2024-15264. Antidumping Duty Order on Hydrofluorocarbon Blends From the People's Republic of China: Final Affirmative Determination of Circumvention With Respect to R-410B, R-407G, and a Certain Custom Blend From the People's Republic of China

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Department of Commerce

International Trade Administration

1. [A-570-028]

AGENCY:

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

SUMMARY:

The U.S. Department of Commerce (Commerce) determines that imports of R-410B, R-407G, and a custom hydrofluorocarbon (HFC) blend of 50-percent R-125 and 50-percent R-134a (custom HFC blend) which are blended in the People's Republic of China (China) and further processed in the United States, are circumventing the antidumping duty (AD) order on HFC blends from China.

DATES:

Applicable July 11, 2024.

FOR FURTHER INFORMATION CONTACT:

Benjamin Nathan, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On August 19, 2016, Commerce published in the Federal Register the AD order on HFC blends from China.^[1] On July 7, 2023, Commerce initiated a country-wide circumvention inquiry pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.226(d)(1)(ii) to determine whether imports of R-410B, R-407G, and the custom HFC blend which are blended in China and further processed in the United States, are circumventing the Order and, accordingly, should be covered by the scope of the Order.^[2] On April 11, 2024, Commerce published in the Federal Register its affirmative Preliminary Determination that imports of R-410B, R-407G, and the custom HFC blend which are blended in China using China-origin components and further processed in the United States are circumventing the Order.^[3]

For a summary of events that occurred since the Preliminary Determination, as well as a full discussion of the issues raised by parties for consideration in this final determination, see the Issues and Decision Memorandum.^[4] 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 https://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.

Scope of the Order

The merchandise covered by the Order is certain HFC blends. For a complete description of the scope of the Order, see the Issues and Decision Memorandum.

Merchandise Subject to the Circumvention Inquiry

This circumvention inquiry covers imports of HFC blends R-410B, R-407G, and a certain custom HFC blend which are blended in China using China-origin HFC components and further processed in the United States (inquiry merchandise).

Methodology

Commerce is conducting this circumvention inquiry in accordance with section 781(a) of the Act, and 19 CFR 351.226. See Preliminary Determination for a full description of the methodology.^[5] We have continued to apply this methodology, without exception, and incorporate by reference this description of the methodology, for our final determination.

Analysis of Comments Received

All issues raised in this inquiry are addressed in the Issues and Decision Memorandum. A list of the issues raised is attached to this notice in Appendix I. Based on our analysis of the comments received from interested parties, we have not made any changes to the Preliminary Determination.

Final Circumvention Determination

We determine that imports of R-410B, R-407G, and the custom HFC blend which are blended in China using China-origin HFC components and further processed in the United States, would be circumventing the Order whether such imports were by one company, or all companies. Accordingly, we are applying our decision on a country-wide basis. As a result, in accordance with section 781(a) of the Act, we determine that inquiry merchandise should be included within the scope of the Order. For a detailed explanation of our determination with respect to the respondents, see Preliminary Determination, and the Issues and Decision Memorandum. See the “Suspension of Liquidation and Cash Deposit Requirements” section, below, for details regarding suspension of liquidation and cash deposit requirements. See the “Certifications” and “Certification Requirements” sections below for details regarding the use of certifications for inquiry merchandise imported from China.

Suspension of Liquidation and Cash Deposit Requirements

Based on the final affirmative country-wide determination of circumvention for China, in accordance with section 19 CFR 351.226(I)(3)(i)-(ii), Commerce will direct U.S. Customs and Border Protection (CBP) to continue the suspension of liquidation of previously suspended entries and to suspend liquidation and require a cash deposit of estimated duties on unliquidated entries of R-410B, R-407G, and a certain custom HFC blend that were entered, or withdrawn from warehouse, for consumption on or after July 7, 2023, the date of publication of the initiation of this circumvention inquiry in the Federal Register .^[6]

