90 FR 60 pgs. 14235-14237 - Hard Empty Capsules From Brazil: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination
Type: NOTICEVolume: 90Number: 60Pages: 14235 - 14237
Pages: 14235, 14236, 14237Docket number: [C-351-865]
FR document: [FR Doc. 2025-05421 Filed 3-28-25; 8:45 am]
Agency: Commerce Department
Sub Agency: International Trade Administration
Official PDF Version: PDF Version
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-351-865]
Hard Empty Capsules From Brazil: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination
AGENCY:
Enforcement and Compliance, International Trade Administration, Department of Commerce.
SUMMARY:
The U.S. Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from Brazil. The period of investigation is January 1, 2023, through December 31, 2023. Interested parties are invited to comment on this preliminary determination.
DATES:
Applicable March 31, 2025.
FOR FURTHER INFORMATION CONTACT:
Samuel Evans, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2420.
SUPPLEMENTARY INFORMATION:
Background
On November 20, 2024, Commerce published the notice of initiation of this countervailing duty (CVD) investigation on capsules from Brazil. 1 On January 15, 2025, Commerce postponed the preliminary determination of this investigation until March 24, 2025. 2 This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act).
Footnotes:
1 ? See Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Initiation of Countervailing Duty Investigations, 89 FR 91680 (November 20, 2024) ( Initiation Notice ).
2 ? See Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Postponement of Preliminary Determinations in the Countervailing Duty Investigations, 90 FR 3788 (January 15, 2025).
For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum. 3 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 https://access.trade.gov. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx.
Footnotes:
3 ? See Memorandum, "Decision Memorandum for the Preliminary Determination of the Countervailing Duty Investigation of Hard Empty Capsules from Brazil," dated concurrently with, and hereby adopted by, this notice (Preliminary Decision Memorandum).
Scope of the Investigation
The products covered by this investigation are capsules from Brazil. For a complete description of the scope of this investigation, see Appendix I.
Scope Comments
[top] In accordance with the Preamble to Commerce's regulations, 4 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage ( i.e., scope). 5 Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For a summary of the scope comments and rebuttal responses submitted for this preliminary determination, and Commerce's accompanying preliminary analysis of all comments timely received, see the Preliminary Scope Decision Memorandum. 6 Commerce is not preliminarily modifying the scope
Footnotes:
4 ? See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) ( Preamble ).
5 ? See Initiation Notice.
6 ? See Memorandum, "Less-Than-Fair-Value and Countervailing Duty Investigations of Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Scope Comments Decision Memorandum for the Preliminary Determination," dated concurrently with, and hereby adopted by, this notice (Preliminary Scope Decision Memorandum).
Methodology
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, i.e., a financial contribution by an "authority" that gives rise to a benefit to the recipient, and that the subsidy is specific. 7
Footnotes:
7 ? 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.
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. 8 For further information, see the "Use of Facts Otherwise Available and Adverse Inferences" section in the Preliminary Decision Memorandum.
Footnotes:
8 ? See sections 776(a) and (b) of the Act.
Alignment
As noted in the Preliminary Decision Memorandum, 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 less-than-fair-value (LTFV) investigation of capsules from Brazil based on a request made by the petitioner. 9 Consequently, this final CVD determination will be issued on the same date as the final LTFFV determination, which is currently scheduled to be issued no later than August 5, 2025, unless postponed.
Footnotes:
9 ? See Petitioner's Letter, "Lonza's Request to Align Final Antidumping and Countervailing Duty Determinations," dated March 11, 2025.
All-Others Rate
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 zero and de minimis rates and any rates based entirely under section 776 of the Act. If the rates established for all exporters and producers individually investigated are zero, de minimis, or determined entirely under facts available, Commerce may use any reasonable method to establish an all-others rate. 10
Footnotes:
10 ? See sections 705(c)(5)(A)(i) and (ii) of the Act.
