Certain Cold-Rolled Steel Flat Products From the People's Republic of China: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders, 81057-81062 [2016-27850]
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Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices
Ware Road (80 acres), at FM 1016
between Bentsen Road and Shary Road
(695 acres), at 3801 West Military
Highway (50 acres), and at 6800 South
Ware Road (40 acres) in McAllen; and,
Site 2 (8.5 acres)—McAllen Miller
International Airport Air Cargo Facility
located south of Uvalde Street and East
of FM 1926 in McAllen.
The grantee’s proposed service area
under the ASF would be Hidalgo
County, Texas, as described in the
application. If approved, the grantee
would be able to serve sites throughout
the service area based on companies’
needs for FTZ designation. The
application indicates that the proposed
service area is within and adjacent to
the Hidalgo/Pharr Customs and Border
Protection port of entry.
The applicant is requesting authority
to reorganize its existing zone to include
all of the existing sites as ‘‘magnet’’
sites. The ASF allows for the possible
exemption of one magnet site from the
‘‘sunset’’ time limits that generally
apply to sites under the ASF, and the
applicant proposes that Site 1 be so
exempted. No subzones/usage-driven
sites are being requested at this time.
The application would have no impact
on FTZ 12’s previously authorized
subzone.
In accordance with the FTZ Board’s
regulations, Camille Evans of the FTZ
Staff is designated examiner to evaluate
and analyze the facts and information
presented in the application and case
record and to report findings and
recommendations to the FTZ Board.
Public comment is invited from
interested parties. Submissions shall be
addressed to the FTZ Board’s Executive
Secretary at the address below. The
closing period for their receipt is
January 17, 2017. Rebuttal comments in
response to material submitted during
the foregoing period may be submitted
during the subsequent 15-day period to
January 31, 2017.
A copy of the application will be
available for public inspection at the
Office of the Executive Secretary,
Foreign-Trade Zones Board, Room
21013, U.S. Department of Commerce,
1401 Constitution Avenue NW.,
Washington, DC 20230–0002, and in the
‘‘Reading Room’’ section of the FTZ
Board’s Web site, which is accessible
via www.trade.gov/ftz.
For further information, contact
Camille Evans at Camille.Evans@
trade.gov or (202) 482–2350.
Dated: November 10, 2016.
Elizabeth Whiteman,
Acting Executive Secretary.
[FR Doc. 2016–27666 Filed 11–16–16; 8:45 am]
BILLING CODE 3510–DS–P
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DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–029, C–570–030]
Certain Cold-Rolled Steel Flat Products
From the People’s Republic of China:
Initiation of Anti-Circumvention
Inquiries on the Antidumping Duty and
Countervailing Duty Orders
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from
ArcelorMittal USA LLC, Nucor
Corporation, United States Steel
Corporation, and AK Steel Corporation,
as well as Steel Dynamics, Inc. and
California Steel Industries, (collectively,
Domestic Producers), the Department of
Commerce (the Department) is initiating
anti-circumvention inquiries to
determine whether imports of certain
cold-rolled steel flat products (CRS),
which are produced in the Socialist
Republic of Vietnam (Vietnam) from
hot-rolled steel produced in the People’s
Republic of China (PRC), are
circumventing the antidumping duty
(AD) and countervailing duty (CVD)
orders on CRS from the PRC.
DATES: Effective November 17, 2016.
FOR FURTHER INFORMATION CONTACT: John
K. Drury or Victoria Cho, AD/CVD
Operations, Office VI, Enforcement and
Compliance, International Trade
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW., Washington, DC 20230; telephone:
(202) 482–0195 or (202) 482–5075,
respectively.
AGENCY:
SUPPLEMENTARY INFORMATION:
Background
On July 28, 2015, AK Steel
Corporation, ArcelorMittal USA EEC,
Nucor Corporation, Steel Dynamics,
Inc., and the United States Steel
Corporation (collectively, Petitioners)
filed petitions seeking the imposition of
antidumping and countervailing duties
on imports of CRS from Brazil, the
People’s Republic of China, India,
Japan, the Republic of Korea, the
Netherlands, Russia, and the United
Kingdom. Following the Department’s
final affirmative determinations of
dumping and countervailable
subsidies,1 and the U.S. International
Trade Commission (ITC)’s finding of
1 See Certain Cold-Rolled Steel Flat Products
From the People’s Republic of China: Final
Affirmative Countervailing Duty Determination and
Final Partial Affirmative Critical Circumstances
Determination, FR 81 (May 24, 2016).
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81057
material injury,2 the Department issued
AD and CVD orders on imports of CRS
from the PRC.3
On September 22, 2016, pursuant to
section 781(b) of the Tariff Act of 1930,
as amended (the Act) and 19 CFR
351.225(h), Steel Dynamics, Inc. and
California Steel Industries submitted a
request for the Department to initiate
anti-circumvention inquiries to
determine whether producers of CRS in
Vietnam are circumventing the Orders
by exporting to the United States CRS
which is completed or assembled in
Vietnam using hot-rolled steel (HRS)
sourced from the PRC.4 On September
27, 2016, ArcelorMittal USA LLC, Nucor
Corporation, United States Steel
Corporation, and AK Steel Corporation
also submitted a request for the
Department to initiate anticircumvention inquiries and issue
preliminary determinations of
circumvention to suspend liquidation of
imports of CRS from Vietnam.5 On
October 13, 2016, we received
comments supporting the allegation
from the United Steelworkers.6
Domestic Producers request that the
Department treat CRS imports from
Vietnam as subject merchandise under
the scope of the Orders and impose cash
deposit requirements on all imports of
CRS from Vietnam.
