Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable January 8, 2020.
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FOR FURTHER INFORMATION CONTACT:
Jaron Moore at (202) 482-3640 or Katherine Johnson at (202) 482-4929 (Germany), and Yang Jin Chun at (202) 482-5760 (India and Italy), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
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On December 19, 2019, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) petitions concerning imports of forged steel fluid end blocks (fluid end blocks) from the Federal Republic of Germany (Germany), India, and Italy filed in proper form on behalf of the FEB Fair Trade Coalition, Ellwood Group,
and Finkl Steel 
(collectively, the petitioners), domestic producers of fluid end blocks.
The Petitions were accompanied by countervailing duty (CVD) petitions concerning imports of fluid end blocks from the People's Republic of China, Germany, India, and Italy.
On December 23, 2019 and January 2, 2020, Commerce requested supplemental information pertaining to certain aspects of the Petitions in separate supplemental questionnaires.
The petitioners filed responses to the supplemental questionnaires on December 30, 2019 through January 6, 2020.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of fluid end blocks from Germany, India, and Italy are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the Start Printed Page 2395meaning of section 731 of the Act, and that imports of such products are materially injuring, or threatening material injury to, the domestic fluid end blocks industry in the United States. Consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry, because the petitioners are interested parties, as defined in sections 771(9)(C) and (F) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support for the initiation of the requested AD investigations.
Periods of Investigation
Because the Petitions were filed on December 19, 2019, the period of investigation (POI) for the Germany, India, and Italy AD investigations is October 1, 2018 through September 30, 2019, pursuant to 19 CFR 351.204(b)(1).
Scope of the Investigations
The products covered by these investigations are fluid end blocks from Germany, India, and Italy. For a full description of the scope of these investigations, see the appendix to this notice.
Comments on the Scope of the Investigations
During our review of the Petitions, we contacted the petitioners regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As a result, the scope of the Petitions was modified to clarify the description of the merchandise covered by the Petitions.
The description of the merchandise covered by these investigations, as described in the appendix to this notice, reflects these clarifications.
As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (i.e., scope).
Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determinations. If scope comments include factual information,
all such factual information should be limited to public information. To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit such comments by 5:00 p.m. Eastern Time (ET) on January 28, 2020, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on February 7, 2020, which is ten calendar days from the initial comment deadline.
Commerce requests that any factual information parties consider relevant to the scope of the investigations be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact Commerce and request permission to submit the additional information. All such submissions must be filed on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).
An electronically filed document must be received successfully in its entirety by the time and date it is due. Documents exempted from the electronic submission requirements must be filed manually (i.e., in paper form) with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, and stamped with the date and time of receipt by the applicable deadlines.
Comments on Product Characteristics
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of fluid end blocks to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant costs of production accurately, as well as to develop appropriate product-comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics, and (2) product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe fluid end blocks, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on January 28, 2020, which is 20 calendar days from the signature date of this notice.
Any rebuttal comments must be filed by 5:00 p.m. ET on February 7, 2020. All comments and submissions to Commerce must be filed electronically using ACCESS, as explained above, on the record of each of the AD investigations.
Determination of Industry Support for the Petitions
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition Start Printed Page 2396does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,
they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition).
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.
Based on our analysis of the information submitted on the record, we have determined that fluid end blocks, as defined in the scope, constitute a single domestic like product, and we have analyzed industry support in terms of that domestic like product.
In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioners provided the 2018 production of the domestic like product for the U.S. producers that support the Petitions.
The petitioners estimated the production of the domestic like product for the entire domestic industry based on shipment/sales data, because shipments/sales and production of fluid end blocks correlate with one another and shipments/sales are a reasonable proxy for production in the fluid end blocks industry.
The petitioners compared the production of the companies supporting the Petitions to the estimated total shipments/sales of the domestic like product for the entire domestic industry.
We relied on data provided by the petitioners for purposes of measuring industry support.
Our review of the data provided in the Petitions, the Petition Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.
First, the Petitions established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).
Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petitions account for at least 25 percent of the total production of the domestic like product.
Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petitions account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petitions.
Accordingly, Commerce determines that the Petitions were filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act.
Allegations and Evidence of Material Injury and Causation
The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; reduced market share; underselling and price depression or suppression; lost sales and revenues; and a decline in the domestic industry's financial performance and profitability.
We have assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as cumulation, and Start Printed Page 2397we have determined that these allegations are properly supported by adequate evidence, and meet the statutory requirements for initiation.
