Certain Tissue Paper Products From the People's Republic of China: Preliminary Affirmative Determination of Circumvention of the Antidumping Duty Order, 19043-19049 [2011-8213]
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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices
Net
subsidy
rate
Exporter/manufacturer
Zhejiang Huayue Wooden Products Co., Ltd.
Zhejiang Yongji Wooden Co.,
Ltd.
Zhejiang Yongyu Bamboo Development.
Zhongshan New Oasis Wood Industry Co., Ltd.
Zhongyi Bamboo Industrial Co.,
Ltd. Fujian.
All Others ....................................
27.01
27.01
27.01
27.01
27.01
2.25
In accordance with sections
703(d)(1)(B) and (2) of the Act, we are
directing CBP to suspend liquidation of
all entries of wood flooring from the
PRC that are entered, or withdrawn from
warehouse, for consumption on or after
the date of the publication of this notice
in the Federal Register, and to require
a cash deposit or bond for such entries
of merchandise in the amounts
indicated above. However, because the
estimated CVD rate for Layo and Yuhua
is de minimis, liquidation will not be
suspended and no cash deposits or
bonds are required for merchandise
produced and exported by Layo or
Yuhua.
In accordance with sections 703(d)
and 705(c)(5)(A) of the Act, for
companies not investigated, we apply
an ‘‘all-others’’ rate, which is normally
calculated by weighting the subsidy
rates of the individual companies
selected as respondents by those
companies’’ exports of the subject
merchandise to the United States. The
‘‘all-others’’ rate does not include zero
and de minimis rates or any rates based
solely on the facts available. In this
investigation, because we have only one
rate that can be used to calculate the
‘‘all-others’’ rate, Fine Furniture’s rate,
we have assigned that rate to ‘‘allothers.’’
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ITC Notification
In accordance with section 703(f) of
the Act, we will notify the ITC of our
determination. In addition, we are
making available to the ITC all nonprivileged and non-proprietary
information relating to this
investigation. We will allow the ITC
access to all privileged and business
proprietary information in our files,
provided the ITC confirms that it will
not disclose such information, either
publicly or under an administrative
protective order, without the written
consent of the Assistant Secretary for
Import Administration.
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Dated: March 21, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. 2011–8173 Filed 4–5–11; 8:45 am]
BILLING CODE 3510–DS–P
Disclosure and Public Comment
* Non-cooperative company receiving the
AFA rate. See ‘‘Non-Cooperative Companies’’
section, above.
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In accordance with section 705(b)(2)
of the Act, if our final determination is
affirmative, the ITC will make its final
determination within 45 days after the
Department makes its final
determination.
19043
In accordance with 19 CFR
351.224(b), we will disclose to the
parties the calculations for this
preliminary determination within five
days of its announcement. Due to the
anticipated timing of verification and
issuance of verification reports, case
briefs for this investigation must be
submitted no later than one week after
the issuance of the last verification
report. See 19 CFR 351.309(c)(i) (for a
further discussion of case briefs).
Rebuttal briefs must be filed within five
days after the deadline for submission of
case briefs, pursuant to 19 CFR
351.309(d)(1). A list of authorities relied
upon, a table of contents, and an
executive summary of issues should
accompany any briefs submitted to the
Department. Executive summaries
should be limited to five pages total,
including footnotes. See 19 CFR
351.309(c)(2) and (d)(2).
Section 774 of the Act provides that
the Department will hold a public
hearing to afford interested parties an
opportunity to comment on arguments
raised in case or rebuttal briefs,
provided that such a hearing is
requested by an interested party. If a
request for a hearing is made in this
investigation, the hearing will be held
two days after the deadline for
submission of the rebuttal briefs,
pursuant to 19 CFR 351.310(d), at the
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230. Parties should
confirm by telephone the time, date, and
place of the hearing 48 hours before the
scheduled time.
Interested parties who wish to request
a hearing, or to participate if one is
requested, must submit a written
request to the Assistant Secretary for
Import Administration, U.S. Department
of Commerce, Room 1870, 14th Street
and Constitution Avenue, NW.,
Washington, DC 20230, within 30 days
of the publication of this notice,
pursuant to 19 CFR 351.310(c). Requests
should contain: (1) The party’s name,
address, and telephone; (2) the number
of participants; and (3) a list of the
issues to be discussed. Oral
presentations will be limited to issues
raised in the briefs. Id.
This determination is published
pursuant to sections 703(f) and 777(i) of
the Act.
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DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–894]
Certain Tissue Paper Products From
the People’s Republic of China:
Preliminary Affirmative Determination
of Circumvention of the Antidumping
Duty Order
Import Administration,
International Trade Administration,
Department of Commerce.
AGENCY:
Preliminary Determination
We preliminarily determine that
certain tissue paper products (tissue
paper) produced and/or exported by
Max Fortune (Vietnam) Paper Products
Company, Limited (MFVN) 1 to the
United States from Vietnam 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) (PRC Tissue Paper Order).
DATES: Effective Date: April 6, 2011.
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 February 19, 2010, the Seaman
Paper Company of Massachusetts, Inc.
(the petitioner) requested that the
Department of Commerce (the
Department) initiate an anticircumvention inquiry pursuant to
section 781(b) of the Act, and 19 CFR
351.225(h), to determine whether U.S.
1 MFVN is a company located in Vietnam and is
a wholly owned subsidiary of Max Fortune
Industrial Co., Ltd. (Max Fortune HK) located in
Hong Kong.
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imports of tissue paper exported from
Vietnam by MFVN were made from
jumbo rolls and/or cut sheets of tissue
paper produced in the PRC, and thus
circumventing PRC Tissue Paper Order.
See the petitioner’s February 19, 2010,
anti-circumvention inquiry request
(February 19 Submission) at pages 13–
14; and PRC Tissue Paper Order.
Specifically, the petitioner alleged that
Chinese-produced jumbo rolls and/or
cut sheets of tissue paper sent to
Vietnam for completion or assembly
into merchandise of the same class or
kind as that covered by the PRC Tissue
Paper Order constituted circumvention
pursuant to section 781(b) of the Act.
The petitioner also alleged in its
February 19 Submission that MFVN had
been obtaining Chinese-produced tissue
paper jumbo rolls and/or cut sheets and
using that merchandise in its U.S. tissue
paper sales since it commenced its
operations in 2005.
On March 29, 2010, the Department
initiated an anti-circumvention inquiry
on imports of tissue paper from Vietnam
produced and/or exported by MFVN.
See Certain Tissue Paper Products from
the People’s Republic of China: Notice
of Initiation of Anti-circumvention
Inquiry, 75 FR 64 (April 5, 2010)
(Initiation Notice).
On April 23, 2010, the Department
issued an anti-circumvention
questionnaire to MFVN, asking for sales
and production information with
respect to the period January 1, 2005, to
the present (April 23 Questionnaire). On
May 13, 2010, MFVN entered a notice
of appearance in this proceeding. Also,
on May 13, 2010, MFVN requested
additional time to file a response to the
anti-circumvention questionnaire.
Pursuant to this request, the Department
extended the questionnaire response
deadline until June 28, 2010, and MFVN
submitted its response to the
questionnaire on that date (June 28
Response). In its June 28 Response,
MFVN admitted that it was possible that
it manufactured some tissue paper in
Vietnam from PRC-origin jumbo rolls
before and during 2007. MFVN also
stated that its records before 2008 were
incomplete and unreliable. However,
MFVN asserted that it could
conclusively demonstrate that as of
January 1, 2008, it did not convert any
PRC-origin jumbo rolls and/or cut sheets
of tissue paper in Vietnam into its own
tissue paper products. See pages 3 and
12 of MFVN’s June 28 Response.
In the April 23 Questionnaire, the
Department requested factors of
production (FOP) information for
purposes of determining whether the
value of the processing performed in
Vietnam represented a small portion of
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the value of the merchandise imported
into the United States. MFVN
responded that it would not submit FOP
data to the Department because it
claimed that since January 1, 2008, it no
longer included Chinese-origin tissue
paper jumbo rolls and/or cut sheets in
its U.S. sales. See pages 14–15 of
MFVN’s June 28 Response.
The Department issued a
supplemental questionnaire to MFVN
on July 23, 2010, and received MFVN’s
supplemental questionnaire response on
September 1, 2010.
Also on September 1, 2010, MFVN
filed a submission in which it rebutted
the petitioner’s February 19, 2010,
allegations and provided information
with respect to certain transactions with
an affiliated Chinese company, Fuzhou
Tian Jun Trading Co., Ltd. (Tian Jun),
during the 2008–2009 period, which
were alleged by the petitioner in its
February 19 Submission to have
involved tissue paper.