The blends subject to this inquiry not further processed in the United States are not subject to this inquiry. Therefore, cash deposits are not required for such merchandise under the Order. If an importer imports R-410B, R-407G, and a certain custom HFC blend subject to this inquiry from China and claims that they will not be further processed into subject merchandise in the United States, in order to not be subject to the Order cash deposit requirements, the importer is required to meet the certification and documentation requirements described in the “Certifications” and “Certification Requirements” sections below.^[7]

Where no certification is provided for an entry, and the Order potentially applies to that entry, Commerce intends to instruct CBP to suspend the entry and collect cash deposits: (1) for entries of R-410B, R-407G, and a certain custom HFC blend for which the exporter has a company-specific cash deposit rate under the AD Order, the cash deposit rate will be the company-specific AD cash deposit rate established for that company in the most recently completed segment of the proceeding; (2) for all Chinese exporters of R-410B, R-407G, and a certain custom HFC blend that do not have a company-specific cash deposit rate under the AD Order, the AD cash deposit rate will be the cash deposit rate for the China-wide entity ( i.e., 216.37 percent); ^[8] and (3) for all non-Chinese exporters of R-410B, R-407G, and a certain custom HFC blend which have not received their own rate, the cash deposit rate will be the rate applicable to the Chinese exporter that supplied that non-Chinese exporter. These suspension of liquidation instructions and cash deposit requirements will remain in effect until further notice.

Certified Entries

Entries for which the importer has met the certification requirements described below and in Appendix II to this notice will not be subject to either the suspension of liquidation or the cash deposit requirements described above. Failure to comply with the applicable requisite certification requirements may result in the merchandise being subject to duties.

Certifications

To administer the country-wide affirmative determination of circumvention, Commerce established importer certifications, which allow companies to certify that specific entries of R-410B, R-407G, and a certain custom HFC blend are not subject to suspension of liquidation or the collection of cash deposits pursuant to this country-wide affirmative determination of circumvention because the merchandise is not further processed into subject HFC blends in the United States ( see Appendix II to this notice).

Importers that claim that their entries of merchandise subject to this inquiry from China are not subject to suspension of liquidation or the collection of cash deposits because the merchandise is not further processed into subject merchandise in the United States must complete the applicable certification and meet the certification and documentation requirements described below, as well as the requirements identified in the importer certification.

Certification Requirements

Importers are required to complete and maintain the applicable importer certification and retain all supporting documentation. The importer certification must be completed, signed, and dated by the time the entry summary is filed for the relevant entry. The importer, or the importer's agent, must submit the importer's certification to CBP as part of the entry process by uploading it into the document imaging system (DIS) in ACE. Where the importer uses a broker to facilitate the entry process, the importer should obtain the entry summary number from the broker. Agents of the importer, such as brokers, however, are not permitted to certify on behalf of the importer.

Additionally, the claims made in the certification and any supporting documentation are subject to verification by Commerce and/or CBP. Importers are required to maintain the certifications and supporting documentation until the later of: (1) the date that is five years after the latest entry date of the entries covered by the certification; or (2) the date that is three years after the conclusion of any litigation in United States courts regarding such entries.

For all R-410B, R-407G, and a certain custom HFC blend from China that was entered, or withdrawn from warehouse, for consumption during the period July 7, 2023 (the date of initiation of this circumvention inquiry), through the date of publication of the preliminary determination in the Federal Register , where the entry has not been liquidated (and entries for which liquidation has not become final), the relevant certification should already be complete and signed.

For unliquidated entries (and entries for which liquidation has not become final) of R-410B, R-407G, and a certain custom HFC blend from China that were declared as non-AD type entries ( e.g., type 01) and entered, or withdrawn from warehouse, for consumption in the United States during the period July 7, 2023 (the date of initiation of this circumvention inquiry), through the date of publication of the preliminary determination in the Federal Register , for which no importer certification may be made, importers must file a Post Summary Correction with CBP, in accordance with CBP's regulations, regarding conversion of such entries from non-AD type entries to AD type entries ( e.g., type 01 to type 03). The importer should pay cash deposits on those entries consistent with the regulations governing post summary corrections that require payment of additional duties, including AD/CVD duties.

