Certain Tissue Paper Products From the People's Republic of China: Notice of Initiation of Anti-circumvention Inquiry, 63688-63692 [E8-25584]
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Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Notices
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[FR Doc. Z8–22458 Filed 10–24–08; 8:45 am]
BILLING CODE 1505–01–D
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–894]
Certain Tissue Paper Products From
the People’s Republic of China: Notice
of Initiation of Anti-circumvention
Inquiry
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from
Seaman Paper Company of
Massachusetts, Inc. (the petitioner), the
Department of Commerce (the
Department) is initiating an anticircumvention inquiry to determine
whether certain imports of tissue paper
from Thailand are circumventing the
antidumping duty order on certain
tissue paper products (tissue paper)
from the People’s Republic of China
(PRC). 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) (Tissue Paper Order).
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AGENCY:
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DATES:
Effective Date: October 27, 2008.
FOR FURTHER INFORMATION CONTACT:
Brian Smith or Gemal Brangman, AD/
CVD Operations, Office 2, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–1766 or (202) 482–
3773, respectively.
SUPPLEMENTARY INFORMATION:
Background
On September 10, 2008, the petitioner
submitted a letter requesting that the
Department initiate and conduct an
anti-circumvention inquiry, pursuant to
section 781(b) of the Tariff Act of 1930,
as amended (the Act), and 19 CFR
351.225(h), to determine whether
imports of tissue paper from Thailand
´
which Sunlake Decor Co., Ltd.
(Sunlake) 1 made from jumbo rolls and
cut sheets of tissue paper produced in
the PRC are circumventing the
antidumping duty order on tissue paper
from the PRC. Specifically, the
petitioner alleges that PRC-produced
jumbo rolls and cut sheets of tissue
paper sent to Thailand for completion or
assembly into merchandise of the same
class or kind as that covered by the
antidumping duty order on tissue paper
from the PRC are circumventing that
order.
On September 19, 2008, Department
officials met with the petitioner’s
counsel to discuss the petitioner’s
September 10, 2008, anti-circumvention
inquiry request. See memorandum to
the file entitled, ‘‘Meeting with Counsel
for the Petitioner,’’ dated September 24,
2008.
On September 25, 2008, Department
officials spoke with the foreign market
researcher who provided certain
information contained in the anticircumvention inquiry request. See
memorandum to the file entitled,
‘‘Telephone Conversation with Foreign
Market Researcher,’’ dated September
29, 2008.
To date, we have received no
comments from Sunlake on this matter.
Scope of the Order
The tissue paper products subject to
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
1 Sunlake
PO 00000
is a company located in Thailand.
Frm 00016
Fmt 4703
Sfmt 4703
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.
Tissue paper products subject to this
order do not have specific classification
numbers assigned to them under the
Harmonized Tariff Schedule of the
United States (HTSUS) and appear to be
imported under one or more of the
several different ‘‘basket’’ categories,
including but not necessarily limited to
the following subheadings: HTSUS
4802.30, HTSUS 4802.54, HTSUS
4802.61, HTSUS 4802.62, HTSUS
4802.69, HTSUS 4804.39, HTSUS
4806.40, HTSUS 4808.30, HTSUS
4808.90, HTSUS 4811.90, HTSUS
4823.90, HTSUS 9505.90.40.
Although the HTSUS subheadings are
provided for convenience and customs
purposes, the written description of the
scope of the investigation is dispositive.
Excluded from the scope of the 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; and (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).
Initiation of Anti-Circumvention
Proceeding
Applicable Statute
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 anticircumvention 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
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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; (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; and (E) the administering
authority determines that action is
appropriate to prevent evasion of such
order or finding. As discussed below,
the petitioner presented evidence with
respect to these criteria.
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A. Merchandise of the Same Class or
Kind
The petitioner argues that the tissue
paper from Thailand, which it alleges
´
Sunlake Decor Co., Ltd. (Sunlake)
completes or assembles (e.g., such as
cutting to length, possibly folding, and
packaging) in Thailand before exporting
it to the United States, is produced from
jumbo rolls and sheets of PRC-origin
tissue paper obtained from its affiliate,
Zhangzhou MagicPro G.M. Arts and
Crafts Co., Ltd. (ZMGM), and is
physically identical to the subject
merchandise cut-to-length tissue paper
from the PRC. Accordingly, pursuant to
section 781(b)(1)(A)(i) of the Act, the
petitioner claims this tissue paper is of
the same class or kind as the tissue
paper produced in the PRC, which is
subject to the antidumping duty order.
B. Completion of Merchandise in a
Foreign Country
The petitioner states that the tissue
paper that is the subject of the anticircumvention inquiry request is made
from jumbo rolls and sheets of tissue
paper produced in the PRC and
converted (i.e., cut-to-length, possibly
folded, and packaged) into cut-to-length
sheets of tissue paper in Thailand for
export to the United States. The
petitioner argues that unlike Sunlake’s
PRC affiliate (i.e., ZMGM), which has a
production facility capable of producing
tissue paper, Sunlake’s facility in
Thailand only has the ability to convert
jumbo rolls and/or sheets of tissue paper
into cut-to-length tissue paper and
package it for exportation. The
petitioner therefore concludes that,
pursuant to section 781(b)(1)(B)(ii) of
the Act, Sunlake’s cut-to-length tissue
paper is merchandise completed in
another foreign country (Thailand) from
merchandise that is produced in a
country (the PRC) subject to an
antidumping order which includes cutto-length tissue paper in its scope.
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C. Minor or Insignificant Process
The petitioner argues that for the
purpose of section 781(b)(1)(C) of the
Act, conversion of jumbo rolls and/or
sheets of tissue paper produced in the
PRC into cut-to-length tissue paper in
Thailand is a ‘‘minor or insignificant
process’’ as defined by the Act.
According to the petitioner, the record
of this proceeding contains substantial
and detailed evidence demonstrating
that converting jumbo rolls and sheets
of tissue paper is a minor or
insignificant process. The petitioner
states that cutting and packaging tissue
paper are operations that merely impart
the final sheet size and form in which
the product is delivered to the ultimate
customer. The petitioner also states that
the most fundamental aspects of the
merchandise, such as the basis weight,
texture, quality, and other special
characteristics that may be required if
the paper is intended for printing, are
irrevocably established when the paper
is produced. Furthermore, the petitioner
claims that the types of minor assembly
operations described above with respect
to converting jumbo rolls and sheets of
tissue paper are consistent with the
information its market researcher
obtained from Sunlake’s facility in
Thailand. See September 10, 2008, anticircumvention inquiry request at
Exhibit 6.
The petitioner states that converting
the tissue involves two to three minor
processes typically performed by hand
in Thailand: cutting the tissue to a
specific size, folding it (by hand) and
packaging it for export (by hand). The
petitioner contends that, based on the
information obtained from its market
researcher, Sunlake only has converting
operations in Thailand. The petitioner
cites to an affidavit in its anticircumvention inquiry request (at
Exhibit 6), wherein its market researcher
reported first-hand knowledge of the
operations at the Sunlake facility based
on a site visit during which the market
researcher observed only converting
operations. Therefore, the petitioner
argues, the statements made by the
market researcher in its affidavit
confirm that Sunlake’s converting
operations involve cutting, hand-folding
and hand-packaging, rather than highly
capital-intensive and automated
activities relevant to tissue paper
production, and are therefore ‘‘minor or
insignificant’’ processes.
The petitioner argues that an analysis
of the relevant statutory factors of
section 781(b)(2) of the Act further
supports its conclusion that the
processing in Thailand is ‘‘minor or
insignificant.’’ These factors include: (1)
PO 00000
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63689
Level of investment in the foreign
country; (2) level of research and
development in the foreign country; (3)
nature of the production process in the
foreign country; (4) extent of production
facilities in the foreign country; and (5)
whether the value of the processing in
the foreign country represents a small
proportion of the value of the
merchandise imported into the United
States.
The petitioner argues that the
processing in Thailand is ‘‘minor and
insignificant’’ as the term is defined in
section 781(b)(2) of the Act when
compared to the complex, highly
capital-intensive, skilled operations
required to produce lightweight tissue
paper from pulp, chemicals, and dyes.
The petitioner’s analysis of the statutory
factors follows below.
(1) Level of Investment
The petitioner claims that available
information concerning Sunlake’s
operations indicates that little
investment has been or is being made in
Thailand. The petitioner argues that
Sunlake’s business model indicates that
Sunlake only serves as a converting
operation and an export platform for
Magicpro companies to the PRC
(including ZMGM) and is not an
integrated production operation (see
page 41 of the anti-circumvention
inquiry request). This assessment is
consistent with the fact that Sunlake
rents but does not own its own facilities,
and that its converting operations are
much less capital-intensive and more
susceptible to relocation than
papermaking operations. The petitioner
further argues that ZMGM would have
no desire to set up an operation in
Thailand that would compete with its
own production operations. The
petitioner concludes that the level of
investment in the Thailand processing
facility is low.
(2) Level of Research and Development
The petitioner maintains that the
evidence reasonably available indicates
that no research and development (R&D)
is taking place in Thailand. The
petitioner states that because Sunlake is
affiliated with ZMGM, it is reasonable to
presume that any R&D efforts would
originate at ZMGM in the PRC.
Furthermore, the petitioner states that
tissue paper production is a mature
industry and any technical
developments are refinements rather
than new technologies. Converting
operations also reflect mature
technologies, according to the
petitioner, and the Thai converting
operations involve hand-folding and
packaging, which are less automated
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and less R&D-intensive activities than
those found in the United States. See
September 10, 2008, anti-circumvention
inquiry request at page 43.
(3) Nature of the Production Process in
Thailand
The petitioner argues that the data
obtained from its market researcher
indicate that Sunlake’s operations in
Thailand are limited to PRC-origin
jumbo rolls and sheets being cut to size
(if necessary) and packed by hand prior
to export. They involve unskilled
manual labor in contrast to skilled labor
required for papermaking. Therefore,
the petitioner contends that Sunlake’s
‘‘production process’’ reflects operations
that are designed to assemble or
complete the merchandise in a minor or
insignificant fashion. See September 10,
2008, anti-circumvention inquiry
request at page 44. The petitioner notes
that all of the operations observed and
documented by its market researcher are
designed and intended to convert (cut
and/or package) the tissue paper
imported into Thailand without altering
its fundamental and critical
characteristics of basis weight, quality,
and texture that are established during
the papermaking stage of production.
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(4) Extent of Production in Thailand
The petitioner states that Sunlake’s
operations are housed in rented
facilities, a fact which suggests a lower
level of investment than that which
would be required by the capitalintensive nature of papermaking
operations. The petitioner also states
that Sunlake does not have papermaking
operations. According to the petitioner,
the capital-intensive nature of
papermaking operations requires that
the necessary machinery be
permanently placed and operated, while
converting and packaging operations
can be temporarily housed and are
easily movable. The petitioner claims
that this information supports a
determination that Sunlake was
established as a means for the Magicpro
companies in the PRC (including
ZMGM) to continue using their tissue
paper production capacity and doing
business in the U.S. market without
paying duties.
(5) Value of Thailand Processing
Compared to Tissue Paper Imported Into
the United States
The petitioner states that it does not
have access to information concerning
the cost of the jumbo rolls and sheets of
tissue paper exported from the PRC to
Sunlake, or the costs associated with the
converting operations performed in
Thailand; however, it contends that data
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from the record of the anticircumvention inquiry regarding tissue
paper exports from Vietnam support a
determination that the value of
processing performed in Thailand
represents a small portion of the value
of the merchandise imported into the
United States. Specifically, in the
Vietnam anti-circumvention inquiry, the
Department determined that the same
type of conversion processes were
minor or insignificant for purposes of
the statute, and that inclusion of the
resulting tissue paper in the order was
appropriate to avoid circumvention of
the order. See 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, 73 FR 21580
(April 22, 2008) (which was upheld in
Certain Tissue Paper Products From the
People’s Republic of China: Affirmative
Final Determination of Circumvention
of the Antidumping Duty Order, 73 FR
57591 (October 3, 2008)). In fact, the
petitioner notes that in the anticircumvention inquiry involving
Vietnam, the activities performed by the
Vietnamese entity at issue included
more involved forms of processing (e.g.,
dip-dying) which would add greater
amounts of value than merely
converting jumbo rolls and, particularly,
sheets. In contrast, the petitioner
contends that Sunlake is importing the
jumbo rolls and sheets and is only
converting them without additional
processing (such as dip-dying).
D. Value of Merchandise Produced in
PRC
The petitioner argues that the
evidence as noted in its anticircumvention inquiry request clearly
supports its position that the value of
the tissue paper jumbo rolls and sheets
produced in the PRC and sent to
Sunlake represents a significant portion
of the total value of the merchandise
exported to the United States, as
measured by the prices at which jumbo
rolls and cut tissue paper sheets are
produced and/or sold at market value.
The petitioner notes that this conclusion
is particularly supported by the fact that
Sunlake’s activities are limited to
cutting and folding (if necessary),
packing, and shipping the finished
tissue paper product.
E. Factors To Consider in Determining
Whether Action Is Necessary
The petitioner argues that additional
factors must be considered in the
Department’s decision whether to issue
a finding of circumvention regarding
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importation of Thai tissue paper. These
factors are discussed below.
Pattern of Trade
The petitioner states that section
781(b)(3) of the Act directs the
Department to take into account
patterns of trade when making a
decision in an anti-circumvention case.
The petitioner argues that two months
after the antidumping duty order was
issued, substantial volumes of certain
tissue paper products began appearing
as U.S. imports from Thailand through
Sunlake, and have continued since then.
The petitioner bases this claim on an
analysis of publicly available U.S.
import statistics and company-specific
information from the Port Import Export
Reporting Service (PIERS). See
September 10, 2008, anti-circumvention
inquiry request at Exhibits 1 and 2.
Affiliation
The petitioner states that section
781(b)(3) of the Act directs the
Department to take into account
whether the manufacturer or exporter of
the merchandise is affiliated with the
person who uses the merchandise to
assemble or complete in the foreign
country the merchandise that is
subsequently imported into the United
States when making a decision in an
anti-circumvention case. The petitioner
contends that Sunlake is affiliated with
multiple Magicpro companies
worldwide, including ZMGM, which is
known to be a tissue paper producer in
the PRC. See September 10, 2008, anticircumvention inquiry request at pages
51–52 and Exhibit 6. The petitioner
argues that the affiliation, the timing of
Sunlake’s establishment and the nature
of the company’s operation (i.e.,
importing rolls and/or sheets to be
converted and then exporting them)
suggest a clear intention to shift
completion of merchandise under order
from the PRC to Thailand. See
September 10, 2008, anti-circumvention
request at page 52.
Subsequent Import Volume
The petitioner states that section
781(b)(3) of the Act directs the
Department to take into account
whether imports into the foreign
country of the merchandise have
increased after the initiation of the
investigation which resulted in the
issuance of an order when making a
decision in an anti-circumvention case.
The petitioner claims it does not have
access to precise data concerning trade
flows of jumbo rolls and sheets of tissue
paper between Magicpro companies in
the PRC and Sunlake in Thailand;
however, it maintains that import data
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from World Trade Atlas show that the
volume of tissue paper shipments from
the PRC to Thailand increased
significantly after the original
investigation was initiated and the
antidumping duty order was issued in
this proceeding. In addition, the
petitioner notes that it is impossible that
Sunlake would have received jumbo
rolls before May 17, 2005, because the
company did not exist before then. See
September 10, 2008, anti-circumvention
inquiry request at pages 6 and 53.
The petitioner also points out that the
evidence concerning Thailand’s prior
lack of exports of tissue paper to the
United States, coupled with the
emergence of large export volumes of
tissue paper from Thailand starting four
months after the petition was filed,
provides a reasonable basis for inferring
that jumbo roll and large tissue sheet
imports into Thailand from the PRC
increased after the initiation of the
original investigation in this proceeding.
See September 10, 2008, anticircumvention inquiry request at page
53.
Analysis
Based on our analysis of the
petitioner’s September 10, 2008, anticircumvention inquiry request, the
Department determines that a formal
anti-circumvention inquiry is
warranted. In accordance with 19 CFR
351.225(e), if the Department finds that
the issue of whether a product is
included within the scope of an order
cannot be determined based solely upon
the request and the descriptions of the
merchandise, the Department will notify
by mail all parties on the Department’s
scope service list of the initiation of a
scope inquiry, including an anticircumvention inquiry. In addition, in
accordance with 19 CFR 351.225(f)(1), a
notice of the initiation of an anticircumvention inquiry issued under 19
CFR 351.225(e) will include a
description of the product that is the
subject of the anti-circumvention
inquiry—in this case, cut-to-length
tissue paper that contains the
characteristics as provided in the scope
of the order—and an explanation of the
reasons for the Department’s decision to
initiate an anti-circumvention inquiry,
as provided below.
With regard to whether the
merchandise from Thailand is of the
same class or kind as the merchandise
produced in the PRC, the petitioner has
presented information indicating that
the merchandise being imported from
Thailand is of the same class or kind as
the tissue paper produced in the PRC,
which is subject to the antidumping
duty order. The merchandise from
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Thailand shares physical characteristics
with the merchandise covered by the
antidumping duty order.
With regard to completion of
merchandise in a foreign country, the
petitioner has also presented
information that the tissue paper from
Thailand is being processed in Thailand
using PRC jumbo rolls and/or sheets of
tissue paper as the input.
With regard to whether the
conversion of PRC jumbo rolls and/or
sheets of tissue paper into cut-to-length
tissue paper from Thailand is a ‘‘minor
or insignificant process,’’ the petitioner
addressed the relevant statutory factors
used to determine whether the
processing of jumbo rolls and sheets of
tissue paper is minor or insignificant
with the best information available to
the petitioner at the time of the request.
The petitioner relied on information
obtained from its market researcher for
this purpose. See September 10, 2008,
anti-circumvention inquiry request at
Exhibit 6.
Having established through direct
contact the reliability of the data
presented by the market researcher in
Exhibit 6, we find that the information
presented by the petitioner supports its
request to initiate an anti-circumvention
inquiry. In particular, the petitioner
provides evidence for each of the
criteria provided in the statute,
including the following: (1) Sunlake’s
corporate and financial profile suggests
little investment has been made in
Sunlake; (2) because ZMGM has a fully
integrated production facility and is
affiliated with Sunlake, it is reasonable
to infer that R&D takes place in the PRC;
(3) cutting, folding and packaging (i.e.,
the converting process) do not alter the
fundamental characteristics of the tissue
paper; (4) Sunlake’s rented facilities
suggest a lower investment level than
that required by the capital-intensive
nature of the papermaking process; and
(5) Sunlake’s limited operations suggest
that converting tissue paper adds little
value to the merchandise imported into
the United States.
With respect to the value of the
merchandise produced in the PRC, the
petitioner relied on the information and
arguments in the ‘‘minor or insignificant
process’’ portion of its anticircumvention request to indicate that
the value of jumbo rolls and sheets of
tissue paper is significant relative to the
total value of finished merchandise
exported to the United States. We find
that the information adequately meets
the requirements of this factor, as
discussed above.
Finally, the petitioner argued that the
Department should also consider the
pattern of trade, affiliation, and
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63691
subsequent import volume as factors in
determining whether to initiate the anticircumvention inquiry. The import
information submitted by the petitioner
indicates that U.S. imports of tissue
paper from Thailand are rising
significantly, and that the volume of
tissue paper shipments from the PRC to
Thailand has increased significantly. In
addition, the petitioner provides
information suggesting that Sunlake’s
affiliation with a known producer of the
subject merchandise in the PRC, the
timing of Sunlake’s establishment, and
the nature of Sunlake’s operations
reflect an intention to shift completion
of merchandise subject to the order from
the PRC to Thailand.
Accordingly, we are initiating a
formal anti-circumvention inquiry
concerning the antidumping duty order
on certain tissue paper products from
the PRC, pursuant to section 781(b) of
the Act. In accordance with 19 CFR
351.225(l)(2), if the Department issues a
preliminary affirmative determination,
we will then instruct U.S. Customs and
Border Protection to suspend
liquidation and require a cash deposit of
estimated duties, at the applicable rate,
for each unliquidated entry of the
merchandise at issue, entered or
withdrawn from warehouse for
consumption on or after the date of
initiation of the inquiry.
The Department is focusing its
analysis of the significance of the
production process in Thailand on the
single processor identified by the
petitioner, namely Sunlake, in its
September 10, 2008, anti-circumvention
inquiry request and about which
sufficient information to initiate an anticircumvention inquiry has been
provided. If the Department receives a
formal request from an interested party
regarding potential circumvention by
other Thai companies involved in
processing PRC jumbo rolls and/or
sheets for export to the United States
within sufficient time, we will consider
conducting the inquiries concurrently.
The Department will, following
consultation with interested parties,
establish a schedule for questionnaires
and comments on the issues. The
Department intends to issue its final
determination within 300 days of the
date of publication of this initiation
consistent with the language of section
781(f) of the Act.
This notice is published in
accordance with 19 CFR 351.225(f).
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Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Notices
Dated: October 21, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import
Administration.
[FR Doc. E8–25584 Filed 10–24–08; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
A–533–809
Certain Forged Stainless Steel Flanges
from India; Rescission of
Administrative Review
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: On August 1, 2008, the
Department of Commerce (the
Department) published the preliminary
intent to rescind and rescission in part
for the administrative review of the
antidumping duty order on certain
forged stainless steel flanges (stainless
steel flanges) from India manufactured
by Pradeep Metals Limited (Pradeep)
and covering the period February 1,
2007, through January 31, 2008. See
Certain Forged Stainless Steel Flanges
from India; Preliminary Intent to
Rescind Administrative Review and
Rescission in Part, 73 FR 44969 (August
1, 2008) (Preliminary Intent). We are
rescinding the review for Pradeep
because we have determined that it had
no bona fide U.S. sales during the
period of review.
EFFECTIVE DATE: October 27, 2008.
FOR FURTHER INFORMATION CONTACT: Fred
Baker or Robert James, AD/CVD
Operations, Office 7, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–2924 or (202) 482–
0649, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
mstockstill on PROD1PC66 with NOTICES
Background
On August 1, 2008, the Department
published the Preliminary Intent. In
response to the Department’s invitation
to comment on the Preliminary Intent,
Pradeep submitted comments on August
27, 2008. However, these comments
included new, unsolicited information
after the regulatory deadline for such
information. Therefore, we returned the
submission to Pradeep, and requested
that it remove the new information. See
the Department’s letter to Pradeep dated
September 8, 2008. Pradeep resubmitted
its comments on September 17, 2008.
However, Pradeep had not removed the
VerDate Aug<31>2005
17:13 Oct 24, 2008
Jkt 217001
new, unsolicited information. Therefore,
we returned Pradeep’s comments, and
have not considered them in these final
results of review. See the Department’s
letter to Pradeep dated September 23,
2008.
We also received comments from
Rosemount, Inc. (Rosemount), the
customer for Pradeep’s U.S. sale, on
September 2, 2008. However, this
submission likewise contained new,
unsolicited information after the
deadline for such information.
Therefore, we returned the submission
to Rosemount with instructions to
remove the new information. See the
Department’s letter to Rosemount dated
September 8, 2008. We received
Rosemount’s revised comments on
September 15, 2008. However, this
version had filing deficiencies for which
we returned the submission to
Rosemount. See the Department’s letter
to Rosemount dated September 23,
2008. Rosemount submitted a revised
version on September 26, 2008.
Period of Review
The period of review is February 1,
2007, to January 31, 2008.
Scope of the Order
The products covered by this order
are certain forged stainless steel flanges,
both finished and not finished,
generally manufactured to specification
ASTM A–182, and made in alloys such
as 304, 304L, 316, and 316L. The scope
includes five general types of flanges.
They are weldneck, used for butt–weld
line connection; threaded, used for
threaded line connections; slip–on and
lap joint, used with stub–ends/butt–
weld line connections; socket weld,
used to fit pipe into a machined
recession; and blind, used to seal off a
line. The sizes of the flanges within the
scope range generally from one to six
inches; however, all sizes of the above–
described merchandise are included in
the scope. Specifically excluded from
the scope of this order are cast stainless
steel flanges. Cast stainless steel flanges
generally are manufactured to
specification ASTM A–351. The flanges
subject to this order are currently
classifiable under subheadings
7307.21.1000 and 7307.21.5000 of the
Harmonized Tariff Schedule (HTS).
Although the HTS subheadings are
provided for convenience and customs
purposes, the written description of the
merchandise under review is dispositive
of whether or not the merchandise is
covered by the scope of the order.
Final Rescission of Review
In the Preliminary Intent, we stated
that we intended to rescind the review
PO 00000
Frm 00020
Fmt 4703
Sfmt 4703
with respect to Pradeep because we had
determined, based on the totality of the
circumstances, that Pradeep’s U.S. sale
was not bona fide. See Preliminary
Intent at 44970. We received comments
from Rosemount which, as explained
below, we have addressed in the issues
and decision memorandum
accompanying this notice. Rosemount’s
comments did not change our
preliminary ruling announced in the
Preliminary Intent. Therefore, we are
rescinding this review with respect to
Pradeep.
Analysis of Comments Received
All issues raised in our Preliminary
Intent are addressed in the ‘‘Issues and
Decision Memorandum’’ from Richard
Weible, Director, Office 7, Import
Administration, to Stephen J. Claeys,
Deputy Assistant Secretary for Import
Administration, dated concurrently
with this notice (Decision
Memorandum), which is hereby
adopted by this notice. A list of the
issues which parties have raised and to
which we have responded, all of which
are in the Decision Memorandum, is
attached to this notice as an appendix.
Parties can find a complete discussion
of all issues raised in this review and
the corresponding recommendations in
this public memorandum which is on
file in the Central Records Unit, room
1117 of the main Department of
Commerce building. In addition, a
complete version of the decision
memorandum can be accessed directly
on the Web at https://ia.ita.doc.gov/frn/
release/release.html. The paper copy
and electronic version of the decision
memorandum are identical in content.
Assessment
The Department will instruct U.S.
Customs and Border Protection (CBP) to
assess antidumping duties on all
appropriate entries. For Pradeep,
antidumping duties shall be assessed at
rates equal to the cash deposit of
estimated antidumping duties required
at the time of entry, or withdrawal from
warehouse, for consumption, in
accordance with 19 CFR
351.212(c)(1)(i). The Department
intends to issue appropriate assessment
instructions directly to CBP 15 days
after publication of this notice.
Notification to Interested Parties
This notice also serves as a final
reminder to importers of their
responsibility under 19 CFR
351.402(f)(2) to file a certificate
regarding the reimbursement of
antidumping duties prior to liquidation
of the relevant entries during this
review period. Failure to comply with
E:\FR\FM\27OCN1.SGM
27OCN1
]]>Agencies
[Federal Register Volume 73, Number 208 (Monday, October 27, 2008)]
[Notices]
[Pages 63688-63692]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25584]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-894]
Certain Tissue Paper Products From the People's Republic of
China: Notice of Initiation of Anti-circumvention Inquiry
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from Seaman Paper Company of
Massachusetts, Inc. (the petitioner), the Department of Commerce (the
Department) is initiating an anti-circumvention inquiry to determine
whether certain imports of tissue paper from Thailand are circumventing
the antidumping duty order on certain tissue paper products (tissue
paper) from the People's Republic of China (PRC). 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) (Tissue Paper Order).
DATES: Effective Date: October 27, 2008.
FOR FURTHER INFORMATION CONTACT: Brian Smith or Gemal Brangman, AD/CVD
Operations, Office 2, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1766 or (202) 482-3773, respectively.
SUPPLEMENTARY INFORMATION:
Background
On September 10, 2008, the petitioner submitted a letter requesting
that the Department initiate and conduct an anti-circumvention inquiry,
pursuant to section 781(b) of the Tariff Act of 1930, as amended (the
Act), and 19 CFR 351.225(h), to determine whether imports of tissue
paper from Thailand which Sunlake D[eacute]cor Co., Ltd. (Sunlake) \1\
made from jumbo rolls and cut sheets of tissue paper produced in the
PRC are circumventing the antidumping duty order on tissue paper from
the PRC. Specifically, the petitioner alleges that PRC-produced jumbo
rolls and cut sheets of tissue paper sent to Thailand for completion or
assembly into merchandise of the same class or kind as that covered by
the antidumping duty order on tissue paper from the PRC are
circumventing that order.
---------------------------------------------------------------------------
\1\ Sunlake is a company located in Thailand.
---------------------------------------------------------------------------
On September 19, 2008, Department officials met with the
petitioner's counsel to discuss the petitioner's September 10, 2008,
anti-circumvention inquiry request. See memorandum to the file
entitled, ``Meeting with Counsel for the Petitioner,'' dated September
24, 2008.
On September 25, 2008, Department officials spoke with the foreign
market researcher who provided certain information contained in the
anti-circumvention inquiry request. See memorandum to the file
entitled, ``Telephone Conversation with Foreign Market Researcher,''
dated September 29, 2008.
To date, we have received no comments from Sunlake on this matter.
Scope of the Order
The tissue paper products subject to 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.
Tissue paper products subject to this order do not have specific
classification numbers assigned to them under the Harmonized Tariff
Schedule of the United States (HTSUS) and appear to be imported under
one or more of the several different ``basket'' categories, including
but not necessarily limited to the following subheadings: HTSUS
4802.30, HTSUS 4802.54, HTSUS 4802.61, HTSUS 4802.62, HTSUS 4802.69,
HTSUS 4804.39, HTSUS 4806.40, HTSUS 4808.30, HTSUS 4808.90, HTSUS
4811.90, HTSUS 4823.90, HTSUS 9505.90.40.
Although the HTSUS subheadings are provided for convenience and
customs purposes, the written description of the scope of the
investigation is dispositive.
Excluded from the scope of the 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; and (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).
Initiation of Anti-Circumvention Proceeding
Applicable Statute
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 anti-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
[[Page 63689]]
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; (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; and (E) the administering
authority determines that action is appropriate to prevent evasion of
such order or finding. As discussed below, the petitioner presented
evidence with respect to these criteria.
A. Merchandise of the Same Class or Kind
The petitioner argues that the tissue paper from Thailand, which it
alleges Sunlake D[eacute]cor Co., Ltd. (Sunlake) completes or assembles
(e.g., such as cutting to length, possibly folding, and packaging) in
Thailand before exporting it to the United States, is produced from
jumbo rolls and sheets of PRC-origin tissue paper obtained from its
affiliate, Zhangzhou MagicPro G.M. Arts and Crafts Co., Ltd. (ZMGM),
and is physically identical to the subject merchandise cut-to-length
tissue paper from the PRC. Accordingly, pursuant to section
781(b)(1)(A)(i) of the Act, the petitioner claims this tissue paper is
of the same class or kind as the tissue paper produced in the PRC,
which is subject to the antidumping duty order.
B. Completion of Merchandise in a Foreign Country
The petitioner states that the tissue paper that is the subject of
the anti-circumvention inquiry request is made from jumbo rolls and
sheets of tissue paper produced in the PRC and converted (i.e., cut-to-
length, possibly folded, and packaged) into cut-to-length sheets of
tissue paper in Thailand for export to the United States. The
petitioner argues that unlike Sunlake's PRC affiliate (i.e., ZMGM),
which has a production facility capable of producing tissue paper,
Sunlake's facility in Thailand only has the ability to convert jumbo
rolls and/or sheets of tissue paper into cut-to-length tissue paper and
package it for exportation. The petitioner therefore concludes that,
pursuant to section 781(b)(1)(B)(ii) of the Act, Sunlake's cut-to-
length tissue paper is merchandise completed in another foreign country
(Thailand) from merchandise that is produced in a country (the PRC)
subject to an antidumping order which includes cut-to-length tissue
paper in its scope.
C. Minor or Insignificant Process
The petitioner argues that for the purpose of section 781(b)(1)(C)
of the Act, conversion of jumbo rolls and/or sheets of tissue paper
produced in the PRC into cut-to-length tissue paper in Thailand is a
``minor or insignificant process'' as defined by the Act. According to
the petitioner, the record of this proceeding contains substantial and
detailed evidence demonstrating that converting jumbo rolls and sheets
of tissue paper is a minor or insignificant process. The petitioner
states that cutting and packaging tissue paper are operations that
merely impart the final sheet size and form in which the product is
delivered to the ultimate customer. The petitioner also states that the
most fundamental aspects of the merchandise, such as the basis weight,
texture, quality, and other special characteristics that may be
required if the paper is intended for printing, are irrevocably
established when the paper is produced. Furthermore, the petitioner
claims that the types of minor assembly operations described above with
respect to converting jumbo rolls and sheets of tissue paper are
consistent with the information its market researcher obtained from
Sunlake's facility in Thailand. See September 10, 2008, anti-
circumvention inquiry request at Exhibit 6.
The petitioner states that converting the tissue involves two to
three minor processes typically performed by hand in Thailand: cutting
the tissue to a specific size, folding it (by hand) and packaging it
for export (by hand). The petitioner contends that, based on the
information obtained from its market researcher, Sunlake only has
converting operations in Thailand. The petitioner cites to an affidavit
in its anti-circumvention inquiry request (at Exhibit 6), wherein its
market researcher reported first-hand knowledge of the operations at
the Sunlake facility based on a site visit during which the market
researcher observed only converting operations. Therefore, the
petitioner argues, the statements made by the market researcher in its
affidavit confirm that Sunlake's converting operations involve cutting,
hand-folding and hand-packaging, rather than highly capital-intensive
and automated activities relevant to tissue paper production, and are
therefore ``minor or insignificant'' processes.
The petitioner argues that an analysis of the relevant statutory
factors of section 781(b)(2) of the Act further supports its conclusion
that the processing in Thailand is ``minor or insignificant.'' These
factors include: (1) Level of investment in the foreign country; (2)
level of research and development in the foreign country; (3) nature of
the production process in the foreign country; (4) extent of production
facilities in the foreign country; and (5) whether the value of the
processing in the foreign country represents a small proportion of the
value of the merchandise imported into the United States.
The petitioner argues that the processing in Thailand is ``minor
and insignificant'' as the term is defined in section 781(b)(2) of the
Act when compared to the complex, highly capital-intensive, skilled
operations required to produce lightweight tissue paper from pulp,
chemicals, and dyes. The petitioner's analysis of the statutory factors
follows below.
(1) Level of Investment
The petitioner claims that available information concerning
Sunlake's operations indicates that little investment has been or is
being made in Thailand. The petitioner argues that Sunlake's business
model indicates that Sunlake only serves as a converting operation and
an export platform for Magicpro companies to the PRC (including ZMGM)
and is not an integrated production operation (see page 41 of the anti-
circumvention inquiry request). This assessment is consistent with the
fact that Sunlake rents but does not own its own facilities, and that
its converting operations are much less capital-intensive and more
susceptible to relocation than papermaking operations. The petitioner
further argues that ZMGM would have no desire to set up an operation in
Thailand that would compete with its own production operations. The
petitioner concludes that the level of investment in the Thailand
processing facility is low.
(2) Level of Research and Development
The petitioner maintains that the evidence reasonably available
indicates that no research and development (R&D) is taking place in
Thailand. The petitioner states that because Sunlake is affiliated with
ZMGM, it is reasonable to presume that any R&D efforts would originate
at ZMGM in the PRC. Furthermore, the petitioner states that tissue
paper production is a mature industry and any technical developments
are refinements rather than new technologies. Converting operations
also reflect mature technologies, according to the petitioner, and the
Thai converting operations involve hand-folding and packaging, which
are less automated
[[Page 63690]]
and less R&D-intensive activities than those found in the United
States. See September 10, 2008, anti-circumvention inquiry request at
page 43.
(3) Nature of the Production Process in Thailand
The petitioner argues that the data obtained from its market
researcher indicate that Sunlake's operations in Thailand are limited
to PRC-origin jumbo rolls and sheets being cut to size (if necessary)
and packed by hand prior to export. They involve unskilled manual labor
in contrast to skilled labor required for papermaking. Therefore, the
petitioner contends that Sunlake's ``production process'' reflects
operations that are designed to assemble or complete the merchandise in
a minor or insignificant fashion. See September 10, 2008, anti-
circumvention inquiry request at page 44. The petitioner notes that all
of the operations observed and documented by its market researcher are
designed and intended to convert (cut and/or package) the tissue paper
imported into Thailand without altering its fundamental and critical
characteristics of basis weight, quality, and texture that are
established during the papermaking stage of production.
(4) Extent of Production in Thailand
The petitioner states that Sunlake's operations are housed in
rented facilities, a fact which suggests a lower level of investment
than that which would be required by the capital-intensive nature of
papermaking operations. The petitioner also states that Sunlake does
not have papermaking operations. According to the petitioner, the
capital-intensive nature of papermaking operations requires that the
necessary machinery be permanently placed and operated, while
converting and packaging operations can be temporarily housed and are
easily movable. The petitioner claims that this information supports a
determination that Sunlake was established as a means for the Magicpro
companies in the PRC (including ZMGM) to continue using their tissue
paper production capacity and doing business in the U.S. market without
paying duties.
(5) Value of Thailand Processing Compared to Tissue Paper Imported Into
the United States
The petitioner states that it does not have access to information
concerning the cost of the jumbo rolls and sheets of tissue paper
exported from the PRC to Sunlake, or the costs associated with the
converting operations performed in Thailand; however, it contends that
data from the record of the anti-circumvention inquiry regarding tissue
paper exports from Vietnam support a determination that the value of
processing performed in Thailand represents a small portion of the
value of the merchandise imported into the United States. Specifically,
in the Vietnam anti-circumvention inquiry, the Department determined
that the same type of conversion processes were minor or insignificant
for purposes of the statute, and that inclusion of the resulting tissue
paper in the order was appropriate to avoid circumvention of the order.
See 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, 73 FR
21580 (April 22, 2008) (which was upheld in Certain Tissue Paper
Products From the People's Republic of China: Affirmative Final
Determination of Circumvention of the Antidumping Duty Order, 73 FR
57591 (October 3, 2008)). In fact, the petitioner notes that in the
anti-circumvention inquiry involving Vietnam, the activities performed
by the Vietnamese entity at issue included more involved forms of
processing (e.g., dip-dying) which would add greater amounts of value
than merely converting jumbo rolls and, particularly, sheets. In
contrast, the petitioner contends that Sunlake is importing the jumbo
rolls and sheets and is only converting them without additional
processing (such as dip-dying).
D. Value of Merchandise Produced in PRC
The petitioner argues that the evidence as noted in its anti-
circumvention inquiry request clearly supports its position that the
value of the tissue paper jumbo rolls and sheets produced in the PRC
and sent to Sunlake represents a significant portion of the total value
of the merchandise exported to the United States, as measured by the
prices at which jumbo rolls and cut tissue paper sheets are produced
and/or sold at market value. The petitioner notes that this conclusion
is particularly supported by the fact that Sunlake's activities are
limited to cutting and folding (if necessary), packing, and shipping
the finished tissue paper product.
E. Factors To Consider in Determining Whether Action Is Necessary
The petitioner argues that additional factors must be considered in
the Department's decision whether to issue a finding of circumvention
regarding importation of Thai tissue paper. These factors are discussed
below.
Pattern of Trade
The petitioner states that section 781(b)(3) of the Act directs the
Department to take into account patterns of trade when making a
decision in an anti-circumvention case. The petitioner argues that two
months after the antidumping duty order was issued, substantial volumes
of certain tissue paper products began appearing as U.S. imports from
Thailand through Sunlake, and have continued since then. The petitioner
bases this claim on an analysis of publicly available U.S. import
statistics and company-specific information from the Port Import Export
Reporting Service (PIERS). See September 10, 2008, anti-circumvention
inquiry request at Exhibits 1 and 2.
Affiliation
The petitioner states that section 781(b)(3) of the Act directs the
Department to take into account whether the manufacturer or exporter of
the merchandise is affiliated with the person who uses the merchandise
to assemble or complete in the foreign country the merchandise that is
subsequently imported into the United States when making a decision in
an anti-circumvention case. The petitioner contends that Sunlake is
affiliated with multiple Magicpro companies worldwide, including ZMGM,
which is known to be a tissue paper producer in the PRC. See September
10, 2008, anti-circumvention inquiry request at pages 51-52 and Exhibit
6. The petitioner argues that the affiliation, the timing of Sunlake's
establishment and the nature of the company's operation (i.e.,
importing rolls and/or sheets to be converted and then exporting them)
suggest a clear intention to shift completion of merchandise under
order from the PRC to Thailand. See September 10, 2008, anti-
circumvention request at page 52.
Subsequent Import Volume
The petitioner states that section 781(b)(3) of the Act directs the
Department to take into account whether imports into the foreign
country of the merchandise have increased after the initiation of the
investigation which resulted in the issuance of an order when making a
decision in an anti-circumvention case. The petitioner claims it does
not have access to precise data concerning trade flows of jumbo rolls
and sheets of tissue paper between Magicpro companies in the PRC and
Sunlake in Thailand; however, it maintains that import data
[[Page 63691]]
from World Trade Atlas show that the volume of tissue paper shipments
from the PRC to Thailand increased significantly after the original
investigation was initiated and the antidumping duty order was issued
in this proceeding. In addition, the petitioner notes that it is
impossible that Sunlake would have received jumbo rolls before May 17,
2005, because the company did not exist before then. See September 10,
2008, anti-circumvention inquiry request at pages 6 and 53.
The petitioner also points out that the evidence concerning
Thailand's prior lack of exports of tissue paper to the United States,
coupled with the emergence of large export volumes of tissue paper from
Thailand starting four months after the petition was filed, provides a
reasonable basis for inferring that jumbo roll and large tissue sheet
imports into Thailand from the PRC increased after the initiation of
the original investigation in this proceeding. See September 10, 2008,
anti-circumvention inquiry request at page 53.
Analysis
Based on our analysis of the petitioner's September 10, 2008, anti-
circumvention inquiry request, the Department determines that a formal
anti-circumvention inquiry is warranted. In accordance with 19 CFR
351.225(e), if the Department finds that the issue of whether a product
is included within the scope of an order cannot be determined based
solely upon the request and the descriptions of the merchandise, the
Department will notify by mail all parties on the Department's scope
service list of the initiation of a scope inquiry, including an anti-
circumvention inquiry. In addition, in accordance with 19 CFR
351.225(f)(1), a notice of the initiation of an anti-circumvention
inquiry issued under 19 CFR 351.225(e) will include a description of
the product that is the subject of the anti-circumvention inquiry--in
this case, cut-to-length tissue paper that contains the characteristics
as provided in the scope of the order--and an explanation of the
reasons for the Department's decision to initiate an anti-circumvention
inquiry, as provided below.
With regard to whether the merchandise from Thailand is of the same
class or kind as the merchandise produced in the PRC, the petitioner
has presented information indicating that the merchandise being
imported from Thailand is of the same class or kind as the tissue paper
produced in the PRC, which is subject to the antidumping duty order.
The merchandise from Thailand shares physical characteristics with the
merchandise covered by the antidumping duty order.
With regard to completion of merchandise in a foreign country, the
petitioner has also presented information that the tissue paper from
Thailand is being processed in Thailand using PRC jumbo rolls and/or
sheets of tissue paper as the input.
With regard to whether the conversion of PRC jumbo rolls and/or
sheets of tissue paper into cut-to-length tissue paper from Thailand is
a ``minor or insignificant process,'' the petitioner addressed the
relevant statutory factors used to determine whether the processing of
jumbo rolls and sheets of tissue paper is minor or insignificant with
the best information available to the petitioner at the time of the
request. The petitioner relied on information obtained from its market
researcher for this purpose. See September 10, 2008, anti-circumvention
inquiry request at Exhibit 6.
Having established through direct contact the reliability of the
data presented by the market researcher in Exhibit 6, we find that the
information presented by the petitioner supports its request to
initiate an anti-circumvention inquiry. In particular, the petitioner
provides evidence for each of the criteria provided in the statute,
including the following: (1) Sunlake's corporate and financial profile
suggests little investment has been made in Sunlake; (2) because ZMGM
has a fully integrated production facility and is affiliated with
Sunlake, it is reasonable to infer that R&D takes place in the PRC; (3)
cutting, folding and packaging (i.e., the converting process) do not
alter the fundamental characteristics of the tissue paper; (4)
Sunlake's rented facilities suggest a lower investment level than that
required by the capital-intensive nature of the papermaking process;
and (5) Sunlake's limited operations suggest that converting tissue
paper adds little value to the merchandise imported into the United
States.
With respect to the value of the merchandise produced in the PRC,
the petitioner relied on the information and arguments in the ``minor
or insignificant process'' portion of its anti-circumvention request to
indicate that the value of jumbo rolls and sheets of tissue paper is
significant relative to the total value of finished merchandise
exported to the United States. We find that the information adequately
meets the requirements of this factor, as discussed above.
Finally, the petitioner argued that the Department should also
consider the pattern of trade, affiliation, and subsequent import
volume as factors in determining whether to initiate the anti-
circumvention inquiry. The import information submitted by the
petitioner indicates that U.S. imports of tissue paper from Thailand
are rising significantly, and that the volume of tissue paper shipments
from the PRC to Thailand has increased significantly. In addition, the
petitioner provides information suggesting that Sunlake's affiliation
with a known producer of the subject merchandise in the PRC, the timing
of Sunlake's establishment, and the nature of Sunlake's operations
reflect an intention to shift completion of merchandise subject to the
order from the PRC to Thailand.
Accordingly, we are initiating a formal anti-circumvention inquiry
concerning the antidumping duty order on certain tissue paper products
from the PRC, pursuant to section 781(b) of the Act. In accordance with
19 CFR 351.225(l)(2), if the Department issues a preliminary
affirmative determination, we will then instruct U.S. Customs and
Border Protection to suspend liquidation and require a cash deposit of
estimated duties, at the applicable rate, for each unliquidated entry
of the merchandise at issue, entered or withdrawn from warehouse for
consumption on or after the date of initiation of the inquiry.
The Department is focusing its analysis of the significance of the
production process in Thailand on the single processor identified by
the petitioner, namely Sunlake, in its September 10, 2008, anti-
circumvention inquiry request and about which sufficient information to
initiate an anti-circumvention inquiry has been provided. If the
Department receives a formal request from an interested party regarding
potential circumvention by other Thai companies involved in processing
PRC jumbo rolls and/or sheets for export to the United States within
sufficient time, we will consider conducting the inquiries
concurrently.
The Department will, following consultation with interested
parties, establish a schedule for questionnaires and comments on the
issues. The Department intends to issue its final determination within
300 days of the date of publication of this initiation consistent with
the language of section 781(f) of the Act.
This notice is published in accordance with 19 CFR 351.225(f).
[[Page 63692]]
Dated: October 21, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E8-25584 Filed 10-24-08; 8:45 am]
BILLING CODE 3510-DS-P