On October 17, 2016, we received
comments objecting to the allegation
from Metallia U.S.A., LLC, Metallia, A
Division of Hartree Partners, LP, Nippon
Steel and Sumiken Bussan Americas
Inc., Mitsui & Co. (U.S.A.), Inc., and
Marubeni-Itochu Steel America Inc.
(MISA).7 Also on October 17, 2016, we
2 See Cold-Rolled Steel Flat Products From China
and Japan; Determinations, 81 FR 45305 (July 13,
2016)
3 See Certain Cold-Rolled Steel Flat Products
From Japan and the People’s Republic of China:
Antidumping Duty Orders, 81 FR 45956 (July 14,
2016) (AD Order); see also Certain Cold-Rolled Steel
Flat Products From the People’s Republic of China:
Countervailing Duty Order, 81 FR 45960 (July 14,
2016) (CVD Order) (collectively, Orders).
4 See Letter from Schagrin Associates to the
Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
Flat Products from China: Request for
Circumvention Ruling,’’ dated September 22, 2016
(Schagrin Request).
5 See Letter from Kelley Drye & Warren LLP to the
Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
Flat Products From the People’s Republic of
China—Request for Circumvention Ruling Pursuant
to Section 781(b) of the Tariff Act of 1930,’’ dated
September 27, 2016 (Kelley Drye Request).
6 See Letter from United Steelworkers to the
Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
Flat Products from the People’s Republic of China,’’
dated October 13, 2016.
7 See Letter from Morris, Manning & Martin, LLP
to the Secretary of Commerce, ‘‘Certain Cold-Rolled
Steel Flat Products and Corrosion-Resistant Steel
Products from the People’s Republic of China:
Response to Request for Anti-Circumvention
Inquiry,’’ dated October 17, 2016.
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received comments objecting to the
allegation from Minmetals, Inc.
(Minmetals).8 On October 17, 2016, we
also received comments objecting to the
allegation from POSCO-Vietnam Co.,
Ltd. (POSCO Vietnam).9 On October 21,
2016, we received comments objecting
to the allegation from China Steel
Sumikin Vietnam Joint Stock
Company.10 Also on October 26, 2016,
we received comments objecting to the
allegation from Summit Global Trading,
a Subsidiary of Sumitomo Corporation
of Americas (Sumitomo).11 On October
28, 2016, we received comments
objecting to the allegation from
thyssenkrupp Materials NA, Inc.
(thyssenkrupp).12 On October 31, 2016,
we also received comments objecting to
the allegation on behalf of Hoa Sen
Group (HSG) 13 and Maruichi Sun Steel
Joint Stock Company (Maruichi).14 On
November 1, 2016, we received
comments objecting to the allegation
from behalf of from Vietnam
Competition Authority.15
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Scope of the Orders
The products covered by the orders
are certain cold-rolled (cold-reduced),
flat-rolled steel products, whether or not
8 See Letter from Minmetals, Inc. to the Secretary
of Commerce, dated October 17, 2016.
9 See Letter from Arnold and Porter, LLP to the
Secretary of Commerce, ‘‘Cold-Rolled Steel Flat
Products from China: Response to Petitioners’
Circumvention Allegation,’’ dated October 17, 2016
(POSCO Vietnam Submission).
10 See Letter from Mowry & Grimson, PLLC and
Sidley Austin LLP to the Secretary of Commerce,
‘‘Certain Corrosion-Resistant Steel Products from
China—Response to Petitioners’ Circumvention
Allegations,’’ dated October 20, 2016.
11 See Letter from Sandler, Travis, and Rosenberg,
P.A. to the Secretary of Commerce, ‘‘Certain
Corrosion-Resistant Steel Products from the
People’s Republic of China: Response to Request for
Anti-Circumvention Inquiry,’’ dated October 26,
2016.
12 See Letter from Crowell and Moring, LLP to the
Secretary of Commerce, ‘‘Certain CorrosionResistant and Cold-Rolled Steel Products from the
People’s Republic of China: Comments Opposing
Petitioners’ Circumvention Allegations,’’ dated
October 28, 2016.
13 See Letter from Curtis, Mallet-Prevost, Colt &
Mosle, LLP to the Secretary of Commerce,
‘‘Opposition to Request for Anti-Circumvention
Inquiry Certain Corrosion-Resistant Steel Products
and Cold-Rolled Steel Flat Products from the
People’s Republic of China,’’ dated October 31,
2016.
14 See Letter from Curtis, Mallet-Prevost, Colt &
Mosle, LLP to the Secretary of Commerce,
‘‘Opposition to Request for Anti-Circumvention
Inquiry Certain Corrosion-Resistant Steel Products
and Cold-Rolled Steel Flat Products from the
People’s Republic of China,’’ dated October 31,
2016.
15 See the Letter from the Vietnam Competition
Authority to the Secretary of Commerce, ‘‘Certain
Corrosion-Resistant Steel Products from China;
Certain Cold-Rolled Steel Flat Products from
China—Opposition to Initiation of
Anticircumvention Proceedings,’’ dated November
1, 2016.
