Certain Tissue Paper Products From the People's Republic of China: Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order and Extension of Final Determination, 21580-21588 [E8-8679]
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21580
Federal Register / Vol. 73, No. 78 / Tuesday, April 22, 2008 / Notices
Number of Respondents: 35,700.
Frequency of Responses: Reporting;
On occasion.
Total Burden Hours: 2,471.
Ruth Brown,
Departmental Information Collection
Clearance Officer.
[FR Doc. E8–8644 Filed 4–21–08; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–894]
Certain Tissue Paper Products From
the People’s Republic of China:
Affirmative Preliminary Determination
of Circumvention of the Antidumping
Duty Order and Extension of Final
Determination
Import Administration,
International Trade Administration,
Department of Commerce.
AGENCY:
sroberts on PROD1PC70 with NOTICES
Preliminary Determination
We preliminarily determine that
certain tissue paper products (‘‘tissue
paper’’) produced by Vietnam Quijiang
Paper Co., Ltd. (‘‘Quijiang’’) are
circumventing the antidumping duty
order on tissue paper from the People’s
Republic of China (‘‘PRC’’), as provided
in section 781(b) of the Tariff Act of
1930, as amended (‘‘the Act’’). See
Notice of Amended Final Determination
of Sales at Less than Fair Value and
Antidumping Duty Order: Certain
Tissue Paper Products from the People’s
Republic of China, 70 FR 16223 (March
30, 2005) (‘‘Order’’).
DATES: Effective Date: April 22, 2008.
FOR FURTHER INFORMATION CONTACT: Julia
Hancock, Office 9, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC, 20230;
telephone: (202) 482–1394.
SUPPLEMENTARY INFORMATION:
Background
On July 19, 2006, the Seaman Paper
Company of Massachusetts, Inc.
(‘‘Petitioner’’) requested that the
Department of Commerce (‘‘the
Department’’) initiate a circumvention
inquiry pursuant to section 781(b) of the
Act, and 19 CFR 351.225(h), to
determine whether imports of tissue
paper from Vietnam made from PRCorigin jumbo rolls are circumventing the
antidumping duty order on tissue paper
from the PRC. See Petitioner’s Request
for a circumvention Inquiry, (July 19,
2006) (‘‘Circumvention Petition’’);
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Order. Petitioner alleged that sending
PRC-origin jumbo rolls of tissue paper to
Vietnam for completion or assembly
into tissue paper products covered by
the Order constitutes circumvention
pursuant to section 781(b) of the Act.
On July 21, 2006, Petitioner amended
the Circumvention Petition to include
certain business proprietary
information. On August 11, 2006,
Quijiang submitted comments regarding
Petitioner’s July 21, 2006, request for an
anti-circumvention inquiry. On August
14, 2006, the Department requested that
the Petitioner submit documentation
referenced, but not included, in its July
21, 2006, request. On August 18, 2006,
Petitioner submitted a response to the
Department’s August 14, 2006, request.
On August 21, 2006, Petitioner
submitted comments on Quijiang’s
August 11, 2006, submission.
On September 5, 2006, the
Department initiated a circumvention
inquiry on certain imports of tissue
paper from Vietnam. See Certain Tissue
Paper Products from the People’s
Republic of China: Initiation of
Circumvention Inquiry, 71 FR 53662
(September 12, 2006) (‘‘Initiation’’). In
the Initiation notice, the Department
stated that it would focus its analysis on
the significance of the production
process in Vietnam by Quijiang, the
company the Petitioner identified in its
circumvention request.
However, in the Initiation notice, the
Department also stated that Quijiang
had admitted on the record of the first
administrative review of the Order that
it received jumbo rolls of tissue paper
produced by its PRC parent company,
Guilin Qifeng Paper Co., Ltd. (‘‘Guilin
Qifeng’’). Guilin Qifeng is the sole
owner of Quijiang. According to
Quijiang, Guilin Qifeng, which is a
tissue paper processor and exporter
located in Guangxi, PRC, established
Quijiang in June 2004. Additionally,
Quijiang stated that Guilin Qifeng was
the sole supplier of the PRC-origin
jumbo rolls, which Quijiang converted
to cut-to-length tissue paper that was
exported to the United States. See
Quijiang’s First Questionnaire
Response, (December 11, 2006) at 4–8.
Accordingly, for purposes of this
circumvention inquiry, the Department
has focused its analysis on whether
PRC-origin jumbo rolls supplied by
Guilin Qifeng that were converted to
cut-to-length tissue paper products by
Quijiang are circumventing the Order,
as provided in section 781(b) of the Act.
Questionnaires
On September 27, 2006, Petitioner
submitted comments concerning the
initial questionnaire to be issued to
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Quijiang. On October 6, 2006, Cleo Inc.
(‘‘Cleo’’), a U.S. importer, submitted
rebuttal comments to Petitioner’s
September 27, 2006, submission. On
October 26, 2006, Petitioner submitted
surrebuttal comments to Cleo’s October
6, 2006, submission.
Between November 2, 2006, and
December 3, 2007, the Department
issued six questionnaires to Quijiang
soliciting information regarding
Quijiang’s tissue paper production and
exports to the United States to which
Quijiang responded. Between January 8,
2007, and April 3, 2008, Petitioner and
Cleo submitted comments on Quijiang’s
questionnaire responses and whether
the Department should suspend
liquidation and collect cash deposits on
all entries of tissue paper from Quijiang.
Surrogate Country Comments
In this case, both the country that
produced the jumbo rolls and the
country that produced the tissue paper
products from the jumbo rolls are
considered non-market economy
(‘‘NME’’) countries.1 Therefore, because
the production of jumbo rolls and the
cut-to-length tissue paper are performed
in NME countries, we used surrogate
values to determine whether the value
of processing performed in Vietnam
represents a small portion of the value
of the merchandise sold in the United
States. Accordingly, pursuant to section
773(c)(4) of the Act, in valuing the
FOPs, the Department shall utilize, to
the extent possible, the prices or costs
of factors of production (‘‘FOPs’’) in one
or more market-economy countries that
are at a level of economic development
comparable to that of the NME country
and are significant producers of
comparable merchandise.
On November 5, 2007, the Department
determined that India, Indonesia, Sri
Lanka, the Philippines, and Egypt are
countries comparable to the PRC and
also determined that Bangladesh,
Pakistan, India, Sri Lanka, and
Indonesia are countries comparable to
1 In accordance with section 771(18)(C)(i) of the
Act, any determination that a foreign country is an
NME country shall remain in effect until revoked
by the administering authority. See Preliminary
Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Coated Free
Sheet Paper from the People’s Republic of China,
72 FR 30758, 30760 (June 4, 2007), unchanged in
Final Determination of Sales at Less Than Fair
Value: Coated Free Sheet Paper from the People’s
Republic of China, 72 FR 60632 (October 25, 2007);
Certain Frozen Fish Fillets from the Socialist
Republic of Vietnam: Final Results of the Second
Administrative, 72 FR 13242 (March 21, 2007)
(‘‘FFF2 Final Results’’). No party has challenged the
designation of the PRC or Vietnam as an NME
country in this investigation. Therefore, we
continue to treat the PRC and Vietnam as NME
countries for purposes of the preliminary
determination of this circumvention inquiry.
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Vietnam in terms of economic
development. See Memorandum from
Ron Lorentzen, Director, Office of
Policy, to Alex Villanueva, Program
Manager, China/NME Group, Office 9:
Circumvention Inquiry of the
Antidumping Duty Order of Certain
Tissue Paper Products from the People’s
Republic of China (PRC): Request for a
List of Surrogate Countries, (November
5, 2007) (‘‘Surrogate Country List’’).
On November 8, 2007, the Department
requested comments on the selection of
a surrogate country from the interested
parties in this circumvention inquiry.
On November 29, 2007, Petitioner
submitted surrogate country comments
requesting that India be selected as the
appropriate surrogate country for
valuing factors of production for both
the PRC and Vietnam. No other
interested party commented on the
selection of a surrogate country. For a
detailed discussion of the selection of
the surrogate country, see ‘‘Surrogate
Country’’ section below.
Surrogate Value Comments
On December 20, 2008, Petitioner
submitted surrogate factor valuation
comments. No other interested party
submitted surrogate factor valuation
comments. For a detailed discussion of
the selection of the surrogate values, see
‘‘Calculation of Value-Added’’ section
below.
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Verification
On January 10, 2008, the Department
issued the verification outline to Guilin
Qifeng and Quijiang notifying them that
the Department would verify Guilin
Qifeng from February 19 to February 22,
2008, and would verify Quijiang from
February 25 to February 27, 2008.
On February 14, 2008, Quijiang
submitted a letter requesting that the
Department postpone the scheduled
verification by one month because
neither Quijiang nor Guilin Qifeng
would be prepared when verification
was scheduled to commence. On
Feburary 15, 2008, Petitioner submitted
a letter opposing Quijiang’s request to
delay the scheduled verification. On
February 15, 2008, the Department
notified Quijiang and Petitioner that it
was not going to conduct the
verification scheduled for February 19,
2008.
Extension of Determination
On June 29, 2007, August 14, 2007,
and January 4, 2008, the Department
extended the determination deadline of
this circumvention inquiry. The
preliminary determination of this
circumvention inquiry is currently due
April 14, 2008.
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21581
Scope of the Antidumping Duty Order
Scope of the Circumvention Inquiry
The tissue paper products subject to
this order are cut-to-length sheets of
tissue paper having a basis weight not
exceeding 29 grams per square meter.
Tissue paper products subject to this
order may or may not be bleached, dyecolored, surface-colored, glazed, surface
decorated or printed, sequined,
crinkled, embossed, and/or die cut. The
tissue paper subject to this order is in
the form of cut-to-length sheets of tissue
paper with a width equal to or greater
than one-half (0.5) inch. Subject tissue
paper may be flat or folded, and may be
packaged by banding or wrapping with
paper or film, by placing in plastic or
film bags, and/or by placing in boxes for
distribution and use by the ultimate
consumer. Packages of tissue paper
subject to this order may consist solely
of tissue paper of one color and/or style,
or may contain multiple colors and/or
styles.
The merchandise subject to this order
does not have specific classification
numbers assigned to them under the
Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’). Subject
merchandise may be under one or more
of several different subheadings,
including: 4802.30; 4802.54; 4802.61;
4802.62; 4802.69; 4804.31.1000;
4804.31.2000; 4804.31.4020;
4804.31.4040; 4804.31.6000; 4804.39;
4805.91.1090; 4805.91.5000;
4805.91.7000; 4806.40; 4808.30;
4808.90; 4811.90; 4823.90; 4820.50.00;
4802.90.00; 4805.91.90; 9505.90.40. The
tariff classifications are provided for
convenience and customs purposes;
however, the written description of the
scope of this order is dispositive.2
Excluded from the scope of this order
are the following tissue paper products:
(1) Tissue paper products that are
coated in wax, paraffin, or polymers, of
a kind used in floral and food service
applications; (2) tissue paper products
that have been perforated, embossed, or
die-cut to the shape of a toilet seat, i.e.,
disposable sanitary covers for toilet
seats; (3) toilet or facial tissue stock,
towel or napkin stock, paper of a kind
used for household or sanitary
purposes, cellulose wadding, and webs
of cellulose fibers (HTSUS
4803.00.20.00 and 4803.00.40.00).
The products covered by this inquiry
are jumbo rolls of tissue paper that are
exported from the PRC to Vietnam
where they are converted, possibly dyed
and/or printed, into tissue paper
products, as described above in the
‘‘Scope of the Antidumping Duty
Order’’ section. This inquiry only covers
such products that are exported to the
United States by Quijiang.
2 On January 30, 2007, at the direction of U.S.
Customs and Border Protection (‘‘CBP’’), the
Department added the following HTSUS
classifications to the AD/CVD module for tissue
paper: 4802.54.3100, 4802.54.6100, and
4823.90.6700. However, we note that the six-digit
classifications for these numbers were already listed
in the scope.
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Statutory Provisions Regarding
Circumvention
Section 781(b) of the Act provides
that the Department may find
circumvention of an antidumping duty
order when merchandise of the same
class or kind subject to the order is
completed or assembled in a foreign
country other than the country to which
the order applies. In conducting
circumvention inquiries under section
781(b) of the Act, the Department relies
upon the following criteria: (A)
Merchandise imported into the United
States is of the same class or kind as any
merchandise produced in a foreign
country that is subject to an
antidumping duty order; (B) before
importation into the United States, such
imported merchandise is completed or
assembled in another foreign country
from merchandise which is subject to
the order or produced in the foreign
country that is subject to the order; (C)
the process of assembly or completion
in the foreign country referred to in (B)
is minor or insignificant; and (D) the
value of the merchandise produced in
the foreign country to which the
antidumping duty order applies is a
significant portion of the total value of
the merchandise exported to the United
States.
The Department’s questionnaires
issued to Quijiang and its PRC parent
company, Guilin Qifeng, were designed
to elicit information for purposes of
conducting both qualitative and
quantitative analyses in accordance
with the criteria enumerated in section
781(b) of the Act, as outlined above.
This approach is consistent with our
analyses in prior circumvention
inquiries. See Circumvention and Scope
Inquiries on the Antidumping Duty
Order on Certain Frozen Fish Fillets
from the Socialist Republic of Vietnam:
Partial Affirmative Final Determination
of Circumvention of the Antidumping
Duty Order, Partial Final Termination of
Circumvention Inquiry and Final
Rescission of Scope Inquiry, 71 FR
38608 (July 7, 2006) (‘‘FFF
Circumvention Final’’); AntiCircumvention Inquiry of the
Antidumping and Countervailing Duty
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Orders on Certain Pasta from Italy:
Affirmative Final Determinations of
Circumvention of Antidumping and
Countervailing Duty Orders, 68 FR
54888 (September 19, 2003) (‘‘Pasta
Circumvention Final’’); Hot-Rolled Lead
and Bismuth Carbon Steel Products
from Germany and the United Kingdom;
Negative Final Determinations of
Circumvention of Antidumping and
Countervailing Duty Orders, 64 FR
40336 (July 26, 1999). To ascertain the
value of the completed merchandise
exported to the United States we
requested PRC production data of jumbo
rolls produced by Guilin Qifeng and
Vietnam production data of the
processing and packaging operations
performed by Quijiang.