If it is determined that an importer has not met the certification and/or related documentation requirements for certain entries, Commerce intends to instruct CBP to suspend, pursuant to this final affirmative country-wide determination of circumvention and the Order,^[9] all unliquidated entries for which these requirements were not met and to require the importer to post applicable cash deposits equal to the rate noted above.

Opportunity To Request an Administrative Review

Each year during the anniversary month of the publication of an AD or CVD order, finding, or suspended investigation, an interested party, as defined in section 771(9) of the Act, may request, in accordance with 19 CFR 351.213, that Commerce conduct an administrative review of that AD or CVD order, finding, or suspended investigation. An interested party who would like Commerce to conduct an administrative review should wait until Commerce announces via the Federal Register the next opportunity during the anniversary month of the publication of the Order to submit such requests. The anniversary month for this Order is August.

Administrative Protective Order

This notice will serve as the only reminder to all parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or 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 determination is issued and published in accordance with section 781(b) of the Act and 19 CFR 351.226(g)(2).

Dated: July 5, 2024.

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

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Scope of the Order

IV. Merchandise Subject to the Circumvention Inquiry

V. Period of Circumvention Inquiry

VI. Changes from the Preliminary Determination

VII. Discussion of the Issues

Comment 1: Retroactive Suspension of Liquidation and Cash Deposit Requirement

Comment 2: Certification Requirement

Comment 3: Argument Concerning Circumvention by Additional Companies

Comment 4: Whether the Preliminary Determination is Contrary to Law

Comment 5: Whether the Determination with Respect to R-410B is Supported by Substantial Evidence

VIII. Recommendation

Appendix II

Importer Certification

I hereby certify that:

A. My name is {IMPORTING COMPANY OFFICIAL'S NAME} and I am an official of {NAME OF IMPORTING COMPANY}, located at {ADDRESS of IMPORTING COMPANY};

B. I have direct personal knowledge of the facts regarding the importation into the Customs territory of the United States of the hydrofluorocarbon (HFC) blend R-410B, R-407G, and a certain custom HFC blend produced in China that entered under the entry number(s) identified below, and which are covered by this certification. “Direct personal knowledge” refers to facts the certifying party is expected to have in its own records. For example, the importer should have direct personal knowledge of the importation of the product, including the exporter's and/or foreign seller's identity and location;

C. If the importer is acting on behalf of the first U.S. customer, include the following sentence as paragraph C of this certification:

The R-410B, R-407G, and a certain custom HFC blend covered by this certification were imported by {NAME OF IMPORTING COMPANY} on behalf of {NAME OF U.S. CUSTOMER}, located at {ADDRESS OF U.S. CUSTOMER}.

If the importer is not acting on behalf of the first U.S. customer, include the following sentence as paragraph C of this certification:

{NAME OF IMPORTING COMPANY} is not acting on behalf of the first U.S. customer.

D. The R-410B, R-407G, and a certain custom HFC blend covered by this certification was shipped to {NAME OF PARTY IN THE UNITED STATES TO WHOM THE MERCHANDISE WAS FIRST SHIPPED} located at {U.S. ADDRESS TO WHICH MERCHANDISE WAS SHIPPED}.

E. Select the appropriate statement below:

__ I have direct personal knowledge of the facts regarding the end use of the imported products covered by this certification because my company is the end user of the imported product covered by this certification and I certify that the R-410B, R-407G, and a certain custom HFC blend will not be used to produce subject merchandise. “Direct Personal knowledge” includes information contained within my company's books and records.

__ My company is not the end user of the imported product covering this certification, however, I have personal knowledge of the facts regarding the end use of the imported products covered by this certification. I have been able to contact the end user of the imported product and confirm that it will not use this product to produce subject merchandise. The end user of the imported product is {COMPANY NAME} located at {ADDRESS}. “Personal knowledge” includes facts obtained from another party ( e.g., correspondence received by the importer from the end user of the product).