The Department issued an additional
supplemental questionnaire to MFVN
on October 12, 2010, and received
MFVN’s supplemental questionnaire
response on November 12, 2010.
On November 16, 2010, the
Department placed on the record certain
data from the 2008–2009 administrative
review of tissue paper from the PRC. See
Memorandum from Brian Smith, Senior
Analyst, to The File, dated November
16, 2010.
On November 18, 2010, the
Department issued a verification outline
to MFVN.
On November 22, 2010, the
Department met with the petitioner’s
counsel to discuss agenda items in the
verification outline issued to MFVN.2
The petitioner submitted preverification comments on November 24,
2010.
Pursuant to section 782(i) of the Act,
the Department conducted verification
of the questionnaire responses
submitted by MFVN and its affiliates
Max Fortune HK, Tian Jun, and Max
Fortune (FZ) Paper Products Co., Ltd.,
from November 30 to December 16,
2010.3 This verification report is on file
and available in the Central Records
2 See Memorandum to The File from Brian Smith,
Senior Analyst, entitled ‘‘Ex-Parte Meeting with
Petitioner’s Counsel,’’ dated November 22, 2010.
3 See Memorandum to The File from Case
Analysts entitled ‘‘Verification of the Questionnaire
Response of Max Fortune (Vietnam) Paper Products
Co., Ltd. and Its Affiliates in the Anticircumvention Inquiry and 2009–2010
Antidumping Duty Administrative Review of
Certain Tissue Paper Products from the People’s
Republic of China,’’ dated March 31, 2011 (MFVN
verification report).
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Unit (CRU) of the Department’s main
building.
On January 18, 2011, the Department
notified the parties by letter that it was
postponing the final determination of
this inquiry until August 1, 2011.4
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, dyecolored, surface-colored, glazed, surface
decorated or printed, sequined,
crinkled, embossed, and/or die cut. The
tissue paper subject to this order is in
the form of cut-to-length sheets of tissue
paper with a width equal to or greater
than one-half (0.5) inch. Subject tissue
paper may be flat or folded, and may be
packaged by banding or wrapping with
paper or film, by placing in plastic or
film bags, and/or by placing in boxes for
distribution and use by the ultimate
consumer. Packages of tissue paper
subject to this order may consist solely
of tissue paper of one color and/or style,
or may contain multiple colors and/or
styles.
The merchandise subject to this order
does not have specific classification
numbers assigned to them under the
Harmonized Tariff Schedule of the
United States (HTSUS). Subject
merchandise may be under one or more
of several different subheadings,
including: 4802.30; 4802.54; 4802.61;
4802.62; 4802.69; 4804.31.1000;
4804.31.2000; 4804.31.4020;
4804.31.4040; 4804.31.6000; 4804.39;
4805.91.1090; 4805.91.5000;
4805.91.7000; 4806.40; 4808.30;
4808.90; 4811.90; 4823.90; 4820.50.00;
4802.90.00; 4805.91.90; 9505.90.40. The
tariff classifications are provided for
convenience and customs purposes;
however, the written description of the
scope of this order is dispositive.5
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
4 See Letter to the Interested Parties from James
Maeder, Office Director, entitled ‘‘AntiCircumvention Inquiry on Certain Tissue Paper
Products from the People’s Republic of China:
Extension of Final Determination,’’ dated January
18, 2011.
5 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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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).
mstockstill on DSKH9S0YB1PROD with NOTICES
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 Vietnam from Chineseorigin jumbo rolls and/or cut sheets of
tissue paper, and exported from
Vietnam to the United States by MFVN.
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 anticircumvention inquiries under section
781(b)(1) 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.
Section 781(b)(2) of the Act provides
the criteria for determining whether the
process of assembly or completion is
minor or insignificant. These criteria
are: (a) The level of investment in the
foreign country; (b) the level of research
and development (R&D) in the foreign
country; (c) the nature of the production
process in the foreign country; (d) the
extent of the production facilities in the
foreign country; and (e) whether the
value of the processing performed in the
foreign country represents a small
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16:52 Apr 05, 2011
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proportion of the value of the
merchandise imported into the United
States.
The Statement of Administrative
Action (SAA) accompanying the
Uruguay Round Agreements Act, H.
Doc. No. 103–316, at 893 (1994),
provides some guidance with respect to
these criteria. It explains that no single
factor listed in section 781(b)(2) of the
Act will be controlling. Accordingly, it
is the Department’s practice to evaluate
each of the factors as they exist in the
foreign country depending on the
particular circumvention scenario.
Therefore, the importance of any one of
the factors listed under section 781(b)(2)
of the Act can vary from case to case
depending on the particular
circumstances unique to each
circumvention inquiry.
Section 781(b)(3) of the Act further
provides that, in determining whether to
include merchandise assembled or
completed in a foreign country in an
antidumping duty order, the
Department shall consider: (A) The
pattern of trade, including sourcing
patterns; (B) whether the manufacturer
or exporter of the merchandise
described in accordance with section
781(b)(1)(B) of the Act is affiliated with
the person who uses the merchandise
described in accordance with section
781(b)(1)(B) to assemble or complete in
the foreign country the merchandise
that is subsequently imported into the
United States; and (C) whether imports
into the foreign country of the
merchandise described in accordance
with section 781(b)(1)(B) have increased
after the initiation of the investigation
which resulted in the issuance of such
order.
In this case, the PRC Tissue Paper
Order covers cut-to-length sheets of
tissue paper equal to or greater than 0.5
inches in width, with a basis weight not
exceeding 29 grams per square meter
and other specified characteristics of the
scope. The merchandise subject to this
inquiry is tissue paper products
exported to the United States by MFVN
produced from Chinese-origin jumbo
rolls and/or cut sheets of tissue paper.
The list of products MFVN provided in
its questionnaire responses indicates
that the tissue paper products it
exported to the United States meet the
written description of the products
subject to the PRC Tissue Paper Order.
See June 28 Response at Exhibit 6.
Accordingly, we find that the
merchandise subject to this inquiry is
the same class or kind of merchandise
as that subject to the PRC Tissue Paper
Order, pursuant to section 781(b)(1)(A)
of the Act. With respect to the
remaining statutory criteria for
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determining whether circumvention
exists, the Department finds it necessary
to rely on facts available, as the
respondent failed to provide necessary,
verifiable information upon which the
Department could rely. Further, as
discussed in detail below, we find it
appropriate in this inquiry to apply facts
available with an adverse inference, as
the respondent failed to cooperate to the
best of its ability in providing the
necessary information.
Adverse Facts Available
Section 776(a) of the Act, provides
that, if (1) necessary information is not
available on the record or (2) 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
information cannot be verified, the
Department shall, subject to subsection
782(d) of the Act, use facts otherwise
available in reaching the applicable
determination.
Furthermore, section 776(b) of the Act
states that if the Department ‘‘finds that
an interested party has failed to
cooperate by not acting to the best of its
ability to comply with a request for
information from the administering
authority * * * , the administering
authority * * * , in reaching the
applicable determination under this
title, may use an inference that is
adverse to the interests of that party in
selecting from among the facts
otherwise available.’’ See also SAA,
H.Rep. No. 103–316 at 870 (1994). It is
the Department’s practice to make an
adverse inference ‘‘to ensure that the
party does not obtain a more favorable
result by failing to cooperate than if it
had cooperated fully.’’ Id. An adverse
inference may include reliance on
information derived from the petition,
the final determination in the
investigation, any previous review, or
any other information placed on the
record. See section 776(b) of the Act.
In this case, MFVN informed the
Department that it could not provide
any information with respect to the
production of the merchandise exported
from Vietnam during the period January
1, 2005, to December 31, 2007. In fact,
MFVN admitted that ‘‘it is possible that
MFVN might have made tissue paper in
Vietnam from jumbo rolls from the PRC’’
during this time period. See MFVN’s
June 28 Response at page 3.
Furthermore, the data provided in the
petitioner’s February 19 Submission
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show that MFVN obtained a significant
amount of Chinese-origin jumbo rolls
and/or cut sheets of tissue paper during
this time period. See February 19
Submission at pages 13–14. This is the
extent of information on the record with
regard to MFVN’s production during
this time period.
Absent any further information on the
record, pursuant to section 776(a) of the
Act, the Department has concluded that
the application of facts available is
warranted with respect to exports of
tissue paper from MFVN to the United
States from January 1, 2005, to
December 31, 2007 (2005–2007 period).
Production information for the 2005–
2007 period is necessary for purposes of
this anti-circumvention inquiry and
without it on the administrative record,
the Department cannot conduct its anticircumvention analysis for the 2005–
2007 period. MFVN claims that it was
unable to maintain such records during
the above-referenced time period.