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annealed, painted, varnished, or coated
with plastics or other nonmetallic
substances. The products covered do
not include those that are clad, plated,
or coated with metal. The products
covered include coils that have a width
or other lateral measurement (‘‘width’’)
of 12.7 mm or greater, regardless of form
of coil (e.g., in successively
superimposed layers, spirally
oscillating, etc.). The products covered
also include products not in coils (e.g.,
in straight lengths) of a thickness less
than 4.75 mm and a width that is 12.7
mm or greater and that measures at least
10 times the thickness. The products
covered also include products not in
coils (e.g., in straight lengths) of a
thickness of 4.75 mm or more and a
width exceeding 150 mm and measuring
at least twice the thickness. The
products described above may be
rectangular, square, circular, or other
shape and include products of either
rectangular or non-rectangular crosssection where such cross-section is
achieved subsequent to the rolling
process, i.e., products which have been
‘‘worked after rolling’’ (e.g., products
which have been beveled or rounded at
the edges). For purposes of the width
and thickness requirements referenced
above:
(1) Where the nominal and actual
measurements vary, a product is within
the scope if application of either the
nominal or actual measurement would
place it within the scope based on the
definitions set forth above, and
(2) where the width and thickness
vary for a specific product (e.g., the
thickness of certain products with nonrectangular cross-section, the width of
certain products with nonrectangular
shape, etc.), the measurement at its
greatest width or thickness applies.
Steel products included in the scope
of the orders are products in which: (1)
Iron predominates, by weight, over each
of the other contained elements; (2) the
carbon content is 2 percent or less, by
weight; and (3) none of the elements
listed below exceeds the quantity, by
weight, respectively indicated:
• 2.50 percent of manganese, or
• 3.30 percent of silicon, or
• 1.50 percent of copper, or
• 1.50 percent of aluminum, or
• 1.25 percent of chromium, or
• 0.30 percent of cobalt, or
• 0.40 percent of lead, or
• 2.00 percent of nickel, or
• 0.30 percent of tungsten (also called
wolfram), or
• 0.80 percent of molybdenum, or
• 0.10 percent of niobium (also called
columbium), or
• 0.30 percent of vanadium, or
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• 0.30 percent of zirconium
Unless specifically excluded,
products are included in this scope
regardless of levels of boron and
titanium.
For example, specifically included in
this scope are vacuum degassed, fully
stabilized (commonly referred to as
interstitial-free (IF)) steels, high strength
low alloy (HSLA) steels, motor
lamination steels, Advanced High
Strength Steels (AHSS), and Ultra High
Strength Steels (UHSS). If steels are
recognized as low carbon steels with
micro-alloying levels of elements such
as titanium and/or niobium added to
stabilize carbon and nitrogen elements.
HSLA steels are recognized as steels
with micro-alloying levels of elements
such as chromium, copper, niobium,
titanium, vanadium, and molybdenum.
Motor lamination steels contain microalloying levels of elements such as
silicon and aluminum. AHSS and UHSS
are considered high tensile strength and
high elongation steels, although AHSS
and UHSS are covered whether or not
they are high tensile strength or high
elongation steels.
Subject merchandise includes coldrolled steel that has been further
processed in a third country, including
but not limited to annealing, tempering,
painting, varnishing, trimming, cutting,
punching, and/or slitting, or any other
processing that would not otherwise
remove the merchandise from the scope
of the orders if performed in the country
of manufacture of the cold-rolled steel.
All products that meet the written
physical description, and in which the
chemistry quantities do not exceed any
one of the noted element levels listed
above, are within the scope of the orders
unless specifically excluded. The
following products are outside of and/
or specifically excluded from the scope
of the orders:
• Ball bearing steels; 16
• Tool steels; 17
16 Ball bearing steels are defined as steels which
contain, in addition to iron, each of the following
elements by weight in the amount specified: (i) Not
less than 0.95 nor more than 1.13 percent of carbon;
(ii) not less than 0.22 nor more than 0.48 percent
of manganese; (iii) none, or not more than 0.03
percent of sulfur; (iv) none, or not more than 0.03
percent of phosphorus; (v) not less than 0.18 nor
more than 0.37 percent of silicon; (vi) not less than
1.25 nor more than 1.65 percent of chromium; (vii)
none, or not more than 0.28 percent of nickel; (viii)
none, or not more than 0.38 percent of copper; and
(ix) none, or not more than 0.09 percent of
molybdenum.
17 Tool steels are defined as steels which contain
the following combinations of elements in the
quantity by weight respectively indicated: (i) More
than 1.2 percent carbon and more than 10.5 percent
chromium; or (ii) not less than 0.3 percent carbon
and 1.25 percent or more but less than 10.5 percent
chromium; or (iii) not less than 0.85 percent carbon
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• Silico-manganese steel; 18
• Grain-oriented electrical steels
(GOES) as defined in the final
determination of the U.S. Department of
Commerce in Grain-Oriented Electrical
Steel From Germany, Japan, and
Poland.19
• Non-Oriented Electrical Steels
(NOES), as defined in the antidumping
orders issued by the U.S. Department of
Commerce in Non-Oriented Electrical
Steel From the People’s Republic of
China, Germany, Japan, the Republic of
Korea, Sweden, and Taiwan.20
The products subject to the orders are
currently classified in the Harmonized
Tariff Schedule of the United States
(HTSUS) under item numbers:
7209.15.0000, 7209.16.0030,
7209.16.0060, 7209.16.0070,
7209.16.0091, 7209.17.0030,
7209.17.0060, 7209.17.0070,
7209.17.0091, 7209.18.1530,
7209.18.1560, 7209.18.2510,
7209.18.2520, 7209.18.2580,
7209.18.6020, 7209.18.6090,
7209.25.0000, 7209.26.0000,
7209.27.0000, 7209.28.0000,
7209.90.0000, 7210.70.3000,
and 1 percent to 1.8 percent, inclusive, manganese;
or (iv) 0.9 percent to 1.2 percent, inclusive,
chromium and 0.9 percent to 1.4 percent, inclusive,
molybdenum; or (v) not less than 0.5 percent carbon
and not less than 3.5 percent molybdenum; or (vi)
not less than 0.5 percent carbon and not less than
5.5 percent tungsten.