Statutory Analysis
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(A) Whether Merchandise Sold in the
United States Is of the Same Class or
Kind as Other Merchandise That Is
Subject to the Order
The Order covers cut-to-length sheets
of tissue paper equal to or greater than
0.5 inches in width, with a basis weight
not exceeding 29 grams per square
meter and other specified characteristics
of the scope. The merchandise subject to
this inquiry is tissue paper products
exported to the United States by
Quijiang produced from PRC-origin
jumbo rolls. The information provided
by Quijiang in its questionnaire
responses indicates that the tissue paper
products produced from PRC-origin
jumbo rolls it exported to the United
States meet the written description of
the products subject to the Order. See
Quijiang’s First Questionnaire
Response, (December 11, 2006) at
Appendix 7. Quijiang submitted a
product list showing that all the tissue
paper products it produced and
exported to the United States were
below the basis weight of 29 grams per
square meter, which is the weight that
merchandise subject to the Order is not
to exceed. See Quijiang’s Second
Questionnaire Response, (April 3, 2007)
at Exhibit S1–2. A review of the product
list also shows that Quijiang’s tissue
paper products meet other criteria
identified in the Order such as dyed,
printed, etc. Finally, we note that
Quijiang has not argued that its exports
of tissue paper products to the United
States are not of the same class or kind
of merchandise as that subject to the
Order. Accordingly, we find that the
merchandise subject to this inquiry is
the same class or kind of merchandise
as that subject to the Order.
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(B) Whether Merchandise Sold in the
United States Is Completed or
Assembled in Another Foreign Country
From Merchandise Which Is Subject to
the Order or Produced in the Foreign
Country That Is Subject to the Order
In this proceeding, the merchandise
exported to the United States is tissue
paper products processed in Vietnam
from PRC-origin jumbo rolls of tissue
paper. Qujiang has reported that it
exported tissue paper that was
processed in Vietnam using PRC-origin
jumbo rolls of tissue paper as the input.
See Quijiang’s First Questionnaire
Response, at 6. Specifically, Quijiang
stated that it imported PRC-origin jumbo
rolls of tissue paper produced by its
parent company, Guilin Qifeng, which
were then converted, possibly dyed
and/or printed, into cut-to-length tissue
paper. See id. at 6 and Appendix 1.
Additionally, Quijiang reported that it
exported tissue paper that was
processed in Vietnam using PRC-origin
jumbo rolls between July 2004 and July
2006. See Quijiang’s Sixth
Questionnaire Response, (January 4,
2008) at 22. Accordingly, we find that
the merchandise subject to this
circumvention inquiry was completed
in Vietnam from PRC-origin jumbo rolls
that were produced in the country to
which this Order applies.
(C) Whether the Process of Assembly or
Completion in the Foreign Country Is
Minor or Insignificant
Section 781(b)(2) of the Act provides
the criteria for determining whether the
process of assembly or completion is
minor or insignificant. These criteria
are:
(a) The level of investment in the
foreign country;
(b) the level of research and
development in the foreign country;
(c) the nature of the production
process in the foreign country;
(d) the extent of the production
facilities in the foreign country; and
(e) whether the value of the
processing performed in the foreign
country represents a small proportion of
the value of the merchandise imported
into the United States.
The Statement of Administrative
Action (‘‘SAA’’) accompanying the
Uruguay Round Agreements Act, H.
Doc. No. 103–316, at 893 (1994),
provides some guidance with respect to
these criteria. It explains that no single
factor listed in section 781(b)(2) of the
Act will be controlling. Accordingly, it
is the Department’s practice to evaluate
each of the factors as they exist in the
United States or foreign country
depending on the particular
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circumvention scenario. Therefore, the
importance of any one of the factors
listed under section 781(b)(2) of the Act
can vary from case to case depending on
the particular circumstances unique to
each circumvention inquiry.
In this circumvention inquiry, we
based our analysis on both qualitative
and quantitative factors in determining
whether the process of converting the
jumbo rolls in Vietnam was minor or
insignificant, in accordance with the
criteria of section 781(b)(2) of the Act.
This approach is consistent with our
analysis in prior circumvention
inquiries. See Anti-Circumvention
Inquiry of the Antidumping and
Countervailing Duty Orders on Certain
Pasta From Italy: Affirmative
Preliminary Determinations of
Circumvention of Antidumping and
Countervailing Duty Orders, 68 FR
46571 (August 6, 2003) (‘‘Pasta
Circumvention Prelim’’) (unchanged in
Pasta Circumvention Final, 68 FR
54888).
(a) The Level of Investment in Vietnam
For purposes of this circumvention
inquiry, we analyzed the level of
investment in Quijiang that is associated
with converting the PRC-origin jumbo
rolls into finished cut-to-length tissue
paper. Specifically, we reviewed the
level of investment in Quijiang for the
conversion process by Quijiang’s parent
company, Guilin Qifeng, and Quijiang’s
investment on its own behalf.
Quijiang reported that its operations
in Vietnam for converting jumbo rolls
into cut-to-length tissue paper are
comprised of equipment sourced in
three ways: (1) Assets identified as
‘‘purchase from China,’’ which consist
of equipment that Quijiang purchased
from its parent company, Guilin Qifeng;
(2) assets identified as ‘‘Guilin Qifeng
Investment,’’ which are assets that
Guilin Qifeng physically moved to
Quijiang but nevertheless retained
ownership; and (3) assets identified as
‘‘Vietnam domestic purchase,’’ which
are assets or equipment that Quijiang
purchased in Vietnam. See Quijiang’s
Second Questionnaire Response, at 7.
Additionally, Quijiang identified the
types of equipment and where that
equipment was used in the production
of cut-to-length tissue paper products,
(i.e., Quijiang identified what type of
equipment, such as cutting machines,
was used in the processing workshop
where the jumbo rolls were converted).
Id., at Exhibit S2–5. Moreover, Quijiang
stated that for the assets that were
sourced in these three ways, the first
method, which is identified as
‘‘purchases from China,’’ is Guilin
Qifeng’s investment and that the second
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and third method, which are identified
as ‘‘purchases from China’’ and
‘‘Vietnamese domestic purchases,’’ is
Quijiang’s investment. Id.
With respect to Guilin Qifeng’s
investment in Quijiang for the
conversion of the jumbo rolls, Quijiang
stated that these assets were in use by
Guilin Qifeng immediately prior to their
physical transfer to Quijiang. See
Quijiang’s Second Questionnaire
Response, at 7. Specifically, Quijiang
stated that these assets were transferred
to Quijiang from Guilin Qifeng in the
following manner: (1) Dissembling,
packing, and loading the assets or
equipment onto a truck; (2) transporting
the assets or equipment across the
border from China to Quijiang in
Vietnam; and (3) unloading, assembling,
and testing the assets or equipment. See
Quijiang’s Sixth Questionnaire
Response, at 25 and Appendix S6–29.
The facts show that the vast majority of
the equipment or assets that were
transferred from Guilin Qifeng to
Quijiang to be used in converting the
PRC-origin jumbo rolls to cut-to-length
tissue paper were not new assets as
nearly all of this equipment had been in
use by Guilin Qifeng prior to their
transfer. Therefore, we find that Guilin
Qifeng’s investment in Quijiang that
was used for converting the PRC-origin
jumbo rolls to cut-to-length tissue paper
was not new investment because almost
all of the assets that consist of this
investment were in prior use by Guilin
Qifeng. However, we will use Guilin
Qifeng’s investment in Quijiang for the
conversion process in determining
whether Quijiang’s own investment was
minor or insignificant because the assets
or equipment representing Guilin
Qifeng’s investment were used in the
conversion process and there were some
expenses incurred for moving the
equipment and getting it situated in
Vietnam.
We calculated the total level of
investment in Quijiang for converting
PRC-origin jumbo rolls into cut-length
tissue paper and find that the Guilin
Qifeng’s investment (i.e., assets
transferred from Guilin Qifeng) is
significant as compared to the level of
investment, (i.e., purchases from China
and Vietnamese domestic purchases),
provided by Quijiang. See
Memorandum to the File from Julia
Hancock, Senior Case Analyst, through
Alex Villanueva, Program Manager, AD/
CVD Operations, Office 9:
Circumvention Inquiry on Certain
Tissue Paper Products from the People’s
Republic of China: Proprietary Analysis
of Certain Statutory Factors for Vietnam
Quijiang for the Preliminary
Determination, (April 14, 2008)
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16:25 Apr 21, 2008
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(‘‘Analysis Memorandum’’).
Specifically, Guilin Qifeng’s overall
investment in the conversion of the
PRC-origin jumbo rolls accounts for
approximately 75 percent of total
investment whereas Quijiang’s total
investment accounts for approximately
only 25 percent of the total investment
for equipment used in converting PRCorigin jumbo rolls.3 Id. Accordingly, we
find that the level of investment by
Quijiang for equipment used in
converting the PRC-origin jumbo rolls is
minor or insignificant compared to the
level of investment provided by Guilin
Qifeng.
(b) The Level of Research and
Development (‘‘R&D’’) in Vietnam
We find that the record evidence for
this circumvention inquiry
demonstrates that Quijiang has not
undertaken a significant level of R&D in
order to process tissue paper products.
In describing the level of R&D in the
tissue paper industry in Vietnam,
Quijiang reported that the tissue paper
industry is a mature, traditional and
labor intensive industry and that there
is not much research and development
involved in this industry. See Quijiang’s
First Questionnaire Response, at 10.
Additionally, the limited role of R&D in
the tissue paper industry in Vietnam is
further supported by the fact that
Quijiang confirmed that it did not
undertake any R&D initiatives and
expenditures involved with tissue paper
processing. See Quijiang’s Sixth
Questionnaire Response, at 25.
Accordingly, based on facts on the
record of this circumvention inquiry
and because the conversion of jumbo
rolls to tissue paper products is a
technically mature process, we find that
R&D into the process of producing
tissue paper products is not a significant
factor in the Vietnamese tissue paper
industry.
(c) The Nature of the Production Process
in Vietnam
As discussed above, the element of
the tissue paper production process
performed by Quijiang in Vietnam is the
conversion of the PRC-origin jumbo
rolls to cut-to-length tissue paper.
According to Quijiang, the entire
process to produce cut-to-length tissue
paper from the raw input, paper pulp,
occurs in six stages. See Quijiang’s First
Questionnaire Response, at Exhibit 1.
However, according to Quijiang’s
questionnaire responses, Quijiang’s
conversion of the PRC-origin jumbo
3 Because this information is business
proprietary, the values have been ranged by plus or
minus 10 percent.
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21583
rolls covers only the last two stages of
the overall production process.4 Id.
According to Quijiang, seasonal workers
were used in the conversion of the PRCorigin jumbo rolls to cut-to-length tissue
paper during the final stage of the
overall production process, which is
primarily a manual operation. In
contrast to the production process of
converting PRC-origin jumbo rolls to
cut-to-length tissue, Quijiang stated that
Guilin Qifeng’s production of the PRCorigin jumbo rolls involved the first four
stages of the overall production process
required to produce cut-to-length tissue
paper.5 According to Quijiang, the
fourth stage of the overall production
process requires three shifts of workers
and is labor intensive. Id.
Based on the above descriptions, we
find that, in contrast to the first four
stages of the overall production process
that involved the production of jumbo
rolls, which require significant
equipment involved in the process and
labor, the final two stages of the overall
production process that involved the
conversion of PRC-origin jumbo rolls are
limited to cutting, dyeing, printing, and
packaging/packing the cut-to-length
tissue paper. Moreover, the facts on the
record show that there is limited
equipment and labor involved in these
two stages of the production process.
Accordingly, we find that the
4 The first of the final two stages of the overall
production process that involve the conversion of
the jumbo rolls involves the following: (1) Workers
unrolling and re-rolling the jumbo roll during the
surface coloring, decorating, or embossing process;
(2) preparing the dye and dip-dying the jumbo rolls;
(3) multi-color printing the jumbo rolls on the
printing machines; and (4) cutting the jumbo rolls
to length on the cutting machines. The second of
the final two stages of the overall production
process that involve the conversion of the jumbo
rolls involves the following: (1) Counting and
folding the sheets prior to packaging; (2) packaging
the sheets in polyethylene bags, sealing, and
labeling the bags; and (3) packing the bags of tissue
paper in cartons, which are tied in plastic strip and
then shipped to the customer.
5 The first of the first four stages of the overall
production process that involve the production of
the jumbo rolls is the blending stage (i.e., this
involves water and paper pulp being blended in a
tank into a pulp mixture, which is pumped into
crude stock storage). The second of the first four
stages of the overall production process that
involves the production of the jumbo rolls is the
stock grinding stage (i.e., this involves refining the
crude stock by grinding the fibers into shorter
lengths and then cleaning). The third of the first
four stages of the overall production process that
involve the production of the jumbo rolls is the
stock preparation stage (i.e., this involves the
refined stock being pumped from a storage vat into
a preparation tank where whiteners, dyes, or other
fixatives may be added). The fourth of the first four
stages of the overall production process that involve
the production of the jumbo rolls is the papermaking stage (i.e., this involves the prepared stock
being moved onto a porous cylinder where the wet
paper is then transferred to a second spinning
cylinder and is wrapped onto and passes over a
heated drum as it rotates).
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production process conducted by
Quijiang in converting the PRC-origin
jumbo rolls to cut-to-length tissue paper
is limited and minor when compared to
the production process of the jumbo
rolls.
(d) The Extent of Production Facilities
in Vietnam
In analyzing the extent of the
production facilities, we have
considered the capital equipment used
in the production process, the types of
employees, and whether the facilities
used by Quijiang in the conversion
process were permanent facilities.
Quijiang states that when it began
operations in July 2004, the facility had
four conversion lines and dip-dyeing
machines that were used to convert
PRC-origin jumbo rolls to cut-to-length
paper. See Quijiang’s First
Questionnaire Response, at 8. A review
of the records of the equipment at this
facility shows that the capital
equipment used to convert PRC-origin
jumbo rolls to cut-to-length tissue paper
consisted of paper-cutting machines,
electronic scales, trolleys, and bed-plate.
See Quijiang’s Second Questionnaire
Response, at Exhibit S1–5. Additionally,
Quijiang also reports that it leased two
facilities to conduct the printing and
packaging processes. A review of the
records of the equipment at these
facilities shows that the capital
equipment used to print and package
the cut-to-length tissue paper consisted
of packaging working tables and
printing machines. Id., at Exhibits S1–
4 and S1–5.