Allegations of Sales at LTFV
The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate AD investigations of imports of fluid end blocks from Germany, India, and Italy. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the country-specific AD Initiation Checklists.
The petitioners based export price (EP) on pricing information for sales of or sales offers for fluid end blocks produced in, and exported from Germany, India, and Italy. For Germany and Italy, the petitioners deducted from U.S. price international freight expenses and import duties.
For India, the petitioners deducted from U.S. price foreign inland freight and foreign brokerage and handling expenses, international freight expenses, and import duties.
The petitioners were unable to obtain pricing information for fluid end blocks produced in and sold, or offered for sale, in Germany, India, or Italy or in third country markets.
The petitioners therefore calculated NV based on constructed value (CV).
For further discussion of CV, see the section “Normal Value Based on Constructed Value” below.
Normal Value Based on Constructed Value
Pursuant to section 773(e) of the Act, CV consists of the cost of manufacturing (COM), selling, general, and administrative (SG&A) expenses, financial expenses, and profit. For Germany, India and Italy, the petitioners calculated the COM based on input factors of production and usage rates of a U.S. producer of fluid end blocks. The input factors of production were valued using publicly available data on costs specific to Germany, India and Italy during the proposed POI.
Specifically, the prices for raw materials and energy inputs were valued using publicly available import and domestic price data for Germany, India and Italy.
Labor costs were valued using publicly available sources for Germany, India, and Italy.
Overhead costs were valued using the experience of a U.S. producer of fluid end blocks. The petitioners calculated SG&A expenses, financial expenses, and profit for Germany, India, and Italy based on the ratios found in the experience of a producer of comparable or identical merchandise from Germany, India, and Italy, respectively.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to believe that imports of fluid end blocks from Germany, India, and Italy are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to CV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for fluid end blocks for each of the countries covered by this initiation are as follows: (1) Germany—83.37 percent; 
(2) India—198.85 percent; 
and (3) Italy—87.04 percent.
Initiation of LTFV Investigations
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of fluid end blocks from Germany, India, and Italy are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.
In the Petitions, the petitioners named five companies in Germany,
two companies in India,
and 18 companies in Italy 
as producers/exporters of fluid end blocks.
In the event Commerce determines that the number of companies in each country is large, and it cannot individually examine each company based upon Commerce's resources, where appropriate, Commerce intends to select mandatory respondents based on quantity and value (Q&V) questionnaires issued to potential respondents. Following standard practice in AD investigations involving market economy countries, Commerce would normally select respondents based on U.S. Customs and Border Protection (CBP) entry data for imports under the appropriate Harmonized Tariff Schedule of the United States (HTSUS) numbers listed in the scope of the investigations. However, for these investigations, the HTSUS numbers under which the subject merchandise would enter (7218.91.0030, 7218.99.0030, 7224.90.0015, 7224.90.0045, 7326.19.0010, 7326.90.8688, or 8413.91.9055) are basket categories containing a wide variety of manufactured steel products unrelated to fluid end blocks. We, therefore, cannot rely on CBP entry data in selecting respondents. Except as noted below for India, we intend to issue Q&V questionnaires to each potential respondent for which the petitioners have provided a complete address.
Exporters and producers of fluid end blocks from Germany and Italy that do not receive Q&V questionnaires by mail may still submit a response to the Q&V questionnaire and can obtain a copy of the Q&V questionnaire from the Enforcement and Compliance website, at http://trade.gov/enforcement/news.asp. Responses to the Q&V questionnaire must be submitted by the relevant German and Italian exporters/producers no later than 5:00 p.m. ET on January 21, 2020. All Q&V responses must be filed electronically via ACCESS.
For India, the petitioners identified two companies as producers/exporters of fluid end blocks (i.e., Bharat Forge Limited and Ultra Engineers) and provided independent, third-party Start Printed Page 2398information as support.
We currently know of no additional producers/exporters of fluid end blocks from India. Accordingly, Commerce intends to examine all known producers/exporters in the investigation for India (i.e., the companies cited above).
Parties wishing to comment on respondent selection for India must do so within three business days of the publication of this notice in the Federal Register. Comments must be filed electronically using ACCESS. An electronically-filed document must be received successfully in its entirety by Commerce's electronic records system, ACCESS, by 5:00 p.m. ET on the specified deadline.
Distribution of Copies of the AD Petitions
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the AD Petitions have been provided to the governments of Germany, India, and Italy via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the AD Petitions to each exporter named in the AD Petitions, as provided under 19 CFR 351.203(c)(2).