However, we find this claim to be
unreasonable. A company is expected to
maintain its production records in the
normal course of business. For
companies doing business in Vietnam,
the Vietnamese Government has even
issued regulations which require
companies like MFVN to retain such
records for up to 10 years.6 This is
especially true in this case where MFVN
demonstrated at verification that it
maintained such records in both 2009
and 2010. Therefore, because MFVN did
not provide the Department with
necessary information with respect to
MFVN’s exports of tissue paper during
the 2005–2007 period, the application of
facts available pursuant to sections
776(a)(1) and (2) of the Act is warranted.
Furthermore, MFVN’s admission that
it ‘‘possibly’’ made tissue paper in
Vietnam from Chinese-origin jumbo
rolls, coupled with the fact that the
petitioner’s data show that MFVN
obtained PRC-origin jumbo rolls and/or
cut sheets from January 1, 2005, to
December 31, 2007, leads us to conclude
that MFVN failed to cooperate by not
acting to the best of its ability to comply
with the Department’s request for
information with respect to its
commercial activities during this
period. Therefore, pursuant to section
776(b) of the Act, an adverse inference
is warranted. Accordingly, as adverse
facts available (AFA), the Department
6 See Memorandum to the File dated March 31,
2011 which contains the following document,
‘‘Decree No. 129/2004/ND–CP of May 31, 2004
Detailing and Guiding the Implementation of a
Number of Articles of the Accounting Law,
Applicable to Business Activities,’’ issued by the
Government of the Socialist Republic of Vietnam on
May 31, 2004.
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preliminarily finds that all tissue paper
produced and/or exported by MFVN to
the United States from January 1, 2005,
to December 31, 2007, was made with
Chinese-origin jumbo rolls and/or cut
sheets of tissue paper.
With respect to MFVN’s exports of
tissue paper to the United States during
the calendar year 2008, the Department
also concludes that the application of
AFA is warranted. Although MFVN
stated in its June 28 Response that it
could conclusively demonstrate through
its accounting and production records
that it did not use Chinese-origin tissue
paper jumbo rolls and/or cut sheets in
its U.S. sales during 2008, the
Department was unable to verify this
claim. In fact, at verification, MFVN
provided inadequate and incomplete
accounting records for calendar year
2008. Specifically, MFVN did not
support its claim that it had ceased
using Chinese-origin jumbo rolls and/or
cut sheets of tissue paper in its U.S.
sales during 2008, nor did it provide the
necessary accounting records at
verification to show the type and origin
of the materials it used in its tissue
paper exports to the United States from
January 1, 2008, to December 31, 2008.
See MFVN verification report at pages 2,
35–36, and 39–40.
For example, at verification, MFVN
provided a worksheet which reconciled
the cost-of-sales figure in its 2008
audited financial statements to its
purchases, beginning and ending
inventory values and conversion costs,
as reflected in its annual summary trial
balance for 2008. We subsequently
requested that MFVN reconcile its
monthly trial balances or other monthly
general ledger-type reports to the annual
summary trial balance for 2008. MFVN,
however, claimed at verification that it
could not locate its monthly trial
balances or any other detailed
accounting records for 2008 to support
its annual summary trial balance
amounts. See MFVN verification report
at pages 35–36.
In addition, we requested that MFVN
provide the company’s 2008 monthly
inventory movement ledgers for raw
materials, work in process (WIP), and
finished goods. While MFVN provided
its detailed inventory ledger as of
December 31, 2008, the company
informed Department officials at
verification that it could not provide
any of the other requested 2008 monthly
detailed inventory movement ledgers.
Without the detailed trial balances or
inventory movement ledgers,
Department officials were unable to rely
on the company’s monthly production
cost and inventory movement activity
(for raw materials, WIP and finished
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goods) noted in its warehouse records
for purposes of testing at verification the
production quantity data contained in
MFVN’s submissions for calendar year
2008. See MFVN verification report at
pages 35–36.
Also, MFVN did not provide at
verification, upon request, details of its
raw material and WIP inventory as of
January 1, 2008. Thus, Department
officials were unable to obtain details of
the amounts reflected in MFVN’s
beginning inventory value noted in its
2008 audited financial statements (e.g.,
quantity of pulp versus Chinese-sourced
jumbo rolls in the beginning raw
material inventory amount reflected in
the 2008 audited financial statements).
See MFVN verification report at pages
35–37.
All of the above examples
demonstrate that MFVN did not provide
to the Department verifiable production
data for calendar year 2008, was unable
to tie its export sales data to its
production data for calendar year 2008,
and did not respond fully to the
Department’s questionnaires with regard
to its production during that period. The
absence of verifiable production data on
the record for 2008 impeded the
conduct of this anti-circumvention
inquiry. Therefore, pursuant to section
776(a)(2) of the Act, the Department
concludes that the use of facts available
is warranted with regard to MFVN’s
U.S. tissue paper sales transactions from
January 1 to December 31, 2008.
Furthermore, because MFVN did not
provide verifiable data showing that it
used only non-Chinese-origin jumbo
rolls and/or sheets in its production of
all of the tissue paper it exported to the
United States from its facility during
2008, the Department concludes that
MFVN did not act to the best of its
ability in this inquiry. As noted above,
a company is expected to maintain its
production records in the normal course
of business. MFVN was aware that these
records were necessary for the
Department’s anti-circumvention
analysis, but did not provide them at
verification, as requested. Therefore,
pursuant to section 776(b) of the Act, an
adverse inference is warranted because
MFVN did not provide all of the
necessary information on the record and
failed to provide at verification the
accounting records the Department
needed to analyze the relevant
production data for the calendar year
2008. Accordingly, as AFA, the
Department preliminarily concludes
that all of MFVN’s exports of tissue
paper to the United States during 2008
were produced with Chinese-origin
jumbo rolls and/or cut sheets of tissue
paper.
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In addition, MFVN’s books and
records, as verified, reflect that on
January 1, 2009, the company had
significant amounts of tissue paper in
finished goods and WIP inventory. This
entire inventory was produced and/or
purchased during 2008 or earlier. At
verification, MFVN stated that it did not
have records to show the source of the
material it used in the production of
that inventory. Furthermore,
Department officials discovered in the
records MFVN provided at verification
that there were jumbo rolls of Chineseorigin in inventory at the end of
December 2008, which remained in
inventory throughout 2009, and were
later withdrawn from inventory in
March 2010. See MFVN verification
report at pages 40–41. Therefore, the
Department finds that adverse facts
available is also warranted with respect
to the beginning inventory amount in
2009. Accordingly, as AFA, the
Department determines that any tissue
paper exported by MFVN to the United
States on or after January 1, 2009, which
was withdrawn from, or produced from
merchandise in, finished goods or WIP
inventory as of January 1, 2009, was
produced from Chinese jumbo rolls and/
or cut sheets.
Based on the foregoing analysis, as
AFA, the Department preliminarily
finds that MFVN used Chinese-origin
jumbo rolls and/or cut-sheets of tissue
paper in its production of tissue paper
that it exported to the United States
from January 1, 2005, to December 31,
2008, and that MFVN continued to use
such merchandise from inventory
during that period to produce and/or
sell tissue paper on or after January 1,
2009. Accordingly, the Department
preliminarily concludes that MFVN’s
tissue paper exports to the United States
during 2009 and 2010 included tissue
paper produced from Chinese jumbo
rolls and/or cut sheets.
However, the Department was able to
verify based on its examination of
Vietnamese Customs data from January
1, 2008, to December 10, 2010, MFVN
had not imported any additional
Chinese-origin jumbo rolls and/or cut
sheets of tissue paper. See MFVN
verification report at page 3. In light of
these verified data and the Department’s
observation of MFVN’s tissue-paper
production operations at verification,
we find that MFVN now has the
capacity and ability to produce tissue
paper for export.
In determining whether
circumvention of an order is occurring,
section 781(b)(1) of the Act directs the
Department to address, among other
things, whether before importation into
the United States, the imported
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16:52 Apr 05, 2011
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merchandise is completed or assembled
in another country from merchandise
which is subject to the order or
produced in the foreign country that is
subject to the order. See section
781(b)(1)(B) of the Act. Based on the
preceding analysis, there is little dispute
that during the period of analysis of this
inquiry, MFVN completed some tissue
paper in Vietnam using jumbo rolls and/
or cut sheets produced in the PRC.