18 Silico-manganese steel is defined as steels
containing by weight: (i) Not more than 0.7 percent
of carbon; (ii) 0.5 percent or more but not more than
1.9 percent of manganese, and (iii) 0.6 percent or
more but not more than 2.3 percent of silicon.
19 Grain-Oriented Electrical Steel From Germany,
Japan, and Poland: Final Determinations of Sales at
Less Than Fair Value and Certain Final Affirmative
Determination of Critical Circumstances, 79 FR
42,501, 42,503 (Dep’t of Commerce, July 22, 2014).
This determination defines grain-oriented electrical
steel as ‘‘a flat-rolled alloy steel product containing
by weight at least 0.6 percent but not more than 6
percent of silicon, not more than 0.08 percent of
carbon, not more than 1.0 percent of aluminum, and
no other element in an amount that would give the
steel the characteristics of another alloy steel, in
coils or in straight lengths.’’
20 Non-Oriented Electrical Steel From the People’s
Republic of China, Germany, Japan, the Republic of
Korea, Sweden, and Taiwan: Antidumping Duty
Orders, 79 FR 71,741, 71,741–42 (Dep’t of
Commerce, Dec. 3, 2014). The orders define NOES
as ‘‘cold-rolled, flat-rolled, alloy steel products,
whether or not in coils, regardless of width, having
an actual thickness of 0.20 mm or more, in which
the core loss is substantially equal in any direction
of magnetization in the plane of the material. The
term ‘substantially equal’ means that the cross grain
direction of core loss is no more than 1.5 times the
straight grain direction (i.e., the rolling direction) of
core loss. NOES has a magnetic permeability that
does not exceed 1.65 Tesla when tested at a field
of 800 A/m (equivalent to 10 Oersteds) along (i.e.,
parallel to) the rolling direction of the sheet (i.e.,
B800 value). NOES contains by weight more than
1.00 percent of silicon but less than 3.5 percent of
silicon, not more than 0.08 percent of carbon, and
not more than 1.5 percent of aluminum. NOES has
a surface oxide coating, to which an insulation
coating may be applied.’’
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7211.23.1500, 7211.23.2000,
7211.23.3000, 7211.23.4500,
7211.23.6030, 7211.23.6060,
7211.23.6075, 7211.23.6085,
7211.29.2030, 7211.29.2090,
7211.29.4500, 7211.29.6030,
7211.29.6080, 7211.90.0000,
7212.40.1000, 7212.40.5000,
7225.50.6000, 7225.50.8015,
7225.50.8085, 7225.99.0090,
7226.92.5000, 7226.92.7050, and
7226.92.8050.
The products subject to the orders
may also enter under the following
HTSUS numbers: 7210.90.9000,
7212.50.0000, 7215.10.0010,
7215.10.0080, 7215.50.0016,
7215.50.0018, 7215.50.0020,
7215.50.0061, 7215.50.0063,
7215.50.0065, 7215.50.0090,
7215.90.5000, 7217.10.1000,
7217.10.2000, 7217.10.3000,
7217.10.7000, 7217.90.1000,
7217.90.5030, 7217.90.5060,
7217.90.5090, 7225.19.0000,
7226.19.1000, 7226.19.9000,
7226.99.0180, 7228.50.5015,
7228.50.5040, 7228.50.5070,
7228.60.8000, and 7229.90.1000.
The HTSUS subheadings above are
provided for convenience and customs
purposes only. The written description
of the scope of the orders is dispositive.
Merchandise Subject to the AntiCircumvention Inquiries
These anti-circumvention inquiries
cover CRS exported from Vietnam
produced from HRS exported from the
PRC.
Initiation of Anti-Circumvention
Inquiries
Section 781(b)(1) of the Act provides
that the Department may find
circumvention of an AD or CVD 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 an anticircumvention inquiry, under section
781(b)(1) of the Act, the Department
relies on 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 the subject of an
antidumping or countervailing duty
order or finding; (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 merchandise which is
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 section (B) is
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81059
minor or insignificant; (D) the value of
the merchandise produced in the
foreign country to which the AD or CVD
order applies is a significant portion of
the total value of the merchandise
exported to the United States; and (E)
the administering authority determines
that action is appropriate to prevent
evasion of such order or finding. As
discussed below, Domestic Producers
provided evidence with respect to these
criteria.
A. Merchandise of the Same Class or
Kind
Domestic Producers claim that CRS
exported to the United States is the
same class or kind as that covered by
the Orders in these inquiries.21
Domestic Producers provided evidence
to show that the merchandise from
Vietnam enters the United States under
the same tariff classification as subject
merchandise.22
B. Completion of Merchandise in a
Foreign Country
Domestic Producers note that section
781(b)(l)(B)(ii) of the Act requires that
‘‘the Department must also determine
whether, prior to importation into the
United States, the merchandise in the
third country is completed from
merchandise produced in the country
subject to the antidumping or
countervailing duty order.’’ 23 Domestic
Producers presented evidence showing
after the publication of the preliminary
affirmative CVD determination in
December 2015, how the imports of CRS
from Vietnam to the United States more
than tripled than the previous two years
combined. Additionally, Domestic
Producers provide evidence that no
capacity currently exists in Vietnam to
produce HRS and, thus, they contend
any CRS manufactured in Vietnam must
use imported HRS.24 Domestic
Producers also provide information
reflecting that imports into the United
States of CRS from the PRC significantly
decreased after the imposition of the
Orders, and imports into the United
States of CRS from Vietnam, as well as
imports into Vietnam of Chinese HRS,
also increased significantly.25 Finally,
Domestic Producers state that
Minmetals, a U.S. trading company,
currently has arrangements to ship HRS
from the PRC to Vietnam and convert
21 See Schagrin Request, at 8; Kelley Drye
Request, at 8. See also sections 781(b)(1)(A)(i) and
(iii) of the Act.
