Brass Rod From Israel: Final Affirmative Countervailing Duty Determination

AGENCY:

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

SUMMARY:

The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of brass rod from Israel. The period of investigation (POI) is January 1, 2022, through December 31, 2022.

DATES:

Applicable August 5, 2024.

FOR FURTHER INFORMATION CONTACT:

Zachary Shaykin, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2638.

SUPPLEMENTARY INFORMATION:

Background

On September 29, 2023, Commerce published its Preliminary Determination . In the Preliminary Determination, and in accordance with section 705(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.210(b)(4), Commerce aligned the final countervailing duty (CVD) determination with the final antidumping duty determination. On October 12, 2023, Commerce tolled all deadlines for this investigation for a period of 90 days due to the outbreak of war in Israel and the consequent impacts on all parts of the country. On May 10, 2024, Commerce released its Post-Preliminary Decision. On July 22, 2024, Commerce tolled certain deadlines in this proceeding by seven days. The deadline for the final determination is now July 29, 2024.

For a complete description of the events that followed the Preliminary Determination , see the Issues and Decision Memorandum. The Issues and Decision Memorandum is a public document and is made available to the public 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.

Scope of the Investigation

The product covered by this investigation is brass rod from Israel. For a complete description of this investigation, see Appendix I.

Scope Comments

During this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period for parties to address scope issues in scope-specific case and rebuttal briefs. We did not receive timely comments from any interested parties on the Preliminary Scope Decision Memorandum. Thus, we did not make any changes to the scope of the investigation from the scope published in the Preliminary Determination and included in Appendix I.

Verification

As provided in section 782(i)(1) of the Act, in May 2024, we verified the information submitted by Finkelstein and the Government of Israel (GOI) for use in our final determination. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by Finkelstein and the GOI.

Analysis of Subsidy Programs and Comments Received

All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum, see Appendix II to this notice.

Methodology

Commerce conducted this investigation in accordance with section 701 of 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. For a full description of the methodology underlying our final determination, see the Issues and Decision Memorandum.

Changes Since the Preliminary Determination

We made certain changes to the countervailable subsidy rate calculations for Finkelstein. For a discussion of these changes, see the Issues and Decision Memorandum.

All-Others Rate

In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an individual estimated countervailable subsidy rate for the mandatory respondent, Finkelstein. 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.

We continue to calculate an individual estimated countervailable subsidy rate that is not zero, de minimis, or based entirely on facts otherwise available. Therefore, we have applied the all-others rate as equal to the rate for Finkelstein, i.e., 1.89 percent ad valorem, as this is the only rate that is not zero, de minimis, or based entirely on the facts otherwise available.

Final Determination

Commerce determines that the following estimated countervailable subsidy rates exist:

Disclosure

Commerce intends to disclose to interested parties the calculations and analysis performed in this final determination within five days of any public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in proceeding in accordance with 19 CFR 351.224(b).

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 collect cash deposits and suspend liquidation of entries of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on September 29, 2023, the date of publication of the Preliminary Determination in the Federal Register . In accordance with section 703(d) of the Act, we issued instructions to CBP to discontinue the suspension of liquidation of subject merchandise entered, or withdrawn from warehouse, on or after January 27, 2024, but to continue the suspension of liquidation of all entries from September 29, 2023, through January 26, 2024 for Finkelstein and all producers/exporters not individually examined.

Pursuant to section 706(a)of the Act, in the event of an affirmative injury determination by the U.S. International Trade Commission (ITC), we will issue a countervailing duty order, reinstate the suspension of liquidation, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. Effective on the date of publication in the Federal Register of the ITC's final determination, Commerce will instruct CBP to require a cash deposit equal to the estimated net countervailable subsidy rate or the estimated all others rate as follows: (1) the cash deposit rate for the companies listed above will be equal to the company-specific estimated net countervailable subsidy rate determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the company-specific net countervailable subsidy rate established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated net countervailable subsidy rate.

Pursuant to section 705(c)(2) of the Act, 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.

U.S. International Trade Commission Notification

In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of brass rod from Israel. 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 brass rod from Israel no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a countervailing duty order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are 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. In addition, we are making available to the ITC all non-privileged and non-proprietary information in our files. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.

Administrative Protective Orders

This notice will serve as the only reminder to parties subject to an 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/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

Notification to Interested Parties

This determination and this notice are issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).

Appendix I

Scope of the Investigation

The products covered by this investigation are brass rod and bar (brass rod), which is defined as leaded, low-lead, and no-lead solid brass made from alloys such as, but not limited to the following alloys classified under the Unified Numbering System (UNS) as C27450, C27451, C27460, C34500, C35000, C35300, C35330, C36000, C36300, C37000, C37700, C48500, C67300, C67600, and C69300, and their international equivalents.

The brass rod subject to this investigation has an actual cross-section or outside diameter greater than 0.25 inches but less than or equal to 12 inches. Brass rod cross-sections may be round, hexagonal, square, or octagonal shapes as well as special profiles ( e.g., angles, shapes), including hollow profiles.

Standard leaded brass rod covered by the scope contains, by weight, 57.0—65.0 percent copper; 0.5—3.0 percent lead; no more than 1.3 percent iron; and at least 15 percent zinc. No-lead or low-lead brass rod covered by the scope contains by weight 59.0—76.0 percent copper; 0—1.5 percent lead; no more than 0.35 percent iron; and at least 15 percent zinc. Brass rod may also include other chemical elements ( e.g., nickel, phosphorous, silicon, tin, etc.).

Brass rod may be in straight lengths or coils. Brass rod covered by this investigation may be finished or unfinished, and may or may not be heated, extruded, pickled, or cold-drawn. Brass rod may be produced in accordance with ASTM B16, ASTM B124, ASTM B981, ASTM B371, ASTM B453, ASTM B21, ASTM B138, and ASTM B927, but such conformity to an ASTM standard is not required for the merchandise to be included within the scope.

Excluded from the scope of this investigation is brass ingot, which is a casting of unwrought metal unsuitable for conversion into brass rod without remelting, that contains, by weight, at least 57.0 percent copper and 15.0 percent zinc.

The merchandise covered by this investigation is currently classifiable under subheadings 7407.21.9000, 7407.21.7000, and 7407.21.1500 of the Harmonized Tariff Schedule of the United States (HTSUS). Products subject to the scope may also enter under HTSUS subheadings 7403.21.0000, 7407.21.3000, and 7407.21.5000. The HTSUS subheadings and UNS alloy designations are provided for convenience and customs purposes. The written description of the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Subsidies Valuation

IV. Diversification of Israel's Economy

V. Changes Since the Preliminary Determination

VI. Analysis of Programs

VII. Discussion of the Issues

Comment 1: Whether Commerce Should Change the Benchmark Under the Land for Less-than-Adequate-Remuneration Program

Comment 2: Whether the Provision of Natural Gas for LTAR Program Provides an Indirect Financial Contribution

Comment 3: Whether Commerce Should Revise its Calculation of Benefits under the Provision of Brass Rod for More-Than-Adequate-Remuneration Program

VIII. Recommendation