We will notify the ITC of our initiation, as required by section 732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will preliminarily determine, within 45 days after the date on which the AD Petitions were filed, whether there is a reasonable indication that imports of fluid end blocks from Germany, India, and/or Italy are materially injuring, or threatening material injury to, a U.S. industry.
A negative ITC determination for any country will result in the investigation being terminated with respect to that country.
Otherwise, these AD investigations will proceed according to statutory and regulatory time limits.
Submission of Factual Information
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted 
and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct.
Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in these investigations.
Particular Market Situation Allegation
Section 504 of the Trade Preferences Extension Act of 2015 amended the Act by adding the concept of particular market situation (PMS) for purposes of CV under section 773(e) of the Act.
Section 773(e) of the Act states that “if a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, the administering authority may use another calculation methodology under this subtitle or any other calculation methodology.” When an interested party submits a PMS allegation pursuant to section 773(e) of the Act, Commerce will respond to such a submission consistent with 19 CFR 351.301(c)(2)(v). If Commerce finds that a PMS exists under section 773(e) of the Act, then it will modify its dumping calculations appropriately.
Neither section 773(e) of the Act nor 19 CFR 351.301(c)(2)(v) set a deadline for the submission of PMS allegations and supporting factual information. However, in order to administer section 773(e) of the Act, Commerce must receive PMS allegations and supporting factual information with enough time to consider the submission. Thus, should an interested party wish to submit a PMS allegation and supporting new factual information pursuant to section 773(e) of the Act, it must do so no later than 20 days after submission of a respondent's initial section D questionnaire response.
Extensions of Time Limits
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in a letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting factual information in these investigations.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Parties must use the certification formats provided in 19 CFR 351.303(g).
Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.
Notification to Interested Parties
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to participate in these investigations should ensure that they meet the requirements of these procedures (e.g.,
Start Printed Page 2399the filing of letters of appearance as discussed at 19 CFR 351.103(d)).
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
Dated: January 8, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
Scope of the Investigations
The products covered by these investigations are forged steel fluid end blocks (fluid end blocks), whether in finished or unfinished form, and which are typically used in the manufacture or service of hydraulic pumps.
The term “forged” is an industry term used to describe the grain texture of steel resulting from the application of localized compressive force. Illustrative forging standards include, but are not limited to, American Society for Testing and Materials (ASTM) specifications A668 and A788.
For purposes of these investigations, the term “steel” denotes metal containing the following chemical elements, by weight: (i) Iron greater than or equal to 60 percent; (ii) nickel less than or equal to 8.5 percent; (iii) copper less than or equal to 6 percent; (iv) chromium greater than or equal to 0.4 percent, but less than or equal to 20 percent; and (v) molybdenum greater than or equal to 0.15 percent, but less than or equal to 3 percent. Illustrative steel standards include, but are not limited to, American Iron and Steel Institute (AISI) or Society of Automotive Engineers (SAE) grades 4130, 4135, 4140, 4320, 4330, 4340, 8630, 15-5, 17-4, F6NM, F22, F60, and XM25, as well as modified varieties of these grades.
The products covered by these investigations are: (1) Cut-to-length fluid end blocks with an actual height (measured from its highest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), an actual width (measured from its widest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), and an actual length (measured from its longest point) of 11 inches (279.4 mm) to 75 inches (1,905.0 mm); and (2) strings of fluid end blocks with an actual height (measured from its highest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), an actual width (measured from its widest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), and an actual length (measured from its longest point) up to 360 inches (9,144.0 mm).
The products included in the scope of these investigations have a tensile strength of at least 70 KSI (measured in accordance with ASTM A370) and a hardness of at least 140 HBW (measured in accordance with ASTM E10).
A fluid end block may be imported in finished condition (i.e., ready for incorporation into a pump fluid end assembly without further finishing operations) or unfinished condition (i.e., forged but still requiring one or more finishing operations before it is ready for incorporation into a pump fluid end assembly). Such finishing operations may include: (1) Heat treating; (2) milling one or more flat surfaces; (3) contour machining to custom shapes or dimensions; (4) drilling or boring holes; (5) threading holes; and/or (6) painting, varnishing, or coating.
The products included in the scope of these investigations may enter under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7218.91.0030, 7218.99.0030, 7224.90.0015, 7224.90.0045, 7326.19.0010, 7326.90.8688, or 8413.91.9055. While these HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigations is dispositive.
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[FR Doc. 2020-00493 Filed 1-14-20; 8:45 am]
BILLING CODE 3510-DS-P