Polyethylene Retail Carrier Bags From Taiwan: Initiation of Anti-Circumvention Inquiry on Antidumping Duty Order, 46319-46322 [2013-18430]

Download as PDF Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES In this instance, Huade’s sale of subject merchandise was made during the POR specified by the Department’s regulations, but the shipment entered within thirty days after the end of that POR. When the sale of the subject merchandise occurs within the POR specified by the Department’s regulations, but the entry occurs after the POR, the specified POR may be extended unless it would be likely to prevent the completion of the review within the time limits set by the Department’s regulations.9 Additionally, the preamble to the Department’s regulations states that both the entry and the sale should occur during the POR, and that under ‘‘appropriate’’ circumstances the Department has the flexibility to extend the POR.10 The Department finds that extending the POR to capture this entry would not prevent the completion of the review within the time limits set by the Department’s regulations. Therefore, the Department has extended the POR for the new shipper review of Huade by thirty days. Initiation of New Shipper Review Pursuant to section 751(a)(2)(B) of the Act and 19 CFR 351.214(b), and the information on the record, the Department finds that the requests submitted by Huade, Bonn Flooring and Fuerjia meet the threshold requirements for initiation of new shipper reviews for the shipments of multilayered wood flooring from the PRC produced and exported by these companies.11 However, if the information supplied by Huade, Bonn Flooring or Fuerjia is later found to be incorrect or insufficient during the course of this proceeding, the Department may rescind the review or apply adverse facts available pursuant to section 776 of the Act, depending upon the facts on record. The Department intends to issue the preliminary results of these new shipper reviews no later than 180 days from the date of initiation, and the final results no later than 90 days from the issuance of the preliminary results.12 It is the Department’s usual practice, in cases involving non-market economies, to require that a company seeking to establish eligibility for an antidumping duty rate separate from the country-wide rate provide evidence of de jure and de facto absence of 9 See 19 CFR 351.214(f)(2)(ii). Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27319–27320 (May 19, 1997). 11 See Huade Initiation Checklist; see also Bonn Initiation Checklist; see also Fuerjia Initiation Checklist. 12 See section 751(a)(2)(B)(iv) of the Act. 10 See VerDate Mar<15>2010 16:14 Jul 30, 2013 Jkt 229001 government control over the company’s export activities. Accordingly, the Department will issue questionnaires to Huade, Bonn Flooring and Fuerjia, which will include a section requesting information with regard to these companies’ export activities for separate rates purposes. The review of each exporter will proceed if the response provides sufficient indication that it is not subject to either de jure or de facto government control with respect to its export of subject merchandise. The Department will instruct CBP to allow, until the completion of the review, at the option of the importer, the posting of a bond or security in lieu of a cash deposit for each entry of the subject merchandise from Huade, Bonn Flooring and Fuerjia, in accordance with section 751(a)(2)(B)(iii) of the Act and 19 CFR 351.214(e). Because Huade, Bonn Flooring and Fuerjia certified that they produced and exported the subject merchandise, the Department will apply the bonding privilege only for subject merchandise that the respondent both produced and exported. Interested parties requiring access to proprietary information in these new shipper reviews should submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305 and 19 CFR 351.306. Revised Factual Information Requirements On April 10, 2013, the Department published Definition of Factual Information and Time Limits for Submission of Factual Information: Final Rule, 78 FR 21246 (April 10, 2013), which modified two regulations related to antidumping and countervailing duty proceedings: the definition of factual information (19 CFR 351.102(b)(21)), and the time limits for the submission of factual information (19 CFR 351.301). The final rule identifies five categories of factual information in 19 CFR 351.102(b)(21), which are summarized as follows: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i)–(iv). The final rule requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 46319 factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. The final rule also modified 19 CFR 351.301 so that, rather than providing general time limits, there are specific time limits based on the type of factual information being submitted. These modifications are effective for all segments initiated on or after May 10, 2013. Please review the final rule, available at https:// ia.ita.doc.gov/frn/2013/1304frn/201308227.txt, prior to submitting factual information in this segment. Any party submitting factual information in an antidumping duty or countervailing duty proceeding must certify to the accuracy and completeness of that information.13 Parties are hereby reminded that revised certification requirements are in effect for company/ government officials as well as their representatives in all segments of any antidumping duty or countervailing duty proceedings initiated on or after March 14, 2011.14 The formats for the revised certifications are provided at the end of the Interim Final Rule. The Department intends to reject factual submissions in any proceeding segments initiated on or after March 14, 2011, if the submitting party does not comply with the revised certification requirements. This initiation and notice are in accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214 and 19 CFR 351.221(c)(1)(i). Dated: July 25, 2013. Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations. [FR Doc. 2013–18426 Filed 7–30–13; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–583–843] Polyethylene Retail Carrier Bags From Taiwan: Initiation of AntiCircumvention Inquiry on Antidumping Duty Order Import Administration, International Trade Administration, Department of Commerce. DATES: Effective Date: July 31, 2013. AGENCY: 13 See section 782(b) of the Act. Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491 (February 10, 2011) (‘‘Interim Final Rule’’), amending 19 CFR 351.303(g)(1) and (2). 