Steel Wire Garment Hangers From the People's Republic of China: Initiation of Anti-Circumvention Inquiry, 42685-42689 [2010-18000]

Download as PDF Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices Atmospheric Administration (NOAA), Commerce. ACTION: Notice of initiation of 5-year review; request for information. NMFS announces a 5-year review of the Baiji/Chinese River Dolphin/Yangtze River Dolphin (Lipotes vexillifer) under the Endangered Species Act of 1973, as amended (ESA). A 5-year review is a periodic process conducted to ensure that the listing classification of a species is accurate and it is based on the best scientific and commercial data available at the time of the review; therefore, we are requesting submission of any such information on the Baiji/Chinese River Dolphin/ Yangtze River Dolphin that has become available. Based on the results of this 5year review, we will make the requisite finding under the ESA. DATES: To allow us adequate time to conduct this review, we must receive your information no later than September 20, 2010. However, we will continue to accept new information about any listed species at any time. ADDRESSES: You may submit comments, identified by [0648–XX29], by either of the following methods: Mail: Angela Somma, National Marine Fisheries Service, Office of Protected Resources, Endangered Species Division, 1325 East West Highway, Silver Spring, MD 20910 Fax: 301–713–4060, attention: Angela Somma Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal http:// www.regulations.gov, by selecting ‘‘submit a comment’’ and ID# 0648– XX29. Instructions: No comments will be posted for public viewing until after the comment period has closed. All comments received are a part of the public record and will generally be posted to http://www.regulations.gov without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). You may submit attachments to electronic comments in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only. To the extent consistent with applicable law, we will make all submissions from organizations or businesses, and from individuals identifying themselves as sroberts on DSKD5P82C1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 representatives or officials of organizations or businesses, available for public inspection in their entirety. Information received in response to this notice and review will be available for public inspection (by appointment, during normal business hours) at the above address. FOR FURTHER INFORMATION CONTACT: Larissa Plants (301) 713–1401, larissa.plants@noaa.gov. SUPPLEMENTARY INFORMATION: Background Under the ESA, a list of endangered and threatened wildlife and plant species (list) must be maintained. The list is published at 50 CFR 17.11 (for animals) and 17.12 (for plants). Section 4(c)(2)(A) of the ESA requires that we conduct a review of listed species at least once every 5 years. On the basis of such reviews under section 4(c)(2)(B), we determine whether or not any species should be removed from the list (delisted), or reclassified from endangered to threatened or from threatened to endangered. Delisting a species must be supported by the best scientific and commercial data available and only considered if such data substantiates that the species is neither endangered nor threatened for one or more of the following reasons: (1) the species is considered extinct; (2) the species is considered to be recovered; and/or (3) the original data available when the species was listed, or the interpretation of such data, were in error. Any change in federal classification would require a separate rulemaking process. The regulations (50 CFR 424.21) require that we publish a notice in the Federal Register announcing those species currently under active review. This notice announces our active review of the Baiji/Chinese River Dolphin/Yangtze River Dolphin (Lipotes vexillifer) currently listed as endangered. Public Solicitation of New Information To ensure that the 5-year review is complete and based on the best available scientific and commercial information, we are soliciting new information from the public, concerned governmental agencies, tribes, the scientific community, industry, environmental entities, and any other interested parties concerning the status of the Baiji/Chinese River Dolphin/ Yangtze River Dolphin (Lipotes vexillifer). Five-year reviews consider the best scientific and commercial data and all new information that has become available since the listing determination PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 42685 or most recent status review. Categories of requested information include the following: (A) species biology, including, but not limited to, population trends, distribution, abundance, demographics, and genetics; (B) habitat conditions, including, but not limited to, amount, distribution, and suitability; (C) conservation measures that have been implemented that benefit the species; (D) status and trends of threats; and (E) other new information, data, or corrections, including, but not limited to, taxonomic or nomenclatural changes, identification of erroneous information contained in the list, and improved analytical methods. If you wish to provide information for this 5-year review, you may submit your information and materials to Angela Somma (see ADDRESSES). Authority: 16 U.S.C. 1531 et seq. Dated: July 15, 2010. Therese Conant, Acting Chief, Endangered Species Division, Office of Protected Resources, National Marine Fisheries Service. [FR Doc. 2010–17832 Filed 7–21–10; 8:45 am] BILLING CODE 3510–22–S DEPARTMENT OF COMMERCE International Trade Administration [A–570–918] Steel Wire Garment Hangers From the People’s Republic of China: Initiation of Anti-Circumvention Inquiry Import Administration, International Trade Administration, Commerce. SUMMARY: In response to requests from the M&B Metal Products Co., Inc. (‘‘Petitioner’’), the Department of Commerce (‘‘Department’’) is initiating an anti-circumvention inquiry to determine whether certain imports of steel wire garment hangers from the Socialist Republic of Vietnam (‘‘Vietnam’’) are circumventing the antidumping duty order on steel wire garment hangers (‘‘hangers’’) from the People’s Republic of China (‘‘PRC’’). See Notice of Antidumping Duty Order: Steel Wire Garment Hangers from the People’s Republic of China, 73 FR 58111 (October 6, 2008) (‘‘Hangers Order’’). DATES: Effective Date: July 22, 2010. FOR FURTHER INFORMATION CONTACT: Irene Gorelik, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482–6905. AGENCY: E:\FR\FM\22JYN1.SGM 22JYN1 42686 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices sroberts on DSKD5P82C1PROD with NOTICES SUPPLEMENTARY INFORMATION: Background On May 5, 2010, pursuant to section 781(b) of the Tariff Act of 1930, as amended (‘‘Act’’), and 19 CFR 351.225(h), Petitioner submitted requests for the Department to initiate and conduct an anti-circumvention inquiry of two Vietnamese companies to determine whether hangers composed of low-grade steel wire, which are allegedly products of the PRC exported from Vietnam, are circumventing the Hangers Order. In its two requests, Petitioner alleges that PRC manufacturers of subject merchandise have been circumventing the Hangers Order by using two Vietnamese companies to export their hangers. Specifically, in its requests, Petitioner claims that Angang Clothes Rack Manufacture Co., Ltd. (‘‘Angang’’) is circumventing the Hangers Order with the help of its alleged affiliate, PRC-based Shaoxing Gangyuan Metal Manufactured Co., Ltd. (‘‘Gangyuan’’) and that Quyky Yanglei International Co., Ltd. (‘‘Quyky’’) is circumventing the Hangers Order with the help of its alleged affiliates, PRC-based Shanghai Ruishan Metal Products Co., Ltd. and Zhejiang Taizhou Hongda Metal Products Co., Ltd. (collectively, ‘‘Ruishan-Taizhou’’). Petitioner further alleges that Gangyuan and RuishanTaizhou are supplying pre-formed hangers to Angang and Quyky, respectively, for completion or assembly into merchandise of the same class or kind as the merchandise covered by the Hangers Order and that this constitutes circumvention. On May 20, 2010, the Department sent a supplemental questionnaire to Petitioner regarding the requests to initiate the anti-circumvention inquiry. On May 25, 2010, Petitioner provided a response to