90 FR 6 pgs. 1962-1965 - Erythritol From the People's Republic of China: Initiation of Countervailing Duty Investigation
Type: NOTICEVolume: 90Number: 6Pages: 1962 - 1965
Pages: 1962, 1963, 1964, 1965Docket number: [C-570-193]
FR document: [FR Doc. 2025-00259 Filed 1-8-25; 8:45 am]
Agency: Commerce Department
Sub Agency: International Trade Administration
Official PDF Version: PDF Version
[top]
DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-193]
Erythritol From the People's Republic of China: Initiation of Countervailing Duty Investigation
AGENCY:
Enforcement and Compliance, International Trade Administration, Department of Commerce.
DATES:
Applicable January 2, 2025.
FOR FURTHER INFORMATION CONTACT:
Ajay Menon, Office IX, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0208.
SUPPLEMENTARY INFORMATION:
The Petition
On December 13, 2024, the U.S. Department of Commerce (Commerce) received a countervailing duty (CVD) petition concerning imports of erythritol from the People's Republic of China (China) filed in proper form on behalf of Cargill, Incorporated (the petitioner), a U.S. producer of erythritol. 1 The CVD Petition was accompanied by an antidumping duty (AD) petition concerning imports of erythritol from China. 2
Footnotes:
1 ? See Petitioner's Letter, "Petition for the Imposition of Antidumping and Countervailing Duties," December 13, 2024 (Petition).
2 ? Id.
On December 17, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petition in supplemental questionnaires. 3 On December 19, 2024, the petitioner filed timely responses to these requests for additional information. 4
Footnotes:
3 ? See Commerce's Letters, "Supplemental Questions," dated December 17, 2024 (General Issues Questionnaire); and "Supplemental Questions," dated December 17, 2024.
4 ? See Petitioner's Letters, "Response to Supplemental Petition Questionnaire," dated December 19, 2024 (General Issues Supplement); and "Response to Supplemental Petition Questionnaire," dated December 19, 2024.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that the Government of China (GOC) is providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of erythritol in China, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing erythritol in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating a CVD investigation, the Petition was accompanied by information reasonably available to the petitioner supporting its allegations.
Commerce finds that the petitioner filed the Petition on behalf of the domestic industry, because the petitioner is an interested party, as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support with respect to the initiation of the requested CVD investigation. 5
Footnotes:
5 ? See section on "Determination of Industry Support for the Petition," infra.
Period of Investigation
Because the Petition was filed on December 13, 2024, the period of investigation for the CVD investigation is January 1, 2023, through December 31, 2023. 6
Footnotes:
6 ? See 19 CFR 351.204(b)(2).
Scope of the Investigation
The product covered by this investigation is erythritol from China. For a full description of the scope of this investigation, see the appendix to this notice.
Comments on the Scope of the Investigation
On December 17, 2024, Commerce requested information and clarification from the petitioner regarding the proposed scope to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief. 7 On December 19, 2024, the petitioner provided clarifications and revised the scope. 8 The description of merchandise covered by this investigation, as described in the appendix to this notice, reflects these clarifications.
Footnotes:
7 ? See General Issues Questionnaire.
8 ? See General Issues Supplement at 2-3 and Exhibit GEN-S-2.
As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage ( i.e., scope). 9 Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determination. If scope comments include factual information, all such factual information should be limited to public information. 10 To facilitate preparation of its questionnaires, Commerce requests that scope comments be submitted by 5:00 p.m. Eastern Time (ET) on January 22, 2025, which 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, and should also be limited to public information, must be filed by 5:00 p.m. ET on February 3, 2025, which is the next business day after 10 calendar days from the initial comment deadline. 11
Footnotes:
9 ? See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997) ( Preamble ).
10 ? See 19 CFR 351.102(b)(21) (defining "factual information").
11 ? See 19 CFR 351.303(b)(1). The deadline for scope rebuttal comments falls on February 1, 2025, which is a Saturday. In accordance with 19 CFR 351.303(b)(1), Commerce will accept scope rebuttal comments filed by 5:00 p.m. ET on February 3, 2025 ("For both electronically filed and manually filed documents, if the applicable due date falls on a non-business day, the Secretary will accept documents that are filed on the next business day.").
Commerce requests that any factual information that parties consider relevant to the scope of the investigation be submitted during that time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent AD and CVD investigations.