14 See E:\FR\FM\31JYN1.SGM 31JYN1 46320 Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / Notices In response to a request from The Polyethylene Retail Carrier Bag Committee and its individual members PCL Packaging, Inc., Hilex Poly Co., LLC, and Superbag Corp. (collectively, the petitioners), the Department of Commerce (the Department) is initiating an anti-circumvention inquiry pursuant to section 781(a) of the Tariff Act of 1930, as amended (the Act) to determine whether imports of unfinished polyethylene retail carrier bags (PRCBs) on a roll from Taiwan are circumventing the antidumping duty order on PRCBs from Taiwan.1 FOR FURTHER INFORMATION CONTACT: Hermes Pinilla, AD/CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–3477. SUPPLEMENTARY INFORMATION: SUMMARY: mstockstill on DSK4VPTVN1PROD with NOTICES Background The Department received from U.S. Customs and Border Protection (CBP) a sample of merchandise that was part of a larger shipment imported into the United States and that resembles a series or roll of unfinished PRCBs. The particular sample measures roughly 42.5 inches by 9 inches and the front surface is printed with multi-color graphics and the words ‘‘Brush,’’ ‘‘Floss,’’ and ‘‘Smile.’’ The sample also shows the location of oval handles that have not yet been die cut out of the bags and the color printing registration marks used to print the bag in Taiwan are contained in the location of the oval handles. The sample resembles in-scope, finished PRCBs on a roll in all respects except that the bottoms are open and they lack handles. The merchandise appears ready to undergo the final processing of cutting the unfinished PRCBs to length, sealing the bottoms, and die-cutting the unfinished PRCBs to create the handles of the finished PRCBs. In addition, the Department received from CBP documentation associated with the shipment of this product. In April 2013, the Department placed two memoranda on to the record stating that it received this sample unfinished PRCB along with proprietary documentation associated with the shipment, and inviting parties to view the sample and submit comments.2 On May 3, 2013, SmileMakers Inc. (SmileMakers) submitted a scope ruling 1 See Antidumping Duty Order: Polyethylene Retail Carrier Bags from Indonesia, Taiwan, and the Socialist Republic of Vietnam, 75 FR 23667 (May 4, 2010) (PRCB Orders). 2 See Memoranda to the File dated April 18, 2013, and April 24, 2013. VerDate Mar<15>2010 16:14 Jul 30, 2013 Jkt 229001 request to the Department regarding certain rolls of unfinished PRCBs that are to be used to ‘‘produce customized bags for dentists’ and doctors’ offices.’’ 3 On May 20, 2013, the petitioners requested that the Department issue an affirmative anti-circumvention determination, pursuant to section 781(a) of the Act and 19 CFR 351.225(g).4 The petitioners further state that CBP officials had advised them that the practice of importing unfinished PRCBs is increasing and expanding to multiple ports.5 The petitioners claim that there is no commercial justification for not completing the PRCB production process at the place of manufacture and instead locating the final minor finishing operation in the United States except to evade imposition of antidumping duties.6 After considering the information placed on the record, the Department has determined to conduct one proceeding in the context of an anticircumvention inquiry. The parties’ submissions demonstrate that both requests cover identically described merchandise. For this reason, we find that it is reasonable and practical to address whether the merchandise at issue is subject to the order on PRCBs from Taiwan in the context of an anticircumvention inquiry, which will provide for the most comprehensive analysis, under section 781(a) of the Act and 19 CFR 351.225(g). As a result of our determination to initiate this inquiry, we are placing SmileMakers’ scope ruling request and the information we received from CBP on the record of this anti-circumvention inquiry. and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm). PRCBs are typically provided without any consumer packaging and free of charge by retail establishments, e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants, to their customers to package and carry their purchased products. The scope of the order excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments, e.g., garbage bags, lawn bags, trash-can liners. Imports of the subject merchandise are currently classifiable under statistical category 3923.21.0085 of the Harmonized Tariff Schedule of the United States (HTSUS). This subheading also covers products that are outside the scope of the order. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of the order is dispositive. Scope of the Anti-Circumvention Inquiry This anti-circumvention inquiry covers merchandise from Taiwan that appears to be a series or roll of unfinished PRCBs that is ready to undergo the final steps in the production process, i.e., cutting-to-size the merchandise, sealing the bag on one end to form a closure, and creating the handles of a finished PRCB (using a die press to stamp out the opening).7 Scope of the Order The merchandise subject to the antidumping duty order is PRCBs which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), The Petitioners’ Request for Initiation of Anti-Circumvention Proceeding As stated above, the petitioners filed a request for a circumvention determination in which they commented on the relationship of this merchandise to merchandise covered by the scope of the PRCB order from Taiwan. The petitioners allege that 3 See SmileMakers’ letter to the Department, ‘‘Polyethylene Retail Carrier Bags from Taiwan (A– 583–843): SmileMakers, Inc., Scope Ruling Request: Rolls of Polyethylene Film Tube’’ dated May 3, 2013 (SmileMakers’ scope ruling request). 4 See the petitioners’ letter to the Department, ‘‘Polyethylene Retail Carrier Bags From Taiwan/ Request For An Affirmative Anti-Circumvention Determination’’ dated May 20, 2013 (the petitioners’ request). 5 Id. at 3. 6 Id. 7 The unfinished PRCBs, as described by SmileMakers in its scope request, ‘‘are made from polyethylene formed into the shape of a tube that is open (unsealed) on both ends; they do not contain any handles, perforations, seams, or seals; they are imprinted with a variety of pictures and designs, depending on SmileMakers requirements; and they all serve the same purpose (i.e., after importation, they are imprinted with medical practitioners’ contact information, cut, punched, and sealed to form small bags that are given out at dentists’ and doctors’ offices, etc.).’’ PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / Notices while the imported unfinished PRCBs are sealed on the sides, the bottom and top are open, and the oval handle has not been die cut. The petitioners contend that completion of these steps would make the bags subject merchandise if they were imported in this condition.8 Citing the International Trade Commission (ITC)’s recent sunset review determination of PRCBs from the PRC, the petitioners explain that the PRCB production process can be described as a four-step process consisting of (1) Blending polyethylene resin pellets, color concentrates, and other additives; (2) extrusion and film forming; (3) printing; and (4) PRCB conversion.9 The final, normal ‘‘conversion’’ step is described in information submitted by the petitioners as follows: ‘‘After the printing process is complete, the large roll of film is then cut to size with hot knives that seam the sides of the bags together when cut. Then, the film is fed into bag manufacturing machines where the top and bottom seals are formed and handles are cut out.’’ 10 The petitioners contend that the unfinished PRCBs that are the subject of their request represent an interruption in this continuous production process because, while they have been sealed on their sides, the bottom and top are open and the oval handle has not been die cut.11 Completion of these steps would make the bags subject of the antidumping duty order if they were imported in this finished condition.12 Initiation of Anti-Circumvention Proceeding mstockstill on DSK4VPTVN1PROD with NOTICES Applicable Law Section 781(a) of the Act and 19 CFR 351.225(g) provide that the Department may find circumvention of an antidumping duty order when merchandise of the same class or kind as merchandise that is subject to the order is completed or assembled in the United States. In conducting anticircumvention inquiries under section 781(a)(1) of the Act, the Department relies upon the following criteria: (A) Merchandise sold in the United States is of the same class or kind as other merchandise that is produced in a foreign country that is subject to an antidumping duty order; (B) such 8 See the petitioners’ request at 6. at 4, citing Polyethylene Retail Carrier Bags from China, Malaysia, and Thailand, Inv. Nos. 731– TA–1043–1045 (Review), USITC Pub. 4160 (June 2010) at I–17. 10 See the petitioners’ request at Exhibit 5. 11 Id. at 6. 12 Id. 9 Id. VerDate Mar<15>2010 16:14 Jul 30, 2013 Jkt 229001 merchandise sold in the United States is completed or assembled in the United States from parts or components produced in the foreign country with respect to which the antidumping duty order applies; (C) the process of assembly or completion in the United States is minor or insignificant; and (D) the value of the parts or components referred to in (B) is a significant portion of the total value of the merchandise. As discussed below, the petitioners presented evidence with respect to these criteria. A. Merchandise of the Same Class or Kind The petitioners state that the merchandise sold in the United States is of the same class or kind as the subject merchandise. The petitioners agree with the Department’s statement that the samples ‘‘closely resemble’’ a PRCB.13 Moreover, the merchandise is made of polyethylene film and the dimensions of the finished PRCBs are within those of the scope definition. Finally, the petitioners state, because the bag is completely and exclusively dedicated to use as a Dentist PRCB and has been finished to the point where there can be no doubt of its intended use, the merchandise will be subject merchandise within the order on PRCBs Taiwan scope definition when completed.14 B. Completion of Merchandise in the United States The petitioners cite to the CBP referral and SmileMakers’ scope ruling request to support their claim that the imported rolls are completed in the United States from parts and components produced in Taiwan. All the necessary raw materials for a finished PRCB are entered. Performing the final die-cutting operation in the United States simply finishes the PRCB.15 C. Minor or Insignificant Process According to the petitioners, the process of converting this product into a finished PRCB is minor or insignificant, particularly relative to the production process as a whole. The petitioners assert that the sealing and cutting operation is a simple step that occurs only at the very end of the multistep production process. Specifically, the bottom of the bag is sealed with a hot knife and the handles cut by clamping a die to a press and then pressing on the pillow pack.16 13 See Memorandum to the File, dated April 18, 2013. 14 Id. at 10. 15 Id. at 11. 16 Id. at 12. PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 46321 Consequently, the only equipment that is needed seals the bag and cuts out an oval handle.17 According to the advertisement provided by the petitioners, the equipment needed to accomplish these tasks can be purchased new for $11,000 to $13,000.18 In contrast, the operations performed in Taiwan, the petitioners contend, are highly capital-intensive and technologically sophisticated. The petitioners further argue that no research and development expenditures are required to perform the simple sealing, and die-cutting operations, as the technically complex research and development activities are performed prior to this stage in Taiwan.19 Similarly, the petitioners state that minor production facilities are required and that the operations could be performed in a small single-story room.20 Finally, the petitioners assert that the value of processing performed in the United States represents a negligible proportion of the value of the merchandise sold in the United States. Completion of the PRCB can be performed by a single employee, and the capital and marginal costs of the diecutting operations in the United States are relatively insignificant in comparison to the manufacturing of the imported merchandise performed in Taiwan.21 The petitioners further explain that the Department need not collect precise information on the amount of the value added in the United States to conclude that the process is minor or insignificant, but may rather rely on a qualitative assessment to draw this conclusion.22 D. Value of Merchandise Produced in the Foreign Country Is a Significant Portion of the Value of the Merchandise Sold in the United States As stated above, the petitioners contend that the value of the processing performed in the United States represents a minor portion of the value 17 Id. at 11. and Exhibit 10. 19 Id. at 12. 20 Id. 21 Id. 22 Id. at 10 n. 37 (citing Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders on Certain Pasta From Italy: Affirmative Preliminary Determinations of Circumvention of Antidumping and Countervailing Duty Orders, 68 FR 46571 (August 6, 2003), unchanged in Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders on Certain Pasta from Italy: Affirmative Final Determinations of Circumvention of Antidumping and Countervailing Duty Orders, 68 FR 54888 (September 19, 2003)). 