the Department’s supplemental questionnaire. On May 25, 2010, Department met with the foreign market researcher (‘‘FMR’’) to discuss certain information contained in the anti-circumvention inquiry requests. See ‘‘Memorandum to the File through Catherine Bertrand, Program Manager, Office 9, from Irene Gorelik, Senior Analyst, Office 9; Meeting with Foreign Market Researcher,’’ dated June 1, 2010. Neither Quyky nor Angang submitted comments regarding Petitioner’s circumvention allegations. Neither Gangyuan nor Ruishan-Taizhou submitted comments regarding Petitioner’s allegations that they are involved in the circumvention of the Hangers Order. On June 14, 2010, the Department extended the deadline to initiate an VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 anti-circumvention inquiry by 30 days, pursuant to 19 CFR 351.302(b).1 Scope of the Order The merchandise that is subject to the order is steel wire garment hangers, fabricated from carbon steel wire, whether or not galvanized or painted, whether or not coated with latex or epoxy or similar gripping materials, and/or whether or not fashioned with paper covers or capes (with or without printing) and/or nonslip features such as saddles or tubes. These products may also be referred to by a commercial designation, such as shirt, suit, strut, caped, or latex (industrial) hangers. Specifically excluded from the scope of the order are wooden, plastic, and other garment hangers that are not made of steel wire. Also excluded from the scope of the order are chrome-plated steel wire garment hangers with a diameter of 3.4 mm or greater. The products subject to the order are currently classified under U.S. Harmonized Tariff Schedule (‘‘HTSUS’’) subheadings 7326.20.0020 and 7323.99.9060. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise is dispositive. Initiation of Anti-Circumvention Proceeding Section 781(b)(1) 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)(1) of the Act, the Department will also evaluate whether: (1) The process of assembly or completion in the other foreign country is minor or insignificant; (2) 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 (3) action is appropriate to prevent evasion of such an order or finding. As discussed below, Petitioner presented evidence with respect to these criteria. A. Merchandise of the Same Class or Kind Petitioner states that the Hangers Order covers hangers produced from steel wire, which are often referred to as shirt, suit, strut, and/or caped hangers, imported under HTSUS 7326.20.0020, and are commonly used in the dry PO 00000 1 See Letter to Petitioner dated June 14, 2010. Frm 00009 Fmt 4703 Sfmt 4703 cleaning industry. Petitioner argues that since the merchandise being imported into the United States from Vietnam, under HTSUS 7326.20.0020, is physically identical to subject merchandise from the PRC entering the United States, pursuant to section 781(b)(1)(A)(i) of the Act, these hangers are of the same class or kind as those subject to the Hangers Order. Petitioner provided Zepol ImportIQ reports for Angang and Quyky exports showing bills of lading for merchandise identical to that which is subject to the Hangers Order. See Petitioner’s AntiCircumvention Inquiry Request for Quyky, dated May 5, 2010, at 7 and Exhibits 2, 3, and 9 (‘‘Quyky Request’’); see also Petitioner’s Anti-Circumvention Inquiry Request for Angang, dated May 5, 2010, at 7 and Exhibits 2 and 6 (‘‘Angang Request’’). B. Completion of Merchandise in a Foreign Country Petitioner states that the hangers subject to its anti-circumvention inquiry requests are made from semi-finished steel wire hangers produced in the PRC, then exported to and completed in Vietnam for re-export to the United States. Petitioner argues that the semifinished hangers are imported by Vietnamese companies 2 for end-stage processing, which consists of unskilled laborers manually affixing paper capes and paper tubes with glue to the semifinished, PRC-produced hangers. Petitioner contends that the completed merchandise is then exported to the United States as Vietnamese-origin. Petitioner also notes that the paper capes and tubes are also likely to be PRC-origin and imported into Vietnam for the end-stage processing. Therefore, Petitioner concludes that, pursuant to section 781(b)(1)(B)(ii) of the Act, Quyky’s and Angang’s hangers are merchandise completed in another foreign country (Vietnam) from merchandise that is produced in a country (the PRC) already subject to an antidumping duty order which includes hangers produced from steel wire in its scope. See Quyky Request, at 7; see also Petitioner’s Angang Request for, at 8. C. Minor or Insignificant Process Petitioner argues that for the purposes of section 781(b)(1)(C) of the Act, the process of manually affixing paper capes and tubes with glue to semifinished hangers in Vietnam is ‘‘minor or insignificant’’ as defined by the Act. According to Petitioner, the addition of 2 As noted above, Petitioner’s allegation of anticircumvention is focused on two Vietnamese companies: Quyky and Angang. E:\FR\FM\22JYN1.SGM 22JYN1 sroberts on DSKD5P82C1PROD with NOTICES Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices capes and tubes to formed shirt or strut hangers is an operation that completes the merchandise. However, Petitioner argues that the most fundamental aspect of the production process—the forming/ shaping of drawn steel wire into a hanger—occurs in the PRC with heavy and complex machinery. Citing to the factor of production consumption ratios reported by Gangyuan, one of the individually investigated PRC exporters in the underlying less-than-fair-value (‘‘LTFV’’) investigation, Petitioner contends that the steel input used in producing the hangers themselves is ‘‘by far the most significant in terms of consumption * * * ’’ and that, ‘‘ * * * there can be no question that the production process utilized to form the hangers accounts for the vast majority of the total value of the final product.’’ See Quyky Request at 10; see also Angang Request, at Exhibit 5. Petitioner further states that only manual, unskilled labor is required to affix paper capes, tubes and struts to already formed hangers, without the need for equipment or machinery. Petitioner cites to the International Trade Commission’s (‘‘ITC’’) final report, where the ITC stated that ‘‘operations such as the addition of capes and struts and painting the wire are executed by machine in the United States while they may be performed manually in China.’’ See Steel Wire Garment Hangers from China, Investigation No. 731–TA–1123 (Final), USITC Pub. 4034 (September 2008), at I–9 (‘‘ITC Report’’). Based on information obtained by Petitioner, paper capes, tubes, and struts are manually affixed to formed hangers in Vietnam. See Quyky Request at 10 and Exhibit 5; see also Angang Request at 11 and Exhibit 3. Petitioner argues that data and statements from the LTFV and ITC investigations support its statements that Vietnamese operations involving the attachment of paper capes, tubes, and struts with glue are ‘‘minor or insignificant’’ processes. Petitioner argues that an analysis of the relevant statutory factors of section 781(b)(2) of the Act further supports its conclusion that the Vietnamese processing 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. Petitioner’s analysis of these VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 factors, including citations as appropriate, is as follows. (1) Level of Investment Petitioner claims that information procured from Angang (and alleged PRC affiliate, Gangyuan) indicates that little investment has been or is being made in Vietnam. Further, Petitioner also claims that information procured from Quyky (and alleged PRC affiliates, RuishanTaizhou) indicates that little investment has been, or is being, made in Vietnam. Petitioner argues that the business model described by Angang and Quyky indicates that they only serve as hanger completion operations, are export platforms for hangers, and are not integrated production operations. Petitioner further contends that the extent of any investment in Vietnam would be the materials required to complete the hangers before exportation to the United States, such as table and chairs for the workers, glue to affix the paper capes, tubes, and struts, and packing materials. Petitioner