Filing Requirements
[top] All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS),
Footnotes:
12 ? See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and Compliance; Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014), for details of Commerce's electronic filing requirements, effective August 5, 2011. Information on using ACCESS can be found at https://access.trade.gov/help.aspx and a handbook can be found at https://access.trade.gov/help/Handbook_on_Electronic_Filing_Procedures.pdf.
Consultations
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified the GOC of the receipt of the Petition and provided an opportunity for consultations with respect to the Petition. 13 The GOC did not request consultations.
Footnotes:
13 ? See Commerce's Letter, "Invitation for Consultation to Discuss the Countervailing Duty Petition," dated December 16, 2024.
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the "industry."
Section 771(4)(A) of the Act defines the "industry" as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International Trade Commission (ITC), which is responsible for determining whether "the domestic industry" has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC apply the same statutory definition regarding the domestic like product, 14 they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law. 15
Footnotes:
14 ? See section 771(10) of the Act.
15 ? See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff'd Algoma Steel Corp., Ltd. v. United States, 865 F.2d 240 (Fed. Cir. 1989)).
Section 771(10) of the Act defines the domestic like product as "a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title." Thus, the reference point from which the domestic like product analysis begins is "the article subject to an investigation" ( i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition).
With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigation. 16 Based on our analysis of the information submitted on the record, we have determined that erythritol, as defined in the scope, constitute a single domestic like product, and we have analyzed industry support in terms of that domestic like product. 17
Footnotes:
16 ?For a discussion of the domestic like product analysis as applied to this case and information regarding industry support, see Checklist, "Countervailing Duty Investigation Initiation Checklist: Erythritol from the People's Republic of China," dated concurrently with, and hereby adopted by, this notice (China CVD Initiation Checklist), at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petitions Covering Erythritol from the People's Republic of China (Attachment II). This checklist is on file electronically via ACCESS.
17 ? See Attachment II of the China CVD Initiation Checklist.
In determining whether the petitioner has standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the "Scope of the Investigation," in the appendix to this notice. To establish industry support, the petitioner provided its own production of the domestic like product in 2023. 18 The petitioner stated that there are no other known producers of erythritol in the United States; therefore, the Petition is supported by 100 percent of the U.S. industry. 19 We relied on data provided by the petitioner for purposes of measuring industry support. 20
Footnotes:
18 ? Id.
19 ? Id.
20 ?For further discussion, see Attachment II of the China CVD Initiation Checklist.
Our review of the data provided in the Petition, the General Issues Supplement, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petition. 21 First, the Petition established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support ( e.g., polling). 22 Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petition account for at least 25 percent of the total production of the domestic like product. 23 Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petition. 24 Accordingly, Commerce determines that the Petition was filed on behalf of the domestic industry within the meaning of section 702(b)(1) of the Act. 25
Footnotes:
21 ? Id.
22 ? Id.; see also section 702(c)(4)(D) of the Act.
23 ? See Attachment II of the China CVD Initiation Checklist.
24 ? Id.
25 ? Id.
Injury Test
Because China is a "Subsidies Agreement Country" within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from China materially injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
[top] The petitioner alleges that imports of the subject merchandise are benefiting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioner
Footnotes:
26 ?For further information regarding negligibility and the injury allegation, see China CVD Initiation Checklist at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petitions Covering Erythritol from the People's Republic of China (Attachment III).
The petitioner contends that the industry's injured condition is illustrated by the significant and increasing volume of subject imports; reduced market share; underselling and price depression and/or suppression; lost sales and revenues; and declines in the domestic industry's production, capacity utilization, U.S. shipments, employment variables, and financial performance. 27 We assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, cumulation, as well as negligibility, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation. 28
Footnotes:
27 ? Id.
28 ? Id.
Initiation of CVD Investigation
Based upon the examination of the Petition and supplemental responses, we find that they meet the requirements of section 702 of the Act. Therefore, we are initiating a CVD investigation to determine whether imports of erythritol benefit from countervailable subsidies conferred by the GOC. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 65 days after the date of this initiation.
Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 28 of the 29 programs alleged by the petitioner. For a full discussion of the basis for our decision to initiate on each program, see the China CVD Initiation Checklist. A public version of the initiation checklist for this investigation is available on ACCESS.
Respondent Selection
In the Petition, the petitioner identified 83 companies in China as producers and/or exporters of erythritol. 29 Commerce intends to follow its standard practice in CVD investigations and calculate company-specific subsidy rates in this investigation. In the event that Commerce determines that the number of companies is large and it cannot individually examine each company based on Commerce's resources, Commerce normally selects mandatory respondents in CVD investigations using U.S. Customs and Border Protection (CBP) entry data for U.S. imports under the appropriate Harmonized Tariff Schedule of the United States (HTSUS) subheading(s) listed in the "Scope of the Investigation" in the appendix.
Footnotes:
29 ? See Petition at Volume I (pages I-7 and I-8 and Exhibit I-5); see also General Issues Supplement at 1 and Exhibit GEN-S-1.
On December 31, 2024, Commerce released CBP data on imports of erythritol from China under administrative protective order (APO) to all parties with access to information protected by APO and indicated that interested parties wishing to comment on CBP data and/or respondent selection must do so within three business days of the publication date of the notice of initiation of this investigation. 30 Comments must be filed electronically using ACCESS. An electronically-filed document must be received successfully in its entirety via ACCESS by 5:00 p.m. ET on the specified deadline. Commerce will not accept rebuttal comments regarding the CBP data or respondent selection.
Footnotes:
30 ? See Memorandum, "Release of U.S. Customs and Border Protection Entry Data," dated December 31, 2024.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at https://www.trade.gov/administrative-protective-orders.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petition has been provided to the GOC via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petition to each exporter named in the Petition, as provided under 19 CFR 351.203(c)(2).
ITC Notification
Commerce will notify the ITC of its initiation, as required by section 702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of erythritol from China are materially injuring, or threatening material injury to, a U.S. industry. 31 A negative ITC determination will result in the investigation being terminated. 32 Otherwise, this CVD investigation will proceed according to statutory and regulatory time limits.
Footnotes:
31 ? See section 703(a)(1) of the Act.
32 ? Id.
Submission of Factual Information
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors of production under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted? 33 and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. 34 Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in this investigation.
Footnotes:
33 ? See 19 CFR 351.301(b).
34 ? See 19 CFR 351.301(b)(2).
Extensions of Time Limits
[top] Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. 35 For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, Commerce may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in a letter or memorandum of the deadline (including
Footnotes:
35 ? See 19 CFR 351.302.
36 ? See 19 CFR 351.301; see also Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013) ( Time Limits Final Rule ), available at https://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm.
Certification Requirements
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information. 37 Parties must use the certification formats provided in 19 CFR 351.303(g). 38 Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.
Footnotes:
37 ? See section 782(b) of the Act.
38 ? See Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) ( Final Rule ); see also frequently asked questions regarding the Final Rule, available at https://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
Notification to Interested Parties
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in this investigation should ensure that they meet the requirements of 19 CFR 351.103(d) ( e.g., by filing the required letters of appearance). Note that Commerce has amended certain of its requirements pertaining to the service of documents in 19 CFR 351.303(f). 39
Footnotes:
39 ? See Administrative Protective Order, Service, and Other Procedures in Antidumping and Countervailing Duty Proceedings, 88 FR 67069 (September 29, 2023).
This notice is issued and published pursuant to sections 702 and 777(i) of the Act, and 19 CFR 351.203(c).
Dated: January 2, 2025.
Abdelali Elouaradia,
Deputy Assistant Secretary for Enforcement and Compliance.
Appendix
Scope of the Investigation
The product within the scope of this investigation is erythritol, which is a sugar alcohol, commonly referred to as a polyol, typically produced by the fermentation of glucose using enzymes and yeast or yeast-like fungi (though the scope includes erythritol produced using any other feedstock or organism). Erythritol is an organic compound with the molecular formula C 4 H 10 O 4 and a Chemical Abstracts Service (CAS) registry number of 149-32-6. Other names for erythritol include meso -erythritol, (2R, 3S)-butan-1,2,3,4-tetrol, butane-1,2,3,4-tetrol, or meso -1,2,3,4-Tetrahydryoxybutane.
Erythritol typically appears as a white crystalline, odorless product that rapidly dissolves in water. While erythritol is typically produced in the crystalline form or as a fine powder or in directly compressible form, the scope of this investigation covers all physical forms and grades of erythritol, including organic erythritol.
The merchandise covered by this investigation is classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2905.49.4000. Erythritol may also enter under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by this investigation is dispositive.
[FR Doc. 2025-00259 Filed 1-8-25; 8:45 am]
BILLING CODE 3510-DS-P