18 Id. E:\FR\FM\31JYN1.SGM 31JYN1 46322 Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / Notices of the completed merchandise.23 Therefore, because most of the value of the finished PRCB is created in Taiwan, the value of the merchandise as entered is certainly a significant portion of the total value of the finished PRCB. mstockstill on DSK4VPTVN1PROD with NOTICES E. Factors To Consider in Determining Whether Action Is Necessary Section 781(a)(3) of the Act identifies additional factors that the Department shall consider in determining whether to include parts or components in an antidumping duty order as part of an anti-circumvention inquiry. Of these, the petitioners argue that importation of the circumventing merchandise represents a change in the pattern of trade.24 The petitioners assert that prior to imposition of the PRCB Orders, no party imported such merchandise for completion into finished PRCBs. The petitioners argue that interrupting the production process prior to completion is neither economical nor rational, and that the only reason not to complete the PRCB in the country of origin is to evade application of antidumping duties upon importation.25 Analysis Section 351.225(f)(1) of our regulations directs that a notice of the initiation of an anti-circumvention inquiry issued under 19 CFR 351.225(e) will include a description of the product that is the subject of the anticircumvention inquiry and an explanation of the reasons for the Department’s decision to initiate an anti-circumvention inquiry. The product that is subject of this anti-circumvention inquiry covers merchandise from Taiwan that appears to be series or roll of unfinished PRCBs that is ready to undergo the final steps in the production process, i.e., cuttingto-size the merchandise, sealing the bag on one end to form a closure, and creating the handles of a finished PRCB (using a die press to stamp out the opening). Based on our analysis of the petitioners’ request, the Department determines that the criteria under section 781(a) of the Act have been satisfied to warrant the initiation of an anti-circumvention inquiry. With regard to whether the merchandise sold in the United States is of the same class or kind as the merchandise covered by the antidumping duty order, the petitioners presented information indicating that the merchandise completed and sold in the United States is of the same class or kind as PRCBs from Taiwan which are subject to the order on PRCBs from Taiwan.26 With regard to whether the process of converting this product into finished PRCBs is a ‘‘minor or insignificant process,’’ the petitioners addressed the relevant statutory factors with the best information available to them at the time of their anticircumvention inquiry request.27 The petitioners relied on publicly-available information for this purpose, in addition to their own expertise in the production process. Given that the petitioners do not have access to cost or price data of either the Taiwanese producer or the U.S. importer, the petitioners relied on their own knowledge of the production process to draw their conclusions and demonstrate that, qualitatively, the value of the conversion of the imported merchandise into subject merchandise is minor or insignificant.28 With respect to the value of the merchandise produced in Taiwan, the petitioners relied on the information and arguments in the ‘‘minor or insignificant process’’ portion of their anti-circumvention request to indicate that the value of Taiwan production for unfinished PRCBs is significant relative to the total value of finished PRCBs sold in the United States.29 Finally, the petitioners argued that the Department should also consider the pattern of trade as a factor in determining whether to initiate the anticircumvention inquiry. In particular, the petitioners asserted that no party imported merchandise that must undergo the final step of the production process to be converted into finished PRCBs prior to the imposition of the order on PRCBs from Taiwan, as doing so is irrational and uneconomical.30 Based on these allegations, we are initiating an anti-circumvention inquiry concerning the antidumping duty order on PRCBs from Taiwan, pursuant to section 781(a) of the Act and 19 CFR 351.225(g). The Department is initiating this anti-circumvention inquiry with respect to all such merchandise from Taiwan as described above, regardless of producer or exporter. In accordance with 19 CFR 351.225(l)(2), if the Department issues a preliminary affirmative determination, we will then instruct CBP to suspend liquidation and require a cash deposit of estimated duties, at the applicable rate, for each unliquidated entry of the merchandise 26 Id. 27 Id. 23 Id. at 13. 29 Id. 25 Id. 16:14 Jul 30, 2013 Jkt 229001 PO 00000 at 13. Frm 00011 Fmt 4703 [FR Doc. 2013–18430 Filed 7–30–13; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration [Docket No. 130702582–3582–01] RIN 0648–XC747 Endangered and Threatened Species; 90-Day Finding on Petition To Delist the Southern Oregon/Northern California Coast Evolutionarily Significant Unit of Coho Salmon Under the Endangered Species Act National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of 90-day petition finding. AGENCY: We, NMFS, announce a 90day finding on a petition to delist the Southern Oregon/Northern California Coast (SONCC) Evolutionarily Significant Unit (ESU) of coho salmon 30 Id. VerDate Mar<15>2010 Dated: July 25, 2013. Paul Piquado, Assistant Secretary for Import Administration. SUMMARY: at 10–11. at 11–13. 28 Id. 24 Id. at issue, entered or withdrawn from warehouse for consumption on or after the date of initiation of the inquiry. In accordance with section 781(e)(1) of the Act and 19 CFR 351.225(f)(7)(i)(A), we intend to notify the ITC in the event of an affirmative preliminary determination of circumvention under section 781(d) of the Act. This notice serves as an invitation to interested parties to participate in this anti-circumvention inquiry. The Department invites all potential respondents to identify themselves as producers, importers, or further processors of such merchandise and to provide their own evidence and information that may inform the Department’s determination. Please contact the official listed under the above heading, FOR FURTHER INFORMATION CONTACT for instructions for participating in this inquiry. The Department will, following consultation with interested parties, establish a schedule for questionnaires and comments on the issues. The Department intends to issue its final determination within 300 days of the date of publication of this initiation consistent with section 781(f) of the Act. This notice is published in accordance with 781(a) of the Act and 19 CFR 351.225(f). Sfmt 4703 E:\FR\FM\31JYN1.SGM 31JYN1

