTNT> <SU>10</SU>   <E T="03">See</E> sections 771(5)(B) and (D) of the Act regarding financial contribution; <E T="03">see also</E> section 771(5)(E) of the Act regarding benefit; and section 771(5A) of the Act regarding specificity. </FTNT> In making this final determination, Commerce relied, in part, on facts otherwise available, including with an adverse inference, pursuant to sections 776(a) and (b) of the Act. For a full discussion of our application of adverse facts available (AFA), <E T="03">see</E> the <E T="03">Preliminary Determination</E>   <SU>11</SU> <FTREF/> and the Issues and Decision Memorandum at the section entitled “Use of Facts Available and Application of Adverse Inferences.” <FTNT> <SU>11</SU>   <E T="03">See Preliminary Determination</E> PDM at 6-16. </FTNT> <HD SOURCE="HD1">Changes Since the Preliminary Determination</HD> Based on our review and analysis of the information received during verification and comments received from parties, for this final determination, we made certain changes to the countervailable subsidy rate calculations for Jiangsu Lefan, Shanxi JC, and for all other producers/exporters. <SU>12</SU> <FTREF/> For a discussion of these changes, <E T="03">see</E> the Issues and Decision Memorandum. <FTNT> <SU>12</SU>   <E T="03">See</E> Issues and Decision Memorandum at 3. </FTNT> <HD SOURCE="HD1">All-Others Rate</HD> Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and <E T="03">de minimis</E> countervailable subsidy rates, and any rates determined entirely under section 776 of the Act. Commerce calculated individual estimated countervailable subsidy rates for Jiangsu Lefan and Shanxi JC that are not zero, <E T="03">de minimis,</E> or based entirely on facts otherwise available. Commerce calculated the all- ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━