Commerce Preliminary Finding: Countervailable Subsidies for Brazilian Pulp

Content

SUMMARY:

The U.S. Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers
and exporters of high purity dissolving pulp (dissolving pulp) from Brazil. The period of investigation is January 1, 2024,
through December 31, 2024. Interested parties are invited to comment on this preliminary determination.

DATES:

Applicable March 25, 2026.

FOR FURTHER INFORMATION CONTACT:

Sarah Keith or Gorden Struck, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration,
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0264 or (202) 482-8151,
respectively.

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 investigation on September 8, 2025. (1) On September 29, 2025, Commerce postponed the preliminary determination of this investigation until January 12, 2026. (2)

Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in
administrative proceedings by 47 days. (3) Additionally, due to a backlog of documents that were electronically filed via Enforcement and Compliance's Antidumping and
Countervailing Duty Centralized Electronic Service System (ACCESS) during the Federal Government shutdown, on November 24,
2025, Commerce tolled all deadlines in administrative proceedings by an additional 21 days. (4) Accordingly, the deadline for this preliminary determination is now March 19, 2026.

For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum. (5) 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 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 product covered by this investigation is dissolving pulp from Brazil. For a complete description of the scope of this
investigation, see Appendix I.

Scope Comments

In accordance with the Preamble to Commerce's regulations, (6) the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., scope). (7) Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. Commerce intends to issue its preliminary decision regarding comments concerning the scope of the antidumping duty (AD)
and countervailing duty (CVD) investigations in the preliminary determination of the companion AD investigation.

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. (8) Commerce notes that, in making these findings, Commerce relied, in part, on facts available, and, because it finds that the
Government of Brazil did not act to the best of its ability to respond to Commerce's requests for information, it drew an
adverse inference where appropriate in selecting from among the facts otherwise available. (9) For further information, see the “Use of Facts Otherwise Available and Adverse Inferences,” section in 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 in this investigation with the final determination in the companion AD investigation
of dissolving pulp from Brazil based on a request made by the petitioners. (10) Consequently, the final

  CVD determination will be issued on the same date as the final AD determination, which is currently scheduled to be issued
  no later than August 3, 2026, 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 zero and de minimis rates and any rates based entirely under section 776 of the Act.

Commerce calculated an individual estimated countervailable subsidy rate for Bracell Bahia Specialty Cellulose S.A. (BSC),
the only individually examined exporter/producer in this investigation. Because the only individual calculated rate is not
zero, de minimis, or based entirely on facts otherwise available, the estimated weighted-average rate calculated for BSC is the rate assigned
to all other producers and exporters, pursuant to section 705(c)(5)(A)(i) of the Act.

Preliminary Determination

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

| Company | Subsidy rate

           (percent *ad valorem*) |

| --- | --- |
| Bracell Bahia Specialty Cellulose S.A. 11 | 3.67 |
| All Others | 3.67 |

Suspension of Liquidation

In accordance with sections 703(d)(1)(B) and (d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP)
to suspend liquidation of entries of dissolving pulp, as described in the scope of the investigation section, entered, or
withdrawn from warehouse, for consumption on or after the date of publication of this notice in the
Federal Register
. Further, pursuant to section 703(d)(1)(B) of the Act and 19 CFR 351.107(e), Commerce will instruct CBP to require a cash
deposit equal to the estimated company-specific countervailable subsidy rate or the estimated all-others rate, as follows:
(1) the cash deposit rate for the respondents listed above will be equal to the company-specific estimated individual countervailable
subsidy rates determined in this preliminary determination; (2) if both the producer and exporter of the subject merchandise
have company-specific estimated subsidy rates determined in this preliminary determination, and their rates differ, then the
applicable cash deposit rate will be the higher of these two rates; (3) if either the producer or the exporter, but not both,
of the subject merchandise have a company-specific estimated subsidy rate determined in this preliminary determination, the
applicable cash deposit rate will be that company's company-specific rate; and (4) the cash deposit rate for all other producers
and exporters will be equal to the estimated all-others subsidy rate.

Disclosure

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

Consistent with 19 CFR 351.224(e), Commerce will analyze and, if appropriate, correct any timely allegations of significant
ministerial errors by amending the preliminary determination. However, consistent with 19 CFR 351.224(d), Commerce will not
consider incomplete allegations that do not address the significance standard under 19 CFR 351.224(g) following the preliminary
determination. Instead, Commerce will address such allegations in the final determination together with issues raised in the
case briefs or other written comments.

Verification

As provided in section 782(i)(1) of the Act, Commerce intends to verify the information relied upon in making its final determination.

Public Comment

Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later
than seven days after the date on which the last verification report is issued in this investigation. Rebuttal briefs, limited
to issues raised in the case briefs, may be filed not later than five days after the date for filing case briefs. (12) Interested parties who submit case or rebuttal briefs in this proceeding must submit: (1) a table of contents listing each
issue; and (2) a table of authorities. (13)

As provided under 19 CFR 351.309(c)(2)(iii) and (d)(2)(iii), we request that interested parties provide at the beginning of
their briefs a public executive summary for each issue raised in their briefs. (14) Further, we request that interested parties limit their executive summary of each issue to no more than 450 words, not including
citations. We intend to use the executive summaries as the basis of the comment summaries included in the issues and decision
memorandum that will accompany the final determination in this investigation. We request that interested parties include footnotes
for relevant citations in the executive summary of each issue. Note that Commerce has amended certain of its requirements
pertaining to the service of documents in 19 CFR 351.303(f). (15)

Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and
rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department
of Commerce within 30 days after the date of publication of this notice. Requests should contain: (1) the party's name, address,
and telephone number; (2) the number of participants and whether any participant is a foreign national; and (3) a list of
issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at a time and date to be
determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled
date.