Agencies

[Federal Register Volume 78, Number 147 (Wednesday, July 31, 2013)]
[Notices]
[Pages 46319-46322]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18430]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-843]


Polyethylene Retail Carrier Bags From Taiwan: Initiation of Anti-
Circumvention Inquiry on Antidumping Duty Order

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

DATES: Effective Date: July 31, 2013.

[[Page 46320]]

SUMMARY: In response to a request from The Polyethylene Retail Carrier 
Bag Committee and its individual members PCL Packaging, Inc., Hilex 
Poly Co., LLC, and Superbag Corp. (collectively, the petitioners), the 
Department of Commerce (the Department) is initiating an anti-
circumvention inquiry pursuant to section 781(a) of the Tariff Act of 
1930, as amended (the Act) to determine whether imports of unfinished 
polyethylene retail carrier bags (PRCBs) on a roll from Taiwan are 
circumventing the antidumping duty order on PRCBs from Taiwan.\1\
---------------------------------------------------------------------------

    \1\ See Antidumping Duty Order: Polyethylene Retail Carrier Bags 
from Indonesia, Taiwan, and the Socialist Republic of Vietnam, 75 FR 
23667 (May 4, 2010) (PRCB Orders).

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla, AD/CVD Operations, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
---------------------------------------------------------------------------
Washington, DC 20230; telephone: (202) 482-3477.

SUPPLEMENTARY INFORMATION:

Background

    The Department received from U.S. Customs and Border Protection 
(CBP) a sample of merchandise that was part of a larger shipment 
imported into the United States and that resembles a series or roll of 
unfinished PRCBs. The particular sample measures roughly 42.5 inches by 
9 inches and the front surface is printed with multi-color graphics and 
the words ``Brush,'' ``Floss,'' and ``Smile.'' The sample also shows 
the location of oval handles that have not yet been die cut out of the 
bags and the color printing registration marks used to print the bag in 
Taiwan are contained in the location of the oval handles. The sample 
resembles in-scope, finished PRCBs on a roll in all respects except 
that the bottoms are open and they lack handles. The merchandise 
appears ready to undergo the final processing of cutting the unfinished 
PRCBs to length, sealing the bottoms, and die-cutting the unfinished 
PRCBs to create the handles of the finished PRCBs. In addition, the 
Department received from CBP documentation associated with the shipment 
of this product.
    In April 2013, the Department placed two memoranda on to the record 
stating that it received this sample unfinished PRCB along with 
proprietary documentation associated with the shipment, and inviting 
parties to view the sample and submit comments.\2\
---------------------------------------------------------------------------

    \2\ See Memoranda to the File dated April 18, 2013, and April 
24, 2013.
---------------------------------------------------------------------------

    On May 3, 2013, SmileMakers Inc. (SmileMakers) submitted a scope 
ruling request to the Department regarding certain rolls of unfinished 
PRCBs that are to be used to ``produce customized bags for dentists' 
and doctors' offices.'' \3\
---------------------------------------------------------------------------

    \3\ See SmileMakers' letter to the Department, ``Polyethylene 
Retail Carrier Bags from Taiwan (A-583-843): SmileMakers, Inc., 
Scope Ruling Request: Rolls of Polyethylene Film Tube'' dated May 3, 
2013 (SmileMakers' scope ruling request).
---------------------------------------------------------------------------

    On May 20, 2013, the petitioners requested that the Department 
issue an affirmative anti-circumvention determination, pursuant to 
section 781(a) of the Act and 19 CFR 351.225(g).\4\ The petitioners 
further state that CBP officials had advised them that the practice of 
importing unfinished PRCBs is increasing and expanding to multiple 
ports.\5\ The petitioners claim that there is no commercial 
justification for not completing the PRCB production process at the 
place of manufacture and instead locating the final minor finishing 
operation in the United States except to evade imposition of 
antidumping duties.\6\
---------------------------------------------------------------------------

    \4\ See the petitioners' letter to the Department, 
``Polyethylene Retail Carrier Bags From Taiwan/Request For An 
Affirmative Anti-Circumvention Determination'' dated May 20, 2013 
(the petitioners' request).
    \5\ Id. at 3.
    \6\ Id.
---------------------------------------------------------------------------

    After considering the information placed on the record, the 
Department has determined to conduct one proceeding in the context of 
an anti-circumvention inquiry. The parties' submissions demonstrate 
that both requests cover identically described merchandise. For this 
reason, we find that it is reasonable and practical to address whether 
the merchandise at issue is subject to the order on PRCBs from Taiwan 
in the context of an anti-circumvention inquiry, which will provide for 
the most comprehensive analysis, under section 781(a) of the Act and 19 
CFR 351.225(g). As a result of our determination to initiate this 
inquiry, we are placing SmileMakers' scope ruling request and the 
information we received from CBP on the record of this anti-
circumvention inquiry.

