Hard Empty Capsules: New AD/CVD Investigations Deadlines & Scope

The International Trade Commission will conduct a concurrent investigation to determine whether imports of dumped and subsidized hard empty capsules from Brazil, China, India and Vietnam are injuring U.S. industry. If the ITC finds no injury in its preliminary injury determination, due Dec. 9, the investigations will immediately end. If Commerce finds dumping or illegal subsidization in the preliminary determinations of these investigations, due in January for CVD and April for AD, it will set AD and/or CVD cash deposit requirements for imports of merchandise subject to the investigation. If both Commerce and the ITC reach affirmative final determinations, Commerce will issue AD and/or CVD orders making duties permanent and beginning a process of annual administrative reviews to set final assessments of AD/CVD on importers and potentially change AD/CVD cash deposit rates.

If duties are imposed, Chinese and Vietnamese producers and exporters that don't demonstrate independence from government control and request eligibility for a “separate rate” will be assigned the antidumping duty “China-wide rate” or "Vietnam-wide rate," which can reach more than 200% for some products. Separate rate applications from Chinese and Vietnamese producers and exporters are available here. Separate rate applications will be due Dec. 20.

AD/CVD Respondent Selection

For its AD investigations on China and Vietnam, Commerce will send quantity and value questionnaires to potential respondents, and will base respondent selection on the responses it receives. Exporters that don't get a quantity and value questionnaire can submit one using forms on Commerce's website. Responses are due Nov. 27.

For its AD investigation on India and its CVD investigations on China and India, Commerce will pick respondents to its AD/CVD investigations based on CBP import data. Comments on respondent selections are due three business days after Commerce's AD initiation notice is published, putting the deadline at Nov. 25.

For its AD/CVD investigations on Brazil, Commerce identified two companies that produce or export hard empty capsules (ACG do Brasil S.A. and Genix Industria Farmaceutica LTDA (Qualicaps Brazil)). Likewise, for its CVD investigation on Vietnam, Commerce identified only two producer/exporters (Cuu Long Pharmaceutical Joint Stock Company (DCL) and Suheung Vietnam Co., Ltd.). The agency will select these companies as respondents to these investigations respectively. Comments are due Nov. 25.

Scope of the AD/CVD Investigations

“The merchandise subject to the scope of these investigations is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.

"Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia -- National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in HECs are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.

"Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.

"Hard empty capsules are covered by the scope of these investigations regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.

"Hard empty capsules are also covered by the scope of these investigations regardless of their size, weight, length, diameter, thickness, and filling capacity.

"Cap and body pieces of hard empty capsules are covered by the scope of these investigations regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.

"Hard empty capsules covered by the scope of these investigations are those that disintegrate in water within 2 hours under tests specified in Chapter 701 of the USP-NF, or equivalent disintegration tests.

"Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by these investigations is dispositive."

Comments on the scope of these investigations are due by Dec. 3.

Investigations Timetable

These deadlines may be, and usually are, extended. The Commerce Department fact sheet on the initiation of these investigations is (here). See (2410290025) for a summary of the petition requesting these investigations.