U.S. International Trade Commission (ITC) Notification

In accordance with section 703(f) of the Act, Commerce will notify the ITC of its determination. If the final determination
is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45
days after the final determination whether imports of dissolvable pulp from Brazil are

  materially injuring, or threaten material injury to, the U.S. industry.

Notification to Interested Parties

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

Dated: March 19, 2026. Christopher Abbott, Deputy Assistant Secretary for Policy and Negotiations, performing the non-exclusive functions and duties of the Assistant
Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

The merchandise subject to this investigation is high purity dissolving pulp, which is a dissolving pulp with an alpha cellulose
percentage of 90 percent by weight or higher on an oven dry basis, as calculated by: alpha cellulose percentage = (100-S10)
+ 0.5*(S10-S18) where S10 and S18 values are determined by International Organization for Standardization (ISO) 692:1982,
and having a brightness level of 90 percent or higher, as measured by ISO 2470-1:2016. High purity dissolving pulp may be
derived from any virgin or recycled cellulose fiber source (including, but not limited to, those sourced from hardwoods, softwoods,
woody crops, agricultural crops/byproducts/residue, and agricultural/industrial/other waste). High purity dissolving pulp
may be produced from a chemical pulping process including without limitation a kraft (sulfate) pulping and/or sulfite pulping
process.

High purity dissolving pulp can be shipped in any form, including, but not limited to, a liquid slurry or in any dried form
such as flakes, powder, granules, pellets, shreds, rolls and sheets.

The scope includes merchandise matching the above description that has been finished, packaged, or otherwise processed in
a third country, including but not limited to processes such as commingling, blending, diluting, repackaging, or any other
process that would not otherwise remove the merchandise from the scope of the investigation if performed in the subject country.
The scope also includes high purity dissolving pulp that is commingled or blended with high purity dissolving pulp from sources
not subject to this investigation. Only the subject component of such commingled or blended products is covered by the scope
of this investigation.

Excluded from the scope is high purity dissolving pulp with an intrinsic viscosity under 455 milliliters per gram (mL/g),
as measured by ISO 5351:2010.

Also excluded from the scope is cotton linters pulp that consists of at least 90 percent by weight, on an oven-dried basis,
of cotton linters fibers.

High purity dissolving pulp products are classified under subheadings 4702.00.0020 and 4702.00.0040, of the Harmonized Tariff
Schedule of the United States (HTSUS). High purity dissolving pulp products may also enter under subheadings 4706.30.0000
or 4706.92.0100. Reference to the HTSUS classifications are provided for convenience and customs purposes, and the written
description of the merchandise under investigation is dispositive.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary

II. Background

III. Injury Test

IV. Diversification of Brazil's Economy

V. Subsidies Valuation Information

VI. New Subsidy Allegations

VII. Use of Facts Otherwise Available and Adverse Inferences

VIII. Analysis of Programs

IX. Recommendation

[FR Doc. 2026-05805 Filed 3-24-26; 8:45 am] BILLING CODE 3510-DS-P

Footnotes

(1) See High Purity Dissolving Pulp from Brazil: Initiation of Countervailing Duty Investigation, 90 FR 43174 (September 8, 2024) (Initiation Notice).

(2) See High Purity Dissolving Pulp from Brazil: Postponement of Preliminary Determination in the Countervailing Duty Investigation, 90 FR 46561 (September 29, 2025).

(3) See Memorandum, “Deadlines Affected by the Shutdown of the Federal Government,” dated November 14, 2025.

(4) See Memorandum, “Tolling of all Case Deadlines,” dated November 24, 2025.

(5) See Memorandum, “Decision Memorandum for the Preliminary Affirmative Determination of the Countervailing Duty Investigation of
High Purity Dissolving Pulp from Brazil,” dated concurrently with, and hereby adopted by, this notice (Preliminary Decision
Memorandum).

(6) See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997).

(7) See Initiation Notice.

(8) See sections 771(5)(B) and (D) of the Act regarding financial contribution; section 771(5)(E) of the Act regarding benefit; and
section 771(5A) of the Act regarding specificity.

(9) See sections 776(a) and (b) of the Act.

(10) See Petitioners' Letter, “Petitioners' Request for Alignment of the Countervailing Duty Investigation

  with the Concurrent Antidumping Duty Investigation,” dated March 5, 2026. The petitioners are Rayonier Advanced Materials
  Inc. and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International
  Union, AFL-CIO (collectively, the petitioners).

(11) As discussed in the Preliminary Decision Memorandum, Commerce has found the following companies to be cross-owned with BSC:
Bracell Bahia Florestal Ltda, Bracell SP Celulose Limitada, and Bracell SP Florestal Ltda.. See Preliminary Decision Memorandum at 2.

(12) See 19 CFR 351.309(d); see also Administrative Protective Order, Service, and Other Procedures in Antidumping and Countervailing Duty Proceedings, 88 FR 67069, 67077 (September 29, 2023) (APO and Service Final Rule).

(13) See 19 351.309(c)(2) and (d)(2).

(14) We use the term “issue” here to describe an argument that Commerce would normally address in a comment of the Issues and
Decision Memorandum.

(15) See APO and Service Final Rule.

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