cites to the FMR’s report for detailed descriptions of the low level of investment at Angang and Quyky. Because the FMR’s report is business proprietary information, its specific content cannot be discussed here. See Quyky Request at Exhibit 5; see also Angang Request at Exhibit 3. (2) Level of Research and Development Petitioner states that, similar to the level of investment, because Angang’s and Quyky’s operations involve manual labor and required little or no machinery or equipment, no research and development are required to set up and operate a company to assemble or complete hangers in Vietnam from Chinese components. See Quyky Request at 10 and Exhibit 5; see also Angang Request at 11 and Exhibit 3. (3) Nature of the Production Process Petitioner argues that the nature of the production process for hangers completed or assembled by Quyky and Angang is based on unskilled manual labor with little machinery or equipment required. Petitioner states that paper capes, tubes, and struts are manually attached with glue to preformed hangers that had been imported from partner producers in the PRC. Petitioner notes that once the paper capes and tubes have been affixed to the pre-formed hangers, the completed hangers are packaged into cartons for export to the United States. See Quyky Request at 10 and Exhibit 5; see also Angang Request at 11 and Exhibit 3. Petitioner adds that the most significant operation in the manufacture of hangers is not the addition of paper capes and PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 42687 tubes but rather the steel wire rod drawing process and hanger forming process. See, e.g., Angang Request at footnote 23. (4) Extent of Production in Vietnam As stated above, Petitioner contends that the extent of production in Vietnam is the simple addition of paper capes and tubes to pre-formed, PRC-produced hangers that were imported by Quyky and Angang. Petitioner states that this process requires nothing more than tables and chairs for the unskilled laborers, glue, and packing materials for exportation. (5) Value of Vietnam Processing Compared to Hangers Imported Into the United States Petitioner argues that the Vietnamese assembly of pre-formed hangers adds little value to the final product exported to the United States. Petitioner argues that the value of the final product is, most significantly, the steel input. Petitioner cites to Gangyuan’s responses in the underlying investigation, where it stated that ‘‘wire rod is the most significant input in the production of wire hangers.’’ See Angang’s Request at 10–11 and footnote 23. Petitioner further cites to Gangyuan’s material input consumption figures for the production of subject merchandise, noting that the steel input used to produce subject merchandise was, by far, the most significant input in the production process. Id., at 12. Petitioner further argues that even the paper inputs, such as capes, tubes, and struts used by Angang and Quyky in Vietnam are also supplied by the PRC, thus, the value of the manufacture of the preformed hangers and the paper attachments originate in the PRC. As stated above, Petitioner argues that the completion activities in Vietnam add very little to the hangers that are exported to the United States because the steel hanger was drawn from wire rod and formed in the PRC. D. Value of Merchandise Produced in PRC Petitioner argues that the evidence, as noted supra, in its anti-circumvention requests clearly supports its position that the value of the pre-formed hangers produced in the PRC, and then sent to Angang and Quyky, represents a significant portion of the total value of the merchandise exported to the United States, as measured by the consumption figures reported by Gangyuan in the underlying investigation and included with Petitioner’s anti-circumvention inquiry requests. E:\FR\FM\22JYN1.SGM 22JYN1 42688 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices E. Factors To Consider in Determining Whether Action Is Necessary Petitioner argues that the additional factors contained in section 781(b)(3) of the Act must also be considered in the Department’s decision whether to issue a finding of circumvention regarding Vietnamese importation of semifinished hangers. sroberts on DSKD5P82C1PROD with NOTICES Pattern of Trade Petitioner states that section 781(b)(3) of the Act directs the Department to take into account patterns of trade when making a decision whether to include merchandise assembled or completed in Vietnam within the scope of the Hangers Order. Petitioner argues that in July 2007, when Petitioner filed its antidumping petition, Vietnam was not a source of any exports of hangers to the United States. Petitioner bases these claims on an analysis of publicly available information from the ITC’s Dataweb of U.S. import data. See Quyky Request at 13 and Exhibit 9; see also Angang Request at 14 and Exhibit 6. Petitioner claims that, upon the publication of the preliminary determination in the underlying investigation, Vietnamese exports of hangers to the United States increased dramatically. See Quyky Request at Exhibit 10; see also Angang Request at Exhibit 7. Based on shipment data obtained from Zepol ImportIQ, a database of manifest data similar to PIERS, Petitioner contends that two months after the Hangers Order was issued (October 2008), Angang began to export hangers to the United States. See Angang Request at 14 and Exhibit 2. Further, based on Zepol ImportIQ, Petitioner contends that, in September 2008, one month before the Hangers Order was issued, Quyky began to ship hangers to the United States from Vietnam. See Quyky Request at Exhibit 2 and 3. Petitioner notes that, based on information provided by the FMR, Quyky has been shipping 25 containers per month to the United States from Vietnam, whereas, the Zepol ImportIQ data has only accounted for up to nine containers shipped monthly, suggesting that the Zepol ImportIQ data has been understated. Id. at 13. Petitioner argues that these patterns of trade are consistent with an assembly operation in Vietnam established by PRC producers who are no longer able to supply hangers directly to the United States due to the antidumping duty order in place. Affiliation Petitioner states that section 781(b)(3) of the Act directs the Department to take VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 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 decisions on anti-circumvention rulings. With respect to Quyky, Petitioner argues that Quyky has acknowledged that it has a ‘‘partner’’ factory in the PRC, namely Ruishan. Petitioner also notes that, based on publicly available information Ruishan is affiliated with another PRC producer of hangers, Taizhou. See Quyky Request at 14 and Exhibit 1. Petitioner contends that, based on proprietary information, Quyky has admitted that it imports its hanger components from the PRC, and, through minor assembly operations in Vietnam, Quyky and Ruishan-Taizhou are actively circumventing the Hangers Order. According to Petitioner, the acknowledgement of affiliation and the timing of the exports from Vietnam to the United States support a conclusion that Quyky’s assembly of PRC-produced hanger components in Vietnam is circumventing the antidumping duty order. With respect to Angang, Petitioner argues that Angang admits it receives all of its hanger component parts from the PRC and that Angang and Gangyuan are affiliated. See Angang Request at 9 and 15. Petitioner argues that the combined affiliation with Gangyuan, who as a PRC exporter is subject to the Hangers Order, and the timing of Angang’s initial shipments to the United States suggests a clear intention to shift completion of merchandise subject to the Hangers Order from the PRC to Vietnam. Subsequent Import Volume 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 such an order or finding when making a decision on anticircumvention rulings. Petitioner claims it cannot access data concerning trade flows of hangers or hanger components between the PRC and Vietnam because the HTSUS classification for subject merchandise or the components of hangers are contained within larger basket categories that cannot track the trade of the subject merchandise, or components of the subject merchandise, to the degree achieved for imports into the United States. However, Petitioner notes that, while import data of the hangers HTSUS classification between the PRC and Vietnam does not exist, PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 U.S. import data does show that Vietnam was not a source of hangers to the United States until six months after the petition for investigation was filed. See Angang Request at 16 and Exhibit 6. Petitioner also argues that Angang’s initial shipments starting in late 2008 support the conclusion that Vietnam had not, until recently, been a source of hanger shipments to the United States. Id. at 2. Analysis Based on our analysis of Petitioner’s anti-circumvention inquiry requests and our May 25, 2010, meeting with the FMR, the Department determines that Petitioner has satisfied the criteria under section 781(b)(2) of the Act to warrant an initiation of a formal anticircumvention inquiry. 