In comparison, Quijiang states that
Guilin Qifeng produced the PRC-origin
jumbo rolls at one location in Guilin,
PRC. See Quijiang’s Fifth Questionnaire
Response, at 6. A review of Guilin
Qifeng’s production process shows that
the capital equipment used to produce
the stock for the paper mixture
consisted of numerous blending lines
that have stock storage, storage vats, and
numerous stock preparation tanks. See
Quijiang’s Fourth Questionnaire
Response, at Appendix S4–5.
Additionally, Guilin Qifeng’s
production process shows that the
capital equipment used to produce the
jumbo roll from the paper mixture
consisted of two facilities that had
numerous long net machines and
numerous round net machines. Id. The
facts on the record show that the capital
equipment used by Guilin Qifeng to
produce the PRC-origin jumbo rolls
requires sophisticated machinery, such
as blending lines and long net
machines. In contrast, the capital
equipment used by Quijiang to convert
the PRC-origin jumbo rolls to cut-to-
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length tissue paper did not require
sophisticated capital equipment since
the machinery only consisted of papercutting machines, packaging tables, etc.
Therefore, based on the facts on the
record, we find that Quijiang has not
made substantial purchases of
sophisticated machinery to convert
PRC-origin jumbo rolls to cut-to-length
tissue paper.
With regard to the level of employees
involved in the conversion of PRCorigin jumbo rolls to cut-to-length tissue
paper, Quijiang reported that skilled
labor is involved in the first of the final
two stages of the overall production
process, cutting, dyeing, and printing of
the jumbo rolls, is a semi-automatic
operation. However, according to
Quijiang, the last of the final two stages
of the overall production process for
converting the PRC-origin jumbo rolls to
cut-to-length tissue paper is a manual
operation, which involves unskilled
labor folding and packaging the tissue
paper. See Quijiang’s First
Questionnaire Response, at 12.
Additionally, Quijiang reported that the
workers involved in the packaging and
packing of the cut-to-length tissue paper
are seasonal workers. Id., at Exhibit S1–
5. Moreover, according to Quijiang,
there are more workers involved during
the last of the final two stages. Id. Based
on a review of the labor involved in the
conversion of PRC-origin jumbo rolls to
cut-to-length tissue paper, we find that
most of Quijiang’s labor force consists of
unskilled workers that are employed on
a temporary basis.
Quijiang reports that the headquarters
facility, which housed the conversion
lines, and the two facilities which
conducted the printing and packaging,
were all leased by Quijiang from other,
unaffiliated parties between July 2004
and July 2006. See Quijiang’s Second
Questionnaire Response, at Exhibit S1–
3. Because the three facilities where
Quijiang converted the PRC-origin
jumbo rolls to cut-to-length tissue paper
were leased rather than owned, we find
that Quijiang’s production facilities
were temporary, rather than permanent.
Accordingly, based on the fact that
Quijiang’s capital equipment was not
substantial, Quijiang’s labor force
primarily consisted of unskilled
temporary workers, and the facilities
were leased, we find that the extent of
Quijiang’s production facilities to
convert PRC-origin jumbo rolls to cut-tolength tissue paper was minimal.
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(e) Whether the Value of the Processing
Performed in Vietnam Represents a
Small Portion of the Value of the
Merchandise Sold in the United States
In prior circumvention cases pursuant
to section 781(a) and section 781(b) of
the Act, where the Department must
determine whether the value of
processing either in the United States or
in a third country is minor, we used the
U.S. sales and cost of production data
because the countries at issue were
market economy countries. See Pasta
Circumvention Prelim, 68 FR at 46575
(unchanged in Pasta Circumvention
Final, 68 FR 54888); Certain Carbon
Steel Butt-Weld Pipe Fittings from the
People’s Republic of China: Affirmative
Final Determination of Circumvention
of Antidumping Duty Order, 59 FR
15155, 15156 (March 31, 1994).
However, in this case, both the country
that produced the jumbo rolls and the
country that produced the tissue paper
products from the jumbo rolls are
considered NME countries. Therefore,
because the production of jumbo rolls
and the cut-to-length tissue paper is
performed in NME countries, we used
surrogate values to determine whether
the value of processing performed in
Vietnam represents a small portion of
the value of the merchandise sold in the
United States.
In accordance with section 773(c)(4)
of the Act, in valuing the factors of
production (‘‘FOPs’’), the Department
shall utilize, to the extent possible, the
prices or costs of FOPs in one or more
market-economy countries that are at a
level of economic development
comparable to that of the NME country
and are significant producers of
comparable merchandise. The
Department selected India as the
surrogate country for both the PRC and
Vietnam on the basis that: (1) It is at a
similar level of economic development
pursuant to section 773(c)(4) of the Act;
(2) it is a significant producer of
comparable merchandise; and (3) we
have reliable data from India. See
Memorandum to the File from Julia
Hancock, through Alex Villanueva,
Program Manager, AD/CVD Operations,
Office 9, and James C. Doyle, Director,
AD/CVD Operations, Office 9:
Circumvention Inquiry on Certain
Tissue Paper Products from the People’s
Republic of China: Surrogate Country
and Surrogate Values for the
Preliminary Determination (April 14,
2008) (‘‘Surrogate Country and Value
Memorandum’’). Thus, we have
calculated the value of processing
performed in Vietnam and the value of
the PRC-origin jumbo rolls using
surrogate prices from India. The sources
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of the surrogate values we have used in
this circumvention inquiry are
discussed in the Surrogate Country and
Value Memorandum.
To calculate the value of the PRCorigin jumbo rolls, we used publicly
available Indian import prices for
Harmonized Tariff Schedule (‘‘HTS’’)
4802.54.50, described as ‘‘Uncoated
Paper in Rolls, under 40 grams, Tissue
Paper,’’ as reported in the Monthly
Statistics of the Foreign Trade of India.6
We calculated the surrogate value for
PRC-origin jumbo rolls using monthly
data for July 2004 to July 2006 because
Quijiang reported that July 2006 was the
last month that Guilin Qifeng produced
jumbo rolls that were sold to Quijiang.
See Quijiang’s Sixth Questionnaire
Response, at 12 and Appendix S6–16.
We converted the surrogate value into
U.S. dollars, in accordance with section
773A(a) of the Act, based on the
exchange rates in effect for July 1, 2004,
to July 31, 2006, as certified by the
Federal Reserve Bank. For further
information, see Surrogate Country and
Value Memorandum.
To calculate the value of Quijiang’s
processing of the finished merchandise,
we used Quijiang’s FOPs for each stage
of converting PRC-origin jumbo rolls to
tissue paper, i.e., from the cutting of the
jumbo rolls into cut-to-length sheets of
tissue paper, dyeing (where
appropriate), printing (where
appropriate), and packaging of the final
product. See Quijiang’s First
Questionnaire Response, at Exhibit 1.
We multiplied the reported per-unit
factor consumption rates by the Indian
surrogate values.7 In selecting the
surrogate values, we considered the
quality, specificity, and
contemporaneity of the data.
To derive the value added to the
finished merchandise by Quijiang’s
processing, we divided the total value of
the finished merchandise (i.e., sum of
the surrogate value of the PRC-origin
jumbo rolls and Quijiang’s value of
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6 The
same import prices are also available from
the World Trade Atlas (‘‘WTA’’), published by
Global Trade Information Services, Inc., which is a
secondary electronic source based upon the
publication Monthly Statistics of the Foreign Trade
of India. Volume II: Imports.
7 As appropriate, we adjusted input prices by
including freight costs to make them delivered
prices. Specifically, we added to Indian import
surrogate values a surrogate freight cost using the
shorter of the reported distance from the domestic
supplier to the factory or the distance from the
nearest seaport to the factory where appropriate.
This adjustment is in accordance with the Court of
Appeals for the Federal Circuit’s decision in Sigma
Corp. v. United States, 117 F.3d 1401, 1407–08
(Fed. Cir. 1997). Additionally, we made currency
conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on the exchange
rates in effect on the dates of the U.S. sales as
certified by the Federal Reserve Bank.
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processing), by Quijiang’s value of
processing. The value added to the
finished merchandise by Quijiang’s
processing is an average value of
approximately 34 percent.8 Based on
our analysis of the value added, we find
that the value of the processing
performed by Quijiang to convert the
PRC-origin jumbo rolls to cut-to-length
tissue paper does not represent a small
proportion of the value of the finished
merchandise sold in the United States.
See Analysis Memorandum.
Summary of Analysis of Whether the
Process of Assembly or Completion in
the Foreign Country Is Minor or
Insignificant
In sum, we preliminarily conclude
that the record evidence of this
circumvention inquiry supports a
finding that the process or completion
of the PRC-origin jumbo rolls to cut-tolength tissue paper in Vietnam is minor
or insignificant. Pursuant to section
781(b)(2)(A) of the Act, we find that the
level of investment by Quijiang in the
equipment used to convert the PRCorigin jumbo rolls is minor compared to
the level of investment provided by
Guilin Qifeng. Pursuant to section
781(b)(2)(B) of the Act, we find that the
absence of R&D initiatives by Quijiang
in the production of tissue paper
products shows that R&D is not a
significant factor in the Vietnamese
tissue paper industry. Pursuant to
section 781(b)(2)(C) of the Act, we find
that the portion of the overall
production process of cut-to-length
tissue paper conducted by Quijiang in
converting the PRC-origin jumbo rolls to
cut-to-length tissue paper is limited and
minor when compared to Guilin
Qifeng’s share of the overall production
process in the production of the jumbo
rolls. Pursuant to section 781(b)(2)(D) of
the Act, we find that the extent of
Quijiang’s production facilities is minor
with respect to converting PRC-origin
jumbo rolls to cut-to-length tissue paper
because the capital equipment used by
Quijiang in converting the PRC-origin
jumbo rolls is not substantial in
comparison to the capital equipment
used by Guilin Qifeng to produce the
jumbo rolls, the labor force used by
Quijiang is composed primarily
unskilled workers, and Quijiang’s
facilities were leased, not permanent.
Finally, pursuant to section 781(b)(2)(E)
of the Act, we find that value of the
processing performed by Quijiang to
convert the PRC-origin jumbo rolls to
cut-to-length tissue paper does not
8 Because this information is business
proprietary, we have ranged the values by plus or
minus 10 percent.
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21585
represent a small proportion of the
value of the finished merchandise sold
in the United States.
While the statutory factor, section
781(b)(2)(E) of the Act, is inconclusive,
the information on the record regarding
the four other statutory factors, sections
781(b)(2)(A),(B),(C), and (D) of the Act,
shows that the processing operation to
convert PRC-origin jumbo rolls to cut-tolength tissue paper in Vietnam is minor
or insignificant. We have based our
decision as to whether the processing
operation to convert PRC-origin jumbo
rolls to cut-to-length tissue paper is
minor or insignificant based on the
totality of the record evidence of this
circumvention inquiry. Specifically, the
legislative history to section 781(b)
indicates that Congress intended the
Department to make determinations
regarding circumvention on a case-bycase basis in recognition that the facts
of individual cases and the nature of
specific industries vary widely. See S.
Rep. No. 103–412 (1994), at 81–82.
Although we find pursuant to section
781(b)(2)(E) of the Act, that the value of
the processing performed by Quijiang to
convert the PRC-origin jumbo rolls to
cut-to-length tissue paper does not
represent a small proportion of the
value of the finished merchandise sold
in the United States, the preponderance
of the other record evidence, pursuant
to sections 781(b)(2)(A),(B),(C), and (D)
of the Act, shows that the value of the
processing operation in Vietnam is
minor or insignificant. Accordingly,
based on a review of the record
evidence, it is clear that the majority of
the actual production process for cut-tolength tissue paper is concentrated in
Guilin Qifeng’s production facilities in
the PRC. Therefore, we find that the
processing operation to convert PRCorigin jumbo rolls to cut-to-length tissue
paper in Vietnam is minor or
insignificant, pursuant to section
781(b)(1)(C) of the Act.
(D) Whether the Value of the
Merchandise Produced in the Foreign
Country to Which the Order Applies Is
a Significant Portion of the Total Value
of the Merchandise Exported to the
United States
Under section 781(b)(1)(D) of the Act,
the value of the merchandise produced
in the foreign country to which the
Order applies must be a significant
portion of the total value of the
merchandise sold in the United States
in order to find circumvention. The
major parts and components that consist
of the total value of the cut-to-length
tissue paper sold in the United States
are: PRC-origin jumbo rolls, inks and
dyes, and packaging materials. As
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discussed in the section of ‘‘Whether
Merchandise Sold in The United States
is Completed or Assembled in Another
Foreign Country From Merchandise
Which Is Subject to the Order or
Produced In the Foreign Country That Is
Subject to the Order,’’ in all instances
the PRC-origin jumbo rolls are imported
from Guilin Qifeng, which is located in
the PRC. Additionally, the value of the
PRC-origin jumbo rolls is approximately
an average value of 66 percent of the
total value of the finished merchandise.9
As discussed above, although the value
of the processing conducted in Vietnam
is not small, we find that the value of
the PRC-origin jumbo rolls constitutes a
great majority of the value of the
finished merchandise. Based on our
analysis, the value of the PRC-origin
jumbo rolls taken as a whole constitutes
a significant portion of the value of the
finished product ultimately sold in the
United States.
sroberts on PROD1PC70 with NOTICES
Other Factors To Consider
In making a determination whether to
include merchandise assembled or
completed in a foreign country within
an order, section 781(b)(3) of the Act
instructs us to take into account such
factors as: (A) The pattern of trade,
including sourcing patterns; (B) whether
affiliation exists between the exporter of
the merchandise and the person who
uses the merchandise to assemble or
complete in the foreign country the
merchandise that is sold in the United
States; and (C) whether imports into the
foreign country of the merchandise
described in section 781(b)(1)(B) have
increased since the initiation of the
original investigation. Each of these
factors is examined below.
(A) Pattern of Trade and Sourcing
The first factor to consider under
section 781(b)(3) is changes in the
pattern of trade, including changes in
the sourcing patterns. To evaluate the
pattern of trade in this case, we
examined Quijiang’s source channel of
jumbo rolls. According to Quijiang, it
started sourcing PRC-origin jumbo rolls
from Guilin Qifeng in July 2004 to
produce tissue paper products that
Quijiang exported to the United States.
See Quijiang’s First Questionnaire
Response, at 12. Additionally, the
record of this circumvention inquiry
shows that between July 2004 and July
2006, Quijiang did not purchase PRCorigin jumbo rolls from any other
supplier. See id., at Exhibit 11;
Quijiang’s Sixth Questionnaire
9 Because this information is business
proprietary, we have ranged the values by plus or
minus 10 percent.