Scope of the Order

    The merchandise subject to the antidumping duty order is PRCBs 
which may be referred to as t-shirt sacks, merchandise bags, grocery 
bags, or checkout bags. The subject merchandise is defined as non-
sealable sacks and bags with handles (including drawstrings), without 
zippers or integral extruded closures, with or without gussets, with or 
without printing, of polyethylene film having a thickness no greater 
than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), 
and with no length or width shorter than 6 inches (15.24 cm) or longer 
than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 
inches but not longer than 40 inches (101.6 cm). PRCBs are typically 
provided without any consumer packaging and free of charge by retail 
establishments, e.g., grocery, drug, convenience, department, specialty 
retail, discount stores, and restaurants, to their customers to package 
and carry their purchased products. The scope of the order excludes (1) 
polyethylene bags that are not printed with logos or store names and 
that are closeable with drawstrings made of polyethylene film and (2) 
polyethylene bags that are packed in consumer packaging with printing 
that refers to specific end-uses other than packaging and carrying 
merchandise from retail establishments, e.g., garbage bags, lawn bags, 
trash-can liners. Imports of the subject merchandise are currently 
classifiable under statistical category 3923.21.0085 of the Harmonized 
Tariff Schedule of the United States (HTSUS). This subheading also 
covers products that are outside the scope of the order. Furthermore, 
although the HTSUS subheading is provided for convenience and customs 
purposes, our written description of the scope of the order is 
dispositive.

Scope of the Anti-Circumvention Inquiry

    This anti-circumvention inquiry covers merchandise from Taiwan that 
appears to be a series or roll of unfinished PRCBs that is ready to 
undergo the final steps in the production process, i.e., cutting-to-
size the merchandise, sealing the bag on one end to form a closure, and 
creating the handles of a finished PRCB (using a die press to stamp out 
the opening).\7\
---------------------------------------------------------------------------

    \7\ The unfinished PRCBs, as described by SmileMakers in its 
scope request, ``are made from polyethylene formed into the shape of 
a tube that is open (unsealed) on both ends; they do not contain any 
handles, perforations, seams, or seals; they are imprinted with a 
variety of pictures and designs, depending on SmileMakers 
requirements; and they all serve the same purpose (i.e., after 
importation, they are imprinted with medical practitioners' contact 
information, cut, punched, and sealed to form small bags that are 
given out at dentists' and doctors' offices, etc.).''
---------------------------------------------------------------------------

The Petitioners' Request for Initiation of Anti-Circumvention 
Proceeding

    As stated above, the petitioners filed a request for a 
circumvention determination in which they commented on the relationship 
of this merchandise to merchandise covered by the scope of the PRCB 
order from Taiwan. The petitioners allege that

[[Page 46321]]

while the imported unfinished PRCBs are sealed on the sides, the bottom 
and top are open, and the oval handle has not been die cut. The 
petitioners contend that completion of these steps would make the bags 
subject merchandise if they were imported in this condition.\8\
---------------------------------------------------------------------------

    \8\ See the petitioners' request at 6.
---------------------------------------------------------------------------

    Citing the International Trade Commission (ITC)'s recent sunset 
review determination of PRCBs from the PRC, the petitioners explain 
that the PRCB production process can be described as a four-step 
process consisting of (1) Blending polyethylene resin pellets, color 
concentrates, and other additives; (2) extrusion and film forming; (3) 
printing; and (4) PRCB conversion.\9\
---------------------------------------------------------------------------

    \9\ Id. at 4, citing Polyethylene Retail Carrier Bags from 
China, Malaysia, and Thailand, Inv. Nos. 731-TA-1043-1045 (Review), 
USITC Pub. 4160 (June 2010) at I-17.
---------------------------------------------------------------------------

    The final, normal ``conversion'' step is described in information 
submitted by the petitioners as follows: ``After the printing process 
is complete, the large roll of film is then cut to size with hot knives 
that seam the sides of the bags together when cut. Then, the film is 
fed into bag manufacturing machines where the top and bottom seals are 
formed and handles are cut out.'' \10\ The petitioners contend that the 
unfinished PRCBs that are the subject of their request represent an 
interruption in this continuous production process because, while they 
have been sealed on their sides, the bottom and top are open and the 
oval handle has not been die cut.\11\ Completion of these steps would 
make the bags subject of the antidumping duty order if they were 
imported in this finished condition.\12\
---------------------------------------------------------------------------

    \10\ See the petitioners' request at Exhibit 5.
    \11\ Id. at 6.
    \12\ Id.
---------------------------------------------------------------------------

Initiation of Anti-Circumvention Proceeding

Applicable Law

    Section 781(a) of the Act and 19 CFR 351.225(g) provide that the 
Department may find circumvention of an antidumping duty order when 
merchandise of the same class or kind as merchandise that is subject to 
the order is completed or assembled in the United States. In conducting 
anti-circumvention inquiries under section 781(a)(1) of the Act, the 
Department relies upon the following criteria: (A) Merchandise sold in 
the United States is of the same class or kind as other merchandise 
that is produced in a foreign country that is subject to an antidumping 
duty order; (B) such merchandise sold in the United States is completed 
or assembled in the United States from parts or components produced in 
the foreign country with respect to which the antidumping duty order 
applies; (C) the process of assembly or completion in the United States 
is minor or insignificant; and (D) the value of the parts or components 
referred to in (B) is a significant portion of the total value of the 
merchandise. As discussed below, the petitioners presented evidence 
with respect to these criteria.

