Preliminary conclusions on countervailing duties and serious cases on glass products imported from China

According to a posting in the Federal Register( ), the U.S. Department of Commerce (Commerce) has preliminarily determined that countervailing subsidies are being provided to producers and exporters of certain glass wine bottles from the People's Republic of China (China). The period of investigation (POI) is January 1, 2022, through December 31, 2022. Interested parties are invited to comment on this preliminary determination.

This preliminary determination is made pursuant to section 703(b) of the Tariff Act of 1930, as amended (hereinafter referred to as the Tariff Act). DOC published a notice of initiation of this countervailing duty (CVD) investigation on January 18, 2024.

On March 8, 2024, DOC deferred its preliminary determination to May 28, 2024.

For a complete description of the events that occurred after the initiation of this investigation, please see the Preliminary Determination Memorandum( ). A list of the topics discussed in the Preliminary Determination Memorandum is included in Appendix II to this notice. The Preliminary Determination Memorandum is a public document and is available electronically through the Enforcement and Compliance Office's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). Interested readers can refer to https://access.trade.gov/login.aspx( )

Scope of Investigation: The products subject to this investigation are certain glass wine bottles from China.

The glass bottles subject to this investigation are regulated in the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 7010.90.5019.

Description of Goods:

The goods in question are certain narrow-neck glass bottles, having a nominal capacity of 740 ml (25.02 ounces) to 760 ml (25.70 ounces); a nominal total height of 24.8 cm (9.75 inches) to 35.6 cm (14 inches); a nominal base diameter of 4.6 cm (1.8 inches) to 11.4 cm (4.5 inches); and a mouth with an outside diameter of 25 mm (0.98 inches) to 37.9 mm (1.5 inches); commonly referred to as “wine bottles”.

The subject matter includes, but is not limited to, the following types of bottles: Bordeaux (also known as ''Claret''), Burgundy, Hock, Champagne, Sparkling, Port, Provence or Alsace (also known as ''Germanic'').

Shape: Glass bottles generally have a nearly round base and are available in shapes including, but not limited to, a straight face, a tapered slope from the shoulder (i.e., the slope of the bottle between the neck and the body) to the base, or a neck length with a shoulder sloping toward a wider base.

Goods include glass bottles, whether clear or not, coloured or not, with or without a notch (i.e., an indentation on the underside of the bottle) and with or without design or functional improvements (including, but not limited to, embossing, labelling or engraving).

The goods covered by the investigation are made of glass that is not ''free blown'', i.e., produced using a mould and are distinguished by mould seams, seam marks or parting lines.

The closure of the bottle may include a cork, stelvin (screw cap) or wire cage, or a stopper-in-place cap.The cases excluded from the scope of the investigation include: (1) borosilicate glass containers that meet the requirements of the United States Pharmacopeia for a Type 1 pharmaceutical container; and (2) glass containers that do not have a “finish” (i.e., an opening to the container).

Comments on Scope

Under current regulations, the Notice of Initiation provides a period for interested parties to raise issues related to the scope of the product under investigation. According to the Department, many interested parties commented on the scope of the antidumping (AD) and countervailing duty investigation as outlined in the Notice of Initiation.

A summary of the product scope comments and rebuttal comments submitted for this preliminary determination, along with an accompanying discussion and analysis of all comments received, is set forth in the Preliminary Scope Memorandum. In essence, DOC has not made any changes to the scope language as set forth in the Notice of Initiation.

Methodology

DOC conducts this investigation under section 701 of the Tariff Act. For each subsidy program deemed actionable, DOC makes a preliminary determination that there is a subsidy, i.e., a financial contribution by a “competent authority” that benefits the recipient, and that the subsidy is specific, i.e., not generalized to all recipients but targeted to specific recipients, industries, or products ( ).