22 See Kelley Drye Request, at Attachment 1.
23 Id., at 8.
24 See Schagrin Request, at 10; see also Kelley
Drye Request, at 8–9.
25 See Schagrin Request, at 11–14; see also Kelley
Drye Request, at 9–10.
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the HRS to CRS for export to the United
States with the purpose of evading the
Orders.26
C. Minor or Insignificant Process
Domestic Producers maintain that the
process for completing CRS from HRS is
minor or insignificant. Under section
781(b)(2) of the Act, the Department
considers five factors to determine
whether the process of assembly or
completion is minor or insignificant.
Domestic Producers allege that the
production of HRS in the PRC, which is
subsequently further processed into CRS
in Vietnam, comprises the majority of
the value associated with the
merchandise imported into the United
States, and that the processing of HRS
into CRS in Vietnam adds relatively
little value.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
(1) Level of Investment
Domestic Producers contend that the
level of investment necessary to
construct a factory which can produce
CRS from HRS in Vietnam is
insignificant. In support of its
contention, Domestic Producers
compare the investment necessary to
install a re-rolling facility with the
investment necessary to produce HRS
using a fully-integrated production
process for melting iron and making
steel.27 Domestic Producers estimate
that the investment necessary to
construct a re-rolling facility in Vietnam
that uses HRS substrate to produce CRS
would be between $28 million at $70
million.28 In contrast, Domestic
Producers estimate that the investment
necessary to construct a fully integrated
steel production facility, including a
blast furnace and basic oxygen furnace,
in the PRC would be between $295
million and $10.1 billion.29 Domestic
Producers also argue that using
investment levels in the PRC for a basic
steel making, including a blast furnace
and basic oxygen furnace, as opposed to
an electric arc furnace, is appropriate as
approximately 90 percent of the steel
production in the PRC comes from fully
integrated steel mills.30
(2) Level of Research and Development
Domestic Producers assert that the
level of research and development in
Vietnam is either minimal or nonexistent. Domestic Producers state that
Vietnam is importing technology from
26 See
Schagrin Request, at 15 and Exhibit 10.
Schagrin Request, at 16–17; see also Kelley
Drye Request, at 11–13.
28 See Schagrin Request, at 17; see also Kelley
Drye Request, at 12.
29 See Schagrin Request, at 16; see also Kelley
Drye Request, at 12 and Attachment 9.
30 See Kelley Drye Request, at 12.
27 See
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21:24 Nov 16, 2016
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other sources, rather than developing its
own technology.31 As an example of the
importation of technology into Vietnam,
Domestic Producers provided evidence
that ‘‘Dong A, a Vietnamese steel
company, recently announced that it is
installing European and Japanese
equipment in a new facility that
includes a pickling line and a coldrolling mill.’’ 32
(3) Nature of Production Process
According to Domestic Producers, the
production process undertaken by
Vietnamese producers of CRS is less
complex than steelmaking, and minimal
in nature.33 Citing to a report from the
ITC,34 Domestic Producers describe the
process to produce HRS as consisting of
three distinct states: Melting and
refining, casting molten steel into semifinished forms, and hot-rolling the semifinished forms into HRS.35 In contrast,
Domestic Producers provide
information indicating that the
production of CRS from HRS involves
only cleaning and pickling, rolling,
annealing, and tempering.36
(4) Extent of Production Facilities in
Vietnam
Domestic Producers provide
information indicating that production
facilities in Vietnam are more limited
compared to facilities in the PRC.37 As
noted above, Domestic Producers
maintain that Vietnam has no HRS
capacity. Domestic Producers claim that
Vietnam has fewer than a dozen large
producers of flat steel products.
Moreover, Domestic Producers indicate
that Vietnam has limited production
31 See Schagrin Request, at 17–18; see also Kelley
Drye Request at 13.
32 See Kelley Drye Request at 13 and Attachment
11.
33 See Schagrin Request, at 18; see also Kelley
Drye Request at 14.
34 See Certain Hot-Rolled Steel Flat Products from
Australia, Brazil, Japan, Korea, the Netherlands,
Turkey, and The United Kingdom, Inv. Nos. 70t–
TA–545–547 and 73l–TA–1291–1297, USITC
Pub.4570 (October 2015) (Preliminary) at I–19.
Domestic Producers attached the report as
Attachment 12.
35 See Kelley Drye Request, at 14–16 and
Attachment 12.
36 Id., at 17. Domestic Producers cite to Certain
Hot-Rolled Steel Flat Products from Australia,
Brazil, Japan, Korea, the Netherlands, Turkey, and
The United Kingdom, Inv. Nos. 70t–TA–545–547
and 73l–TA–1291–1297, USITC Pub. 4570
(Oct.2015) (Preliminary) at I–21 in support of their
description of the CRS production process.
37 See Schagrin Request, at 18. Domestic
Producers cite to report on the state of the steel
industry in Vietnam in support of their statements.
See Nozomu Kawabata, ‘‘The Vietnamese Iron and
Steel Industry in Transition to a Market Economy—
Attainments and Challenges,’’ at 14, 20, & 35 (May,
2016) (Tohoku Economics Research Group, Tohoku
University, Discussion Paper No. 349) (Kawabata
Report), attached as Exhibit 4 to the Request.