A. Merchandise of the Same Class or Kind

    The petitioners state that the merchandise sold in the United 
States is of the same class or kind as the subject merchandise. The 
petitioners agree with the Department's statement that the samples 
``closely resemble'' a PRCB.\13\ Moreover, the merchandise is made of 
polyethylene film and the dimensions of the finished PRCBs are within 
those of the scope definition. Finally, the petitioners state, because 
the bag is completely and exclusively dedicated to use as a Dentist 
PRCB and has been finished to the point where there can be no doubt of 
its intended use, the merchandise will be subject merchandise within 
the order on PRCBs Taiwan scope definition when completed.\14\
---------------------------------------------------------------------------

    \13\ See Memorandum to the File, dated April 18, 2013.
    \14\ Id. at 10.
---------------------------------------------------------------------------

B. Completion of Merchandise in the United States

    The petitioners cite to the CBP referral and SmileMakers' scope 
ruling request to support their claim that the imported rolls are 
completed in the United States from parts and components produced in 
Taiwan. All the necessary raw materials for a finished PRCB are 
entered. Performing the final die-cutting operation in the United 
States simply finishes the PRCB.\15\
---------------------------------------------------------------------------

    \15\ Id. at 11.
---------------------------------------------------------------------------

C. Minor or Insignificant Process

    According to the petitioners, the process of converting this 
product into a finished PRCB is minor or insignificant, particularly 
relative to the production process as a whole. The petitioners assert 
that the sealing and cutting operation is a simple step that occurs 
only at the very end of the multi-step production process. 
Specifically, the bottom of the bag is sealed with a hot knife and the 
handles cut by clamping a die to a press and then pressing on the 
pillow pack.\16\ Consequently, the only equipment that is needed seals 
the bag and cuts out an oval handle.\17\ According to the advertisement 
provided by the petitioners, the equipment needed to accomplish these 
tasks can be purchased new for $11,000 to $13,000.\18\ In contrast, the 
operations performed in Taiwan, the petitioners contend, are highly 
capital-intensive and technologically sophisticated.
---------------------------------------------------------------------------

    \16\ Id. at 12.
    \17\ Id. at 11.
    \18\ Id. and Exhibit 10.
---------------------------------------------------------------------------

    The petitioners further argue that no research and development 
expenditures are required to perform the simple sealing, and die-
cutting operations, as the technically complex research and development 
activities are performed prior to this stage in Taiwan.\19\ Similarly, 
the petitioners state that minor production facilities are required and 
that the operations could be performed in a small single-story 
room.\20\
---------------------------------------------------------------------------

    \19\ Id. at 12.
    \20\ Id.
---------------------------------------------------------------------------

    Finally, the petitioners assert that the value of processing 
performed in the United States represents a negligible proportion of 
the value of the merchandise sold in the United States. Completion of 
the PRCB can be performed by a single employee, and the capital and 
marginal costs of the die-cutting operations in the United States are 
relatively insignificant in comparison to the manufacturing of the 
imported merchandise performed in Taiwan.\21\ The petitioners further 
explain that the Department need not collect precise information on the 
amount of the value added in the United States to conclude that the 
process is minor or insignificant, but may rather rely on a qualitative 
assessment to draw this conclusion.\22\
---------------------------------------------------------------------------

    \21\ Id.
    \22\ Id. at 10 n. 37 (citing Anti-Circumvention Inquiry of the 
Antidumping and Countervailing Duty Orders on Certain Pasta From 
Italy: Affirmative Preliminary Determinations of Circumvention of 
Antidumping and Countervailing Duty Orders, 68 FR 46571 (August 6, 
2003), unchanged in Anti-Circumvention Inquiry of the Antidumping 
and Countervailing Duty Orders on Certain Pasta from Italy: 
Affirmative Final Determinations of Circumvention of Antidumping and 
Countervailing Duty Orders, 68 FR 54888 (September 19, 2003)).
---------------------------------------------------------------------------

D. Value of Merchandise Produced in the Foreign Country Is a 
Significant Portion of the Value of the Merchandise Sold in the United 
States

    As stated above, the petitioners contend that the value of the 
processing performed in the United States represents a minor portion of 
the value

[[Page 46322]]

of the completed merchandise.\23\ Therefore, because most of the value 
of the finished PRCB is created in Taiwan, the value of the merchandise 
as entered is certainly a significant portion of the total value of the 
finished PRCB.
---------------------------------------------------------------------------

    \23\ Id. at 13.
---------------------------------------------------------------------------