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16:25 Apr 21, 2008
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Response, at 13 and Appendix S6–16.
Based on the facts on the record, we
find that the fact that Quijiang sourced
jumbo rolls from a PRC supplier to
produce tissue paper products, which
were exported to the United States,
supports a finding that circumvention
was occurring during this period.10
We also examined the timing and
quantities of Quijiang’s exports to the
United States of tissue paper that were
produced from PRC-origin jumbo rolls
since the initiation of the LTFV
investigation in March 2004. A review
of Quijiang’s monthly total exports
shows that from July 2004 to July 2006,
Quijiang’s exports of tissue paper
products produced from PRC-origin
rolls to the United States consisted of
the majority of Quijiang’s total monthly
exports. See Quijiang’s Fifth
Questionnaire Response, at Exhibit 6.
These data indicate that the monthly
volume of Quijiang’s exports of tissue
paper products produced from PRCorigin jumbo rolls to the United States
was significant subsequent to the
initiation of the LTFV investigation.
Additionally, we examined the timing
and quantities of exports of tissue paper
from the PRC to the United States
between 2004 and 2006, and exports of
tissue paper from Vietnam to the United
States between 2004 and 2006. A review
of the data shows that PRC exports of
tissue paper to the United States
decreased by 59.2 percent between 2004
and 2006, whereas Vietnam exports of
tissue paper to the United States
increased by 1739.11 percent between
2004 and 2006. See Analysis
Memorandum. Accordingly, the data
show that PRC exports have decreased
significantly whereas Vietnamese
exports have increased significantly
since the initiation of the LTFV
investigation. Therefore, based on the
facts on the record, we find that the
pattern of trade has changed since the
10 The Department recognizes that Petitioner
submitted comments on February 4, 2008, alleging
that Quijiang, contrary to its own declarations,
continued to import semi-completed tissue paper
products from the PRC after July 2006. However,
the Department finds Petitioner’s evidence in
support of its allegations to be inconclusive.
Accordingly, a factual finding that Quijiang was not
truthful in its statements to the Department with
respect to this issue is not warranted. Thus, the
Department cannot conclude either as a factual
matter or based upon an adverse inference resulting
from Quijiang’s failure to cooperate to the best of
its ability that all exports of subject merchandise by
Quijiang were produced from Chinese-origin semifinished tissue paper products. However, if the
Department reaches a final determination of
circumvention in this proceeding, the 2007/2008
administrative review will cover all of Quijiang’s
entries as of the date of initiation of this
circumvention inquiry, and the Department will
further investigate the issue of origin of all covered
entries in the context of such review.
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initiation of the LTFV investigation and
the imposition of the Order and thus,
supports a finding that circumvention
has occurred.
(B) Affiliation
The second factor to consider under
section 781(b)(3) of the Act is whether
the manufacturer or exporter of the
tissue paper is affiliated with the entity
that assembles or completes the
merchandise sold in the United States
from the imported PRC-origin jumbo
rolls. Generally, we consider
circumvention to be more likely to
occur when the manufacturer of the
covered merchandise is related to the
third country assembler and is a critical
element in our evaluation of
circumvention. See Color Picture Tubes
From Canada, Japan, Republic of Korea
& Singapore: Negative Final
Determinations of Circumvention of
Antidumping Duty Orders, 56 FR 9667
(March 7, 1991) and accompanying
Issues and Decision Memorandum at
Comment 8. The record evidence of this
circumvention inquiry indicates that the
Vietnamese assembler, Quijiang, which
converted the PRC-origin jumbo rolls
into tissue paper products, is a whollyowned subsidiary of Guilin Qifeng. See
Quijiang’s First Questionnaire
Response, at 4. Accordingly, because
Quijiang is 100 percent owned by Guilin
Qifeng, we find that Quijiang and Guilin
Qifeng are affiliated, pursuant to section
771(33) of the Act. Additionally, the
record evidence shows that Guilin
Qifeng was Quijiang’s sole supplier of
PRC-origin jumbo rolls. See Quijiang’s
Second Questionnaire Response, at 3. In
sum, we find that the record evidence
demonstrates that the relationship
between Quijiang and Guilin Qifeng
supports a finding that circumvention of
the Order may have occurred during the
period of investigation.
(C) Whether Imports Have Increased
The third factor to consider under
section 781(b)(3) is whether imports
into the foreign country of the
merchandise described in section
781(b)(1)(B) have increased since the
initiation of the original investigation.
Generally, we consider circumvention
to be more likely when imports of
jumbo rolls, the merchandise imported
from the PRC, have increased into
Vietnam. Because Quijiang was not
established until June 2004, we
reviewed Quijiang’s imports of PRCorigin jumbo rolls from July 2004,
which was when it began importing
PRC-origin jumbo rolls, to the issuance
of the Order, and compared these
imports to those after the issuance of the
Order. See Quijiang’s First
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Questionnaire Response, at Exhibit 11.
The Department finds that Quijiang’s
imports of PRC-origin jumbo rolls were
at their highest levels in the months
after the issuance of the Order through
July 2006. Id.
Additionally, the Department
obtained PRC export data of tissue paper
products to Vietnam since 2004, which
was the year that the LTFV investigation
was initiated. The Department has
obtained PRC export data of HTS
4802.54, which is defined as ‘‘Paper/
Paperboard (Excluding Mechanical
Fibers), Weighing <40 grams.’’ 11
Although HTS 4802.54 does not
necessarily provide export data specific
to jumbo rolls, the Department finds
that it is reasonable to assume that at
least a portion of the data contains
exports of jumbo rolls and thus, are the
best available data in determining PRC
exports of jumbo rolls.
In reviewing PRC exports of HTS
4802.54 between 2003 and 2006, the
Department finds that PRC exports to
Vietnam have steadily increased since
the initiation of the LTFV investigation.
See Analysis Memorandum.
Specifically, the Department finds that
the PRC total exports to Vietnam
increased by 41.12 percent between
2003 and 2006. This increase
corresponds with the initiation of the
LTFV investigation and issuance of the
Order. Accordingly, we find that both
the increase in Quijiang’s imports of
PRC-origin jumbo rolls and the increase
in PRC exports to Vietnam since the
initiation of the LTFV investigation
supports a finding that circumvention
may have occurred.
Summary of Statutory Analysis
As discussed above, in order to make
an affirmative determination of
circumvention, all the elements under
sections 781(b)(1) of the Act must be
satisfied, taking into account the factors
under section 781(b)(2). In addition,
section 781(b)(3) of the Act instructs the
Department to consider, in determining
whether to include merchandise
assembled or completed in a foreign
country within the scope of an order,
such factors as: Pattern of trade,
affiliation, and whether imports into the
foreign country of the merchandise
described in section 781(b)(1)(B) have
increased after the initiation of the
investigation. Pursuant to section
781(b)(1) of the Act, we find that the
merchandise sold in the United States is
within the same class or kind of
11 The Department has obtained PRC export data
for jumbo rolls using 4802.54 because HTS 4802.54
includes exports for both finished tissue paper and
jumbo rolls, which are classified under this HTS
category.
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16:25 Apr 21, 2008
Jkt 214001
merchandise that is subject to the Order
and was completed or assembled in a
third country. Additionally, pursuant to
section 781(b)(2), we find that the
process or assembly of the PRC-origin
jumbo rolls to cut-to-length tissue paper
by Quijiang is minor and insignificant.
Furthermore, in accordance with section
781(b)(1)(D) and 781(b)(1)(E) of the Act,
we find that the value of the
merchandise produced in the PRC is a
significant portion of the total value of
the merchandise exported to the United
States and that action is appropriate to
prevent evasion of the Order. Thus, we
find affirmative evidence of
circumvention in accordance with
section 781(b)(1) and (2) of the Act.
Moreover, we find the factors required
by section 781(b)(3) of the Act indicate
that there is circumvention of the Order.
Consequently, our statutory analysis
leads us to find that during the period
of time examined there was
circumvention of the Order as a result
of Quijiang’s conversion of the PRCorigin jumbo rolls to cut-to-length tissue
paper in Vietnam, as discussed above.
Suspension of Liquidation
In accordance with section 733(d) of
the Act, the Department will direct CBP
to suspend liquidation and to require a
cash deposit of estimated duties, at the
PRC-wide rate, on all unliquidated
entries of certain tissue paper products
produced by Quijiang that were entered,
or withdrawn from warehouse, for
consumption from on or after September
5, 2006, the date of initiation of the
circumvention inquiry, through the date
of publication of the preliminary
determination, with the exception
described below.
After consideration of Petitioner’s
comments between January 8, 2007, and
April 3, 2008, arguing that the
Department should not allow Quijiang
to certify that these entries of tissue
paper products are not produced from
PRC-origin jumbo rolls, the Department
notes that no party on the record has
contested that Quijiang itself now in
Vietnam produces jumbo rolls suitable
for conversion into the tissue paper
products meeting the physical
description of products subject to the
scope of the Order. Given that some of
Quijiang’s tissue paper products may be
made from Vietnamese-origin jumbo
rolls, and given that the Department
does not consider it appropriate to
suspend liquidation of such non-subject
merchandise, the Department finds it
appropriate to follow precedent and
permit certification as described below.
See Circumvention and Scope Inquiries
of the Antidumping Duty Order on
Certain Frozen Fish Fillets from the
PO 00000
Frm 00009
Fmt 4703
Sfmt 4703
21587
Socialist Republic of Vietnam: Partial
Affirmative Final Determination of
Circumvention of the Antidumping Duty
order, Partial Final Determination of
Circumvention Inquiry and Final
Rescission of Scope Inquiry, 71 FR
38608 (July 7, 2006) and accompanying
Issues and Decision Memorandum at
Comment 3. However, in the event of a
final determination of circumvention,
the Department will expand the third
administrative review period back to
September 5, 2006, the date of initiation
of this circumvention inquiry, to
include all of Quijiang’s entries covered
by this determination. In addition, we
hereby serve notice to Quijiang that
such certified entries are subject to
verification by the Department. The
Department will examine any records
Quijiang maintains in its normal course
of business, or any information placed
on the record, supporting or calling into
question its certifications that no PRCorigin jumbo rolls were used in the
production of its tissue paper products.
For all entries of certain tissue paper
products produced by Quijiang that
entered on or after the date of the
publication of the Initiation, the
Department will instruct CBP to allow
Quijiang to certify that no PRC-origin
jumbo rolls were used in the production
of the certain tissue paper products. The
Department will not request that CBP
suspend liquidation, or require a cash
deposit of estimated duties, at the PRCwide rate, for any entries of certain
tissue paper products accompanied by
the certification in Appendix I in this
notice. However, the Department will
direct CBP to suspend liquidation and
to require a cash deposit of estimated
duties, at the PRC-wide rate of 112.64
percent of any entries of certain tissue
paper products not accompanied by the
attached certification in Appendix I of
this notice.
Notification to the International Trade
Commission
The Department, consistent with
section 781(e) of the Act, has notified
the International Trade Commission
(‘‘ITC’’) of this preliminary
determination to include the
merchandise subject to this inquiry
within the antidumping duty order on
certain tissue paper products from the
PRC. Pursuant to section 781(e) of the
Act, the ITC may request consultations
concerning the Department’s proposed
inclusion of the subject merchandise. If,
after consultations, the ITC believes that
a significant injury issue is presented by
the proposed inclusion, it will have 15
days to provide written advice to the
Department.
E:\FR\FM\22APN1.SGM
22APN1
21588
Federal Register / Vol. 73, No. 78 / Tuesday, April 22, 2008 / Notices
Public Comment
Interested parties may submit
publicly available information to value
the FOPs within 15 days after the date
of publication of the preliminary
determination.12 Case briefs from
interested parties may be submitted no
later than 40 days from the publication
of this notice. A list of authorities used
and an executive summary of issues
should accompany any briefs submitted
to the Department. This summary
should be limited to five pages total,
including footnotes. Rebuttal briefs
limited to issues raised in the initial
comments may be filed no later than 45
days after the publication of this notice.
Interested parties who wish to request
a hearing, or to participate if one is
requested, must submit a written
request to the Assistant Secretary for
Import Administration, U.S. Department
of Commerce, Room 1870, within 25
days after the date of publication of this
notice. Requests should contain the
party’s name, address, and telephone
number, the number of participants, and
a list of the issues to be discussed. At
the hearing, each party may make an
affirmative presentation only on issues
raised in that party’s case brief and may
make rebuttal presentations only on
arguments included in that party’s
rebuttal brief. We intend to hold a
hearing, if requested, no later than 50
days after the publication of this notice.
Final Determination
The final determination with respect
to this circumvention inquiry will be
issued no later than ninety days from
the publication of this notice, including
the results of the Department’s analysis
of any written comments.
This affirmative preliminary
circumvention determination is
published in accordance with section
781(b) of the Act and 19 CFR 351.225.
sroberts on PROD1PC70 with NOTICES
12 In
accordance with 19 CFR 351.301(c)(1), for
the final determination of this circumvention
inquiry, interested parties may submit factual
information to rebut, clarify, or correct factual
information submitted by an interested party less
than ten days before, on, or after, the applicable
deadline for submission of such factual
information. However, the Department notes that 19
CFR 351.301(c)(1) permits new information only
insofar as it rebuts, clarifies, or corrects information
recently placed on the record. The Department
generally cannot accept the submission of
additional, previously absent-from-the-record
alternative surrogate value information pursuant to
19 CFR 351.301(c)(1). See Glycine from the People’s
Republic of China: Final Results of Antidumping
Duty Administrative Review and Final Rescission,
in Part, 72 FR 58809 (October 17, 2007) and
accompanying Issues and Decision Memorandum at
Comment 2.
VerDate Aug<31>2005
16:25 Apr 21, 2008
Jkt 214001
Dated: April 15, 2008.
David M. Spooner,
Assistant Secretary for Import
Administration.
certain pneumatic off-the-road (OTR)
tires from the People’s Republic of
China (PRC).
EFFECTIVE DATE:
Attachment I
Certification of Vietnam Quijiang Paper
Co., Ltd.llllllll
Certification to U.S. Customs and
Border Protection
1. Vietnam Quijiang Paper Co., Ltd.
(‘‘Vietnam Quijiang’’) hereby certifies
that the certain tissue paper products
being exported and subject to this
certification were not produced from
Chinese origin jumbo rolls.
