1,1,1,2-Tetrafluoroethane (R-134a) From the People's Republic of China: Preliminary Determination of Sales at Less-Than-Fair Value and Affirmative Determination of Critical Circumstances, in Part, and Postponement of Final Determination

AGENCY:

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

DATES:

Effective October 7, 2016.

SUMMARY:

The Department of Commerce (“Department”) preliminarily determines that 1,1,1,2-Tetrafluoroethane (“R-134a”) from the People's Republic of China (“PRC”) is being, or is likely to be, sold in the United States at less than fair value (“LTFV”). The period of investigation (“POI”) is July 1, 2015, through December 31, 2015. The estimated margins of sales at LTFV are shown in the “Preliminary Determination” section of this notice. The final determination will be issued 75 days after publication of this preliminary determination in the Federal Register. Interested parties are invited to comment on this preliminary determination.

FOR FURTHER INFORMATION CONTACT:

Keith Haynes or Paul Stolz, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-5139 or, (202) 482-4474 respectively.

SUPPLEMENTARY INFORMATION:

Scope of the Investigation

The product subject to this investigation is 1,1,1,2-Tetrafluoroethane, R-134a. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

Methodology

The Department is conducting this investigation in accordance with section 731 of the Tariff Act of 1930, as amended (“the Act”). We calculated export prices in accordance with section 772 of the Act. Because the PRC is a non-market economy within the meaning of section 771(18) of the Act, normal value (“NV”) was calculated in accordance with section 773(c) of the Act.

For a full description of the methodology underlying our conclusions, see the Preliminary Decision Memorandum hereby adopted by 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,, and is available to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

Preliminary Affirmative Determination of Critical Circumstances

On September 9, 2016, Petitioners filed a timely critical circumstances allegation pursuant to section 733(e)(1) of the Act and 19 CFR 351.206 with respect to imports of the subject merchandise. We preliminarily determine that critical circumstances exist for the non-selected separate rate respondents and the PRC-wide entity, but do not exist for the mandatory respondent, Zhejiang Sanmei Chemical Industry Co., Ltd. For a full description of the methodology and the results of our analysis, see the Preliminary Decision Memorandum.

Use of Adverse Facts Available

The Department preliminarily finds that the PRC-wide entity, which includes certain PRC exporters and/or producers that did not respond to the Department's requests for information, withheld information requested by the Department and significantly impeded this proceeding by not submitting requested information. Specifically, 26 companies within the PRC-wide entity failed to respond to the Department's request for quantity and value (“Q&V”) information. Furthermore, the Department finds that the PRC-wide entity's lack of participation, including the failure of certain parts of the PRC-wide entity to submit Q&V information, constitutes circumstances under which it is reasonable to conclude that the PRC-wide entity as a whole failed to cooperate to the best of its ability to comply with the Department's request for information.

Therefore, we preliminarily find that an adverse inference is warranted in selecting from among the facts otherwise available with respect to the PRC-wide entity in accordance with sections 776(a) and 776(b) of the Act and 19 CFR 351.308(a). As adverse facts available, we have preliminarily assigned the PRC-wide entity a rate of 187.71 percent. Further, with respect to critical circumstances, we have preliminarily determined, again, based on adverse facts available, that the PRC-wide entity dumped “massive imports” over a “relatively short period.” For further explanation and analysis, see the Preliminary Decision Memorandum.

Combination Rates

In the Initiation Notice, the Department stated that it would calculate combination rates for the respondents that are eligible for a separate rate in this investigation. Policy Bulletin 05.1 describes this practice.

Preliminary Determination

The preliminary weighted-average antidumping duty (“AD”) margin percentages are as follows:

As detailed further in the Preliminary Decision Memorandum, Zhejiang Quzhou Lianzhou Refrigerants Co., Ltd., a mandatory respondent in this investigation, did not demonstrate that it was entitled to a separate rate. Accordingly, we consider this company to be part of the PRC-wide entity.