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 application 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)(ii), a notice of the initiation of an anti-circumvention inquiry issued under paragraph (e) of this section will include a description of the product that is the subject of the anti-circumvention inquiry—hangers manufactured from steel that contain the characteristics as provided in the scope of the Hangers 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 Vietnam is of the same class or kind as the merchandise produced in the PRC, Petitioner has presented information to the Department indicating that, pursuant to sections 781(b)(1)(A), the merchandise being exported from Vietnam by Angang and Quyky may be of the same class or kind as hangers produced in the PRC and which are subject to the Hangers Order. Consequently, the Department finds that Petitioner provided sufficient information in its requests regarding the class or kind of merchandise to warrant initiation of an anti-circumvention inquiry. With regard to completion or assembly of merchandise in a foreign country, pursuant to section 781(b)(1)(B), Petitioner has also presented information to the Department indicating that the hangers E:\FR\FM\22JYN1.SGM 22JYN1 sroberts on DSKD5P82C1PROD with NOTICES Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices exported from Vietnam to the United States are being processed by Angang and Quyky in Vietnam from pre-formed hangers and paper components allegedly provided by these companies’ suppliers in the PRC. We find that the information presented by Petitioner regarding this criterion supports its requests to initiate an anticircumvention inquiry. The Department believes that Petitioner sufficiently addressed the factors described by section 781(b)(2) of the Act regarding whether the processing of pre-formed hangers in Vietnam is minor or insignificant. Specifically, in support of its argument, Petitioner relied on information from the LTFV investigation, the ITC report, and information in the FMR’s report. Thus, we find that the information presented by Petitioner supports its requests to initiate an anticircumvention inquiry. In particular, we find that Petitioner’s submissions suggest that: (1) Little investment has been made by either Angang or Quyky company in their respective production of hangers in Vietnam; (2) Angang’s and Quyky’s Chinese affiliates have fully integrated production facilities in the PRC and, therefore, that research and development presumably takes place in the PRC rather than Vietnam; (3) the gluing of capes to shirt hangers or attaching tubes to strut hangers in Vietnam does not alter the fundamental characteristics of the hanger, nor whether it is subject to the scope of the Hangers Order; (4) Angang’s and Quyky’s facilities have a lower investment level by those companies than that required by the typical capitalintensive nature of the wire-drawing and hanger-forming processes; and (5) assembling paper components to preformed hangers adds little value to the merchandise imported to the United States. Our analysis will focus on Angang’s and Quyky’s assembly operations in Vietnam and, in the context of this proceeding, we will closely examine the manner in which these companies’ processing materials are obtained, whether those materials are considered subject to the scope of the Hangers Order, and the extent of processing in Vietnam, as well as the manner in which production and sales relationships are conducted with the alleged PRC affiliates. With respect to the value of the merchandise produced in the PRC, pursuant to section 781(b)(1)(D) of the Act, Petitioner relied on its information and arguments in the ‘‘minor or insignificant process’’ portion of its anticircumvention requests to indicate that the value of the steel wire may be VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 significant relative to the total value of a finished hanger with paper accoutrements exported to the United States. We find that the information adequately meets the requirements of this factor, as discussed above, for the purposes of initiating an anticircumvention inquiry. Finally, Petitioner argues that, pursuant to section 781(b)(3) of the Act, the Department should also consider the pattern of trade, affiliation, and subsequent import volumes as factors in determining whether to initiate the anticircumvention inquiry. The U.S. import data submitted by Petitioner suggests that imports of steel wire garment hangers from Vietnam have been rising significantly since the issuance of the Hangers Order in 2008, whereas in years prior to 2008, there were no such imports from Vietnam into the United States. Accordingly, based on Petitioner’s submissions, we have determined that we have a sufficient basis to initiate a formal anti-circumvention inquiry concerning the Hangers Order, 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 on the merchandise. These anti-circumvention inquiries cover Angang and Quyky only. If, within sufficient time, the Department receives a formal request from an interested party regarding potential circumvention of the Hangers Order by other Vietnamese companies, we will consider conducting additional 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. This notice is published in accordance with section 777(i)(1) of the Act. Dated: July 16, 2010. Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration. [FR Doc. 2010–18000 Filed 7–21–10; 8:45 am] BILLING CODE 3510–DS–P PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 42689 DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648–XX67 Marine Mammals; File Nos. 15498 and 15500 National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice; issuance of permits. AGENCY: Notice is hereby given that the Chicago Zoological Society Brookfield Zoo, 3300 Golf Road, Brookfield, IL 60513, and the Georgia Aquarium, 225 Baker Street, NW., Atlanta, GA 30313 have been issued permits to import Atlantic bottlenose dolphins (Tursiops truncatus) for public display. ADDRESSES: The permits and related documents are available for review upon written request or by appointment in the following office(s): Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 713–2289; fax (301) 713–0376; File No. 15498: Northeast Region, NMFS, 55 Great Republic Drive, Gloucester, MA 01930; phone (978) 281–9328; fax (978) 281–9394; and File No. 15500: Southeast Region, NMFS, 263 13th Avenue South, Saint Petersburg, FL 33701; phone (727) 824– 5312; fax (727) 824–5309. FOR FURTHER INFORMATION CONTACT: Jennifer Skidmore or Kristy Beard, (301) 713–2289. SUPPLEMENTARY INFORMATION: On May 3, 2010, notice was published in the Federal Register (75 FR 23242) that requests for public display permits to import bottlenose dolphins had been submitted by the above-named organizations. File No. 15498 requested the importation of one male and one female captive born bottlenose dolphin from Dolphin Quest Bermuda, Hamilton, Bermuda, to the Brookfield Zoo, Brookfield, IL. File No. 15500 requested the importation of two male captive born bottlenose dolphins from Dolphin Experience, Ltd., Freeport, Grand Bahama Island, The Bahamas, and three female captive born bottlenose dolphins from Dolphin Quest Bermuda, Hamilton, Bermuda, to the Georgia Aquarium, Atlanta, Georgia. The requested permits have been issued under the authority of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 et seq.), and SUMMARY: E:\FR\FM\22JYN1.SGM 22JYN1