2. By signing this certificate, Vietnam
Quijiang also hereby agrees to maintain
sufficient documentation supporting the
above statement such as country of
origin certificates for all jumbo rolls
used to process the exported certain
tissue paper products. Further, Vietnam
Quijiang agrees to submit to verification
of the underlying documentation
supporting the above statement.
Vietnam Quijiang agrees that failure to
submit to verification of the
documentation supporting these
statements will result in immediate
revocation of certification rights and
that Vietnam Quijiang will be required
to post a cash deposit equal to the
China-wide entity rate on all entries of
certain tissue paper products. In
addition, if the Department of
Commerce identifies any
misrepresentation or inconsistencies
regarding the certifications, Vietnam
Quijiang recognizes that the matter may
be reported to the U.S. Customs and
Border Protection by the Department for
possible enforcement action.
Signature: lllllllllllll
Printed Name: lllllllllll
Title:
lllllllllllllll
[FR Doc. E8–8679 Filed 4–21–08; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[C–570–913]
Notice of Preliminary Negative
Determination of Critical
Circumstances: Certain New
Pneumatic Off-the-Road Tires From the
People’s Republic of China
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(the Department) has preliminarily
determined that critical circumstances
do not exist with respect to imports of
AGENCY:
PO 00000
Frm 00010
Fmt 4703
April 22, 2008.
FOR FURTHER INFORMATION CONTACT:
Sfmt 4703
Scott Lindsay, AD/CVD Operations,
Office 6, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202)
482–0780.
SUPPLEMENTARY INFORMATION:
Period of Investigation
The period for which we are
measuring subsidies, or the period of
investigation (P01), is calendar year
2006.
Scope of Investigation
The products covered by the scope of
this investigation are new pneumatic
tires designed for off-the-road (OTR) and
off-highway use, subject to exceptions
identified below. Certain OTR tires are
generally designed, manufactured and
offered for sale for use on off-road or off
highway surfaces, including but not
limited to, agricultural fields, forests,
construction sites, factory and
warehouse interiors, airport tarmacs,
ports and harbors, mines, quarries,
gravel yards, and steel mills. The
vehicles and equipment for which
certain OTR tires are designed for use
include, but are not limited to: (1)
Agricultural and forestry vehicles and
equipment, including agricultural
tractors,1 combine harvesters,2
agricultural high clearance sprayers,3
industrial tractors,4 log-skidders,5
agricultural implements, highwaytowed implements, agricultural logging,
and agricultural, industrial, skid-steers/
mini-loaders;6 (2) construction vehicles
and equipment, including earthmover
articulated dump products, rigid frame
1 Agricultural tractors are four-wheeled vehicles
usually with large rear tires and small front tires
that are used to tow farming equipment.
2 Combine harvesters are used to harvest crops
such as corn or wheat.
3 Agricultural sprayers are used to irrigate
agricultural fields.
4 Industrial tractors are four-wheeled vehicles
usually with large rear tires and small front tires
that are used to tow industrial equipment.
5 A log skidder has a grappling lift arm that is
used to grasp, lift and move trees that have been
cut down to a truck or trailer for transport to a mill
or other destination.
6 Skid-steer loaders are four-wheel drive vehicles
with the left-side drive wheels independent of the
right-side drive wheels and lift arms that lie
alongside the driver with the major pivot points
behind the driver’s shoulders. Skid-steer loaders are
used in agricultural, construction and industrial
settings.
E:\FR\FM\22APN1.SGM
22APN1
]]>Agencies
[Federal Register Volume 73, Number 78 (Tuesday, April 22, 2008)]
[Notices]
[Pages 21580-21588]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8679]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-894]
Certain Tissue Paper Products From the People's Republic of
China: Affirmative Preliminary Determination of Circumvention of the
Antidumping Duty Order and Extension of Final Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
Preliminary Determination
We preliminarily determine that certain tissue paper products
(``tissue paper'') produced by Vietnam Quijiang Paper Co., Ltd.
(``Quijiang'') are circumventing the antidumping duty order on tissue
paper from the People's Republic of China (``PRC''), as provided in
section 781(b) of the Tariff Act of 1930, as amended (``the Act''). See
Notice of Amended Final Determination of Sales at Less than Fair Value
and Antidumping Duty Order: Certain Tissue Paper Products from the
People's Republic of China, 70 FR 16223 (March 30, 2005) (``Order'').
DATES: Effective Date: April 22, 2008.
FOR FURTHER INFORMATION CONTACT: Julia Hancock, Office 9, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC,
20230; telephone: (202) 482-1394.
SUPPLEMENTARY INFORMATION:
Background
On July 19, 2006, the Seaman Paper Company of Massachusetts, Inc.
(``Petitioner'') requested that the Department of Commerce (``the
Department'') initiate a circumvention inquiry pursuant to section
781(b) of the Act, and 19 CFR 351.225(h), to determine whether imports
of tissue paper from Vietnam made from PRC-origin jumbo rolls are
circumventing the antidumping duty order on tissue paper from the PRC.
See Petitioner's Request for a circumvention Inquiry, (July 19, 2006)
(``Circumvention Petition''); Order. Petitioner alleged that sending
PRC-origin jumbo rolls of tissue paper to Vietnam for completion or
assembly into tissue paper products covered by the Order constitutes
circumvention pursuant to section 781(b) of the Act.
On July 21, 2006, Petitioner amended the Circumvention Petition to
include certain business proprietary information. On August 11, 2006,
Quijiang submitted comments regarding Petitioner's July 21, 2006,
request for an anti-circumvention inquiry. On August 14, 2006, the
Department requested that the Petitioner submit documentation
referenced, but not included, in its July 21, 2006, request. On August
18, 2006, Petitioner submitted a response to the Department's August
14, 2006, request. On August 21, 2006, Petitioner submitted comments on
Quijiang's August 11, 2006, submission.
On September 5, 2006, the Department initiated a circumvention
inquiry on certain imports of tissue paper from Vietnam. See Certain
Tissue Paper Products from the People's Republic of China: Initiation
of Circumvention Inquiry, 71 FR 53662 (September 12, 2006)
(``Initiation''). In the Initiation notice, the Department stated that
it would focus its analysis on the significance of the production
process in Vietnam by Quijiang, the company the Petitioner identified
in its circumvention request.
However, in the Initiation notice, the Department also stated that
Quijiang had admitted on the record of the first administrative review
of the Order that it received jumbo rolls of tissue paper produced by
its PRC parent company, Guilin Qifeng Paper Co., Ltd. (``Guilin
Qifeng''). Guilin Qifeng is the sole owner of Quijiang. According to
Quijiang, Guilin Qifeng, which is a tissue paper processor and exporter
located in Guangxi, PRC, established Quijiang in June 2004.
Additionally, Quijiang stated that Guilin Qifeng was the sole supplier
of the PRC-origin jumbo rolls, which Quijiang converted to cut-to-
length tissue paper that was exported to the United States. See
Quijiang's First Questionnaire Response, (December 11, 2006) at 4-8.
Accordingly, for purposes of this circumvention inquiry, the Department
has focused its analysis on whether PRC-origin jumbo rolls supplied by
Guilin Qifeng that were converted to cut-to-length tissue paper
products by Quijiang are circumventing the Order, as provided in
section 781(b) of the Act.
Questionnaires
On September 27, 2006, Petitioner submitted comments concerning the
initial questionnaire to be issued to Quijiang. On October 6, 2006,
Cleo Inc. (``Cleo''), a U.S. importer, submitted rebuttal comments to
Petitioner's September 27, 2006, submission. On October 26, 2006,
Petitioner submitted surrebuttal comments to Cleo's October 6, 2006,
submission.
Between November 2, 2006, and December 3, 2007, the Department
issued six questionnaires to Quijiang soliciting information regarding
Quijiang's tissue paper production and exports to the United States to
which Quijiang responded. Between January 8, 2007, and April 3, 2008,
Petitioner and Cleo submitted comments on Quijiang's questionnaire
responses and whether the Department should suspend liquidation and
collect cash deposits on all entries of tissue paper from Quijiang.
Surrogate Country Comments
In this case, both the country that produced the jumbo rolls and
the country that produced the tissue paper products from the jumbo
rolls are considered non-market economy (``NME'') countries.\1\
Therefore, because the production of jumbo rolls and the cut-to-length
tissue paper are performed in NME countries, we used surrogate values
to determine whether the value of processing performed in Vietnam
represents a small portion of the value of the merchandise sold in the
United States. Accordingly, pursuant to section 773(c)(4) of the Act,
in valuing the FOPs, the Department shall utilize, to the extent
possible, the prices or costs of factors of production (``FOPs'') in
one or more market-economy countries that are at a level of economic
development comparable to that of the NME country and are significant
producers of comparable merchandise.
---------------------------------------------------------------------------
\1\ In accordance with section 771(18)(C)(i) of the Act, any
determination that a foreign country is an NME country shall remain
in effect until revoked by the administering authority. See
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Coated Free Sheet Paper from
the People's Republic of China, 72 FR 30758, 30760 (June 4, 2007),
unchanged in Final Determination of Sales at Less Than Fair Value:
Coated Free Sheet Paper from the People's Republic of China, 72 FR
60632 (October 25, 2007); Certain Frozen Fish Fillets from the
Socialist Republic of Vietnam: Final Results of the Second
Administrative, 72 FR 13242 (March 21, 2007) (``FFF2 Final
Results''). No party has challenged the designation of the PRC or
Vietnam as an NME country in this investigation. Therefore, we
continue to treat the PRC and Vietnam as NME countries for purposes
of the preliminary determination of this circumvention inquiry.
---------------------------------------------------------------------------
On November 5, 2007, the Department determined that India,
Indonesia, Sri Lanka, the Philippines, and Egypt are countries
comparable to the PRC and also determined that Bangladesh, Pakistan,
India, Sri Lanka, and Indonesia are countries comparable to
[[Page 21581]]
Vietnam in terms of economic development. See Memorandum from Ron
Lorentzen, Director, Office of Policy, to Alex Villanueva, Program
Manager, China/NME Group, Office 9: Circumvention Inquiry of the
Antidumping Duty Order of Certain Tissue Paper Products from the
People's Republic of China (PRC): Request for a List of Surrogate
Countries, (November 5, 2007) (``Surrogate Country List'').
On November 8, 2007, the Department requested comments on the
selection of a surrogate country from the interested parties in this
circumvention inquiry. On November 29, 2007, Petitioner submitted
surrogate country comments requesting that India be selected as the
appropriate surrogate country for valuing factors of production for
both the PRC and Vietnam. No other interested party commented on the
selection of a surrogate country. For a detailed discussion of the
selection of the surrogate country, see ``Surrogate Country'' section
below.
Surrogate Value Comments
On December 20, 2008, Petitioner submitted surrogate factor
valuation comments. No other interested party submitted surrogate
factor valuation comments. For a detailed discussion of the selection
of the surrogate values, see ``Calculation of Value-Added'' section
below.
Verification
On January 10, 2008, the Department issued the verification outline
to Guilin Qifeng and Quijiang notifying them that the Department would
verify Guilin Qifeng from February 19 to February 22, 2008, and would
verify Quijiang from February 25 to February 27, 2008.
On February 14, 2008, Quijiang submitted a letter requesting that
the Department postpone the scheduled verification by one month because
neither Quijiang nor Guilin Qifeng would be prepared when verification
was scheduled to commence. On Feburary 15, 2008, Petitioner submitted a
letter opposing Quijiang's request to delay the scheduled verification.
On February 15, 2008, the Department notified Quijiang and Petitioner
that it was not going to conduct the verification scheduled for
February 19, 2008.
Extension of Determination
On June 29, 2007, August 14, 2007, and January 4, 2008, the
Department extended the determination deadline of this circumvention
inquiry. The preliminary determination of this circumvention inquiry is
currently due April 14, 2008.
Scope of the Antidumping Duty Order
The tissue paper products subject to this order are cut-to-length
sheets of tissue paper having a basis weight not exceeding 29 grams per
square meter. Tissue paper products subject to this order may or may
not be bleached, dye-colored, surface-colored, glazed, surface
decorated or printed, sequined, crinkled, embossed, and/or die cut. The
tissue paper subject to this order is in the form of cut-to-length
sheets of tissue paper with a width equal to or greater than one-half
(0.5) inch. Subject tissue paper may be flat or folded, and may be
packaged by banding or wrapping with paper or film, by placing in
plastic or film bags, and/or by placing in boxes for distribution and
use by the ultimate consumer. Packages of tissue paper subject to this
order may consist solely of tissue paper of one color and/or style, or
may contain multiple colors and/or styles.
The merchandise subject to this order does not have specific
classification numbers assigned to them under the Harmonized Tariff
Schedule of the United States (``HTSUS''). Subject merchandise may be
under one or more of several different subheadings, including: 4802.30;
4802.54; 4802.61; 4802.62; 4802.69; 4804.31.1000; 4804.31.2000;
4804.31.4020; 4804.31.4040; 4804.31.6000; 4804.39; 4805.91.1090;
4805.91.5000; 4805.91.7000; 4806.40; 4808.30; 4808.90; 4811.90;
4823.90; 4820.50.00; 4802.90.00; 4805.91.90; 9505.90.40. The tariff
classifications are provided for convenience and customs purposes;
however, the written description of the scope of this order is
dispositive.\2\
---------------------------------------------------------------------------
\2\ On January 30, 2007, at the direction of U.S. Customs and
Border Protection (``CBP''), the Department added the following
HTSUS classifications to the AD/CVD module for tissue paper:
4802.54.3100, 4802.54.6100, and 4823.90.6700. However, we note that
the six-digit classifications for these numbers were already listed
in the scope.
---------------------------------------------------------------------------
Excluded from the scope of this order are the following tissue
paper products: (1) Tissue paper products that are coated in wax,
paraffin, or polymers, of a kind used in floral and food service
applications; (2) tissue paper products that have been perforated,
embossed, or die-cut to the shape of a toilet seat, i.e., disposable
sanitary covers for toilet seats; (3) toilet or facial tissue stock,
towel or napkin stock, paper of a kind used for household or sanitary
purposes, cellulose wadding, and webs of cellulose fibers (HTSUS
4803.00.20.00 and 4803.00.40.00).