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Fmt 4703
Sfmt 4703
facilities that would allow for
production of CRS to support the
significant increase of imports into the
United States from Vietnam.38
(5) Value of Processing in Vietnam
Domestic Producers assert that
producing HRS in the PRC accounts for
a large percentage of the total value of
CRS that is produced in Vietnam using
HRS from the PRC. Using information
from the recent CRS investigation by the
ITC, Domestic Producers state that the
price of HRS is consistently between 80
percent and 90 percent of the value of
CRS.39 Using another approach,
focusing solely on the cost of
production in Vietnam, Domestic
Producers estimate that the cost of
manufacture for the CRS operations
value added in Vietnam is less than ten
percent.40 As noted above, Domestic
Producers argue that the vast majority of
the processing and value of CRS comes
from HRS. The value of processing CRS
in Vietnam is a minor part of the total
cost of manufacture, unlikely to exceed
20 percent of the total value. Thus, the
value of the merchandise produced in
China is estimated to be at least 80
percent of the total value of the
merchandise shipped to the United
States.41
D. Additional Factors To Consider in
Determining Whether Action Is
Necessary
Section 781(b)(3) of the Act directs
the Department to consider additional
factors in determining whether to
include merchandise assembled or
completed in a foreign country within
the scope of the order, such as: ‘‘(A) the
pattern of trade, including sourcing
patterns, (B) whether the manufacturer
or exporter of the merchandise . . . is
affiliated with the person who uses the
merchandise. . . to assemble or
complete in the foreign country the
merchandise that is subsequently
imported into the United States, and (C)
whether imports into the foreign
country of the merchandise. . . have
increased after the initiation of the
investigation which resulted in the
issuance of such order or finding.’’
(1) Pattern of Trade
Domestic Producers provide
information reflecting that at the time
the petitions were filed for the original
investigations of CRS from the PRC,
Vietnam was not a source of U.S.
imports of CRS in 2014. Domestic
38 See
Kelley Drye Request, at 17–18.
Schagrin Request, at 18–19.
40 See Kelley Drye Request, at 18–19 and
Attachment 14.
41 See Kelley Drye Request, at 19.
39 See
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Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices
Producers provide information
reflecting imports of CRS from Vietnam
to the United States through July 2015
were low.42 However, subsequent to the
preliminary injury determination by the
ITC, the final quarter of 2015 saw
increased imports of CRS from Vietnam
to the United States.43 Domestic
Producers provide information
demonstrating that after the
Department’s preliminary affirmative
CVD determination for CRS from the
PRC in December 2015, imports of CRS
from Vietnam into the United States
surged dramatically.44 Domestic
Producers further provide evidence that
imports of CRS from the PRC to the
United States decreased substantially
over the same time period.45 No other
factual information on the record
contradicts this claim.
(2) Affiliation
Domestic Producers have not
provided any allegation of affiliation
between producers of HRS in the PRC
and producers of CRS in Vietnam.
(3) Increase of HRS Shipments From the
PRC to Vietnam After Initiations of the
AD and CVD Investigations of CRS From
the PRC
Domestic Producers presented
evidence indicating that imports of HRS
from the PRC to Vietnam have increased
since the initiation of the investigations
of CRS from the PRC.46 No other factual
information on the record contradicts
this claim.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Analysis of the Allegations
Based on our analysis of Domestic
Producers anti-circumvention
allegations and the information
provided therein, the Department
determines that anti-circumvention
inquiries of the AD and CVD orders on
CRS from the PRC are warranted.
With regard to whether the
merchandise from Vietnam is of the
same class or kind as the merchandise
produced in the PRC, Domestic
Producers presented information to the
Department indicating that, pursuant to
section 781(b)(1)(A) of the Act, the
merchandise being produced in and/or
exported from Vietnam is of the same
class or kind as CRS produced in the
PRC, which is subject to the Orders.47
Consequently, the Department finds that
42 See Kelley Drye Request, at 19–20 and
Attachment 1.
43 Id., at 20
44 Id.
45 Id., at 5–6.
46 See Schagrin Request, at 11–14; see also Kelley
Drye Request, at 21 and Attachment 3.
47 See Schagrin Request, at 9; see also Kelly Dry
Request, at 8 and Attachment 1.
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21:24 Nov 16, 2016
Jkt 241001
Domestic Producers provided sufficient
information in their requests regarding
the class or kind of merchandise to
support the initiation of these anticircumvention inquiries.
With regard to completion or
assembly of merchandise in a foreign
country, pursuant to section 781(b)(1)(B)
of the Act, Domestic Producers also
presented information to the
Department indicating that the CRS
exported from Vietnam to the United
States is produced in Vietnam using
HRS from the PRC.48 We find that the
information presented by Domestic
Producers regarding this criterion
supports its request to initiate these
anti-circumvention inquiries.
The Department finds that Domestic
Producers sufficiently addressed the
factors described in section 781(b)(1)(C)
and 781(b)(2) of the Act regarding
whether the process of assembly or
completion of CRS in Vietnam is minor
or insignificant. In particular,
information in Domestic Producers’
submission indicates that: (1) The level
of investment in re-rolling facilities is
minimal when compared with the level
of investment for basic steel making
facilities; (2) there is little or no research
and development taking place in
Vietnam; (3) the CRS production
processes involve the simple processing
of HRS from a country subject to the
Orders; (4) the CRS production facilities
in Vietnam are more limited compared
to facilities in the PRC; and (5) the value
of the processing performed in Vietnam
is a small proportion of the value of the
CRS imported into the United States, as
the production of HRS in the PRC
accounts for 80 to 90 percent of the
value of finished CRS.