Commerce preliminarily calculated an individual estimated countervailable subsidy rate for ACG do Brasil S.A. (ACG Brazil), the only individually examined exporter/producer in this investigation. Because the only individually calculated rate is not zero, de minimis, or based entirely on facts otherwise available, the estimated weighted-average rate calculated for ACG Brazil is the rate assigned to all other producers and exporters, pursuant to section 705(c)(5)(A)(i) of the Act.
Preliminary Determination
Commerce preliminarily determines that the following estimated countervailable subsidy rates exist:
| Company | Subsidy rate (percent ad valorem ) |
|---|---|
| ACG do Brasil S.A | 4.94 |
| All Others | 4.94 |
Disclosure
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 this notice in the Federal Register , in 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.
Suspension of Liquidation
In accordance with sections 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, found in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register . Further, pursuant to 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the rates indicated above.
Verification
As provided in section 782(i)(1) of the Act, Commerce intends to verify the information relied upon in making its final determination.
Public Comment
All interested parties will have the opportunity to submit scope case and rebuttal briefs on the preliminary decision regarding the scope of the LTFV and CVD investigations. The deadlines to submit scope case and rebuttal briefs are April 14, 2025, and April 21, 2025, respectively. For all scope case and rebuttal briefs, parties must file identical documents simultaneously on the records of all the ongoing LTFV and CVD capsules investigations. No new factual information or business proprietary information may be included in either scope case or rebuttal briefs.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation. A timeline for the submission of case briefs and written comments will be notified to interested parties at a later date. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than five days after the date for filing case briefs. 11 Interested parties who submit case briefs or rebuttal briefs in this proceeding must submit: (1) a table of contents listing each issue; and (2) a table of authorities. 12
Footnotes:
11 ? See 19 CFR 351.309(d); see also Administrative Protective Order, Service, and Other Procedures in Antidumping and Countervailing Duty Proceedings, 88 FR 67069, 67077 (September 29, 2023) ( APO and Service Final Rule ).
12 ? See 19 CFR 351.309(c)(2) and (d)(2).
[top] As provided under 19 CFR 351.309(c)(2) and (d)(2), in prior proceedings we have encouraged interested parties to provide an executive summary of their brief that should be limited to five pages total, including footnotes. In this investigation, we instead request that interested parties provide at the beginning of their briefs a public, executive summary for each issue raised in their briefs. 13 Further, we request that interested parties limit their executive summary of each issue to no more than 450 words, not including citations. We
Footnotes:
13 ?We use the term "issue" here to describe an argument that Commerce would normally address in a comment of the Issues and Decision Memorandum.
14 ? See APO and Service Final Rule.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice in the Federal Register . Requests should contain: (1) the party's name, address, and telephone number; (2) the number of participants and whether any participant is a foreign national; and (3) a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at a date and time to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
U.S. International Trade Commission Notification
In accordance with section 703(f) of the Act, Commerce will notify the U.S. International Trade Commission (ITC) of its determination. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether imports of capsules from Brazil are materially injuring, or threaten material injury to, the U.S. industry.
Notification to Interested Parties
This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act and 19 CFR 351.205(c).
Dated: March 24, 2025.
Christopher Abbott,
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 subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia-National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of this investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of this investigation are those that disintegrate in water within 2 hours under tests specified in Chapter 701 of the USP-NF, or equivalent disintegration tests.
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported 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.
Appendix II-List of Topics Discussed in the Preliminary Decision Memorandum
I. Summary
II. Background
III. Injury Test
IV. Diversification of Brazil's Economy
V. Use of Facts Otherwise Available and Adverse Inferences
VI. Subsidies Valuation
VII. Benchmarks to Determine the Adequacy of Remuneration
VIII. Analysis of Programs
IX. Recommendation
[FR Doc. 2025-05421 Filed 3-28-25; 8:45 am]
BILLING CODE 3510-DS-P