Scope of the Circumvention Inquiry
The products covered by this inquiry are jumbo rolls of tissue
paper that are exported from the PRC to Vietnam where they are
converted, possibly dyed and/or printed, into tissue paper products, as
described above in the ``Scope of the Antidumping Duty Order'' section.
This inquiry only covers such products that are exported to the United
States by Quijiang.
Statutory Provisions Regarding Circumvention
Section 781(b) of the Act provides that the Department may find
circumvention of an antidumping duty order when merchandise of the same
class or kind subject to the order is completed or assembled in a
foreign country other than the country to which the order applies. In
conducting circumvention inquiries under section 781(b) of the Act, the
Department relies upon the following criteria: (A) Merchandise imported
into the United States is of the same class or kind as any merchandise
produced in a foreign country that is subject to an antidumping duty
order; (B) before importation into the United States, such imported
merchandise is completed or assembled in another foreign country from
merchandise which is subject to the order or produced in the foreign
country that is subject to the order; (C) the process of assembly or
completion in the foreign country referred to in (B) is minor or
insignificant; and (D) the value of the merchandise produced in the
foreign country to which the antidumping duty order applies is a
significant portion of the total value of the merchandise exported to
the United States.
The Department's questionnaires issued to Quijiang and its PRC
parent company, Guilin Qifeng, were designed to elicit information for
purposes of conducting both qualitative and quantitative analyses in
accordance with the criteria enumerated in section 781(b) of the Act,
as outlined above. This approach is consistent with our analyses in
prior circumvention inquiries. See Circumvention and Scope Inquiries on
the Antidumping Duty Order on Certain Frozen Fish Fillets from the
Socialist Republic of Vietnam: Partial Affirmative Final Determination
of Circumvention of the Antidumping Duty Order, Partial Final
Termination of Circumvention Inquiry and Final Rescission of Scope
Inquiry, 71 FR 38608 (July 7, 2006) (``FFF Circumvention Final'');
Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty
[[Page 21582]]
Orders on Certain Pasta from Italy: Affirmative Final Determinations of
Circumvention of Antidumping and Countervailing Duty Orders, 68 FR
54888 (September 19, 2003) (``Pasta Circumvention Final''); Hot-Rolled
Lead and Bismuth Carbon Steel Products from Germany and the United
Kingdom; Negative Final Determinations of Circumvention of Antidumping
and Countervailing Duty Orders, 64 FR 40336 (July 26, 1999). To
ascertain the value of the completed merchandise exported to the United
States we requested PRC production data of jumbo rolls produced by
Guilin Qifeng and Vietnam production data of the processing and
packaging operations performed by Quijiang.
Statutory Analysis
(A) Whether Merchandise Sold in the United States Is of the Same Class
or Kind as Other Merchandise That Is Subject to the Order
The Order covers cut-to-length sheets of tissue paper equal to or
greater than 0.5 inches in width, with a basis weight not exceeding 29
grams per square meter and other specified characteristics of the
scope. The merchandise subject to this inquiry is tissue paper products
exported to the United States by Quijiang produced from PRC-origin
jumbo rolls. The information provided by Quijiang in its questionnaire
responses indicates that the tissue paper products produced from PRC-
origin jumbo rolls it exported to the United States meet the written
description of the products subject to the Order. See Quijiang's First
Questionnaire Response, (December 11, 2006) at Appendix 7. Quijiang
submitted a product list showing that all the tissue paper products it
produced and exported to the United States were below the basis weight
of 29 grams per square meter, which is the weight that merchandise
subject to the Order is not to exceed. See Quijiang's Second
Questionnaire Response, (April 3, 2007) at Exhibit S1-2. A review of
the product list also shows that Quijiang's tissue paper products meet
other criteria identified in the Order such as dyed, printed, etc.
Finally, we note that Quijiang has not argued that its exports of
tissue paper products to the United States are not of the same class or
kind of merchandise as that subject to the Order. Accordingly, we find
that the merchandise subject to this inquiry is the same class or kind
of merchandise as that subject to the Order.
(B) Whether Merchandise Sold in the United States Is Completed or
Assembled in Another Foreign Country From Merchandise Which Is Subject
to the Order or Produced in the Foreign Country That Is Subject to the
Order
In this proceeding, the merchandise exported to the United States
is tissue paper products processed in Vietnam from PRC-origin jumbo
rolls of tissue paper. Qujiang has reported that it exported tissue
paper that was processed in Vietnam using PRC-origin jumbo rolls of
tissue paper as the input. See Quijiang's First Questionnaire Response,
at 6. Specifically, Quijiang stated that it imported PRC-origin jumbo
rolls of tissue paper produced by its parent company, Guilin Qifeng,
which were then converted, possibly dyed and/or printed, into cut-to-
length tissue paper. See id. at 6 and Appendix 1. Additionally,
Quijiang reported that it exported tissue paper that was processed in
Vietnam using PRC-origin jumbo rolls between July 2004 and July 2006.
See Quijiang's Sixth Questionnaire Response, (January 4, 2008) at 22.
Accordingly, we find that the merchandise subject to this circumvention
inquiry was completed in Vietnam from PRC-origin jumbo rolls that were
produced in the country to which this Order applies.
(C) Whether the Process of Assembly or Completion in the Foreign
Country Is Minor or Insignificant
Section 781(b)(2) of the Act provides the criteria for determining
whether the process of assembly or completion is minor or
insignificant. These criteria are:
(a) The level of investment in the foreign country;
(b) the level of research and development in the foreign country;
(c) the nature of the production process in the foreign country;
(d) the extent of the production facilities in the foreign country;
and
(e) whether the value of the processing performed in the foreign
country represents a small proportion of the value of the merchandise
imported into the United States.
The Statement of Administrative Action (``SAA'') accompanying the
Uruguay Round Agreements Act, H. Doc. No. 103-316, at 893 (1994),
provides some guidance with respect to these criteria. It explains that
no single factor listed in section 781(b)(2) of the Act will be
controlling. Accordingly, it is the Department's practice to evaluate
each of the factors as they exist in the United States or foreign
country depending on the particular circumvention scenario. Therefore,
the importance of any one of the factors listed under section 781(b)(2)
of the Act can vary from case to case depending on the particular
circumstances unique to each circumvention inquiry.
In this circumvention inquiry, we based our analysis on both
qualitative and quantitative factors in determining whether the process
of converting the jumbo rolls in Vietnam was minor or insignificant, in
accordance with the criteria of section 781(b)(2) of the Act. This
approach is consistent with our analysis in prior circumvention
inquiries. See Anti-Circumvention Inquiry of the Antidumping and
Countervailing Duty Orders on Certain Pasta From Italy: Affirmative
Preliminary Determinations of Circumvention of Antidumping and
Countervailing Duty Orders, 68 FR 46571 (August 6, 2003) (``Pasta
Circumvention Prelim'') (unchanged in Pasta Circumvention Final, 68 FR
54888).
(a) The Level of Investment in Vietnam
For purposes of this circumvention inquiry, we analyzed the level
of investment in Quijiang that is associated with converting the PRC-
origin jumbo rolls into finished cut-to-length tissue paper.
Specifically, we reviewed the level of investment in Quijiang for the
conversion process by Quijiang's parent company, Guilin Qifeng, and
Quijiang's investment on its own behalf.
Quijiang reported that its operations in Vietnam for converting
jumbo rolls into cut-to-length tissue paper are comprised of equipment
sourced in three ways: (1) Assets identified as ``purchase from
China,'' which consist of equipment that Quijiang purchased from its
parent company, Guilin Qifeng; (2) assets identified as ``Guilin Qifeng
Investment,'' which are assets that Guilin Qifeng physically moved to
Quijiang but nevertheless retained ownership; and (3) assets identified
as ``Vietnam domestic purchase,'' which are assets or equipment that
Quijiang purchased in Vietnam. See Quijiang's Second Questionnaire
Response, at 7. Additionally, Quijiang identified the types of
equipment and where that equipment was used in the production of cut-
to-length tissue paper products, (i.e., Quijiang identified what type
of equipment, such as cutting machines, was used in the processing
workshop where the jumbo rolls were converted). Id., at Exhibit S2-5.
Moreover, Quijiang stated that for the assets that were sourced in
these three ways, the first method, which is identified as ``purchases
from China,'' is Guilin Qifeng's investment and that the second
[[Page 21583]]
and third method, which are identified as ``purchases from China'' and
``Vietnamese domestic purchases,'' is Quijiang's investment. Id.
With respect to Guilin Qifeng's investment in Quijiang for the
conversion of the jumbo rolls, Quijiang stated that these assets were
in use by Guilin Qifeng immediately prior to their physical transfer to
Quijiang. See Quijiang's Second Questionnaire Response, at 7.
Specifically, Quijiang stated that these assets were transferred to
Quijiang from Guilin Qifeng in the following manner: (1) Dissembling,
packing, and loading the assets or equipment onto a truck; (2)
transporting the assets or equipment across the border from China to
Quijiang in Vietnam; and (3) unloading, assembling, and testing the
assets or equipment. See Quijiang's Sixth Questionnaire Response, at 25
and Appendix S6-29. The facts show that the vast majority of the
equipment or assets that were transferred from Guilin Qifeng to
Quijiang to be used in converting the PRC-origin jumbo rolls to cut-to-
length tissue paper were not new assets as nearly all of this equipment
had been in use by Guilin Qifeng prior to their transfer. Therefore, we
find that Guilin Qifeng's investment in Quijiang that was used for
converting the PRC-origin jumbo rolls to cut-to-length tissue paper was
not new investment because almost all of the assets that consist of
this investment were in prior use by Guilin Qifeng. However, we will
use Guilin Qifeng's investment in Quijiang for the conversion process
in determining whether Quijiang's own investment was minor or
insignificant because the assets or equipment representing Guilin
Qifeng's investment were used in the conversion process and there were
some expenses incurred for moving the equipment and getting it situated
in Vietnam.
We calculated the total level of investment in Quijiang for
converting PRC-origin jumbo rolls into cut-length tissue paper and find
that the Guilin Qifeng's investment (i.e., assets transferred from
Guilin Qifeng) is significant as compared to the level of investment,
(i.e., purchases from China and Vietnamese domestic purchases),
provided by Quijiang. See Memorandum to the File from Julia Hancock,
Senior Case Analyst, through Alex Villanueva, Program Manager, AD/CVD
Operations, Office 9: Circumvention Inquiry on Certain Tissue Paper
Products from the People's Republic of China: Proprietary Analysis of
Certain Statutory Factors for Vietnam Quijiang for the Preliminary
Determination, (April 14, 2008) (``Analysis Memorandum'').
Specifically, Guilin Qifeng's overall investment in the conversion of
the PRC-origin jumbo rolls accounts for approximately 75 percent of
total investment whereas Quijiang's total investment accounts for
approximately only 25 percent of the total investment for equipment
used in converting PRC-origin jumbo rolls.\3\ Id. Accordingly, we find
that the level of investment by Quijiang for equipment used in
converting the PRC-origin jumbo rolls is minor or insignificant
compared to the level of investment provided by Guilin Qifeng.
---------------------------------------------------------------------------
\3\ Because this information is business proprietary, the values
have been ranged by plus or minus 10 percent.
---------------------------------------------------------------------------
(b) The Level of Research and Development (``R&D'') in Vietnam
We find that the record evidence for this circumvention inquiry
demonstrates that Quijiang has not undertaken a significant level of
R&D in order to process tissue paper products. In describing the level
of R&D in the tissue paper industry in Vietnam, Quijiang reported that
the tissue paper industry is a mature, traditional and labor intensive
industry and that there is not much research and development involved
in this industry. See Quijiang's First Questionnaire Response, at 10.
Additionally, the limited role of R&D in the tissue paper industry in
Vietnam is further supported by the fact that Quijiang confirmed that
it did not undertake any R&D initiatives and expenditures involved with
tissue paper processing. See Quijiang's Sixth Questionnaire Response,
at 25. Accordingly, based on facts on the record of this circumvention
inquiry and because the conversion of jumbo rolls to tissue paper
products is a technically mature process, we find that R&D into the
process of producing tissue paper products is not a significant factor
in the Vietnamese tissue paper industry.
(c) The Nature of the Production Process in Vietnam
As discussed above, the element of the tissue paper production
process performed by Quijiang in Vietnam is the conversion of the PRC-
origin jumbo rolls to cut-to-length tissue paper. According to
Quijiang, the entire process to produce cut-to-length tissue paper from
the raw input, paper pulp, occurs in six stages. See Quijiang's First
Questionnaire Response, at Exhibit 1. However, according to Quijiang's
questionnaire responses, Quijiang's conversion of the PRC-origin jumbo
rolls covers only the last two stages of the overall production
process.\4\ Id. According to Quijiang, seasonal workers were used in
the conversion of the PRC-origin jumbo rolls to cut-to-length tissue
paper during the final stage of the overall production process, which
is primarily a manual operation. In contrast to the production process
of converting PRC-origin jumbo rolls to cut-to-length tissue, Quijiang
stated that Guilin Qifeng's production of the PRC-origin jumbo rolls
involved the first four stages of the overall production process
required to produce cut-to-length tissue paper.\5\ According to
Quijiang, the fourth stage of the overall production process requires
three shifts of workers and is labor intensive. Id.
---------------------------------------------------------------------------
\4\ The first of the final two stages of the overall production
process that involve the conversion of the jumbo rolls involves the
following: (1) Workers unrolling and re-rolling the jumbo roll
during the surface coloring, decorating, or embossing process; (2)
preparing the dye and dip-dying the jumbo rolls; (3) multi-color
printing the jumbo rolls on the printing machines; and (4) cutting
the jumbo rolls to length on the cutting machines. The second of the
final two stages of the overall production process that involve the
conversion of the jumbo rolls involves the following: (1) Counting
and folding the sheets prior to packaging; (2) packaging the sheets
in polyethylene bags, sealing, and labeling the bags; and (3)
packing the bags of tissue paper in cartons, which are tied in
plastic strip and then shipped to the customer.
\5\ The first of the first four stages of the overall production
process that involve the production of the jumbo rolls is the
blending stage (i.e., this involves water and paper pulp being
blended in a tank into a pulp mixture, which is pumped into crude
stock storage). The second of the first four stages of the overall
production process that involves the production of the jumbo rolls
is the stock grinding stage (i.e., this involves refining the crude
stock by grinding the fibers into shorter lengths and then
cleaning). The third of the first four stages of the overall
production process that involve the production of the jumbo rolls is
the stock preparation stage (i.e., this involves the refined stock
being pumped from a storage vat into a preparation tank where
whiteners, dyes, or other fixatives may be added). The fourth of the
first four stages of the overall production process that involve the
production of the jumbo rolls is the paper-making stage (i.e., this
involves the prepared stock being moved onto a porous cylinder where
the wet paper is then transferred to a second spinning cylinder and
is wrapped onto and passes over a heated drum as it rotates).