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[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Notices]
[Pages 42685-42689]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18000]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-918]


Steel Wire Garment Hangers From the People's Republic of China: 
Initiation of Anti-Circumvention Inquiry

AGENCY: Import Administration, International Trade Administration, 
Commerce.

SUMMARY: In response to requests from the M&B Metal Products Co., Inc. 
(``Petitioner''), the Department of Commerce (``Department'') is 
initiating an anti-circumvention inquiry to determine whether certain 
imports of steel wire garment hangers from the Socialist Republic of 
Vietnam (``Vietnam'') are circumventing the antidumping duty order on 
steel wire garment hangers (``hangers'') from the People's Republic of 
China (``PRC''). See Notice of Antidumping Duty Order: Steel Wire 
Garment Hangers from the People's Republic of China, 73 FR 58111 
(October 6, 2008) (``Hangers Order'').

DATES: Effective Date: July 22, 2010.

FOR FURTHER INFORMATION CONTACT: Irene Gorelik, AD/CVD Operations, 
Office 9, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-6905.

[[Page 42686]]


SUPPLEMENTARY INFORMATION:

Background

    On May 5, 2010, pursuant to section 781(b) of the Tariff Act of 
1930, as amended (``Act''), and 19 CFR 351.225(h), Petitioner submitted 
requests for the Department to initiate and conduct an anti-
circumvention inquiry of two Vietnamese companies to determine whether 
hangers composed of low-grade steel wire, which are allegedly products 
of the PRC exported from Vietnam, are circumventing the Hangers Order.
    In its two requests, Petitioner alleges that PRC manufacturers of 
subject merchandise have been circumventing the Hangers Order by using 
two Vietnamese companies to export their hangers. Specifically, in its 
requests, Petitioner claims that Angang Clothes Rack Manufacture Co., 
Ltd. (``Angang'') is circumventing the Hangers Order with the help of 
its alleged affiliate, PRC-based Shaoxing Gangyuan Metal Manufactured 
Co., Ltd. (``Gangyuan'') and that Quyky Yanglei International Co., Ltd. 
(``Quyky'') is circumventing the Hangers Order with the help of its 
alleged affiliates, PRC-based Shanghai Ruishan Metal Products Co., Ltd. 
and Zhejiang Taizhou Hongda Metal Products Co., Ltd. (collectively, 
``Ruishan-Taizhou''). Petitioner further alleges that Gangyuan and 
Ruishan-Taizhou are supplying pre-formed hangers to Angang and Quyky, 
respectively, for completion or assembly into merchandise of the same 
class or kind as the merchandise covered by the Hangers Order and that 
this constitutes circumvention.
    On May 20, 2010, the Department sent a supplemental questionnaire 
to Petitioner regarding the requests to initiate the anti-circumvention 
inquiry. On May 25, 2010, Petitioner provided a response to the 
Department's supplemental questionnaire. On May 25, 2010, Department 
met with the foreign market researcher (``FMR'') to discuss certain 
information contained in the anti-circumvention inquiry requests. See 
``Memorandum to the File through Catherine Bertrand, Program Manager, 
Office 9, from Irene Gorelik, Senior Analyst, Office 9; Meeting with 
Foreign Market Researcher,'' dated June 1, 2010. Neither Quyky nor 
Angang submitted comments regarding Petitioner's circumvention 
allegations. Neither Gangyuan nor Ruishan-Taizhou submitted comments 
regarding Petitioner's allegations that they are involved in the 
circumvention of the Hangers Order.
    On June 14, 2010, the Department extended the deadline to initiate 
an anti-circumvention inquiry by 30 days, pursuant to 19 CFR 
351.302(b).\1\
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    \1\ See Letter to Petitioner dated June 14, 2010.
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Scope of the Order

    The merchandise that is subject to the order is steel wire garment 
hangers, fabricated from carbon steel wire, whether or not galvanized 
or painted, whether or not coated with latex or epoxy or similar 
gripping materials, and/or whether or not fashioned with paper covers 
or capes (with or without printing) and/or nonslip features such as 
saddles or tubes. These products may also be referred to by a 
commercial designation, such as shirt, suit, strut, caped, or latex 
(industrial) hangers. Specifically excluded from the scope of the order 
are wooden, plastic, and other garment hangers that are not made of 
steel wire. Also excluded from the scope of the order are chrome-plated 
steel wire garment hangers with a diameter of 3.4 mm or greater. The 
products subject to the order are currently classified under U.S. 
Harmonized Tariff Schedule (``HTSUS'') subheadings 7326.20.0020 and 
7323.99.9060.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the merchandise is 
dispositive.