Suspension of Liquidation

In accordance with section 733(d) of the Act the Department will instruct U.S. Customs and Border Protection (“CBP”) to suspend liquidation of all entries of R-134a from the PRC, as described in the “Scope of the Investigation” in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

Section 733(e)(2) of the Act provides that, given an affirmative determination of critical circumstances, any suspension of liquidation shall apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, for consumption on or after the later of (a) the date which is 90 days before the date on which the suspension of liquidation was first ordered, or (b) the date on which notice of initiation of the investigation was published. We preliminarily find that critical circumstances exist for imports of R-134a from the PRC produced and exported by the separate rate respondents, and the PRC-wide entity. Accordingly, for the separate rate respondents and the PRC-wide entity, in accordance with section 733(e)(2)(A) of the Act, the suspension of liquidation shall apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, for consumption on or after the date which is 90 days before the publication of this notice.

Pursuant to 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which NV exceeds U.S. price as follows: (1) The cash deposit rate for the exporter/producer combinations listed in the table above will be the rate the Department determines in this preliminary determination; (2) for all combinations of PRC exporters/producers of merchandise under consideration that have not received their own separate rate above, the cash-deposit rate will be the cash deposit rate established for the PRC-wide entity; and (3) for all non-PRC exporters of merchandise under consideration which have not received their own separate rate above, the cash-deposit rate will be the cash deposit rate applicable to the PRC exporter/producer combination that supplied that non-PRC exporter. These suspension of liquidation instructions will remain in effect until further notice.

Disclosure and Public Comment

We intend to disclose the calculations performed to parties in this proceeding within five days after public announcement of the preliminary determination in accordance with 19 CFR 351.224(b). 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 final verification report is issued in this proceeding and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs. A table of contents, list of authorities used, and an executive summary of issues should accompany any briefs submitted to the Department.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, filed electronically at Enforcement and Compliance's electronic records system, ACCESS. An electronically filed document must be received successfully in its entirety by the Department's electronic records system, ACCESS, by 5:00 p.m. Eastern Standard Time, within 30 days after the date of publication of this notice. Hearing requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues you intend to present at the hearing. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

Postponement of Final Determination and Extension of Provisional Measures

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by Petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

On September 29, 2016, pursuant to 19 CFR 351.210(b) and (e), Sanmei requested that, contingent upon an affirmative preliminary determination of sales at LTFV for the respondents, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.

In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the requesting exporter accounts for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.

International Trade Commission (“ITC”) Notification

In accordance with section 733(f) of the Act, we notified the ITC of our preliminary affirmative determination of sales at LTFV. Section 735(b)(2) of the Act requires the ITC to 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-134a, or sales (or the likelihood of sales) for importation, of the merchandise under consideration within 45 days of our final determination.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

Appendix I

Scope of the Investigation

The product subject to this investigation is 1,1,1,2-Tetrafluoroethane, R-134a, or its chemical equivalent, regardless of form, type, or purity level. The chemical formula for 1,1,1,2-Tetrafluoroethane is CF₃-CH₂ F, and the Chemical Abstracts Service registry number is CAS 811-97-2.

Merchandise covered by the scope of this investigation is currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheading 2903.39.2020. Although the HTSUS subheading and CAS registry number are provided for convenience and customs purposes, the written description of the scope is dispositive.

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary

II. Background

III. Selection of Respondents

IV. Period of Investigation

V. Scope Comments

VI. Scope of the Investigation

VII. Postponement of Preliminary Determination

VIII. Postponement of Final Determination and Extension of Provisional Measures

IX. Product Characteristics

X. Critical Circumstances

XI. Affiliation Determination

XII. Discussion of the Methodology

A. Non-Market Economy Country

B. Separate Rates

C. Separate Rate Recipients

D. Companies Not Receiving a Separate Rate

E. Margin for the Separate Rate Companies

F. Combination Rates

G. The PRC-wide Entity

H. Application of Facts Available and Adverse Facts Available

I. Surrogate Country and Surrogate Value Data

J. Date of Sale

K. Fair Value Comparisons

L. Export Price

M. Value-Added Tax

N. Normal Value

O. Factor Valuations

P. Comparisons to Normal Value

Q. Currency Conversion

XIII. Verification

XIV. U.S. International Trade Commission Notification

XV. Conclusion