Certain Epoxy Resins From the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination, Preliminary Affirmative Determination of Critical Circumstances, and Alignment of Final Determination With Final Antidumping Duty Determination

SUPPLEMENTARY INFORMATION:

Background

This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this countervailing duty (CVD) investigation on April 29, 2024. On May 28, 2024, Commerce postponed the preliminary determination until September 3, 2024. On July 22, 2024, Commerce tolled certain deadlines in this administrative proceeding by seven days. The deadline for the preliminary determination is now September 9, 2024.

For a complete description of events that followed the initiation of this investigation, see the Preliminary Decision Memorandum. 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.

Scope of the Investigation

The products covered by this investigation are epoxy resins. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

In accordance with the Preamble to Commerce's regulations, the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage ( i.e., scope). We received several comments concerning the scope of this investigation, as well as in the companion less-than-fair value (LTFV) and CVD investigations of epoxy resins, as it appeared in the Initiation Notice. We are currently evaluating the scope comments filed by the interested parties. We intend to issue our preliminary decision regarding the scope of the LTFV and CVD investigations in the preliminary determinations of the companion LTFV investigations, the deadline for which is November 6, 2024. We will incorporate the scope decisions from the LTFV investigations into the scope of the final CVD determination for this investigation after considering any relevant comments submitted in scope case and rebuttal briefs.

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. Commerce notes that, in making these findings, it relied on facts available and, because it finds that the Government of China and both mandatory respondents did not act to the best of their abilities to respond to Commerce's requests for information, Commerce has drawn an adverse inference where appropriate in selecting from among the facts otherwise available. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

Preliminary Affirmative Determination of Critical Circumstances

In accordance with section 703(e)(1) of the Act, we preliminarily find that critical circumstances exist with respect to imports of subject merchandise for Jiangsu Sanmu Group Co., Ltd. (Sanmu), Shandong Bluestar Dongda Chemical (Bluestar), and all other producers and/or exporters. For a full discussion of our preliminary critical circumstances determination, see the “Critical Circumstances” section of the Preliminary Decision Memorandum.

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 with the final determination in the companion LTFV investigation of epoxy resins from China based on a request made by the petitioner. Consequently, the final CVD determination will be issued on the same date as the final LTFV determination, which is currently scheduled to be issued no later than January 21, 2025, unless postponed.

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 rates that are zero, de minimis, or based entirely under section 776 of the Act.

Pursuant to section 705(c)(5)(A)(ii) of the Act, if the individual estimated countervailable subsidy rates established for all exporters and producers individually examined are zero, de minimis, or determined based entirely on facts otherwise available, Commerce may use “any reasonable method” to establish the estimated subsidy rate for all other producers or exporters. In this investigation, Commerce preliminarily determined the individually estimated subsidy rate for each of the individually examined respondents based entirely on facts available under section 776 of the Act. This is the only rate available in this proceeding for deriving the all-others rate. Consequently, pursuant to sections 703(d) and 705(c)(5)(A)(ii) of the Act, Commerce established the all-others rate by applying the countervailable subsidy rate assigned to the mandatory respondents.

Preliminary Determination

Commerce preliminarily determines that the following estimated countervailable subsidy rates exist: