Certain Tissue Paper Products From the People's Republic of China: Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order, 20915-20919 [E9-10477]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 86 (Wednesday, May 6, 2009)]
[Notices]
[Pages 20915-20919]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10477]


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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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

Preliminary Determination

    We preliminarily determine that certain tissue paper products 
(``tissue paper'') from Thailand exported by Sunlake D[eacute]cor Co., 
Ltd. (``Sunlake'') \1\ are made from jumbo rolls and/or cut sheets of 
tissue paper produced in the People's Republic of China (``PRC''), and 
are circumventing the antidumping duty order on tissue paper from the 
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'').
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    \1\ \\ Sunlake is a company located in Thailand.

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DATES: Effective Date: May 6, 2009.

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 Seaman Paper Company of Massachusetts, 
Inc. (``the 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 Thailand, which Sunlake made from jumbo 
rolls and/or cut sheets of tissue paper produced in the PRC, are 
circumventing the antidumping duty order on tissue paper from the PRC. 
See the petitioner's September 10, 2008, anti-circumvention inquiry 
request; Order. Specifically, the petitioner alleges that PRC-produced 
jumbo rolls and/or 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 
constitutes circumvention pursuant to section 781(b) of the Act.
    On October 21, 2008, the Department initiated a circumvention 
inquiry on certain imports of tissue paper from Thailand. See Certain 
Tissue Paper Products from the People's Republic of China: Notice of 
Initiation of Anti-circumvention Inquiry, 73 FR 63688 (October 27, 
2008) (``Initiation''). In the Initiation, the Department stated that 
it would focus its analysis on the significance of the production 
process

[[Page 20916]]

in Thailand by Sunlake (i.e., the company the petitioner identified in 
its circumvention request and about which sufficient information to 
initiate an anti-circumvention inquiry was provided).
    On November 21, 2008, the Department issued an anti-circumvention 
questionnaire to Sunlake. On December 16, 2008, Sunlake entered a 
notice of appearance in this proceeding. Also, on December 16, 2008, 
Sunlake requested additional time to file a response to the anti-
circumvention questionnaire. Pursuant to this request, the Department 
extended the questionnaire response deadline until January 9, 2009. On 
January 8, 2009, Sunlake made a second request for additional time to 
file a response to the anti-circumvention questionnaire, in response to 
which the Department granted an extension until January 23, 2009.
    On January 23, 2009, Sunlake notified the Department that it was 
unable to answer the questionnaire issued to Sunlake, and requested 
that the Department re-issue the questionnaire to focus on Sunlake's 
current operations. On January 27, 2009, the petitioner submitted 
comments in response to Sunlake's January 23, 2009, submission.
    On January 30, 2009, the Department provided Sunlake a final 
opportunity to submit a complete response to the November 21, 2008, 
questionnaire. On February 6, 2009, Sunlake reasserted that it would 
not respond to the Department's questionnaire in its current form.

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\
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    \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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    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 tissue paper products, as 
described above in the ``Scope of the Antidumping Duty Order'' section, 
which are produced in Thailand from PRC-origin jumbo rolls and/or cut 
sheets of tissue paper, and exported to the United States from Thailand 
by Sunlake.

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; (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.
    The Department's questionnaire issued to Sunlake was 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 
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); 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); Anti-Circumvention Inquiry 
of the Antidumping and Countervailing Duty Orders on Certain Pasta from 
Italy: Affirmative Final Determinations of Circumvention of Antidumping 
and Countervailing Duty Orders, 68 FR 54888 (September 19, 2003); 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). Sunlake failed to provide any of the information requested in 
the Department's questionnaire.

Facts Available

    Section 776(a)(2) of the Act provides that the Department will 
apply ``facts otherwise available'' if an interested party: (A) 
Withholds information that has been requested by the Department; (B) 
fails to provide such information in a timely manner or in the form or 
manner requested subject to sections 782(c)(1) and (e) of the Act; (C) 
significantly impedes a proceeding under the antidumping statute; or 
(D) provides such information but the

[[Page 20917]]

information cannot be verified, the Department shall, subject to 
subsection 782(d) of the Act, use facts otherwise available in reaching 
the applicable determination.
    Section 782(d) of the Act provides that if the Department 
determines that a response to a request for information does not comply 
with that request, the Department is obligated to ``promptly inform'' 
the respondent submitting the response as to the ``nature of the 
deficiency'' and, to the ``extent practicable, provide that person with 
an opportunity to remedy or explain the deficiency'' in light of the 
established time limits. If the Department finds the respondent's 
submission to be ``not satisfactory,'' section 782(d) allows the 
Department to disregard all or part of the submission.
    As stated in the ``Background'' section, above, on November 21, 
2008, the Department issued an anti-circumvention questionnaire to 
Sunlake. The original deadline to file a response to this questionnaire 
was December 19, 2008. At Sunlake's request, the Department extended 
this deadline to January 9, 2009, and then to January 23, 2009. On 
January 23, 2009, Sunlake notified the Department that it was 
``unable'' to answer the Department's questionnaire because the 
questionnaire was ``allegedly premised upon the petitioners' erroneous 
assumption that Sunlake is currently engaged in the manufacture and 
export to the United States of cut-to-length tissue products made from 
jumbo rolls produced of Chinese origin that are converted in Sunlake's 
facility in Thailand.'' Sunlake conceded in its January 23, 2009, 
letter that prior to August 2008, its operations in Thailand involved 
minor conversion of PRC-origin jumbo rolls into cut-to-length tissue 
paper products. Sunlake refused to answer questions about its 
production activities before August 2008, and argued that the 
Department should re-issue its questionnaire to focus only on Sunlake's 
current operations, which it claimed incorporate only Thai-origin jumbo 
rolls in the production of cut-to-length tissue paper products.
    On January 27, 2009, the petitioner submitted comments in response 
to Sunlake's January 23, 2009, submission. The petitioner argued that 
due to Sunlake's failure to respond to the questionnaire, the 
Department should resort to facts available and immediately issue an 
affirmative preliminary determination of circumvention, in conjunction 
with the imposition of suspension of liquidation and cash deposit 
requirements on all shipments of tissue paper products from Sunlake.
    On January 30, 2009, the Department provided Sunlake a final 
opportunity to submit a complete response to the November 21, 2008 
questionnaire. The Department informed Sunlake that in order for the 
Department to properly assess and verify Sunlake's manufacturing and 
selling practices for purposes of determining whether it is 
circumventing the antidumping duty order on tissue paper from the PRC, 
it was necessary that Sunlake respond fully to the questions contained 
in the Department's November 21, 2008, questionnaire. The Department 
also notified Sunlake that although it had already given the company 
ample time to respond to the anti-circumvention questionnaire, the 
Department would allow it one final opportunity to respond, and 
accordingly extended the response deadline until February 6, 2009.
    On February 6, 2009, Sunlake reasserted that it would not respond 
to the Department's November 21, 2008, questionnaire.
    The Department gave Sunlake over two months to respond to the 
November 21, 2008 questionnaire and, consistent with section 782(d) of 
the Act, explained to Sunlake why a complete response to the 
questionnaire was necessary, as discussed above. Sunlake, for its part, 
chose not to provide any of the information requested by the 
Department. Because Sunlake failed to answer the Department's 
questionnaire, despite being given ample opportunity to do so, the 
Department is not able to properly assess (or verify) Sunlake's 
manufacturing and selling practices for purposes of determining whether 
it is currently circumventing the antidumping duty order on tissue 
paper from the PRC, or has circumvented the order in the past. 
Therefore, pursuant to sections 776(a)(2)(A), (B), and (C) of the Act, 
the Department preliminarily finds that the use of facts available is 
appropriate for Sunlake in this proceeding.

Application of Adverse Facts Available

    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to make an adverse 
inference if the Department finds that an interested party failed to 
cooperate by not acting to the best of its ability to comply with the 
request for information. See, e.g., Notice of Final Results of 
Antidumping Duty Administrative Review: Stainless Steel Bar from India, 
70 FR 54023, 54025-26 (Sept. 13, 2005); see also Notice of Final 
Determination of Sales at Less Than Fair Value and Final Negative 
Critical Circumstances: Carbon and Certain Alloy Steel Wire Rod from 
Brazil, 67 FR 55792, 55794-96 (Aug. 30, 2002). Adverse inferences are 
appropriate ``to ensure that the party does not obtain a more favorable 
result by failing to cooperate than if it had cooperated fully.'' See 
Statement of Administrative Action accompanying the Uruguay Round 
Agreements Act, H. Rep. No. 103-316, Vol. 1, at 870 (1994) (``SAA''). 
Furthermore, ``affirmative evidence of bad faith on the part of a 
respondent is not required before the Department may make an adverse 
inference.'' See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27340 (May 19, 1997). See also Nippon Steel Corp. v. 
United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003) (Nippon).
    The Department advised Sunlake during the proceeding that if it 
failed to respond to the questionnaire by the extended deadline date 
(i.e., February 6, 2009), the Department might conclude, pursuant to 
section 776(b) of the Act, that Sunlake had not acted to the best of 
its ability in this proceeding. The Department advised further that if 
it made such a determination under that provision, the application of 
adverse facts could be warranted. As explained above, Sunlake refused 
to answer the Department's questionnaire, and instead offered only to 
provide a response to specific questions of its choosing. Such a 
response is unacceptable and the Department will not allow Sunlake to 
supply only enough information ``to obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' We therefore 
find that Sunlake did not act to the best of its ability in this 
proceeding, within the meaning of section 776(b) of the Act. Thus, an 
adverse inference is warranted in selecting the facts otherwise 
available. See Nippon, 337 F. 3d at 1382-83. Accordingly, as adverse 
facts available (``AFA''), we preliminarily consider all of Sunlake's 
exports of tissue paper from Thailand to be of PRC origin, and conclude 
that Sunlake is circumventing the antidumping duty order on tissue 
paper from the PRC.
    Section 776(b) of the Act authorizes the Department to use as AFA, 
information derived from the petition, the final determination in the 
less-than-fair-value (``LTFV'') investigation, any previous 
administrative review, or any information placed on the record. In 
selecting an AFA rate in post-LTFV segments, the Department's practice 
has been to assign the highest margin on the record of any segment of 
the proceeding. See, e.g., Freshwater Crawfish Tail Meat

[[Page 20918]]

from the People's Republic of China: Notice of Final Results of 
Antidumping Duty Administrative Review, 68 FR 19504 (April 21, 2003). 
The Court of International Trade (``CIT'') and the Federal Circuit have 
consistently upheld the Department's practice in this regard. See Rhone 
Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) 
(Rhone Poulenc); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 
(CIT 2004) (upholding a 73.55 percent total AFA rate, the highest 
available dumping margin from a different respondent in a LTFV 
investigation); see also Kompass Food Trading Int'l v. United States, 
24 CIT 678, 689 (July 31, 2000) (upholding a 51.16 percent total AFA 
rate, the highest available dumping margin from a different, fully 
cooperative respondent); and Shanghai Taoen International Trading Co., 
Ltd. v. United States, 360 F. Supp 2d 1339, 1348 (CIT 2005) (upholding 
a 223.01 percent total AFA rate, the highest available dumping margin 
from a different respondent in a previous administrative review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available rule to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). As 
discussed above, the Department's practice also ensures ``that the 
party does not obtain a more favorable result by failing to cooperate 
than if it had cooperated fully.'' See SAA at 870; see also Final 
Determination of Sales at Less than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from Brazil, 69 FR 76910 (December 23, 2004), 
and accompanying Issues and Decision Memorandum at Comment 22.
    For purposes of the preliminary determination and consistent with 
the statute, court precedent, and our normal practice, we have applied 
as AFA to Sunlake a margin of 112.64 percent, which is the highest rate 
on the record in any completed segment of this proceeding (i.e., the 
LTFV investigation, and the first and second administrative reviews). 
As discussed further below, this rate has been corroborated.

Corroboration of Adverse Facts Available Rate

    Section 776(c) of the Act provides that when the Department selects 
from among the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The SAA states that ``corroborate'' means to 
determine that the information used has probative value. See SAA at 
870. The Department has determined that to have probative value, 
information must be reliable and relevant. See Certain Tissue Paper 
Products from the People's Republic of China: Final Results and Final 
Rescission, In Part, of Antidumping Duty Administrative Review, 72 FR 
58642 (October 16, 2007), and accompanying Issues and Decision 
Memorandum at Comment 6.
    The AFA rate of 112.64 percent that we are applying in this 
determination of circumvention of the antidumping duty order on tissue 
paper from the PRC was derived from the petition and corroborated in 
the LTFV investigation. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Tissue Paper Products from the People's 
Republic of China, 70 FR 7475 (February 14, 2005). Furthermore, this 
rate was applied in a review subsequent to the LTFV investigation, and 
no information has been presented in this segment of the proceeding 
that calls into question the reliability of this information. See 
Certain Tissue Paper from the People's Republic of China: Preliminary 
Results and Preliminary Rescission, In Part, of Antidumping Duty 
Administrative Review, 72 FR 17477, 17480-17481 (April 19, 2007) 
(unchanged in Certain Tissue Paper Products from the People's Republic 
of China: Final Results and Final Rescission, In Part, of Antidumping 
Duty Administrative Review, 72FR 58642, 58644-58645 (October 16, 
2007)). Thus, the Department finds that the information is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. The AFA rate we 
are applying for this determination was calculated based on export 
price information and production data from the petition, as well as the 
most appropriate surrogate value information available to the 
Department during the LTFV investigation. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Tissue Paper 
Products from the People's Republic of China, 70 FR 7475 (February 14, 
2005). As there is no information on the record of this segment of the 
proceeding that demonstrates this rate is not appropriate for use as 
AFA, we determine this rate has relevance.
    Because the AFA rate, 112.64 percent, is both reliable and 
relevant, we determine that it has probative value. As a result, we 
determine that the 112.64 percent rate is corroborated to the extent 
practicable for the purposes of this determination, in accordance with 
section 776(c) of the Act, and may reasonably be applied to entries of 
tissue paper produced in and exported from Thailand by Sunlake as AFA.

Suspension of Liquidation

    In accordance with section 19 CFR 351.225(l), the Department will 
direct CBP to suspend liquidation and to require a cash deposit of 
estimated duties, at the rate of 112.64, on all unliquidated entries of 
certain tissue paper products produced in and exported from Thailand by 
Sunlake that were entered, or withdrawn from warehouse, for consumption 
on or after October 21, 2008, the date of initiation of the 
circumvention inquiry.

Notification to the International Trade Commission

    The Department, consistent with section 781(e) of the Act and 19 
CFR 351.225(f)(7)(i)(B), 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.

Public Comment

    Case briefs from interested parties may be submitted no later than 
30 days from the date of publication of this notice. A list of 
authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. See 19 CFR 351.309(c). This 
summary should be limited to five pages total, including footnotes. 
Rebuttal briefs limited to issues raised in the case briefs may be 
filed no later than 35 days after the date of publication of this 
notice. See 19 CFR 351.309(d).
    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

[[Page 20919]]

of Commerce, Room 1117, within 30 days after the date of publication of 
this notice. See 19 CFR 351.310. 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 40 days after the date of publication of this notice.

Final Determination

    The final determination with respect to this circumvention inquiry 
will be issued no later than August 17, 2009, 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.

Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-10477 Filed 5-5-09; 8:45 am]
BILLING CODE 3510-DS-P