E. Factors To Consider in Determining Whether Action Is Necessary

    Section 781(a)(3) of the Act identifies additional factors that the 
Department shall consider in determining whether to include parts or 
components in an antidumping duty order as part of an anti-
circumvention inquiry. Of these, the petitioners argue that importation 
of the circumventing merchandise represents a change in the pattern of 
trade.\24\ The petitioners assert that prior to imposition of the PRCB 
Orders, no party imported such merchandise for completion into finished 
PRCBs. The petitioners argue that interrupting the production process 
prior to completion is neither economical nor rational, and that the 
only reason not to complete the PRCB in the country of origin is to 
evade application of antidumping duties upon importation.\25\
---------------------------------------------------------------------------

    \24\ Id.
    \25\ Id.
---------------------------------------------------------------------------

Analysis

    Section 351.225(f)(1) of our regulations directs that a notice of 
the initiation of an anti-circumvention inquiry issued under 19 CFR 
351.225(e) will include a description of the product that is the 
subject of the anti-circumvention inquiry and an explanation of the 
reasons for the Department's decision to initiate an anti-circumvention 
inquiry.
    The product that is subject of this anti-circumvention inquiry 
covers merchandise from Taiwan that appears to be series or roll of 
unfinished PRCBs that is ready to undergo the final steps in the 
production process, i.e., cutting-to-size the merchandise, sealing the 
bag on one end to form a closure, and creating the handles of a 
finished PRCB (using a die press to stamp out the opening).
    Based on our analysis of the petitioners' request, the Department 
determines that the criteria under section 781(a) of the Act have been 
satisfied to warrant the initiation of an anti-circumvention inquiry.
    With regard to whether the merchandise sold in the United States is 
of the same class or kind as the merchandise covered by the antidumping 
duty order, the petitioners presented information indicating that the 
merchandise completed and sold in the United States is of the same 
class or kind as PRCBs from Taiwan which are subject to the order on 
PRCBs from Taiwan.\26\ With regard to whether the process of converting 
this product into finished PRCBs is a ``minor or insignificant 
process,'' the petitioners addressed the relevant statutory factors 
with the best information available to them at the time of their anti-
circumvention inquiry request.\27\ The petitioners relied on publicly-
available information for this purpose, in addition to their own 
expertise in the production process. Given that the petitioners do not 
have access to cost or price data of either the Taiwanese producer or 
the U.S. importer, the petitioners relied on their own knowledge of the 
production process to draw their conclusions and demonstrate that, 
qualitatively, the value of the conversion of the imported merchandise 
into subject merchandise is minor or insignificant.\28\
---------------------------------------------------------------------------

    \26\ Id. at 10-11.
    \27\ Id. at 11-13.
    \28\ Id.
---------------------------------------------------------------------------

    With respect to the value of the merchandise produced in Taiwan, 
the petitioners relied on the information and arguments in the ``minor 
or insignificant process'' portion of their anti-circumvention request 
to indicate that the value of Taiwan production for unfinished PRCBs is 
significant relative to the total value of finished PRCBs sold in the 
United States.\29\
---------------------------------------------------------------------------

    \29\ Id. at 13.
---------------------------------------------------------------------------

    Finally, the petitioners argued that the Department should also 
consider the pattern of trade as a factor in determining whether to 
initiate the anti-circumvention inquiry. In particular, the petitioners 
asserted that no party imported merchandise that must undergo the final 
step of the production process to be converted into finished PRCBs 
prior to the imposition of the order on PRCBs from Taiwan, as doing so 
is irrational and uneconomical.\30\
---------------------------------------------------------------------------

    \30\ Id.
---------------------------------------------------------------------------

    Based on these allegations, we are initiating an anti-circumvention 
inquiry concerning the antidumping duty order on PRCBs from Taiwan, 
pursuant to section 781(a) of the Act and 19 CFR 351.225(g). The 
Department is initiating this anti-circumvention inquiry with respect 
to all such merchandise from Taiwan as described above, regardless of 
producer or exporter. In accordance with 19 CFR 351.225(l)(2), if the 
Department issues a preliminary affirmative determination, we will then 
instruct CBP to suspend liquidation and require a cash deposit of 
estimated duties, at the applicable rate, for each unliquidated entry 
of the merchandise at issue, entered or withdrawn from warehouse for 
consumption on or after the date of initiation of the inquiry. In 
accordance with section 781(e)(1) of the Act and 19 CFR 
351.225(f)(7)(i)(A), we intend to notify the ITC in the event of an 
affirmative preliminary determination of circumvention under section 
781(d) of the Act.
    This notice serves as an invitation to interested parties to 
participate in this anti-circumvention inquiry. The Department invites 
all potential respondents to identify themselves as producers, 
importers, or further processors of such merchandise and to provide 
their own evidence and information that may inform the Department's 
determination. Please contact the official listed under the above 
heading, FOR FURTHER INFORMATION CONTACT for instructions for 
participating in this inquiry. The Department will, following 
consultation with interested parties, establish a schedule for 
questionnaires and comments on the issues. The Department intends to 
issue its final determination within 300 days of the date of 
publication of this initiation consistent with section 781(f) of the 
Act.
    This notice is published in accordance with 781(a) of the Act and 
19 CFR 351.225(f).

    Dated: July 25, 2013.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2013-18430 Filed 7-30-13; 8:45 am]
BILLING CODE 3510-DS-P

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