Initiation of Anti-Circumvention Proceeding

    Section 781(b)(1) 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)(1) of the 
Act, the Department will also evaluate whether: (1) The process of 
assembly or completion in the other foreign country is minor or 
insignificant; (2) 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 (3) action is appropriate to prevent evasion of such an 
order or finding. As discussed below, Petitioner presented evidence 
with respect to these criteria.

A. Merchandise of the Same Class or Kind

    Petitioner states that the Hangers Order covers hangers produced 
from steel wire, which are often referred to as shirt, suit, strut, 
and/or caped hangers, imported under HTSUS 7326.20.0020, and are 
commonly used in the dry cleaning industry. Petitioner argues that 
since the merchandise being imported into the United States from 
Vietnam, under HTSUS 7326.20.0020, is physically identical to subject 
merchandise from the PRC entering the United States, pursuant to 
section 781(b)(1)(A)(i) of the Act, these hangers are of the same class 
or kind as those subject to the Hangers Order. Petitioner provided 
Zepol ImportIQ reports for Angang and Quyky exports showing bills of 
lading for merchandise identical to that which is subject to the 
Hangers Order. See Petitioner's Anti-Circumvention Inquiry Request for 
Quyky, dated May 5, 2010, at 7 and Exhibits 2, 3, and 9 (``Quyky 
Request''); see also Petitioner's Anti-Circumvention Inquiry Request 
for Angang, dated May 5, 2010, at 7 and Exhibits 2 and 6 (``Angang 
Request'').

B. Completion of Merchandise in a Foreign Country

    Petitioner states that the hangers subject to its anti-
circumvention inquiry requests are made from semi-finished steel wire 
hangers produced in the PRC, then exported to and completed in Vietnam 
for re-export to the United States. Petitioner argues that the semi-
finished hangers are imported by Vietnamese companies \2\ for end-stage 
processing, which consists of unskilled laborers manually affixing 
paper capes and paper tubes with glue to the semi-finished, PRC-
produced hangers. Petitioner contends that the completed merchandise is 
then exported to the United States as Vietnamese-origin. Petitioner 
also notes that the paper capes and tubes are also likely to be PRC-
origin and imported into Vietnam for the end-stage processing. 
Therefore, Petitioner concludes that, pursuant to section 
781(b)(1)(B)(ii) of the Act, Quyky's and Angang's hangers are 
merchandise completed in another foreign country (Vietnam) from 
merchandise that is produced in a country (the PRC) already subject to 
an antidumping duty order which includes hangers produced from steel 
wire in its scope. See Quyky Request, at 7; see also Petitioner's 
Angang Request for, at 8.
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    \2\ As noted above, Petitioner's allegation of anti-
circumvention is focused on two Vietnamese companies: Quyky and 
Angang.
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C. Minor or Insignificant Process

    Petitioner argues that for the purposes of section 781(b)(1)(C) of 
the Act, the process of manually affixing paper capes and tubes with 
glue to semi-finished hangers in Vietnam is ``minor or insignificant'' 
as defined by the Act. According to Petitioner, the addition of

[[Page 42687]]

