[Federal Register Volume 87, Number 6 (Monday, January 10, 2022)]
[Notices]
[Pages 1110-1112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00180]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-138]


Pentafluoroethane (R-125) From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination

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

SUMMARY: The Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers and/or 
exporters of pentafluoroethane (R-125) from the People's Republic of 
China (China). The period of investigation is January 1, 2020, through 
December 31, 2020.

DATES: Applicable January 10, 2022.

FOR FURTHER INFORMATION CONTACT: Adam Simons, AD/CVD Operations, Office 
II, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, 
DC 20230; telephone: (202) 482-6172.

SUPPLEMENTARY INFORMATION:

Background

    On June 25, 2021, Commerce published the Preliminary 
Determination.\1\ The petitioner in this investigation is Honeywell 
International, Inc. In addition to the Government of China, the 
mandatory respondents in this investigation are Zhejiang Quzhou Juxin 
Fluorine Chemical Co., Ltd. (Juxin) and Zhejiang Sanmei Chemical Ind. 
Co., Ltd. (Sanmei).
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    \1\ See Pentafluoroethane (R-125) from the People's Republic of 
China: Preliminary Affirmative Countervailing Duty Determination and 
Alignment of Final Determination with Final Antidumping Duty 
Determination, 86 FR 33648 (June 25, 2021), and accompanying 
Preliminary Decision Memorandum.
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    A summary of the events that occurred since Commerce published the 
Preliminary Determination and a full discussion of the issues raised by 
parties for this final determination are provided in the Issues and 
Decision Memorandum.\2\ The Issues and 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 Issues and 
Decision Memorandum can be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx.
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    \2\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Determination in the Countervailing Duty Investigation of 
Pentafluoroethane (R-125) from the People's Republic of China,'' 
dated concurrently with, and hereby adopted by, this notice (Issues 
and Decision Memorandum).
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Scope of the Investigation

    The product covered by this investigation is R-125 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,\3\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (i.e., scope).\4\ Certain interested 
parties commented on the scope of the investigation as it appeared in 
the Initiation Notice. We addressed these comments in the AD 
Preliminary Determination and preliminarily modified the scope of this 
and the companion antidumping duty investigation.\5\ We established a 
period of time for parties to address scope issues in scope case and 
rebuttal briefs,\6\ and we received such comments, which we addressed 
in the Final Scope Decision Memorandum.\7\ After analyzing interested 
parties' comments, we made certain changes to the scope of this and the 
concurrent CVD investigation that published in the Preliminary 
Determination. See Appendix I to this notice.
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    \3\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997).
    \4\ See Pentafluoroethane (R-125) from the People's Republic of 
China: Initiation of Countervailing Duty Investigation, 86 FR 8589 
(February 8, 2021) (Initiation Notice).
    \5\ See Pentafluoroethane (R-125) from the People's Republic of 
China: Preliminary Affirmative Determination of Sales at Less Than 
Fair Value, Preliminary Affirmative Determination of Critical 
Circumstances, in Part, Postponement of Final Determination, and 
Extension of Provisional Measures, 86 FR 45959 (August 17, 2021) (AD 
Preliminary Determination) at 45960; see also Memorandum, 
``Preliminary Scope Decision Memorandum,'' dated August 10, 2021 
(Preliminary Scope Decision Memorandum).
    \6\ See Preliminary Scope Decision Memorandum at 2-3.
    \7\ See Memorandum, ``Final Scope Decision Memorandum,'' dated 
concurrently with, and hereby adopted by, this notice (Final Scope 
Decision Memorandum).
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Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in the Issues and Decision Memorandum. A list of the issues 
that parties raised is attached to this notice as Appendix II.

Methodology

    Commerce conducted this investigation in accordance with section 
701 of the Tariff Act of 1930, as amended (the Act). For each of the 
subsidy programs found countervailable, Commerce 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\ For a full description of the methodology underlying our 
final determination, see the Issues and Decision Memorandum.
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    \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.
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    In making this final determination, Commerce relied, in part on 
facts otherwise available, and because it found 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 available.\9\ As 
described in the Preliminary Determination, we applied an adverse 
inference in the selection of facts available for determining a subsidy

[[Page 1111]]

rate for the four companies that did not respond to Commerce's quantity 
and value (Q&V) questionnaire: Arkema Daikin Advanced Fluorochemicals 
(Changsu) Co., Ltd.; Daikin Fluorochemicals (China) Co., Ltd.; Hongkong 
Richmax Ltd.; and Weitron International Refrigeration Equipment 
(Kunshan) Co., Ltd.\10\ For a full discussion of our application of 
adverse facts available (AFA), see the Preliminary Determination.\11\
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    \9\ See sections 776(a) and 776(b) of the Act.
    \10\ See Preliminary Decision Memorandum at 6-18.
    \11\ Id. at ``Use of Facts Otherwise Available and Adverse 
Inferences.''
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Verification