Section 781(b)(1) of the Act also
directs the Department to examine
whether (1) the process of assembly or
completion in the foreign country (i.e.,
Vietnam) is minor or insignificant and
(2) the value of the merchandise
produced in the country subject to the
order (i.e., the PRC) is a significant
portion of the total value of the
merchandise exported to the United
States. See sections 781(b)(1)(C) and (D)
of the Act. Because the PRC and
Vietnam are non-market economies, in
any review of merchandise produced in
those countries, section 773(c)(4) of the
Act provides that the Department shall
value the FOP utilizing prices or costs
in one or more market-economy
countries that are at a level of economic
development comparable to that of the
NME country and are significant
producers of comparable merchandise.
Pursuant to this provision, in its
questionnaire to MFVN, the Department
requested the FOP data for both the
Chinese-origin jumbo rolls and/or sheets
imported by MFVN, and the processing
and packaging operations performed by
MFVN in Vietnam. See the
Department’s April 23 Questionnaire at
pages 9–10. See also 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); and 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).
In determining whether the process of
assembly or completion of tissue paper
from jumbo rolls and/or cut sheets is
‘‘minor or insignificant’’ as required by
section 781(b)(1), section 781(b)(2) of
the Act directs the Department to
consider various factors including (a)
MFVN’s level of investment in Vietnam;
(b) MFVN’s level of R&D in Vietnam; (c)
the nature of MFVN’s production
process in Vietnam; (d) the extent of
MFVN’s production facilities in
Vietnam; and (e) whether the value of
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Fmt 4703
Sfmt 4703
19047
the processing performed in Vietnam
represents a small proportion of the
value of the merchandise MFVN
exported to the United States. With
respect to the first criterion, the
Department verified that the level of
investment by MVFN for equipment
used in converting the PRC-origin
jumbo rolls and/or cut sheets into
finished tissue paper is minor or
insignificant. See MFVN verification
report at page 6. Moreover, the record
evidence for this circumvention inquiry
demonstrates that MFVN has not
undertaken a significant level of R&D in
order to process tissue paper products.
See June 28 Response at pages 12–13.
Furthermore, the production process
conducted by MFVN in converting the
PRC-origin jumbo rolls or sheets to cutto-length tissue paper is limited and
minor when compared to the
production process of the jumbo rolls or
sheets. See June 28 Response at pages
13–14. In addition, the Department did
verify that MFVN has production
facilities in Vietnam in terms of the
capital equipment and the types of
employees used in the production
process. See MFVN verification report at
pages 6 and 19–20. However, as noted
above, MFVN was unable to provide
evidence that, before January 1, 2009, it
used its full capacity of production to
manufacture tissue paper.
With respect to the criterion of section
781(b)(2)(e) of the Act, however, MFVN
did not provide the Department with
sufficient information to determine
whether the value of the processing
MFVN performed in Vietnam represents
a small proportion of the value of the
merchandise MFVN exported to the
United States. In response to our
questionnaire, MFVN refused to submit
FOP information, because it stated that
it could definitively demonstrate
through its books and records that as of
January 1, 2008, it did not use Chineseorigin jumbo rolls and/or cut sheets of
tissue paper in its U.S. tissue paper
sales. See June 28 Response at pages 3
and 12. However, as explained above,
MFVN was unable to substantiate this
claim at verification. Accordingly, for
this factor, the application of facts
available is also warranted pursuant to
section 776(a) of the Act.
In its February 19 Submission, the
petitioner provided evidence based on
foreign market research that the
conversion by MFVN of jumbo rolls
and/or sheets of tissue paper produced
in the PRC into finished tissue paper
products in Vietnam is a minor or
insignificant process as defined under
sections 781(b)(1)(C) and (b)(2) of the
Act, and that the value of the processing
performed by MFVN is a minor portion
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of the value of the completed
merchandise. Accordingly, the
petitioner reasoned that the value of the
PRC-origin jumbo rolls and/or sheets
used by MFVN is a significant portion
of the total value of the merchandise
exported to the United States, pursuant
to section 781(b)(1)(D) of the Act. See
Initiation Notice, 75 FR 17128–17131.
Further, in a prior anti-circumvention
segment of this proceeding, the
Department determined that the process
of converting Chinese-origin jumbo rolls
in Vietnam was minor or insignificant,
and that the value of the Chinese-origin
jumbo rolls was a significant portion of
the total value of the finished tissue
paper products the respondent exported
to the United States.7
Therefore, based on data contained in
the petitioner’s February 19 Submission,
as well as our findings in a prior anticircumvention segment of the PRC
tissue paper proceeding, the Department
determines in this case, as facts
available, that the value of the
processing MFVN performed in Vietnam
represents a small proportion of the
value of the merchandise MFVN
exported to the United States.
Taking into consideration all of the
factors under section 781(b)(2) of the
Act, the Department concludes that the
process of converting the jumbo rolls
and/or cut sheets of tissue paper into
the finished tissue paper products in
Vietnam is minor or insignificant,
pursuant to sections 781(b)(1)(C) of the
Act. Accordingly, the Department
concludes, based on the facts available,
that the value of the jumbo rolls and/or
cut sheets produced in the PRC is a
significant portion of the total value of
the finished tissue paper products
MFVN exported to the United States,
pursuant to section 781(b)(1)(D) of the
Act.
Furthermore, in accordance with
section 781(b)(1)(E) of the Act, we find
that action is appropriate to prevent
evasion of the PRC Tissue Paper Order.
In conclusion, the Department
preliminarily determines under section
781(b) of the Act, that exports to the
United States of tissue paper products
produced from PRC-origin jumbo rolls
and/or cut sheets and further processed
in Vietnam by MFVN constitute
circumvention of the PRC Tissue Paper
Order.
The Department notes that this
represents the third instance in which
7 The Department came to this conclusion based
on its analysis of both the qualitative and
quantitative data submitted by the respondent. 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).
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16:52 Apr 05, 2011
Jkt 223001
the Department has found an exporting
company to have circumvented the PRC
Tissue Paper Order. See also Certain
Tissue Paper Products from the People’s
Republic of China: Affirmative Final
Determination of Circumvention of the
Antidumping Duty Order, 74 FR 29172
(June 19, 2009); and 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). The Department has
an obligation to administer the law in a
manner that prevents evasion of the
order. See Tung Mung Development v.
United States, 219 F. Supp. 2d 1333,
1343 (CIT 2002), affirmed 354 F.3d 1371
(January 15, 2004) (finding that the
Department has a responsibility to
prevent the evasion of payment of
antidumping duties). Further, section
781(b)(1)(E) of the Act directs the
Department to take necessary action to
‘‘prevent evasion’’ of antidumping or
countervailing duty orders when it
concludes that ‘‘merchandise has been
completed or assembled in other foreign
countries’’ and is circumventing an
order. Accordingly, to prevent future
evasion of the PRC Tissue Paper Order,
in light of our preliminary
determination, the Department will
instruct CBP to suspend liquidation of
all entries of tissue paper produced and/
or exported by MFVN that were entered,
or withdrawn from warehouse, for
consumption on or after the date of
initiation of the circumvention inquiry.
As noted above, the Department did
determine that MFVN now has the
capacity and ability to produce tissue
paper for export from domesticallysourced input materials. Should the
Department conduct an administrative
review in the future, and determine in
the context of that review that MFVN
has not produced for export tissue paper
using Chinese-origin jumbo rolls and/or
cut sheets, the Department will consider
initiating a changed circumstances
review pursuant to section 751(b) of the
Act to determine if the continued
suspension of merchandise produced
and/or exported by MFVN from
Vietnam is warranted.
Suspension of Liquidation
In accordance with section 733(d) of
the Act, the Department will direct CBP
to suspend liquidation and to require a
cash deposit of estimated duties, at the
PRC-wide rate of 112.64 percent, on all
unliquidated entries of tissue paper
produced and/or exported by MFVN
that were entered, or withdrawn from
warehouse, for consumption on or after
March 29, 2010, the date of initiation of
the circumvention inquiry.
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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 PRC Tissue Paper
Order. 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 exclusion, 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 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, including
the results of the Department’s analysis
of any written comments, will be issued
no later than August 1, 2011.
This preliminary affirmative
circumvention determination is
published in accordance with section
781(b) of the Act and 19 CFR 351.225.
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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices
March 31, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. 2011–8213 Filed 4–5–11; 8:45 am]
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone (202) 482–1766 or (202) 482–
3773, respectively.
SUPPLEMENTARY INFORMATION:
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BILLING CODE 3510–DS–P
Background
On March 30, 2005, the Department
published in the Federal Register the
DEPARTMENT OF COMMERCE
antidumping duty order on certain
International Trade Administration
tissue paper products from the PRC. See
Notice of Amended Final Determination
[A–570–894]
of Sales at Less than Fair Value and
Antidumping Duty Order: Certain
Certain Tissue Paper Products From
the People’s Republic of China: Notice Tissue Paper Products From the
of Preliminary Results of Antidumping People’s Republic of China, 70 FR 16223
(March 30, 2005) (Tissue Paper Order).
