# Hard Empty Capsules From Brazil: Final Affirmative Countervailing Duty Determination
**AGENCY:**
Enforcement and Compliance, International Trade Administration, Department of Commerce.
**SUMMARY:**
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from Brazil. The period of investigation (POI) is January 1, 2023, through December 31, 2023.
**DATES:**
Applicable December 29, 2025.
**FOR FURTHER INFORMATION CONTACT:**
Samuel Evans, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2420.
**SUPPLEMENTARY INFORMATION:**
**Background**
On March 31, 2025, Commerce published the *Preliminary Determination* in the *Federal Register* and invited interested parties to comment. [^1] In the *Preliminary Determination,* and in accordance with section 705(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.210(b)(4), Commerce aligned the final CVD determination with the final determination in the less-than-fair-value investigation of capsules from Brazil. [^2]
[^1]*See Hard Empty Capsules from Brazil: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination with Final Antidumping Duty Determination,* 90 FR 14235 (March 31, 2025) ( *Preliminary Determination* ), and accompanying Preliminary Decision Memorandum (PDM).
[^2]*Id.,* 90 FR at 14236.
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 final determination is now December 18, 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.
For a complete discussion of the events that followed the *Preliminary Determination, see* the Issues and Decision Memorandum. [^5] The Issues and Decision Memorandum is a public document and is made available to the public via ACCESS. ACCESS is available to registered users at *https://access.trade.gov.* In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at *https://access.trade.gov/public/FRNoticesListLayout.aspx.*
[^5]*See* Memorandum, “Issues and Decision Memorandum for the Final Affirmative Determination of the Countervailing Duty Investigation of Hard Empty Capsules from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Issues and Decision Memorandum).
**Scope of the Investigation**
The products covered by this investigation are hard empty capsules from Brazil. For a complete description of the scope of this investigation, *see* Appendix I.
**Scope Comments**
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage ( *i.e.,* scope) in scope-specific case briefs or other written comments. [^6] We received scope case and rebuttal briefs from multiple interested parties. For a summary of the product coverage comments and rebuttal responses submitted to the record for this final determination, and accompanying discussion and analysis of all comments timely received, *see* the Final Scope Memorandum. [^7] In the Final Scope Memorandum, Commerce determined that it is modifying the scope language as it appeared in the *Initiation Notice.*[^8]*See* Appendix I.
[^6]*See* Memorandum, “Less-Than-Fair-Value Investigations of Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam and Countervailing Duty Investigations from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Preliminary Scope Decision Memorandum,” dated March 24, 2025 (Preliminary Scope Memorandum).
[^7]*See* Memorandum, “Less-Than-Fair-Value and Countervailing Duty Investigations of Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Final Scope Decision Memorandum,” dated concurrently with this notice (Final Scope Memorandum).
[^8]*See Hard Empty Capsules from Brazil, the People's Republic of China, India, and the Socialist Republic of Vietnam: Initiation of Countervailing Duty Investigations,* 89 FR 91680 (November 20, 2024) ( *Initiation Notice* ).
**Verification**
As provided in section 782(i) of the Act, in May 2025, Commerce verified the information reported by ACG do Brasil S.A. (ACG Brazil) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided at verification. [^9]
[^9]*See* Memorandum, “Verification of the Questionnaire Responses of ACG do Brasil S.A.,” dated June 3, 2025.
**Analysis of Subsidy Programs and Comments Received**
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs that were submitted by interested parties in this investigation are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum, *see* Appendix II.
**Methodology**
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce 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. For a full description of the methodology underlying our final determination, *see* the Issues and Decision Memorandum.
[^10]*See* sections 771(5)(B) and (D) of the Act regarding financial contribution; *see also* section 771(5)(E) of the Act regarding benefit; and section 771(5A) of the Act regarding specificity.
In making this final determination, Commerce relied, in part, on facts otherwise available, including with an adverse inference, pursuant to sections 776(a) and (b) of the Act. For a further discussion of our application of adverse facts available (AFA), *see* the Issues and Decision Memorandum.
**Changes Since the Preliminary Determination**
Based on our findings at verification, we made changes to our subsidy rate calculations for ACG Brazil for the provision of electricity for less-than-adequate-remuneration program, as well as the Ex-Tarifário program. For a discussion of these changes, *see* the Issues and Decision Memorandum.
**All-Others Rate**
Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and *de minimis* countervailable subsidy rates, and any rates determined entirely under section 776 of the Act.
Commerce calculated an individual estimated countervailable subsidy rate for ACG Brazil, the only individually examined exporter/producer in this investigation. Because the only individually calculated rate is not zero, *de minimis,* or based entirely on facts otherwise available, the estimated countervailable subsidy rate calculated for ACG Brazil is the rate assigned to all other producers and exporters, pursuant to section 705(c)(5)(A)(i) of the Act.
**Final Determination**
Commerce determines that the following estimated countervailable subsidy rates exist for the period January 1, 2023, through December 31, 2023:
| Company | Subsidy rate |
| --- | --- |
| ACG do Brasil S.A | 10.67 |
| All Others | 10.67 |
**Disclosure**
Commerce intends to disclose its calculations performed to interested parties in this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in the *Federal Register* , in accordance with 19 CFR 351.224(b).
**Suspension of Liquidation**
As a result of our *Preliminary Determination,* and pursuant to sections 703(d)(1)(B) and (d)(2) of the Act, we instructed U.S. Customs and Border Protection (CBP) to collect cash deposits and suspend liquidation of entries of subject merchandise from Brazil that were entered, or withdrawn from warehouse, for consumption, on or after March 31, 2025, the date of the publication of the *Preliminary Determination* in the *Federal Register* . [^11] In accordance with section 703(d) of the Act, we instructed CBP to discontinue the suspension of liquidation of all entries of subject merchandise entered or withdrawn from warehouse, on or after July 29, 2025, but to continue the suspension of liquidation of all entries of subject merchandise on or before July 28, 2025.
[^11]*See Preliminary Determination,* 90 FR at 14236.
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty (CVD) order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for entries of subject merchandise in the amounts indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled.
**ITC Notification**
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of capsules from Brazil. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of import of capsules from Brazil. In addition, we are making available to the ITC all non-privileged and non-proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Suspension of Liquidation” section.
**Administrative Protective Order**
This notice will serve as the final reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
**Notification to Interested Parties**
This determination is issued and published in accordance with sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
Dated: December 18, 2025.
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 the scope of this investigation 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 hard empty capsules 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 this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation 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 this investigation 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 this investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based ( *i.e.,* aqueous) fluids 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 this investigation is dispositive.
**Appendix II**
**List of Topics Discussed in the Issues and Decision Memorandum**
I. Summary
II. Background
III. Use of Facts Available and Adverse Inferences
IV. Subsidies Valuation
V. Analysis of Programs
VI. Discussion of the Issues
Comment 1: Whether to Apply Adverse Facts Available to Countervail the Access Road Funding—Pouso Alegre Municipality Program
Comment 2: Whether the Government of Brazil Provided Electricity for Less Than Adequate Remuneration (LTAR) to ACG Brazil
Comment 3: Whether to Modify the Benchmark for the Provision of Electricity for LTAR Program
VII. Recommendation