    Commerce was unable to conduct on-site verification of the 
information relied upon in making its final determination in this 
investigation. However, we took additional steps in lieu of an on-site 
verification to verify the information relied upon in making this final 
determination, in accordance with section 782(i) of the Act.\12\
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    \12\ See Juxin's Letter, ``Submission of In-Lieu-of-Verification 
(ILOV) Questionnaire Response,'' dated September 23, 2021; and 
Sanmei's Letter, ``Submission of In-Lieu-of-Verification (ILOV) 
Questionnaire Response,'' dated October 8, 2021.
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Changes Since the Preliminary Determination

    Based on our review and the analysis of the comments received from 
parties and our verification findings, we made changes to our subsidy 
rate calculations for Juxin and Sanmei. As a result of these changes, 
Commerce also revised the all-others rate. Commerce also revised the 
AFA rate applied to the companies which did not respond to the Q&V 
questionnaire to include the subsidy programs included in the Post-
Preliminary Analysis Memo.\13\ For a discussion of these changes, see 
the Issues and Decision Memorandum.
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    \13\ See Memorandum, ``Post-Preliminary Analysis in the 
Countervailing Duty Investigation of Pentafluoroethane (R-125) from 
the People's Republic of China,'' dated September 9, 2021 (Post-
Preliminary Analysis Memo); see also Issues and Decision Memorandum 
at Appendix II for the revised AFA rate calculation.
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Final Determination

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we 
calculated individual estimated subsidy rates for Juxin and Sanmei. 
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 de minimis countervailable subsidy rates, and any rates 
determined entirely under section 776 of the Act. Therefore, Commerce 
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 data.\14\
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    \14\ With two respondents under examination, Commerce normally 
calculates: (A) a weighted-average of the estimated subsidy rates 
calculated for the examined respondents using each company's 
proprietary U.S. sale quantities for the merchandise under 
consideration; (B) a simple average of the estimated subsidy rates 
calculated for the examined respondents; and (C) a weighted-average 
of the estimated subsidy rates calculated for the examined 
respondents using each company's publicly-ranged U.S. sale values 
for the merchandise under consideration. Commerce then compares (B) 
and (C) to (A) and selects the rate closest to (A) as the most 
appropriate rate for all other producers and exporters. See, e.g., 
Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, 
and the United Kingdom: Final Results of Antidumping Duty 
Administrative Reviews, Final Results of Changed-Circumstances 
Review, and Revocation of an Order in Part, 75 FR 53661, 53663 
(September 1, 2010).
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    Commerce determines that the following total estimated net 
countervailable subsidy rates exist:

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                             (percent)
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Arkema Daikin Advanced Fluorochemicals (Changsu) Co.,             306.57
 Ltd....................................................
Daikin Fluorochemicals (China) Co., Ltd.................          306.57
Hongkong Richmax Ltd....................................          306.57
Weitron International Refrigeration Equipment (Kunshan)           306.57
 Co., Ltd...............................................
Zhejiang Quzhou Juxin Fluorine Chemical Co., Ltd\15\....           14.66
Zhejiang Sanmei Chemical Ind. Co., Ltd\16\..............           12.75
All Others..............................................           14.43
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Disclosure
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    \15\ As discussed in the Preliminary Decision Memorandum, 
Commerce has found the following companies to be cross owned with 
Juxin: Juhua Group Corporation; Zhejiang Juhua Co., Ltd.; Ningbo 
Juhua Chemical & Science Co., Ltd.; Zhejiang Quzhou Fluoxin 
Chemicals Co., Ltd.; and Zhejiang Juhua Chemical Mining Co., Ltd.
    \16\ As discussed in the Preliminary Decision Memorandum, 
Commerce has found the following company to be cross owned with 
Sanmei: Fujian Qingliu Dongying Chemical Ind. Co. Ltd.
    Commerce intends to disclose its calculations and analysis 
performed in this final determination to interested parties within 
five days of the date of public announcement to parties in this 
proceeding or, if there is no public announcement, within five days 
of publication of this notice in accordance with 19 CFR 351.224(b).
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Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination, and pursuant to 
sections 703(d)(1)(B) and (d)(2) of the Act, Commerce instructed U.S. 
Customs and Border Protection (CBP) to suspend liquidation of entries 
of subject merchandise as described in the scope of the investigation 
section, that were entered, or withdrawn from warehouse, for 
consumption on or after June 25, 2021, the date of publication of the 
Preliminary Determination in the Federal Register. In accordance with 
section 703(d) of the Act, we instructed CBP to discontinue the 
suspension of liquidation for subject merchandise entered, or withdrawn 
from warehouse, on or after October 23, 2021.
    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a countervailing duty 
(CVD) order, reinstate the suspension of liquidation under section 
706(a) of the Act, and require cash deposit of estimated countervailing 
duties for such entries of subject merchandise in the amounts indicated 
above. If the ITC determines that material injury, or threat of 
material injury, does not exist, this proceeding will be terminated, 
and all estimated duties deposited, or securities posted as a result of 
the suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. Because the final determination in this 
proceeding is affirmative, in accordance with section 705(b) of the 
Act, the ITC will make its final determination as to whether the 
domestic industry in the United States is materially injured, or 
threatened with material injury, by reason of imports of R-125 from 
China no later than 45 days after our final determination.