---------------------------------------------------------------------------
Based on the above descriptions, we find that, in contrast to the
first four stages of the overall production process that involved the
production of jumbo rolls, which require significant equipment involved
in the process and labor, the final two stages of the overall
production process that involved the conversion of PRC-origin jumbo
rolls are limited to cutting, dyeing, printing, and packaging/packing
the cut-to-length tissue paper. Moreover, the facts on the record show
that there is limited equipment and labor involved in these two stages
of the production process. Accordingly, we find that the
[[Page 21584]]
production process conducted by Quijiang in converting the PRC-origin
jumbo rolls to cut-to-length tissue paper is limited and minor when
compared to the production process of the jumbo rolls.
(d) The Extent of Production Facilities in Vietnam
In analyzing the extent of the production facilities, we have
considered the capital equipment used in the production process, the
types of employees, and whether the facilities used by Quijiang in the
conversion process were permanent facilities.
Quijiang states that when it began operations in July 2004, the
facility had four conversion lines and dip-dyeing machines that were
used to convert PRC-origin jumbo rolls to cut-to-length paper. See
Quijiang's First Questionnaire Response, at 8. A review of the records
of the equipment at this facility shows that the capital equipment used
to convert PRC-origin jumbo rolls to cut-to-length tissue paper
consisted of paper-cutting machines, electronic scales, trolleys, and
bed-plate. See Quijiang's Second Questionnaire Response, at Exhibit S1-
5. Additionally, Quijiang also reports that it leased two facilities to
conduct the printing and packaging processes. A review of the records
of the equipment at these facilities shows that the capital equipment
used to print and package the cut-to-length tissue paper consisted of
packaging working tables and printing machines. Id., at Exhibits S1-4
and S1-5.
In comparison, Quijiang states that Guilin Qifeng produced the PRC-
origin jumbo rolls at one location in Guilin, PRC. See Quijiang's Fifth
Questionnaire Response, at 6. A review of Guilin Qifeng's production
process shows that the capital equipment used to produce the stock for
the paper mixture consisted of numerous blending lines that have stock
storage, storage vats, and numerous stock preparation tanks. See
Quijiang's Fourth Questionnaire Response, at Appendix S4-5.
Additionally, Guilin Qifeng's production process shows that the capital
equipment used to produce the jumbo roll from the paper mixture
consisted of two facilities that had numerous long net machines and
numerous round net machines. Id. The facts on the record show that the
capital equipment used by Guilin Qifeng to produce the PRC-origin jumbo
rolls requires sophisticated machinery, such as blending lines and long
net machines. In contrast, the capital equipment used by Quijiang to
convert the PRC-origin jumbo rolls to cut-to-length tissue paper did
not require sophisticated capital equipment since the machinery only
consisted of paper-cutting machines, packaging tables, etc. Therefore,
based on the facts on the record, we find that Quijiang has not made
substantial purchases of sophisticated machinery to convert PRC-origin
jumbo rolls to cut-to-length tissue paper.
With regard to the level of employees involved in the conversion of
PRC-origin jumbo rolls to cut-to-length tissue paper, Quijiang reported
that skilled labor is involved in the first of the final two stages of
the overall production process, cutting, dyeing, and printing of the
jumbo rolls, is a semi-automatic operation. However, according to
Quijiang, the last of the final two stages of the overall production
process for converting the PRC-origin jumbo rolls to cut-to-length
tissue paper is a manual operation, which involves unskilled labor
folding and packaging the tissue paper. See Quijiang's First
Questionnaire Response, at 12. Additionally, Quijiang reported that the
workers involved in the packaging and packing of the cut-to-length
tissue paper are seasonal workers. Id., at Exhibit S1-5. Moreover,
according to Quijiang, there are more workers involved during the last
of the final two stages. Id. Based on a review of the labor involved in
the conversion of PRC-origin jumbo rolls to cut-to-length tissue paper,
we find that most of Quijiang's labor force consists of unskilled
workers that are employed on a temporary basis.
Quijiang reports that the headquarters facility, which housed the
conversion lines, and the two facilities which conducted the printing
and packaging, were all leased by Quijiang from other, unaffiliated
parties between July 2004 and July 2006. See Quijiang's Second
Questionnaire Response, at Exhibit S1-3. Because the three facilities
where Quijiang converted the PRC-origin jumbo rolls to cut-to-length
tissue paper were leased rather than owned, we find that Quijiang's
production facilities were temporary, rather than permanent.
Accordingly, based on the fact that Quijiang's capital equipment was
not substantial, Quijiang's labor force primarily consisted of
unskilled temporary workers, and the facilities were leased, we find
that the extent of Quijiang's production facilities to convert PRC-
origin jumbo rolls to cut-to-length tissue paper was minimal.
(e) Whether the Value of the Processing Performed in Vietnam Represents
a Small Portion of the Value of the Merchandise Sold in the United
States
In prior circumvention cases pursuant to section 781(a) and section
781(b) of the Act, where the Department must determine whether the
value of processing either in the United States or in a third country
is minor, we used the U.S. sales and cost of production data because
the countries at issue were market economy countries. See Pasta
Circumvention Prelim, 68 FR at 46575 (unchanged in Pasta Circumvention
Final, 68 FR 54888); Certain Carbon Steel Butt-Weld Pipe Fittings from
the People's Republic of China: Affirmative Final Determination of
Circumvention of Antidumping Duty Order, 59 FR 15155, 15156 (March 31,
1994). However, in this case, both the country that produced the jumbo
rolls and the country that produced the tissue paper products from the
jumbo rolls are considered NME countries. Therefore, because the
production of jumbo rolls and the cut-to-length tissue paper is
performed in NME countries, we used surrogate values to determine
whether the value of processing performed in Vietnam represents a small
portion of the value of the merchandise sold in the United States.
In accordance with section 773(c)(4) of the Act, in valuing the
factors of production (``FOPs''), the Department shall utilize, to the
extent possible, the prices or costs of FOPs in one or more market-
economy countries that are at a level of economic development
comparable to that of the NME country and are significant producers of
comparable merchandise. The Department selected India as the surrogate
country for both the PRC and Vietnam on the basis that: (1) It is at a
similar level of economic development pursuant to section 773(c)(4) of
the Act; (2) it is a significant producer of comparable merchandise;
and (3) we have reliable data from India. See Memorandum to the File
from Julia Hancock, through Alex Villanueva, Program Manager, AD/CVD
Operations, Office 9, and James C. Doyle, Director, AD/CVD Operations,
Office 9: Circumvention Inquiry on Certain Tissue Paper Products from
the People's Republic of China: Surrogate Country and Surrogate Values
for the Preliminary Determination (April 14, 2008) (``Surrogate Country
and Value Memorandum''). Thus, we have calculated the value of
processing performed in Vietnam and the value of the PRC-origin jumbo
rolls using surrogate prices from India. The sources
[[Page 21585]]
of the surrogate values we have used in this circumvention inquiry are
discussed in the Surrogate Country and Value Memorandum.
To calculate the value of the PRC-origin jumbo rolls, we used
publicly available Indian import prices for Harmonized Tariff Schedule
(``HTS'') 4802.54.50, described as ``Uncoated Paper in Rolls, under 40
grams, Tissue Paper,'' as reported in the Monthly Statistics of the
Foreign Trade of India.\6\ We calculated the surrogate value for PRC-
origin jumbo rolls using monthly data for July 2004 to July 2006
because Quijiang reported that July 2006 was the last month that Guilin
Qifeng produced jumbo rolls that were sold to Quijiang. See Quijiang's
Sixth Questionnaire Response, at 12 and Appendix S6-16. We converted
the surrogate value into U.S. dollars, in accordance with section
773A(a) of the Act, based on the exchange rates in effect for July 1,
2004, to July 31, 2006, as certified by the Federal Reserve Bank. For
further information, see Surrogate Country and Value Memorandum.
---------------------------------------------------------------------------
\6\ The same import prices are also available from the World
Trade Atlas (``WTA''), published by Global Trade Information
Services, Inc., which is a secondary electronic source based upon
the publication Monthly Statistics of the Foreign Trade of India.
Volume II: Imports.
---------------------------------------------------------------------------
To calculate the value of Quijiang's processing of the finished
merchandise, we used Quijiang's FOPs for each stage of converting PRC-
origin jumbo rolls to tissue paper, i.e., from the cutting of the jumbo
rolls into cut-to-length sheets of tissue paper, dyeing (where
appropriate), printing (where appropriate), and packaging of the final
product. See Quijiang's First Questionnaire Response, at Exhibit 1. We
multiplied the reported per-unit factor consumption rates by the Indian
surrogate values.\7\ In selecting the surrogate values, we considered
the quality, specificity, and contemporaneity of the data.
---------------------------------------------------------------------------
\7\ As appropriate, we adjusted input prices by including
freight costs to make them delivered prices. Specifically, we added
to Indian import surrogate values a surrogate freight cost using the
shorter of the reported distance from the domestic supplier to the
factory or the distance from the nearest seaport to the factory
where appropriate. This adjustment is in accordance with the Court
of Appeals for the Federal Circuit's decision in Sigma Corp. v.
United States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997).
Additionally, we made currency conversions into U.S. dollars, in
accordance with section 773A(a) of the Act, based on the exchange
rates in effect on the dates of the U.S. sales as certified by the
Federal Reserve Bank.
---------------------------------------------------------------------------
To derive the value added to the finished merchandise by Quijiang's
processing, we divided the total value of the finished merchandise
(i.e., sum of the surrogate value of the PRC-origin jumbo rolls and
Quijiang's value of processing), by Quijiang's value of processing. The
value added to the finished merchandise by Quijiang's processing is an
average value of approximately 34 percent.\8\ Based on our analysis of
the value added, we find that the value of the processing performed by
Quijiang to convert the PRC-origin jumbo rolls to cut-to-length tissue
paper does not represent a small proportion of the value of the
finished merchandise sold in the United States. See Analysis
Memorandum.
---------------------------------------------------------------------------
\8\ Because this information is business proprietary, we have
ranged the values by plus or minus 10 percent.
---------------------------------------------------------------------------
Summary of Analysis of Whether the Process of Assembly or Completion in
the Foreign Country Is Minor or Insignificant
In sum, we preliminarily conclude that the record evidence of this
circumvention inquiry supports a finding that the process or completion
of the PRC-origin jumbo rolls to cut-to-length tissue paper in Vietnam
is minor or insignificant. Pursuant to section 781(b)(2)(A) of the Act,
we find that the level of investment by Quijiang in the equipment used
to convert the PRC-origin jumbo rolls is minor compared to the level of
investment provided by Guilin Qifeng. Pursuant to section 781(b)(2)(B)
of the Act, we find that the absence of R&D initiatives by Quijiang in
the production of tissue paper products shows that R&D is not a
significant factor in the Vietnamese tissue paper industry. Pursuant to
section 781(b)(2)(C) of the Act, we find that the portion of the
overall production process of cut-to-length tissue paper conducted by
Quijiang in converting the PRC-origin jumbo rolls to cut-to-length
tissue paper is limited and minor when compared to Guilin Qifeng's
share of the overall production process in the production of the jumbo
rolls. Pursuant to section 781(b)(2)(D) of the Act, we find that the
extent of Quijiang's production facilities is minor with respect to
converting PRC-origin jumbo rolls to cut-to-length tissue paper because
the capital equipment used by Quijiang in converting the PRC-origin
jumbo rolls is not substantial in comparison to the capital equipment
used by Guilin Qifeng to produce the jumbo rolls, the labor force used
by Quijiang is composed primarily unskilled workers, and Quijiang's
facilities were leased, not permanent. Finally, pursuant to section
781(b)(2)(E) of the Act, we find that value of the processing performed
by Quijiang to convert the PRC-origin jumbo rolls to cut-to-length
tissue paper does not represent a small proportion of the value of the
finished merchandise sold in the United States.
While the statutory factor, section 781(b)(2)(E) of the Act, is
inconclusive, the information on the record regarding the four other
statutory factors, sections 781(b)(2)(A),(B),(C), and (D) of the Act,
shows that the processing operation to convert PRC-origin jumbo rolls
to cut-to-length tissue paper in Vietnam is minor or insignificant. We
have based our decision as to whether the processing operation to
convert PRC-origin jumbo rolls to cut-to-length tissue paper is minor
or insignificant based on the totality of the record evidence of this
circumvention inquiry. Specifically, the legislative history to section
781(b) indicates that Congress intended the Department to make
determinations regarding circumvention on a case-by-case basis in
recognition that the facts of individual cases and the nature of
specific industries vary widely. See S. Rep. No. 103-412 (1994), at 81-
82.
Although we find pursuant to section 781(b)(2)(E) of the Act, that
the value of the processing performed by Quijiang to convert the PRC-
origin jumbo rolls to cut-to-length tissue paper does not represent a
small proportion of the value of the finished merchandise sold in the
United States, the preponderance of the other record evidence, pursuant
to sections 781(b)(2)(A),(B),(C), and (D) of the Act, shows that the
value of the processing operation in Vietnam is minor or insignificant.
Accordingly, based on a review of the record evidence, it is clear that
the majority of the actual production process for cut-to-length tissue
paper is concentrated in Guilin Qifeng's production facilities in the
PRC. Therefore, we find that the processing operation to convert PRC-
origin jumbo rolls to cut-to-length tissue paper in Vietnam is minor or
insignificant, pursuant to section 781(b)(1)(C) of the Act.