Further, DOC notes that, in making its determination of actionability, DOC relies in part on the facts available to it, and because DOC finds that certain respondents and the Government of China have failed to cooperate by not acting to the best of their ability in response to DOC’s requests for information, DOC draws an adverse inference where appropriate in selecting from the available facts( ). Interested parties may refer to the section on “Use of Available Facts and Adverse Inferences” in the Preliminary Determination Memorandum.

Preliminary Determination of Significant Cases

In principle, the countervailing duty rate is calculated separately for each foreign producer and exporter and is not higher than the subsidy margin determined for them;

In the case of foreign producers and exporters not selected to participate in the investigation, the countervailing duty rate applied to them is not higher than the average subsidy margin of all foreign producers and exporters selected for the investigation.

Pursuant to section 703(e)(1) of the Act, DOC preliminarily finds that there is a serious case related to the importation of the subject merchandise in the case of Shandong Changyu Glass Co., Ltd. (Shandong Changyu), Non-Responding (Non-Cooperative) Companies/

A full discussion of DOC's determination of preliminary serious cases is provided in the ''Significant Cases'' section of the Preliminary Determination Memorandum.

Proposed Rates for All Other Cases

Sections 703(d) and 705(c)(5)(A) of the Act provide that, in a preliminary determination, DOC shall determine an estimated rate for companies not individually investigated. This rate shall be a weighted average of the estimated subsidy rates established for companies individually investigated, excluding any rates that are zero (de minimis) or based entirely on section 776 of the Tariff Act.

In this investigation, the Department has calculated a preliminary countervailing subsidy rate for Shandong Changyu, the only exporter/producer examined individually in this investigation for which the Department is calculating an estimated countervailing subsidy rate. Because the individual subsidy rate is greater than zero, de minimis, or based solely on available data, the estimated countervailing subsidy rate calculated for Shandong Changyu is the rate assigned to all other exporters and producers, pursuant to section 705(c)(5)(A)(i) of the Tariff Act.

Proposed Rates for Non-Responding Firms

There are eight exporters and/or potential manufacturers of wine bottle products from China that were investigated but did not respond to the Department’s quantity and value (Q&V) questionnaire (hereinafter referred to as non-responding firms), including: 1) Bright Glassware, (2) Boliva International Ltd.; (3) Shandong Dingxin Electronic; (4) Wenden Wensheng Glass Co., Ltd.; (5) Wuixi Hua Zhong Glass Co. Ltd.; (6) Yamamura Glass Qinhuangdao; (7) Xiamen Jane Jonson Co. Ltd.; and (8) Zibo Regal Glass Products Co. Ltd.

These companies have refused to respond to requests for information and have significantly impeded the Department's information gathering process. Therefore, in making its preliminary determinations under sections 776(a)(2)(A) and (C) of the Tariff Act, the Department is basing its CVD subsidy rates on the nonresponding companies based on the facts available to it.

In addition, the Department has preliminarily determined that an adverse inference under section 776(b) of the Tariff Act applies to the nonresponding companies that have failed to cooperate to the fullest extent possible in this investigation. An adverse inference ensures that non-cooperative companies will not achieve a more favorable outcome than if they had fully complied with DOC's request for information.

DOC preliminarily determined that the following estimated countervailing subsidy rates exist:

Companies	Subsidy rate (% of value)
Shandong Changyu Glass Co., Ltd	21,14
Boliva International Limited	202,7
Bright Glassware	202,7
Shandong Dingxin Electronic  Wenden Wensheng Glass	202,7
Wuixi Hua Zhong Glass Co. Ltd	202,7
Xiamen Jane Jonson Co. Ltd	202,7
Yamamura Glass Qinhuangdao	202,7
Zibo Regal Glass Products Co. Ltd	202,7
Tất cả các doanh nghiệp khác	21,14

Note: Rates based on available adverse events

DOC intends to make available to interested parties the calculations made in connection with this preliminary determination within 5 days of public notice or, if no public notice is provided, within 5 days of publication of this notice pursuant to 19 CFR 351.224(b).