Duty Administrative Review
On March 1, 2010, the Department
AGENCY: Import Administration,
published a notice of opportunity to
International Trade Administration,
request an administrative review of the
Department of Commerce.
antidumping duty order on certain
SUMMARY: The Department is conducting tissue paper products from the PRC. See
Antidumping or Countervailing Duty
an administrative review of the
antidumping duty (AD) order on certain Order, Finding, or Suspended
Investigation; Opportunity To Request
tissue paper products (tissue paper)
Administrative Review, 75 FR 9162
from the People’s Republic of China
(March 1, 2010).
(PRC) for the period of review (POR) of
In response, the petitioner 1 timely
March 1, 2009, to February 28, 2010,
requested an administrative review of
with respect to Max Fortune (Vietnam)
the antidumping duty order on certain
Paper Products Company Limited
tissue paper products from the PRC with
(MFVN). MFVN claimed in this
respect to entries of the subject
administrative review that it made no
merchandise during the POR from
sales/shipments during the POR of
MFVN. Therefore, on April 21, 2010, the
tissue paper products produced from
Department initiated an administrative
Chinese-origin jumbo rolls/sheets.
2
Contrary to MFVN’s claim and based on review of MFVN. See Initiation of
Antidumping and Countervailing Duty
our verification findings, we
Administrative Reviews and Request for
preliminarily determine, as adverse
Revocation in Part, 75 FR 22107 (April
facts available (AFA), that during the
27, 2010). MFVN is a company located
POR MFVN made sales/shipments to
in Vietnam which exports tissue paper
the United States of tissue paper
products produced using Chinese-origin to the U.S. market through its parent
company based in Hong Kong—Max
jumbo rolls/sheets. Further, based on
Fortune Industrial Limited (Max
AFA, we find that no substantial
transformation is occurring as a result of Fortune HK). MFVN is also a
further processing in Vietnam, and thus respondent in an on-going antithe country of origin for AD purposes of circumvention inquiry involving the
subject merchandise from the PRC.3
the tissue paper products produced by
MFVN from Chinese-origin jumbo rolls/
1 The petitioner is Seaman Paper Company of
sheets is China.
Massachusetts, Inc.
2 Also on this date, the Department initiated a
If these preliminary results are
review of Max Fortune Industrial Limited, Max
adopted in our final results of this
Fortune (FZ) Paper Products Co., Ltd. (formerly
review, we will instruct U.S. Customs
known as Max Fortune (FETDE) Paper Products Co.,
and Border Protection (CBP) to collect
Ltd.), Max Fortune HK, and Fujian Provincial
cash deposits on all future entries of
Shaowu City Huaguang Special Craft Co., Ltd. based
on the petitioner’s timely request for review of these
tissue paper produced and/or exported
companies, but subsequently rescinded the review
by MFVN.
with respect to these companies pursuant to the
Interested parties are invited to
petitioner’s timely withdrawal of its request for
review. See Certain Tissue Paper Products From the
comment on these preliminary results.
People’s Republic of China: Notice of Partial
We will issue the final results no later
Rescission and Extension of Time Limit for
than 120 days from the date of
Preliminary Results of 2009–2010 Administrative
publication of this notice.
Review, 75 FR 73040 (November 29, 2010) (PRC
Tissue Paper from China Partial Rescission Notice).
DATES: Effective Date: April 6, 2011.
3 On March 29, 2010, the Department initiated an
FOR FURTHER INFORMATION CONTACT:
anti-circumvention inquiry on certain imports of
tissue paper from Vietnam produced and/or
Brian Smith or Gemal Brangman, AD/
exported by MFVN. See Certain Tissue Paper
CVD Operations, Office 2, Import
Products From the People’s Republic of China:
Administration, International Trade
Initiation of Anti-circumvention Inquiry, 75 FR
17127 (April 5, 2010).
Administration, U.S. Department of
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16:52 Apr 05, 2011
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19049
In its June 28, 2010, response to the
Department’s April 23, 2010,
questionnaire in the anti-circumvention
inquiry (June 28 Response), MFVN
claimed that it had not exported tissue
paper to the United States produced
from jumbo rolls or cut sheets imported
from the PRC since January 2008. MFVN
also filed this questionnaire response on
the record of this administrative review.
Similarly, in its August 17, 2010,
response to the Department’s May 7,
2010, questionnaire in this review,
MFVN claimed that it did not export
subject merchandise from the PRC or
Vietnam during the POR.
The Department postponed the
preliminary results in this review until
March 31, 2011, in order to have
sufficient time to conduct verification of
MFVN’s ‘‘no-shipment’’ claim. See PRC.
Tissue Paper Partial Rescission Notice.
Pursuant to 19 CFR 351.221(b)(3) and
351.225(f)(iii)(2), the Department
conducted a verification of the ‘‘noshipment’’ claim MFVN made in this
administrative review and in the anticircumvention inquiry, and met with
Vietnamese Customs on this matter in
December 2010. Both the verification
report and meeting memorandum are on
the record of this segment,4 and are
available in the Central Records Unit
(CRU) of the Department’s main
building.
Period of Review
The period of review (POR) is March
1, 2009, through February 28, 2010.
Scope of the Order
The tissue paper products covered by
this order are cut-to-length sheets of
tissue paper having a basis weight not
exceeding 29 grams per square meter.
Tissue paper products subject to this
order may or may not be bleached, dyecolored, surface-colored, glazed, surface
decorated or printed, sequined,
crinkled, embossed, and/or die cut. The
tissue paper subject to this order is in
the form of cut-to-length sheets of tissue
paper with a width equal to or greater
than one-half (0.5) inch. Subject tissue
paper may be flat or folded, and may be
packaged by banding or wrapping with
paper or film, by placing in plastic or
film bags, and/or by placing in boxes for
distribution and use by the ultimate
4 See Memorandum to The File entitled
‘‘Verification of the Questionnaire Response of Max
Fortune (VN) Paper Products Co., Ltd. (MFVN) and
Its Affiliates in the Anti-circumvention Inquiry and
2009–2010 Administrative Review of Certain Tissue
Paper Products from the People’s Republic of China
(PRC),’’ dated March 31, 2011 (MFVN Verification
Report); and Memorandum to The File entitled
‘‘Meeting with Vietnamese Customs,’’ dated March
31, 2011.
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Agencies
[Federal Register Volume 76, Number 66 (Wednesday, April 6, 2011)]
[Notices]
[Pages 19043-19049]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8213]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-894]
Certain Tissue Paper Products From the People's Republic of
China: Preliminary Affirmative 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) produced and/or exported by Max Fortune (Vietnam) Paper
Products Company, Limited (MFVN) \1\ to the United States from Vietnam
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) (PRC Tissue
Paper Order).
---------------------------------------------------------------------------
\1\ MFVN is a company located in Vietnam and is a wholly owned
subsidiary of Max Fortune Industrial Co., Ltd. (Max Fortune HK)
located in Hong Kong.
---------------------------------------------------------------------------
DATES: Effective Date: April 6, 2011.
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 February 19, 2010, the Seaman Paper Company of Massachusetts,
Inc. (the petitioner) requested that the Department of Commerce (the
Department) initiate an anti-circumvention inquiry pursuant to section
781(b) of the Act, and 19 CFR 351.225(h), to determine whether U.S.
[[Page 19044]]
imports of tissue paper exported from Vietnam by MFVN were made from
jumbo rolls and/or cut sheets of tissue paper produced in the PRC, and
thus circumventing PRC Tissue Paper Order. See the petitioner's
February 19, 2010, anti-circumvention inquiry request (February 19
Submission) at pages 13-14; and PRC Tissue Paper Order. Specifically,
the petitioner alleged that Chinese-produced jumbo rolls and/or cut
sheets of tissue paper sent to Vietnam for completion or assembly into
merchandise of the same class or kind as that covered by the PRC Tissue
Paper Order constituted circumvention pursuant to section 781(b) of the
Act. The petitioner also alleged in its February 19 Submission that
MFVN had been obtaining Chinese-produced tissue paper jumbo rolls and/
or cut sheets and using that merchandise in its U.S. tissue paper sales
since it commenced its operations in 2005.
On March 29, 2010, the Department initiated an anti-circumvention
inquiry on imports of tissue paper from Vietnam produced and/or
exported by MFVN. See Certain Tissue Paper Products from the People's
Republic of China: Notice of Initiation of Anti-circumvention Inquiry,
75 FR 64 (April 5, 2010) (Initiation Notice).
On April 23, 2010, the Department issued an anti-circumvention
questionnaire to MFVN, asking for sales and production information with
respect to the period January 1, 2005, to the present (April 23
Questionnaire). On May 13, 2010, MFVN entered a notice of appearance in
this proceeding. Also, on May 13, 2010, MFVN requested additional time
to file a response to the anti-circumvention questionnaire. Pursuant to
this request, the Department extended the questionnaire response
deadline until June 28, 2010, and MFVN submitted its response to the
questionnaire on that date (June 28 Response). In its June 28 Response,
MFVN admitted that it was possible that it manufactured some tissue
paper in Vietnam from PRC-origin jumbo rolls before and during 2007.
MFVN also stated that its records before 2008 were incomplete and
unreliable. However, MFVN asserted that it could conclusively
demonstrate that as of January 1, 2008, it did not convert any PRC-
origin jumbo rolls and/or cut sheets of tissue paper in Vietnam into
its own tissue paper products. See pages 3 and 12 of MFVN's June 28
Response.
In the April 23 Questionnaire, the Department requested factors of
production (FOP) information for purposes of determining whether the
value of the processing performed in Vietnam represented a small
portion of the value of the merchandise imported into the United
States. MFVN responded that it would not submit FOP data to the
Department because it claimed that since January 1, 2008, it no longer
included Chinese-origin tissue paper jumbo rolls and/or cut sheets in
its U.S. sales. See pages 14-15 of MFVN's June 28 Response.
The Department issued a supplemental questionnaire to MFVN on July
23, 2010, and received MFVN's supplemental questionnaire response on
September 1, 2010.
Also on September 1, 2010, MFVN filed a submission in which it
rebutted the petitioner's February 19, 2010, allegations and provided
information with respect to certain transactions with an affiliated
Chinese company, Fuzhou Tian Jun Trading Co., Ltd. (Tian Jun), during
the 2008-2009 period, which were alleged by the petitioner in its
February 19 Submission to have involved tissue paper.
The Department issued an additional supplemental questionnaire to
MFVN on October 12, 2010, and received MFVN's supplemental
questionnaire response on November 12, 2010.
On November 16, 2010, the Department placed on the record certain
data from the 2008-2009 administrative review of tissue paper from the
PRC. See Memorandum from Brian Smith, Senior Analyst, to The File,
dated November 16, 2010.
On November 18, 2010, the Department issued a verification outline
to MFVN.
On November 22, 2010, the Department met with the petitioner's
counsel to discuss agenda items in the verification outline issued to
MFVN.\2\
---------------------------------------------------------------------------
\2\ See Memorandum to The File from Brian Smith, Senior Analyst,
entitled ``Ex-Parte Meeting with Petitioner's Counsel,'' dated
November 22, 2010.
---------------------------------------------------------------------------
The petitioner submitted pre-verification comments on November 24,
2010.
Pursuant to section 782(i) of the Act, the Department conducted
verification of the questionnaire responses submitted by MFVN and its
affiliates Max Fortune HK, Tian Jun, and Max Fortune (FZ) Paper
Products Co., Ltd., from November 30 to December 16, 2010.\3\ This
verification report is on file and available in the Central Records
Unit (CRU) of the Department's main building.
---------------------------------------------------------------------------
\3\ See Memorandum to The File from Case Analysts entitled
``Verification of the Questionnaire Response of Max Fortune
(Vietnam) Paper Products Co., Ltd. and Its Affiliates in the Anti-
circumvention Inquiry and 2009-2010 Antidumping Duty Administrative
Review of Certain Tissue Paper Products from the People's Republic
of China,'' dated March 31, 2011 (MFVN verification report).
---------------------------------------------------------------------------
On January 18, 2011, the Department notified the parties by letter
that it was postponing the final determination of this inquiry until
August 1, 2011.\4\
---------------------------------------------------------------------------
\4\ See Letter to the Interested Parties from James Maeder,
Office Director, entitled ``Anti-Circumvention Inquiry on Certain
Tissue Paper Products from the People's Republic of China: Extension
of Final Determination,'' dated January 18, 2011.
---------------------------------------------------------------------------
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.\5\
---------------------------------------------------------------------------
\5\ On January 30, 2007, at the direction of U.S. Customs and
Border Protection (CBP), the Department added the following HTSUS
classifications to the AD/CVD module for tissue paper: 4802.54.3100,
4802.54.6100, and 4823.90.6700. However, we note that the six-digit
classifications for these numbers were already listed in the scope.
---------------------------------------------------------------------------
Excluded from the scope of this order are the following tissue
paper products: (1) Tissue paper products that are coated in wax,
paraffin, or polymers, of a kind used in floral and food service
applications; (2) tissue paper products
[[Page 19045]]
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 Vietnam from Chinese-origin jumbo rolls and/or
cut sheets of tissue paper, and exported from Vietnam to the United
States by MFVN.
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 anti-circumvention inquiries under section 781(b)(1) 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.
Section 781(b)(2) of the Act provides the criteria for determining
whether the process of assembly or completion is minor or
insignificant. These criteria are: (a) The level of investment in the
foreign country; (b) the level of research and development (R&D) in the
foreign country; (c) the nature of the production process in the
foreign country; (d) the extent of the production facilities in the
foreign country; and (e) whether the value of the processing performed
in the foreign country represents a small proportion of the value of
the merchandise imported into the United States.
The Statement of Administrative Action (SAA) accompanying the
Uruguay Round Agreements Act, H. Doc. No. 103-316, at 893 (1994),
provides some guidance with respect to these criteria. It explains that
no single factor listed in section 781(b)(2) of the Act will be
controlling. Accordingly, it is the Department's practice to evaluate
each of the factors as they exist in the foreign country depending on
the particular circumvention scenario. Therefore, the importance of any
one of the factors listed under section 781(b)(2) of the Act can vary
from case to case depending on the particular circumstances unique to
each circumvention inquiry.
Section 781(b)(3) of the Act further provides that, in determining
whether to include merchandise assembled or completed in a foreign
country in an antidumping duty order, the Department shall consider:
(A) The pattern of trade, including sourcing patterns; (B) whether the
manufacturer or exporter of the merchandise described in accordance
with section 781(b)(1)(B) of the Act is affiliated with the person who
uses the merchandise described in accordance with section 781(b)(1)(B)
to assemble or complete in the foreign country the merchandise that is
subsequently imported into the United States; and (C) whether imports
into the foreign country of the merchandise described in accordance
with section 781(b)(1)(B) have increased after the initiation of the
investigation which resulted in the issuance of such order.
In this case, the PRC Tissue Paper Order covers cut-to-length
sheets of tissue paper equal to or greater than 0.5 inches in width,
with a basis weight not exceeding 29 grams per square meter and other
specified characteristics of the scope. The merchandise subject to this
inquiry is tissue paper products exported to the United States by MFVN
produced from Chinese-origin jumbo rolls and/or cut sheets of tissue
paper. The list of products MFVN provided in its questionnaire
responses indicates that the tissue paper products it exported to the
United States meet the written description of the products subject to
the PRC Tissue Paper Order. See June 28 Response at Exhibit 6.
Accordingly, we find that the merchandise subject to this inquiry is
the same class or kind of merchandise as that subject to the PRC Tissue
Paper Order, pursuant to section 781(b)(1)(A) of the Act. With respect
to the remaining statutory criteria for determining whether
circumvention exists, the Department finds it necessary to rely on
facts available, as the respondent failed to provide necessary,
verifiable information upon which the Department could rely. Further,
as discussed in detail below, we find it appropriate in this inquiry to
apply facts available with an adverse inference, as the respondent
failed to cooperate to the best of its ability in providing the
necessary information.
Adverse Facts Available
Section 776(a) of the Act, provides that, if (1) necessary
information is not available on the record or (2) 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 information cannot be
verified, the Department shall, subject to subsection 782(d) of the
Act, use facts otherwise available in reaching the applicable
determination.
Furthermore, section 776(b) of the Act states that if the
Department ``finds that an interested party has failed to cooperate by
not acting to the best of its ability to comply with a request for
information from the administering authority * * * , the administering
authority * * * , in reaching the applicable determination under this
title, may use an inference that is adverse to the interests of that
party in selecting from among the facts otherwise available.'' See also
SAA, H.Rep. No. 103-316 at 870 (1994). It is the Department's practice
to make an adverse inference ``to ensure that the party does not obtain
a more favorable result by failing to cooperate than if it had
cooperated fully.'' Id. An adverse inference may include reliance on
information derived from the petition, the final determination in the
investigation, any previous review, or any other information placed on
the record. See section 776(b) of the Act.
In this case, MFVN informed the Department that it could not
provide any information with respect to the production of the
merchandise exported from Vietnam during the period January 1, 2005, to
December 31, 2007. In fact, MFVN admitted that ``it is possible that
MFVN might have made tissue paper in Vietnam from jumbo rolls from the
PRC'' during this time period. See MFVN's June 28 Response at page 3.
Furthermore, the data provided in the petitioner's February 19
Submission
[[Page 19046]]
show that MFVN obtained a significant amount of Chinese-origin jumbo
rolls and/or cut sheets of tissue paper during this time period. See
February 19 Submission at pages 13-14. This is the extent of
information on the record with regard to MFVN's production during this
time period.
Absent any further information on the record, pursuant to section
776(a) of the Act, the Department has concluded that the application of
facts available is warranted with respect to exports of tissue paper
from MFVN to the United States from January 1, 2005, to December 31,
2007 (2005-2007 period). Production information for the 2005-2007
period is necessary for purposes of this anti-circumvention inquiry and
without it on the administrative record, the Department cannot conduct
its anti-circumvention analysis for the 2005-2007 period. MFVN claims
that it was unable to maintain such records during the above-referenced
time period. However, we find this claim to be unreasonable. A company
is expected to maintain its production records in the normal course of
business. For companies doing business in Vietnam, the Vietnamese
Government has even issued regulations which require companies like
MFVN to retain such records for up to 10 years.\6\ This is especially
true in this case where MFVN demonstrated at verification that it
maintained such records in both 2009 and 2010. Therefore, because MFVN
did not provide the Department with necessary information with respect
to MFVN's exports of tissue paper during the 2005-2007 period, the
application of facts available pursuant to sections 776(a)(1) and (2)
of the Act is warranted.
---------------------------------------------------------------------------
\6\ See Memorandum to the File dated March 31, 2011 which
contains the following document, ``Decree No. 129/2004/ND-CP of May
31, 2004 Detailing and Guiding the Implementation of a Number of
Articles of the Accounting Law, Applicable to Business Activities,''
issued by the Government of the Socialist Republic of Vietnam on May
31, 2004.
---------------------------------------------------------------------------
Furthermore, MFVN's admission that it ``possibly'' made tissue
paper in Vietnam from Chinese-origin jumbo rolls, coupled with the fact
that the petitioner's data show that MFVN obtained PRC-origin jumbo
rolls and/or cut sheets from January 1, 2005, to December 31, 2007,
leads us to conclude that MFVN failed to cooperate by not acting to the
best of its ability to comply with the Department's request for
information with respect to its commercial activities during this
period. Therefore, pursuant to section 776(b) of the Act, an adverse
inference is warranted. Accordingly, as adverse facts available (AFA),
the Department preliminarily finds that all tissue paper produced and/
or exported by MFVN to the United States from January 1, 2005, to
December 31, 2007, was made with Chinese-origin jumbo rolls and/or cut
sheets of tissue paper.
With respect to MFVN's exports of tissue paper to the United States
during the calendar year 2008, the Department also concludes that the
application of AFA is warranted. Although MFVN stated in its June 28
Response that it could conclusively demonstrate through its accounting
and production records that it did not use Chinese-origin tissue paper
jumbo rolls and/or cut sheets in its U.S. sales during 2008, the
Department was unable to verify this claim. In fact, at verification,
MFVN provided inadequate and incomplete accounting records for calendar
year 2008. Specifically, MFVN did not support its claim that it had
ceased using Chinese-origin jumbo rolls and/or cut sheets of tissue
paper in its U.S. sales during 2008, nor did it provide the necessary
accounting records at verification to show the type and origin of the
materials it used in its tissue paper exports to the United States from
January 1, 2008, to December 31, 2008. See MFVN verification report at
pages 2, 35-36, and 39-40.
For example, at verification, MFVN provided a worksheet which
reconciled the cost-of-sales figure in its 2008 audited financial
statements to its purchases, beginning and ending inventory values and
conversion costs, as reflected in its annual summary trial balance for
2008. We subsequently requested that MFVN reconcile its monthly trial
balances or other monthly general ledger-type reports to the annual
summary trial balance for 2008. MFVN, however, claimed at verification
that it could not locate its monthly trial balances or any other
detailed accounting records for 2008 to support its annual summary
trial balance amounts. See MFVN verification report at pages 35-36.
In addition, we requested that MFVN provide the company's 2008
monthly inventory movement ledgers for raw materials, work in process
(WIP), and finished goods. While MFVN provided its detailed inventory
ledger as of December 31, 2008, the company informed Department
officials at verification that it could not provide any of the other
requested 2008 monthly detailed inventory movement ledgers. Without the
detailed trial balances or inventory movement ledgers, Department
officials were unable to rely on the company's monthly production cost
and inventory movement activity (for raw materials, WIP and finished
goods) noted in its warehouse records for purposes of testing at
verification the production quantity data contained in MFVN's
submissions for calendar year 2008. See MFVN verification report at
pages 35-36.
Also, MFVN did not provide at verification, upon request, details
of its raw material and WIP inventory as of January 1, 2008. Thus,
Department officials were unable to obtain details of the amounts
reflected in MFVN's beginning inventory value noted in its 2008 audited
financial statements (e.g., quantity of pulp versus Chinese-sourced
jumbo rolls in the beginning raw material inventory amount reflected in
the 2008 audited financial statements). See MFVN verification report at
pages 35-37.
All of the above examples demonstrate that MFVN did not provide to
the Department verifiable production data for calendar year 2008, was
unable to tie its export sales data to its production data for calendar
year 2008, and did not respond fully to the Department's questionnaires
with regard to its production during that period. The absence of
verifiable production data on the record for 2008 impeded the conduct
of this anti-circumvention inquiry. Therefore, pursuant to section
776(a)(2) of the Act, the Department concludes that the use of facts
available is warranted with regard to MFVN's U.S. tissue paper sales
transactions from January 1 to December 31, 2008.
Furthermore, because MFVN did not provide verifiable data showing
that it used only non-Chinese-origin jumbo rolls and/or sheets in its
production of all of the tissue paper it exported to the United States
from its facility during 2008, the Department concludes that MFVN did
not act to the best of its ability in this inquiry. As noted above, a
company is expected to maintain its production records in the normal
course of business. MFVN was aware that these records were necessary
for the Department's anti-circumvention analysis, but did not provide
them at verification, as requested. Therefore, pursuant to section
776(b) of the Act, an adverse inference is warranted because MFVN did
not provide all of the necessary information on the record and failed
to provide at verification the accounting records the Department needed
to analyze the relevant production data for the calendar year 2008.
Accordingly, as AFA, the Department preliminarily concludes that all of
MFVN's exports of tissue paper to the United States during 2008 were
produced with Chinese-origin jumbo rolls and/or cut sheets of tissue
paper.
[[Page 19047]]
In addition, MFVN's books and records, as verified, reflect that on
January 1, 2009, the company had significant amounts of tissue paper in
finished goods and WIP inventory. This entire inventory was produced
and/or purchased during 2008 or earlier. At verification, MFVN stated
that it did not have records to show the source of the material it used
in the production of that inventory. Furthermore, Department officials
discovered in the records MFVN provided at verification that there were
jumbo rolls of Chinese-origin in inventory at the end of December 2008,
which remained in inventory throughout 2009, and were later withdrawn
from inventory in March 2010. See MFVN verification report at pages 40-
41. Therefore, the Department finds that adverse facts available is
also warranted with respect to the beginning inventory amount in 2009.
Accordingly, as AFA, the Department determines that any tissue paper
exported by MFVN to the United States on or after January 1, 2009,
which was withdrawn from, or produced from merchandise in, finished
goods or WIP inventory as of January 1, 2009, was produced from Chinese
jumbo rolls and/or cut sheets.
Based on the foregoing analysis, as AFA, the Department
preliminarily finds that MFVN used Chinese-origin jumbo rolls and/or
cut-sheets of tissue paper in its production of tissue paper that it
exported to the United States from January 1, 2005, to December 31,
2008, and that MFVN continued to use such merchandise from inventory
during that period to produce and/or sell tissue paper on or after
January 1, 2009. Accordingly, the Department preliminarily concludes
that MFVN's tissue paper exports to the United States during 2009 and
2010 included tissue paper produced from Chinese jumbo rolls and/or cut
sheets.
However, the Department was able to verify based on its examination
of Vietnamese Customs data from January 1, 2008, to December 10, 2010,
MFVN had not imported any additional Chinese-origin jumbo rolls and/or
cut sheets of tissue paper. See MFVN verification report at page 3. In
light of these verified data and the Department's observation of MFVN's
tissue-paper production operations at verification, we find that MFVN
now has the capacity and ability to produce tissue paper for export.
In determining whether circumvention of an order is occurring,
section 781(b)(1) of the Act directs the Department to address, among
other things, whether before importation into the United States, the
imported merchandise is completed or assembled in another country from
merchandise which is subject to the order or produced in the foreign
country that is subject to the order. See section 781(b)(1)(B) of the
Act. Based on the preceding analysis, there is little dispute that
during the period of analysis of this inquiry, MFVN completed some
tissue paper in Vietnam using jumbo rolls and/or cut sheets produced in
the PRC.
Section 781(b)(1) of the Act also directs the Department to examine
whether (1) the process of assembly or completion in the foreign
country (i.e., Vietnam) is minor or insignificant and (2) the value of
the merchandise produced in the country subject to the order (i.e., the
PRC) is a significant portion of the total value of the merchandise
exported to the United States. See sections 781(b)(1)(C) and (D) of the
Act. Because the PRC and Vietnam are non-market economies, in any
review of merchandise produced in those countries, section 773(c)(4) of
the Act provides that the Department shall value the FOP utilizing
prices or costs in one or more market-economy countries that are at a
level of economic development comparable to that of the NME country and
are significant producers of comparable merchandise. Pursuant to this
provision, in its questionnaire to MFVN, the Department requested the
FOP data for both the Chinese-origin jumbo rolls and/or sheets imported
by MFVN, and the processing and packaging operations performed by MFVN
in Vietnam. See the Department's April 23 Questionnaire at pages 9-10.
See also 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); and
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).
In determining whether the process of assembly or completion of
tissue paper from jumbo rolls and/or cut sheets is ``minor or
insignificant'' as required by section 781(b)(1), section 781(b)(2) of
the Act directs the Department to consider various factors including
(a) MFVN's level of investment in Vietnam; (b) MFVN's level of R&D in
Vietnam; (c) the nature of MFVN's production process in Vietnam; (d)
the extent of MFVN's production facilities in Vietnam; and (e) whether
the value of the processing performed in Vietnam represents a small
proportion of the value of the merchandise MFVN exported to the United
States. With respect to the first criterion, the Department verified
that the level of investment by MVFN for equipment used in converting
the PRC-origin jumbo rolls and/or cut sheets into finished tissue paper
is minor or insignificant. See MFVN verification report at page 6.
Moreover, the record evidence for this circumvention inquiry
demonstrates that MFVN has not undertaken a significant level of R&D in
order to process tissue paper products. See June 28 Response at pages
12-13. Furthermore, the production process conducted by MFVN in
converting the PRC-origin jumbo rolls or sheets to cut-to-length tissue
paper is limited and minor when compared to the production process of
the jumbo rolls or sheets. See June 28 Response at pages 13-14. In
addition, the Department did verify that MFVN has production facilities
in Vietnam in terms of the capital equipment and the types of employees
used in the production process. See MFVN verification report at pages 6
and 19-20. However, as noted above, MFVN was unable to provide evidence
that, before January 1, 2009, it used its full capacity of production
to manufacture tissue paper.
With respect to the criterion of section 781(b)(2)(e) of the Act,
however, MFVN did not provide the Department with sufficient
information to determine whether the value of the processing MFVN
performed in Vietnam represents a small proportion of the value of the
merchandise MFVN exported to the United States. In response to our
questionnaire, MFVN refused to submit FOP information, because it
stated that it could definitively demonstrate through its books and
records that as of January 1, 2008, it did not use Chinese-origin jumbo
rolls and/or cut sheets of tissue paper in its U.S. tissue paper sales.
See June 28 Response at pages 3 and 12. However, as explained above,
MFVN was unable to substantiate this claim at verification.
Accordingly, for this factor, the application of facts available is
also warranted pursuant to section 776(a) of the Act.
In its February 19 Submission, the petitioner provided evidence
based on foreign market research that the conversion by MFVN of jumbo
rolls and/or sheets of tissue paper produced in the PRC into finished
tissue paper products in Vietnam is a minor or insignificant process as
defined under sections 781(b)(1)(C) and (b)(2) of the Act, and that the
value of the processing performed by MFVN is a minor portion
[[Page 19048]]
of the value of the completed merchandise. Accordingly, the petitioner
reasoned that the value of the PRC-origin jumbo rolls and/or sheets
used by MFVN is a significant portion of the total value of the
merchandise exported to the United States, pursuant to section
781(b)(1)(D) of the Act. See Initiation Notice, 75 FR 17128-17131.
Further, in a prior anti-circumvention segment of this proceeding, the
Department determined that the process of converting Chinese-origin
jumbo rolls in Vietnam was minor or insignificant, and that the value
of the Chinese-origin jumbo rolls was a significant portion of the
total value of the finished tissue paper products the respondent
exported to the United States.\7\
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\7\ The Department came to this conclusion based on its analysis
of both the qualitative and quantitative data submitted by the
respondent. 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).
---------------------------------------------------------------------------
Therefore, based on data contained in the petitioner's February 19
Submission, as well as our findings in a prior anti-circumvention
segment of the PRC tissue paper proceeding, the Department determines
in this case, as facts available, that the value of the processing MFVN
performed in Vietnam represents a small proportion of the value of the
merchandise MFVN exported to the United States.
Taking into consideration all of the factors under section
781(b)(2) of the Act, the Department concludes that the process of
converting the jumbo rolls and/or cut sheets of tissue paper into the
finished tissue paper products in Vietnam is minor or insignificant,
pursuant to sections 781(b)(1)(C) of the Act. Accordingly, the
Department concludes, based on the facts available, that the value of
the jumbo rolls and/or cut sheets produced in the PRC is a significant
portion of the total value of the finished tissue paper products MFVN
exported to the United States, pursuant to section 781(b)(1)(D) of the
Act.
Furthermore, in accordance with section 781(b)(1)(E) of the Act, we
find that action is appropriate to prevent evasion of the PRC Tissue
Paper Order.
In conclusion, the Department preliminarily determines under
section 781(b) of the Act, that exports to the United States of tissue
paper products produced from PRC-origin jumbo rolls and/or cut sheets
and further processed in Vietnam by MFVN constitute circumvention of
the PRC Tissue Paper Order.
The Department notes that this represents the third instance in
which the Department has found an exporting company to have
circumvented the PRC Tissue Paper Order. See also Certain Tissue Paper
Products from the People's Republic of China: Affirmative Final
Determination of Circumvention of the Antidumping Duty Order, 74 FR
29172 (June 19, 2009); and 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). The Department has an obligation to administer the law in a
manner that prevents evasion of the order. See Tung Mung Development v.
United States, 219 F. Supp. 2d 1333, 1343 (CIT 2002), affirmed 354 F.3d
1371 (January 15, 2004) (finding that the Department has a
responsibility to prevent the evasion of payment of antidumping
duties). Further, section 781(b)(1)(E) of the Act directs the
Department to take necessary action to ``prevent evasion'' of
antidumping or countervailing duty orders when it concludes that
``merchandise has been completed or assembled in other foreign
countries'' and is circumventing an order. Accordingly, to prevent
future evasion of the PRC Tissue Paper Order, in light of our
preliminary determination, the Department will instruct CBP to suspend
liquidation of all entries of tissue paper produced and/or exported by
MFVN that were entered, or withdrawn from warehouse, for consumption on
or after the date of initiation of the circumvention inquiry.
As noted above, the Department did determine that MFVN now has the
capacity and ability to produce tissue paper for export from
domestically-sourced input materials. Should the Department conduct an
administrative review in the future, and determine in the context of
that review that MFVN has not produced for export tissue paper using
Chinese-origin jumbo rolls and/or cut sheets, the Department will
consider initiating a changed circumstances review pursuant to section
751(b) of the Act to determine if the continued suspension of
merchandise produced and/or exported by MFVN from Vietnam is warranted.
Suspension of Liquidation
In accordance with section 733(d) of the Act, the Department will
direct CBP to suspend liquidation and to require a cash deposit of
estimated duties, at the PRC-wide rate of 112.64 percent, on all
unliquidated entries of tissue paper produced and/or exported by MFVN
that were entered, or withdrawn from warehouse, for consumption on or
after March 29, 2010, 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 PRC Tissue Paper Order.
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 exclusion, 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 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,
including the results of the Department's analysis of any written
comments, will be issued no later than August 1, 2011.
This preliminary affirmative circumvention determination is
published in accordance with section 781(b) of the Act and 19 CFR
351.225.
[[Page 19049]]
March 31, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-8213 Filed 4-5-11; 8:45 am]
BILLING CODE 3510-DS-P