With respect to the value of the
merchandise produced in the PRC,
pursuant to section 781(b)(1)(D) of the
Act, Domestic Producers relied on
published sources, a simulated cost
structure for producing CRS in Vietnam,
and arguments in the ‘‘minor or
insignificant process’’ portion of its anticircumvention allegation to indicate
that the value of the key material, HRS,
produced in the PRC may be significant
relative to the total value of the CRS
exported to the United States. We find
that this information adequately meets
the requirements of this factor, as
discussed above, for the purposes of
initiating these anti-circumvention
inquiries.
Finally, with respect to the additional
factors listed under section 781(b)(3) of
the Act, we find that Domestic
48 See Schagrin Request, at 6 and 11–18 and
Exhibits 1–2, 4–5, 7 and 13; see also Kelly Dry
Request, at 8–11 and Attachments 1–5.
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Fmt 4703
Sfmt 4703
81061
Producers presented evidence
indicating that shipments of CRS from
Vietnam to the United States increased
since the imposition of the Orders and
that shipments of HRS from the PRC to
Vietnam also increased since the Orders
took effect, further supporting initiation
of these anti-circumvention inquiries.
Accordingly, we are initiating a formal
anti-circumvention inquiry concerning
the AD and CVD Orders on CRS from
the PRC, pursuant to section 781(b) of
the Act.
In connection with these anticircumvention inquiries, in order to
determine, (1) the extent to which PRCsourced HRS is further processed into
CRS in Vietnam before shipment to the
United States, (2) the extent to which a
country-wide finding applicable to all
exports might be warranted, as alleged
by Domestic Producers, and (3) whether
the process of turning PRC-sourced HRS
into CRS is minor or insignificant, the
Department intends to issue
questionnaires to solicit information
from interested parties. The Department
intends to issue questionnaires to solicit
information from the Vietnamese
producers and exporters concerning
their shipments of CRS to the United
States and the origin of the imported
HRS being processed into CRS. A
company’s failure to respond
completely to the Department’s requests
for information may result in the
application of partial or total facts
available, pursuant to section 776(a) of
the Act, which may include adverse
inferences, pursuant to section 776(b) of
the Act.
While we believe sufficient factual
information has been submitted by
Domestic Producers supporting their
request for inquiries, we do not find that
the record supports the simultaneous
issuance of a preliminary ruling. Such
inquiries are by their nature typically
complicated and can require
information regarding production in
both the country subject to the order
and the third country completing the
product. As noted above, the
Department intends to request
additional information regarding the
statutory criteria to determine whether
shipments of CRS from Vietnam are
circumventing the AD and CVD orders
on CRS from the PRC. Thus, with
further development of the record
required before a preliminary ruling can
be issued, the Department does not find
it appropriate to issue a preliminary
ruling at this time.
Notification to Interested Parties
In accordance with 19 CFR
351.225(e), the Department finds that
the issue of whether a product is
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81062
Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices
included within the scope of an order
cannot be determined based solely upon
the application and the descriptions of
the merchandise. Accordingly, the
Department will notify by mail all
parties on the Department’s scope
service list of the initiation of these anticircumvention inquiries. In addition, in
accordance with 19 CFR 351.225(f)(1)(i)
and (ii), in this notice of initiation
issued under 19 CFR 351.225(e), we
have included a description of the
product that is the subject of these anticircumvention inquiries (i.e., CRS that
contains the characteristics as provided
in the scope of the Orders) and an
explanation of the reasons for the
Department’s decision to initiate an
anti-circumvention inquiry, as provided
above.
In accordance with 19 CFR
351.225(l)(2), if the Department issues a
preliminary affirmative determination,
we will then instruct U.S. Customs and
Border Protection to suspend
liquidation and require a cash deposit of
estimated antidumping and
countervailing duties, at the applicable
rate, for each unliquidated entry of the
merchandise at issue, entered or
withdrawn from warehouse for
consumption on or after the date of
initiation of the inquiry. The
Department will establish a schedule for
questionnaires and comments on the
issues. In accordance with section 781(f)
of the Act and 19 CFR 351.225(f)(5), the
Department intends to issue its final
determination within 300 days of the
date of publication of this initiation.
This notice is published in
accordance with 19 CFR 351.225(f).
Dated: November 4, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and
Compliance.
[FR Doc. 2016–27850 Filed 11–16–16; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–533–867, C–533–868]
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Welded Stainless Pressure Pipe From
India: Antidumping Duty and
Countervailing Duty Orders
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: Based on affirmative final
determinations by the Department of
Commerce (‘‘Department’’) and the
International Trade Commission
(‘‘ITC’’), the Department is issuing
antidumping duty (‘‘AD’’) and
AGENCY:
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21:24 Nov 16, 2016
Jkt 241001
countervailing duty (‘‘CVD’’) orders on
welded stainless pressure pipe
(‘‘WSPP’’) from India.
DATES: Effective November 17, 2016.