Suspension of Disposal

Pursuant to sections 03(d)(1)(B) and (d)(2) of the Act, DOC will direct U.S. Customs and Border Protection (CBP) to suspend the disposal of imported articles subject to investigation as described in the scope of the investigation that were entered into, or withdrawn from, storage for consumption on or after the date of publication of this notice in the Federal Register. Furthermore, pursuant to section 19 CFR 351.205(d), DOC will instruct CBP to require cash deposits at the above amounts.

Section 703(e)(2) of the Act provides that, subject to a determination of egregious circumstances, any suspension of disposal shall apply to unsold merchandise that was entered or withdrawn from storage for sale on or after the later of: (a) the date of the initial suspension of disposal; or (b) the date of publication of the notice of initiation of the investigation. DOC preliminarily finds that there are “egregious circumstances” with respect to imports of subject merchandise produced and/or exported by Shandong Changyu, the nonresponding companies, and all other producers and/or exporters.

Pursuant to section 703(e)(2)(A) of the Act, the suspension of disposal shall apply to unsold merchandise from the identified exporters/producers that was entered or withdrawn from storage for sale on or after the date 90 days prior to publication of this notice.

Verification: As provided in section 782(i)(1) of the Tariff Act, the Department intends to verify the information upon which it makes its final determination.

Public Comments

All interested parties are invited to comment on the scope of the preliminary determination issued in this investigation, according to the schedule provided in the Preliminary Determination Memorandum. The Preliminary Determination Memorandum sets forth a schedule for parties to comment on the preliminary scope determination.

For all cases in which scope comments or rebuttal comments are filed, identical documents must be submitted concurrently in the records of the concurrent AD and CVD investigations.

No new factual information or proprietary business information will be included in the scope of the investigation or rebuttal comments.

A case summary or other written comments on matters not covered by the scope may be submitted to the Division of Enforcement and Compliance no later than seven days after the date of issuance of the final verification report in this investigation. A rebuttal brief, limited to the matters raised in the case summary, may be submitted no later than five days after the date of filing of the case summary.

Interested parties submitting a case summary or rebuttal brief in this proceeding must submit the following:

(1) a table of contents listing each document and data; and

(2) a table of information about the relevant authorities.

As required by 19 CFR 351.309(c)(2) and (d)(2), in previous proceedings, DOC has encouraged interested parties to provide brief summaries that should be limited to five pages, including footnotes. In this investigation, DOC instead requests that interested parties provide at the beginning of their briefs a public summary for each issue raised in their briefs. Furthermore, DOC requests that interested parties limit their summaries on each issue to no more than 450 words, excluding citations.

DOC intends to use these summaries as the basis for the comment summaries included in the issues and decision memorandum that will accompany the final decision in this investigation. DOC requests that interested parties include footnotes to relevant citations in the summaries of each issue. It should be noted that DOC has revised some of its requirements regarding service of documents in 19 CFR 351.303(f).

(Readers can refer to the DOC’s previously published posts on the amendments to the documents in the AD, CVD, and anti-circumvention proceedings.)

Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to the issues raised in the case and a rebuttal brief, must submit a written request to the U.S. Department of Commerce’s Enforcement and Compliance Division via ACCESS within 30 days of the date of this notice. The request must include the party’s name, address, and telephone number, the number of participants, and a list of the issues to be discussed. Oral presentations at the hearing will be limited to the issues raised in the brief. If a hearing request is granted, the parties will be notified of the time and date of the hearing. The parties should confirm by telephone the date, time and location of the hearing 02 (two) days prior to the scheduled date.

Notification to the U.S. International Trade Commission

Pursuant to section 703(f) of the Act, DOC will notify the U.S. International Trade Commission (ITC) of its determination. If the final determination is affirmative, the ITC will determine, no later than 120 days after the date of this preliminary determination or 45 days after the date of its final determination, whether imports of certain glass wine bottles from China materially injure or threaten material injury to the U.S. industry.

This determination is issued and published pursuant to sections 703(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).