(D) Whether the Value of the Merchandise Produced in the Foreign
Country to Which the Order Applies Is a Significant Portion of the
Total Value of the Merchandise Exported to the United States
Under section 781(b)(1)(D) of the Act, the value of the merchandise
produced in the foreign country to which the Order applies must be a
significant portion of the total value of the merchandise sold in the
United States in order to find circumvention. The major parts and
components that consist of the total value of the cut-to-length tissue
paper sold in the United States are: PRC-origin jumbo rolls, inks and
dyes, and packaging materials. As
[[Page 21586]]
discussed in the section of ``Whether Merchandise Sold in The United
States is Completed or Assembled in Another Foreign Country From
Merchandise Which Is Subject to the Order or Produced In the Foreign
Country That Is Subject to the Order,'' in all instances the PRC-origin
jumbo rolls are imported from Guilin Qifeng, which is located in the
PRC. Additionally, the value of the PRC-origin jumbo rolls is
approximately an average value of 66 percent of the total value of the
finished merchandise.\9\ As discussed above, although the value of the
processing conducted in Vietnam is not small, we find that the value of
the PRC-origin jumbo rolls constitutes a great majority of the value of
the finished merchandise. Based on our analysis, the value of the PRC-
origin jumbo rolls taken as a whole constitutes a significant portion
of the value of the finished product ultimately sold in the United
States.
---------------------------------------------------------------------------
\9\ Because this information is business proprietary, we have
ranged the values by plus or minus 10 percent.
---------------------------------------------------------------------------
Other Factors To Consider
In making a determination whether to include merchandise assembled
or completed in a foreign country within an order, section 781(b)(3) of
the Act instructs us to take into account such factors as: (A) The
pattern of trade, including sourcing patterns; (B) whether affiliation
exists between the exporter of the merchandise and the person who uses
the merchandise to assemble or complete in the foreign country the
merchandise that is sold in the United States; and (C) whether imports
into the foreign country of the merchandise described in section
781(b)(1)(B) have increased since the initiation of the original
investigation. Each of these factors is examined below.
(A) Pattern of Trade and Sourcing
The first factor to consider under section 781(b)(3) is changes in
the pattern of trade, including changes in the sourcing patterns. To
evaluate the pattern of trade in this case, we examined Quijiang's
source channel of jumbo rolls. According to Quijiang, it started
sourcing PRC-origin jumbo rolls from Guilin Qifeng in July 2004 to
produce tissue paper products that Quijiang exported to the United
States. See Quijiang's First Questionnaire Response, at 12.
Additionally, the record of this circumvention inquiry shows that
between July 2004 and July 2006, Quijiang did not purchase PRC-origin
jumbo rolls from any other supplier. See id., at Exhibit 11; Quijiang's
Sixth Questionnaire Response, at 13 and Appendix S6-16. Based on the
facts on the record, we find that the fact that Quijiang sourced jumbo
rolls from a PRC supplier to produce tissue paper products, which were
exported to the United States, supports a finding that circumvention
was occurring during this period.\10\
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\10\ The Department recognizes that Petitioner submitted
comments on February 4, 2008, alleging that Quijiang, contrary to
its own declarations, continued to import semi-completed tissue
paper products from the PRC after July 2006. However, the Department
finds Petitioner's evidence in support of its allegations to be
inconclusive. Accordingly, a factual finding that Quijiang was not
truthful in its statements to the Department with respect to this
issue is not warranted. Thus, the Department cannot conclude either
as a factual matter or based upon an adverse inference resulting
from Quijiang's failure to cooperate to the best of its ability that
all exports of subject merchandise by Quijiang were produced from
Chinese-origin semi-finished tissue paper products. However, if the
Department reaches a final determination of circumvention in this
proceeding, the 2007/2008 administrative review will cover all of
Quijiang's entries as of the date of initiation of this
circumvention inquiry, and the Department will further investigate
the issue of origin of all covered entries in the context of such
review.
---------------------------------------------------------------------------
We also examined the timing and quantities of Quijiang's exports to
the United States of tissue paper that were produced from PRC-origin
jumbo rolls since the initiation of the LTFV investigation in March
2004. A review of Quijiang's monthly total exports shows that from July
2004 to July 2006, Quijiang's exports of tissue paper products produced
from PRC-origin rolls to the United States consisted of the majority of
Quijiang's total monthly exports. See Quijiang's Fifth Questionnaire
Response, at Exhibit 6. These data indicate that the monthly volume of
Quijiang's exports of tissue paper products produced from PRC-origin
jumbo rolls to the United States was significant subsequent to the
initiation of the LTFV investigation. Additionally, we examined the
timing and quantities of exports of tissue paper from the PRC to the
United States between 2004 and 2006, and exports of tissue paper from
Vietnam to the United States between 2004 and 2006. A review of the
data shows that PRC exports of tissue paper to the United States
decreased by 59.2 percent between 2004 and 2006, whereas Vietnam
exports of tissue paper to the United States increased by 1739.11
percent between 2004 and 2006. See Analysis Memorandum. Accordingly,
the data show that PRC exports have decreased significantly whereas
Vietnamese exports have increased significantly since the initiation of
the LTFV investigation. Therefore, based on the facts on the record, we
find that the pattern of trade has changed since the initiation of the
LTFV investigation and the imposition of the Order and thus, supports a
finding that circumvention has occurred.
(B) Affiliation
The second factor to consider under section 781(b)(3) of the Act is
whether the manufacturer or exporter of the tissue paper is affiliated
with the entity that assembles or completes the merchandise sold in the
United States from the imported PRC-origin jumbo rolls. Generally, we
consider circumvention to be more likely to occur when the manufacturer
of the covered merchandise is related to the third country assembler
and is a critical element in our evaluation of circumvention. See Color
Picture Tubes From Canada, Japan, Republic of Korea & Singapore:
Negative Final Determinations of Circumvention of Antidumping Duty
Orders, 56 FR 9667 (March 7, 1991) and accompanying Issues and Decision
Memorandum at Comment 8. The record evidence of this circumvention
inquiry indicates that the Vietnamese assembler, Quijiang, which
converted the PRC-origin jumbo rolls into tissue paper products, is a
wholly-owned subsidiary of Guilin Qifeng. See Quijiang's First
Questionnaire Response, at 4. Accordingly, because Quijiang is 100
percent owned by Guilin Qifeng, we find that Quijiang and Guilin Qifeng
are affiliated, pursuant to section 771(33) of the Act. Additionally,
the record evidence shows that Guilin Qifeng was Quijiang's sole
supplier of PRC-origin jumbo rolls. See Quijiang's Second Questionnaire
Response, at 3. In sum, we find that the record evidence demonstrates
that the relationship between Quijiang and Guilin Qifeng supports a
finding that circumvention of the Order may have occurred during the
period of investigation.
(C) Whether Imports Have Increased
The third factor to consider under section 781(b)(3) is whether
imports into the foreign country of the merchandise described in
section 781(b)(1)(B) have increased since the initiation of the
original investigation. Generally, we consider circumvention to be more
likely when imports of jumbo rolls, the merchandise imported from the
PRC, have increased into Vietnam. Because Quijiang was not established
until June 2004, we reviewed Quijiang's imports of PRC-origin jumbo
rolls from July 2004, which was when it began importing PRC-origin
jumbo rolls, to the issuance of the Order, and compared these imports
to those after the issuance of the Order. See Quijiang's First
[[Page 21587]]
Questionnaire Response, at Exhibit 11. The Department finds that
Quijiang's imports of PRC-origin jumbo rolls were at their highest
levels in the months after the issuance of the Order through July 2006.
Id.
Additionally, the Department obtained PRC export data of tissue
paper products to Vietnam since 2004, which was the year that the LTFV
investigation was initiated. The Department has obtained PRC export
data of HTS 4802.54, which is defined as ``Paper/Paperboard (Excluding
Mechanical Fibers), Weighing <40 grams.'' \11\ Although HTS 4802.54
does not necessarily provide export data specific to jumbo rolls, the
Department finds that it is reasonable to assume that at least a
portion of the data contains exports of jumbo rolls and thus, are the
best available data in determining PRC exports of jumbo rolls.
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\11\ The Department has obtained PRC export data for jumbo rolls
using 4802.54 because HTS 4802.54 includes exports for both finished
tissue paper and jumbo rolls, which are classified under this HTS
category.
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In reviewing PRC exports of HTS 4802.54 between 2003 and 2006, the
Department finds that PRC exports to Vietnam have steadily increased
since the initiation of the LTFV investigation. See Analysis
Memorandum. Specifically, the Department finds that the PRC total
exports to Vietnam increased by 41.12 percent between 2003 and 2006.
This increase corresponds with the initiation of the LTFV investigation
and issuance of the Order. Accordingly, we find that both the increase
in Quijiang's imports of PRC-origin jumbo rolls and the increase in PRC
exports to Vietnam since the initiation of the LTFV investigation
supports a finding that circumvention may have occurred.
Summary of Statutory Analysis
As discussed above, in order to make an affirmative determination
of circumvention, all the elements under sections 781(b)(1) of the Act
must be satisfied, taking into account the factors under section
781(b)(2). In addition, section 781(b)(3) of the Act instructs the
Department to consider, in determining whether to include merchandise
assembled or completed in a foreign country within the scope of an
order, such factors as: Pattern of trade, affiliation, and whether
imports into the foreign country of the merchandise described in
section 781(b)(1)(B) have increased after the initiation of the
investigation. Pursuant to section 781(b)(1) of the Act, we find that
the merchandise sold in the United States is within the same class or
kind of merchandise that is subject to the Order and was completed or
assembled in a third country. Additionally, pursuant to section
781(b)(2), we find that the process or assembly of the PRC-origin jumbo
rolls to cut-to-length tissue paper by Quijiang is minor and
insignificant. Furthermore, in accordance with section 781(b)(1)(D) and
781(b)(1)(E) of the Act, we find that the value of the merchandise
produced in the PRC is a significant portion of the total value of the
merchandise exported to the United States and that action is
appropriate to prevent evasion of the Order. Thus, we find affirmative
evidence of circumvention in accordance with section 781(b)(1) and (2)
of the Act. Moreover, we find the factors required by section 781(b)(3)
of the Act indicate that there is circumvention of the Order.
Consequently, our statutory analysis leads us to find that during the
period of time examined there was circumvention of the Order as a
result of Quijiang's conversion of the PRC-origin jumbo rolls to cut-
to-length tissue paper in Vietnam, as discussed above.
Suspension of Liquidation
In accordance with section 733(d) of the Act, the Department will
direct CBP to suspend liquidation and to require a cash deposit of
estimated duties, at the PRC-wide rate, on all unliquidated entries of
certain tissue paper products produced by Quijiang that were entered,
or withdrawn from warehouse, for consumption from on or after September
5, 2006, the date of initiation of the circumvention inquiry, through
the date of publication of the preliminary determination, with the
exception described below.
After consideration of Petitioner's comments between January 8,
2007, and April 3, 2008, arguing that the Department should not allow
Quijiang to certify that these entries of tissue paper products are not
produced from PRC-origin jumbo rolls, the Department notes that no
party on the record has contested that Quijiang itself now in Vietnam
produces jumbo rolls suitable for conversion into the tissue paper
products meeting the physical description of products subject to the
scope of the Order. Given that some of Quijiang's tissue paper products
may be made from Vietnamese-origin jumbo rolls, and given that the
Department does not consider it appropriate to suspend liquidation of
such non-subject merchandise, the Department finds it appropriate to
follow precedent and permit certification as described below. See
Circumvention and Scope Inquiries of the Antidumping Duty Order on
Certain Frozen Fish Fillets from the Socialist Republic of Vietnam:
Partial Affirmative Final Determination of Circumvention of the
Antidumping Duty order, Partial Final Determination of Circumvention
Inquiry and Final Rescission of Scope Inquiry, 71 FR 38608 (July 7,
2006) and accompanying Issues and Decision Memorandum at Comment 3.
However, in the event of a final determination of circumvention, the
Department will expand the third administrative review period back to
September 5, 2006, the date of initiation of this circumvention
inquiry, to include all of Quijiang's entries covered by this
determination. In addition, we hereby serve notice to Quijiang that
such certified entries are subject to verification by the Department.
The Department will examine any records Quijiang maintains in its
normal course of business, or any information placed on the record,
supporting or calling into question its certifications that no PRC-
origin jumbo rolls were used in the production of its tissue paper
products.
For all entries of certain tissue paper products produced by
Quijiang that entered on or after the date of the publication of the
Initiation, the Department will instruct CBP to allow Quijiang to
certify that no PRC-origin jumbo rolls were used in the production of
the certain tissue paper products. The Department will not request that
CBP suspend liquidation, or require a cash deposit of estimated duties,
at the PRC-wide rate, for any entries of certain tissue paper products
accompanied by the certification in Appendix I in this notice. However,
the Department will direct CBP to suspend liquidation and to require a
cash deposit of estimated duties, at the PRC-wide rate of 112.64
percent of any entries of certain tissue paper products not accompanied
by the attached certification in Appendix I of this notice.
Notification to the International Trade Commission
The Department, consistent with section 781(e) of the Act, has
notified the International Trade Commission (``ITC'') of this
preliminary determination to include the merchandise subject to this
inquiry within the antidumping duty order on certain tissue paper
products from the PRC. Pursuant to section 781(e) of the Act, the ITC
may request consultations concerning the Department's proposed
inclusion of the subject merchandise. If, after consultations, the ITC
believes that a significant injury issue is presented by the proposed
inclusion, it will have 15 days to provide written advice to the
Department.
[[Page 21588]]
Public Comment
Interested parties may submit publicly available information to
value the FOPs within 15 days after the date of publication of the
preliminary determination.\12\ Case briefs from interested parties may
be submitted no later than 40 days from the publication of this notice.
A list of authorities used and an executive summary of issues should
accompany any briefs submitted to the Department. This summary should
be limited to five pages total, including footnotes. Rebuttal briefs
limited to issues raised in the initial comments may be filed no later
than 45 days after the publication of this notice.
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\12\ In accordance with 19 CFR 351.301(c)(1), for the final
determination of this circumvention inquiry, interested parties may
submit factual information to rebut, clarify, or correct factual
information submitted by an interested party less than ten days
before, on, or after, the applicable deadline for submission of such
factual information. However, the Department notes that 19 CFR
351.301(c)(1) permits new information only insofar as it rebuts,
clarifies, or corrects information recently placed on the record.
The Department generally cannot accept the submission of additional,
previously absent-from-the-record alternative surrogate value
information pursuant to 19 CFR 351.301(c)(1). See Glycine from the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review and Final Rescission, in Part, 72 FR 58809
(October 17, 2007) and accompanying Issues and Decision Memorandum
at Comment 2.
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Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 25 days after the date of publication of this notice.
Requests should contain the party's name, address, and telephone
number, the number of participants, and a list of the issues to be
discussed. At the hearing, each party may make an affirmative
presentation only on issues raised in that party's case brief and may
make rebuttal presentations only on arguments included in that party's
rebuttal brief. We intend to hold a heari