capes and tubes to formed shirt or strut hangers is an operation that 
completes the merchandise. However, Petitioner argues that the most 
fundamental aspect of the production process--the forming/shaping of 
drawn steel wire into a hanger--occurs in the PRC with heavy and 
complex machinery. Citing to the factor of production consumption 
ratios reported by Gangyuan, one of the individually investigated PRC 
exporters in the underlying less-than-fair-value (``LTFV'') 
investigation, Petitioner contends that the steel input used in 
producing the hangers themselves is ``by far the most significant in 
terms of consumption * * * '' and that, `` * * * there can be no 
question that the production process utilized to form the hangers 
accounts for the vast majority of the total value of the final 
product.'' See Quyky Request at 10; see also Angang Request, at Exhibit 
5.
    Petitioner further states that only manual, unskilled labor is 
required to affix paper capes, tubes and struts to already formed 
hangers, without the need for equipment or machinery. Petitioner cites 
to the International Trade Commission's (``ITC'') final report, where 
the ITC stated that ``operations such as the addition of capes and 
struts and painting the wire are executed by machine in the United 
States while they may be performed manually in China.'' See Steel Wire 
Garment Hangers from China, Investigation No. 731-TA-1123 (Final), 
USITC Pub. 4034 (September 2008), at I-9 (``ITC Report''). Based on 
information obtained by Petitioner, paper capes, tubes, and struts are 
manually affixed to formed hangers in Vietnam. See Quyky Request at 10 
and Exhibit 5; see also Angang Request at 11 and Exhibit 3. Petitioner 
argues that data and statements from the LTFV and ITC investigations 
support its statements that Vietnamese operations involving the 
attachment of paper capes, tubes, and struts with glue are ``minor or 
insignificant'' processes.
    Petitioner argues that an analysis of the relevant statutory 
factors of section 781(b)(2) of the Act further supports its conclusion 
that the Vietnamese processing 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. Petitioner's 
analysis of these factors, including citations as appropriate, is as 
follows.
(1) Level of Investment
    Petitioner claims that information procured from Angang (and 
alleged PRC affiliate, Gangyuan) indicates that little investment has 
been or is being made in Vietnam. Further, Petitioner also claims that 
information procured from Quyky (and alleged PRC affiliates, Ruishan-
Taizhou) indicates that little investment has been, or is being, made 
in Vietnam. Petitioner argues that the business model described by 
Angang and Quyky indicates that they only serve as hanger completion 
operations, are export platforms for hangers, and are not integrated 
production operations. Petitioner further contends that the extent of 
any investment in Vietnam would be the materials required to complete 
the hangers before exportation to the United States, such as table and 
chairs for the workers, glue to affix the paper capes, tubes, and 
struts, and packing materials. Petitioner cites to the FMR's report for 
detailed descriptions of the low level of investment at Angang and 
Quyky. Because the FMR's report is business proprietary information, 
its specific content cannot be discussed here. See Quyky Request at 
Exhibit 5; see also Angang Request at Exhibit 3.
(2) Level of Research and Development
    Petitioner states that, similar to the level of investment, because 
Angang's and Quyky's operations involve manual labor and required 
little or no machinery or equipment, no research and development are 
required to set up and operate a company to assemble or complete 
hangers in Vietnam from Chinese components. See Quyky Request at 10 and 
Exhibit 5; see also Angang Request at 11 and Exhibit 3.
(3) Nature of the Production Process
    Petitioner argues that the nature of the production process for 
hangers completed or assembled by Quyky and Angang is based on 
unskilled manual labor with little machinery or equipment required. 
Petitioner states that paper capes, tubes, and struts are manually 
attached with glue to pre-formed hangers that had been imported from 
partner producers in the PRC. Petitioner notes that once the paper 
capes and tubes have been affixed to the pre-formed hangers, the 
completed hangers are packaged into cartons for export to the United 
States. See Quyky Request at 10 and Exhibit 5; see also Angang Request 
at 11 and Exhibit 3. Petitioner adds that the most significant 
operation in the manufacture of hangers is not the addition of paper 
capes and tubes but rather the steel wire rod drawing process and 
hanger forming process. See, e.g., Angang Request at footnote 23.
(4) Extent of Production in Vietnam
    As stated above, Petitioner contends that the extent of production 
in Vietnam is the simple addition of paper capes and tubes to pre-
formed, PRC-produced hangers that were imported by Quyky and Angang. 
Petitioner states that this process requires nothing more than tables 
and chairs for the unskilled laborers, glue, and packing materials for 
exportation.
(5) Value of Vietnam Processing Compared to Hangers Imported Into the 
United States
    Petitioner argues that the Vietnamese assembly of pre-formed 
hangers adds little value to the final product exported to the United 
States. Petitioner argues that the value of the final product is, most 
significantly, the steel input. Petitioner cites to Gangyuan's 
responses in the underlying investigation, where it stated that ``wire 
rod is the most significant input in the production of wire hangers.'' 
See Angang's Request at 10-11 and footnote 23. Petitioner further cites 
to Gangyuan's material input consumption figures for the production of 
subject merchandise, noting that the steel input used to produce 
subject merchandise was, by far, the most significant input in the 
production process. Id., at 12. Petitioner further argues that even the 
paper inputs, such as capes, tubes, and struts used by Angang and Quyky 
in Vietnam are also supplied by the PRC, thus, the value of the 
manufacture of the pre-formed hangers and the paper attachments 
originate in the PRC. As stated above, Petitioner argues that the 
completion activities in Vietnam add very little to the hangers that 
are exported to the United States because the steel hanger was drawn 
from wire rod and formed in the PRC.

D. Value of Merchandise Produced in PRC

    Petitioner argues that the evidence, as noted supra, in its anti-
circumvention requests clearly supports its position that the value of 
the pre-formed hangers produced in the PRC, and then sent to Angang and 
Quyky, represents a significant portion of the total value of the 
merchandise exported to the United States, as measured by the 
consumption figures reported by Gangyuan in the underlying 
investigation and included with Petitioner's anti-circumvention inquiry 
requests.

[[Page 42688]]

E. Factors To Consider in Determining Whether Action Is Necessary

    Petitioner argues that the additional factors contained in section 
781(b)(3) of the Act must also be considered in the Department's 
decision whether to issue a finding of circumvention regarding 
Vietnamese importation of semi-finished hangers.

Pattern of Trade

    Petitioner states that section 781(b)(3) of the Act directs the 
Department to take into account patterns of trade when making a 
decision whether to include merchandise assembled or completed in 
Vietnam within the scope of the Hangers Order. Petitioner argues that 
in July 2007, when Petitioner filed its antidumping petition, Vietnam 
was not a source of any exports of hangers to the United States. 
Petitioner bases these claims on an analysis of publicly available 
information from the ITC's Dataweb of U.S. import data. See Quyky 
Request at 13 and Exhibit 9; see also Angang Request at 14 and Exhibit 
6. Petitioner claims that, upon the publication of the preliminary 
determination in the underlying investigation, Vietnamese exports of 
hangers to the United States increased dramatically. See Quyky Request 
at Exhibit 10; see also Angang Request at Exhibit 7. Based on shipment 
data obtained from Zepol ImportIQ, a database of manifest data similar 
to PIERS, Petitioner contends that two months after the Hangers Order 
was issued (October 2008), Angang began to export hangers to the United 
States. See Angang Request at 14 and Exhibit 2. Further, based on Zepol 
ImportIQ, Petitioner contends that, in September 2008, one month before 
the Hangers Order was issued, Quyky began to ship hangers to the United 
States from Vietnam. See Quyky Request at Exhibit 2 and 3. Petitioner 
notes that, based on information provided by the FMR, Quyky has been 
shipping 25 containers per month to the United States from Vietnam, 
whereas, the Zepol ImportIQ data has only accounted for up to nine 
containers shipped monthly, suggesting that the Zepol ImportIQ data has 
been understated. Id. at 13. Petitioner argues that these patterns of 
trade are consistent with an assembly operation in Vietnam established 
by PRC producers who are no longer able to supply hangers directly to 
the United States due to the antidumping duty order in place.