F. This certification applies to the following entries (repeat this block as many times as necessary):

Entry Summary #:

Entry Summary Line Item #:

Foreign Seller:

Foreign Seller's Address:

Foreign Seller's Invoice #:

Foreign Seller's Invoice Line Item #:

Producer:

Producer's Address:

G. I understand that {NAME OF IMPORTING COMPANY} is required to maintain a copy of this certification and sufficient documentation supporting this certification ( i.e., documents maintained in the normal course of business, or documents obtained by the certifying party, for example, product data sheets, chemical testing specifications, productions records, invoices, etc.) for the later of: (1) the date that is five years after the date of the latest entry covered by the certification or; (2) the date that is three years after the conclusion of any litigation in the United States courts regarding such entries;

H. I understand that {IMPORTING COMPANY} is required to submit a copy of the importer certification as part of the entry summary by uploading them into the document imaging system (DIS) in ACE, and to provide U.S. Customs and Border Protection (CBP) and/or the U.S. Department of Commerce (Commerce) with the importer certification, and any supporting documentation, upon request of either agency;

I. I understand that the claims made herein, and the substantiating documentation, are subject to verification by CBP and/or Commerce;

J. I understand that failure to maintain the required certification and supporting documentation, or failure to substantiate the claims made herein, or not allowing CBP and/or Commerce to verify the claims made herein, may result in a de facto determination that all entries to which this certification applies are within the scope of the antidumping duty (AD) order on HFC blends from China. I understand that such finding will result in:

(i) suspension of liquidation of all unliquidated entries (and entries for which liquidation has not become final) for which these requirements were not met;

(ii) the importer being required to post the cash deposits determined by Commerce; and

(iii) the importer no longer being allowed to participate in the certification process.

K. I understand that agents of the importer, such as brokers, are not permitted to make this certification. Where a broker or other party was used to facilitate the entry process, {NAME OF IMPORTING COMPANY} obtained the entry summary number and date of entry summary from that party.

L. This certification was completed and signed on, or prior to, the date of the entry summary if the entry date is more than 14 days after the date of publication of the notice of Commerce's preliminary determination of circumvention in the Federal Register . If the entry date is on or before the 14th day after the date of publication of the notice of Commerce's preliminary determination of circumvention in the Federal Register , this certification was completed and signed by no later than 45 days after publication of the notice of Commerce's preliminary determination of circumvention in the Federal Register .

M. I am aware that U.S. law (including, but not limited to, 18 U.S.C. 1001) imposes criminal sanctions on individuals who knowingly and willfully make materially false statements to the U.S. government.

Signature

{NAME OF COMPANY OFFICIAL}

{TITLE OF COMPANY OFFICIAL}

{DATE}

Footnotes

1.   See Hydrofluorocarbon Blends from the People's Republic of China: Antidumping Duty Order,81 FR 55436 (August 19, 2016) ( Order).

2.   See Hydrofluorocarbon Blends from the People's Republic of China: Initiation of Circumvention Inquiries on the Antidumping Duty Order,88 FR 43275 (July 7, 2023) ( Initiation Notice).

3.   See Antidumping Duty Order on Hydrofluorocarbon Blends from the People's Republic of China: Preliminary Affirmative Determination of Circumvention with Respect to R-410B, R-407G, and a Certain Custom Blend from the People's Republic of China,89 FR 25568 (April 11, 2024) ( Preliminary Determination), and accompanying Preliminary Decision Memorandum (PDM).

4.   See Memorandum, “Decision Memorandum for the Circumvention Inquiry of the Antidumping Duty Order on Hydrofluorocarbon Blends from the People's Republic of China with Respect to Imports of R-410B and R-407G, and a Certain Custom Blend from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Issues and Decision Memorandum).

5.   See Preliminary Determination PDM at 4-15.

6.   See Initiation Notice.

7.  The certification language at Appendix II, section E for this final determination reflects a minor modification from the certification included in the Preliminary Determination.

8.   See Order.

9.   See Order.