[[Page 1112]]

    If the ITC determines that material injury or threat of material 
injury does not exist, the proceeding will be terminated, and all cash 
deposits will be refunded. If the ITC determines that material injury 
or threat of material injury does exist, Commerce will issue a CVD 
order directing CBP to assess, upon further instruction by Commerce, 
countervailing duties on all imports of the subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after the 
effective date of the suspension of liquidation, as discussed above in 
the ``Continuation of Suspension of Liquidation'' section.

Notification Regarding Administrative Protective Order

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to administrative protective order (APO) of their 
responsibility concerning the disposition of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely 
written notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.

Notification to Interested Parties

    This notice is issued and published in accordance with sections 
705(d) and 777(i) of the Act.

    Dated: December 30, 2021.
Ryan Majerus,
Deputy Assistant Secretary for Policy and Negotiations, performing the 
non-exclusive functions and duties of the Assistant Secretary for 
Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The merchandise covered by this investigation is 
pentafluoroethane (R-125), or its chemical equivalent, regardless of 
form, type or purity level. R-125 has the Chemical Abstracts Service 
(CAS) registry number of 354-33-6 and the chemical formula 
C<INF>2</INF>HF<INF>5</INF>. R-125 is also referred to as 
Pentafluoroethane, Genetron HFC 125, Khladon 125, Suva 125, Freon 
125, and Fc-125.
    R-125 contained in blends that do not conform to ANSI/ASHRAE 
Standard 34 is included in the scope of this investigation when R-
125 constitutes the largest relative component by volume, on an 
actual percentage basis, of the blend.\17\ However, R-125 
incorporated into a blend that conforms to ANSI/ASHRAE Standard 34 
is excluded from the scope of this investigation. When R-125 is 
blended with other products and otherwise falls under the scope of 
this investigation, only the R-125 component of the mixture is 
covered by the scope of this investigation.
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    \17\ ``Largest relative component by volume, on an actual 
percentage basis'' means that the percentage of R-125 contained in a 
blend is larger than the individual percentages of all the other 
components. For example, R-125 contained in a blend that does not 
conform to ANSI/ASHRAE Standard 34 and which contains 35% R-125 by 
volume is covered by the scope of the investigations if no other 
component part of the blend equals or exceeds 35% of the volume of 
the blend.
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    Subject merchandise also includes purified and unpurified R-125 
that is processed in a third country or otherwise outside the 
customs territory of the United States, including, but not limited 
to, purifying, blending, or any other processing that would not 
otherwise remove the merchandise from the scope of this 
investigation if performed in the country of manufacture of the in-
scope R-125. The scope also includes R-125 that is commingled with 
R-125 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 is merchandise covered by the scope of 
the antidumping order on Hydrofluorocarbon Blends from the People's 
Republic of China, including merchandise subject to the affirmative 
anti-circumvention determination in Hydrofluorocarbon Blends from 
the People's Republic of China: Affirmative Final Determination of 
Circumvention of the Antidumping Duty Order; Unfinished R-32/R-125 
Blends, 85 FR 15428 (March 18, 2020). See Hydrofluorocarbon Blends 
from the People's Republic of China: Antidumping Duty Order, 81 FR 
55436 (August 19, 2016) (the Blends Order).
    R-125 is classified under Harmonized Tariff Schedule of the 
United States (HTSUS) subheading 2903.39.2035 and 2903.39.2038. 
Merchandise subject to the scope may also be entered under HTSUS 
subheadings 2903.39.2045, 3824.78.0020, and 3824.78.0050. The HTSUS 
subheadings and CAS registry number are provided for convenience and 
customs purposes. The written description of the scope of this 
investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memo

I. Summary
II. Background
III. Scope Comments
IV. Final Affirmative Determination of Critical Circumstances
V. Subsidies Valuation Information
VI. Use of Facts Otherwise Available and Adverse Inferences
VII. Analysis of Programs
VIII. Discussion of the Issues
    Comment 1: Application of Adverse Facts Available (AFA) to the 
Export Buyer's Credit Program (EBCP)
    Comment 2: Application of AFA to the Provision of Electricity 
for Less-Than-Adequate-Renumeration (LTAR) Program
    Comment 3: Application of AFA to Other Subsidy Programs
    Comment 4: Ministerial Error in the Subsidy Rate Calculation for 
the Electricity for LTAR Program for Sanmei
    Comment 5: Selection of Fluorspar for LTAR Benchmark Prices
    Comment 6: Creditworthiness of Juhua Group Corporation (Juhua 
Group)
    Comment 7: Undervaluation of the Renminbi (RMB)
    Comment 8: Seasonality in the Critical Circumstances Analysis
IX. Recommendation

[FR Doc. 2022-00180 Filed 1-7-22; 8:45 am]
BILLING CODE 3510-DS-P