Affiliation

    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 decisions on 
anti-circumvention rulings. With respect to Quyky, Petitioner argues 
that Quyky has acknowledged that it has a ``partner'' factory in the 
PRC, namely Ruishan. Petitioner also notes that, based on publicly 
available information Ruishan is affiliated with another PRC producer 
of hangers, Taizhou. See Quyky Request at 14 and Exhibit 1. Petitioner 
contends that, based on proprietary information, Quyky has admitted 
that it imports its hanger components from the PRC, and, through minor 
assembly operations in Vietnam, Quyky and Ruishan-Taizhou are actively 
circumventing the Hangers Order. According to Petitioner, the 
acknowledgement of affiliation and the timing of the exports from 
Vietnam to the United States support a conclusion that Quyky's assembly 
of PRC-produced hanger components in Vietnam is circumventing the 
antidumping duty order.
    With respect to Angang, Petitioner argues that Angang admits it 
receives all of its hanger component parts from the PRC and that Angang 
and Gangyuan are affiliated. See Angang Request at 9 and 15. Petitioner 
argues that the combined affiliation with Gangyuan, who as a PRC 
exporter is subject to the Hangers Order, and the timing of Angang's 
initial shipments to the United States suggests a clear intention to 
shift completion of merchandise subject to the Hangers Order from the 
PRC to Vietnam.

Subsequent Import Volume

    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 such an order or 
finding when making a decision on anti-circumvention rulings. 
Petitioner claims it cannot access data concerning trade flows of 
hangers or hanger components between the PRC and Vietnam because the 
HTSUS classification for subject merchandise or the components of 
hangers are contained within larger basket categories that cannot track 
the trade of the subject merchandise, or components of the subject 
merchandise, to the degree achieved for imports into the United States. 
However, Petitioner notes that, while import data of the hangers HTSUS 
classification between the PRC and Vietnam does not exist, U.S. import 
data does show that Vietnam was not a source of hangers to the United 
States until six months after the petition for investigation was filed. 
See Angang Request at 16 and Exhibit 6. Petitioner also argues that 
Angang's initial shipments starting in late 2008 support the conclusion 
that Vietnam had not, until recently, been a source of hanger shipments 
to the United States. Id. at 2.

Analysis

    Based on our analysis of Petitioner's anti-circumvention inquiry 
requests and our May 25, 2010, meeting with the FMR, the Department 
determines that Petitioner has satisfied the criteria under section 
781(b)(2) of the Act to warrant an initiation of a formal anti-
circumvention inquiry. 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 
application 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)(ii), a 
notice of the initiation of an anti-circumvention inquiry issued under 
paragraph (e) of this section will include a description of the product 
that is the subject of the anti-circumvention inquiry--hangers 
manufactured from steel that contain the characteristics as provided in 
the scope of the Hangers 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 Vietnam is of the same 
class or kind as the merchandise produced in the PRC, Petitioner has 
presented information to the Department indicating that, pursuant to 
sections 781(b)(1)(A), the merchandise being exported from Vietnam by 
Angang and Quyky may be of the same class or kind as hangers produced 
in the PRC and which are subject to the Hangers Order. Consequently, 
the Department finds that Petitioner provided sufficient information in 
its requests regarding the class or kind of merchandise to warrant 
initiation of an anti-circumvention inquiry.
    With regard to completion or assembly of merchandise in a foreign 
country, pursuant to section 781(b)(1)(B), Petitioner has also 
presented information to the Department indicating that the hangers

[[Page 42689]]

exported from Vietnam to the United States are being processed by 
Angang and Quyky in Vietnam from pre-formed hangers and paper 
components allegedly provided by these companies' suppliers in the PRC. 
We find that the information presented by Petitioner regarding this 
criterion supports its requests to initiate an anti-circumvention 
inquiry.
    The Department believes that Petitioner sufficiently addressed the 
factors described by section 781(b)(2) of the Act regarding whether the 
processing of pre-formed hangers in Vietnam is minor or insignificant. 
Specifically, in support of its argument, Petitioner relied on 
information from the LTFV investigation, the ITC report, and 
information in the FMR's report. Thus, we find that the information 
presented by Petitioner supports its requests to initiate an anti-
circumvention inquiry. In particular, we find that Petitioner's 
submissions suggest that: (1) Little investment has been made by either 
Angang or Quyky company in their respective production of hangers in 
Vietnam; (2) Angang's and Quyky's Chinese affiliates have fully 
integrated production facilities in the PRC and, therefore, that 
research and development presumably takes place in the PRC rather than 
Vietnam; (3) the gluing of capes to shirt hangers or attaching tubes to 
strut hangers in Vietnam does not alter the fundamental characteristics 
of the hanger, nor whether it is subject to the scope of the Hangers 
Order; (4) Angang's and Quyky's facilities have a lower investment 
level by those companies than that required by the typical capital-
intensive nature of the wire-drawing and hanger-forming processes; and 
(5) assembling paper components to pre-formed hangers adds little value 
to the merchandise imported to the United States. Our analysis will 
focus on Angang's and Quyky's assembly operations in Vietnam and, in 
the context of this proceeding, we will closely examine the manner in 
which these companies' processing materials are obtained, whether those 
materials are considered subject to the scope of the Hangers Order, and 
the extent of processing in Vietnam, as well as the manner in which 
production and sales relationships are conducted with the alleged PRC 
affiliates.
    With respect to the value of the merchandise produced in the PRC, 
pursuant to section 781(b)(1)(D) of the Act, Petitioner relied on its 
information and arguments in the ``minor or insignificant process'' 
portion of its anti-circumvention requests to indicate that the value 
of the steel wire may be significant relative to the total value of a 
finished hanger with paper accoutrements exported to the United States. 
We find that the information adequately meets the requirements of this 
factor, as discussed above, for the purposes of initiating an anti-
circumvention inquiry.
    Finally, Petitioner argues that, pursuant to section 781(b)(3) of 
the Act, the Department should also consider the pattern of trade, 
affiliation, and subsequent import volumes as factors in determining 
whether to initiate the anti-circumvention inquiry. The U.S. import 
data submitted by Petitioner suggests that imports of steel wire 
garment hangers from Vietnam have been rising significantly since the 
issuance of the Hangers Order in 2008, whereas in years prior to 2008, 
there were no such imports from Vietnam into the United States.
    Accordingly, based on Petitioner's submissions, we have determined 
that we have a sufficient basis to initiate a formal anti-circumvention 
inquiry concerning the Hangers Order, 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 on the merchandise.
    These anti-circumvention inquiries cover Angang and Quyky only. If, 
within sufficient time, the Department receives a formal request from 
an interested party regarding potential circumvention of the Hangers 
Order by other Vietnamese companies, we will consider conducting 
additional 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. This notice is 
published in accordance with section 777(i)(1) of the Act.

    Dated: July 16, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-18000 Filed 7-21-10; 8:45 am]
BILLING CODE 3510-DS-P