FOR FURTHER INFORMATION CONTACT: Alex
Rosen at (202) 482–7814 or Mandy
Mallot at (202) 482–6430, AD/CVD
Operations, Office III, Enforcement and
Compliance, U.S. Department of
Commerce, 1401 Constitution Avenue
NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Background
In accordance with sections 705(d)
and 735(d) of the Tariff Act of 1930, as
amended (‘‘Act’’), on September 29,
2016, the Department published its
affirmative final determination of sales
at less than fair value (‘‘LTFV’’) and its
affirmative final determination that
countervailable subsidies are being
provided to producers and exporters of
WSPP from India.1 On November 9,
2016, the ITC notified the Department of
its final affirmative determination that
an industry in the United States is
materially injured by reason of LTFV
imports and subsidized imports of
WSPP from India, within the meaning of
sections 735(b)(1)(A)(i) and
705(b)(1)(A)(i) of the Act.2
Scope of the Orders
The merchandise covered by these
orders is circular welded austenitic
stainless pressure pipe not greater than
14 inches in outside diameter. For
purposes of this scope, references to size
are in nominal inches and include all
products within tolerances allowed by
pipe specifications. This merchandise
includes, but is not limited to, the
American Society for Testing and
Materials (‘‘ASTM’’) A–312 or ASTM
A–778 specifications, or comparable
domestic or foreign specifications.
ASTM A–358 products are only
included when they are produced to
meet ASTM A–312 or ASTM A–778
specifications, or comparable domestic
or foreign specifications.
Excluded from the scope are: (1)
Welded stainless mechanical tubing,
1 See Welded Stainless Pressure Pipe from India:
Final Determination of Sales at Less Than Fair
Value, 81 FR 66921 (September 29, 2016) (‘‘AD
Final Determination’’). See also Countervailing
Duty Investigation of Welded Stainless Pressure
Pipe from India: Final Affirmative Determination,
81 FR 66925 (September 29, 2016) (‘‘CVD Final
Determination’’).
2 See Letter to Christian Marsh, Deputy Assistant
Secretary, from Irving Williamson, Chairman of the
U.S. International Trade Commission, regarding
antidumping and countervailing duty investigations
concerning imports of welded stainless pressure
pipe from India (Investigation Nos 701–TA–548 and
731–TA–1298), dated November 9, 2016 (‘‘ITC
Letter’’).
PO 00000
Frm 00010
Fmt 4703
Sfmt 4703
meeting ASTM A–554 or comparable
domestic or foreign specifications; (2)
boiler, heat exchanger, superheater,
refining furnace, feedwater heater, and
condenser tubing, meeting ASTM A–
249, ASTM A–688 or comparable
domestic or foreign specifications; and
(3) specialized tubing, meeting ASTM
A–269, ASTM A–270 or comparable
domestic or foreign specifications.
The subject imports are normally
classified in subheadings 7306.40.5005,
7306.40.5040, 7306.40.5062,
7306.40.5064, and 7306.40.5085 of the
Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’). They may
also enter under HTSUS subheadings
7306.40.1010, 7306.40.1015,
7306.40.5042, 7306.40.5044,
7306.40.5080, and 7306.40.5090. The
HTSUS subheadings are provided for
convenience and customs purposes
only; the written description of the
scope of these orders is dispositive.
Antidumping Duty Order
In accordance with sections
735(b)(1)(A)(i) and 735(d) of the Act, the
ITC has notified the Department of its
final determination that an industry in
the United States is materially injured
by reason of imports of WSPP that are
subsidized by the government of India
and sold in the United States at LTFV.
Therefore, in accordance with section
735(c)(2) of the Act, we are publishing
this antidumping duty order. Because
the ITC determined that imports of
WSPP from India are materially injuring
a U.S. industry, unliquidated entries of
such merchandise from India, entered or
withdrawn from warehouse for
consumption, are subject to the
assessment of antidumping duties.
In accordance with section 736(a)(1)
of the Act, the Department will direct
U.S. Customs and Border Protection
(‘‘CBP’’) to assess, upon further
instruction by the Department,
antidumping duties equal to the amount
by which the normal value of the
merchandise exceeds the export price
(or constructed export price) of the
merchandise, for all relevant entries of
WSPP from India. Antidumping duties
will be assessed on unliquidated entries
of WSPP from India entered, or
withdrawn from warehouse, for
consumption on or after May 10, 2016,
the date of publication of the AD
Preliminary Determination,3 but will
not include entries occurring after the
expiration of the provisional measures
period and before publication of the
3 See Welded Stainless Pressure Pipe from India:
Affirmative Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final
Determination, 81 FR 28824 (May 10, 2016) (‘‘AD
Preliminary Determination’’).
E:\FR\FM\17NON1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 222 (Thursday, November 17, 2016)]
[Notices]
[Pages 81057-81062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27850]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-029, C-570-030]
Certain Cold-Rolled Steel Flat Products From the People's
Republic of China: Initiation of Anti-Circumvention Inquiries on the
Antidumping Duty and Countervailing Duty Orders
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from ArcelorMittal USA LLC, Nucor
Corporation, United States Steel Corporation, and AK Steel Corporation,
as well as Steel Dynamics, Inc. and California Steel Industries,
(collectively, Domestic Producers), the Department of Commerce (the
Department) is initiating anti-circumvention inquiries to determine
whether imports of certain cold-rolled steel flat products (CRS), which
are produced in the Socialist Republic of Vietnam (Vietnam) from hot-
rolled steel produced in the People's Republic of China (PRC), are
circumventing the antidumping duty (AD) and countervailing duty (CVD)
orders on CRS from the PRC.
DATES: Effective November 17, 2016.
FOR FURTHER INFORMATION CONTACT: John K. Drury or Victoria Cho, AD/CVD
Operations, Office VI, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW., Washington, DC 20230; telephone: (202) 482-0195 or (202) 482-5075,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 28, 2015, AK Steel Corporation, ArcelorMittal USA EEC,
Nucor Corporation, Steel Dynamics, Inc., and the United States Steel
Corporation (collectively, Petitioners) filed petitions seeking the
imposition of antidumping and countervailing duties on imports of CRS
from Brazil, the People's Republic of China, India, Japan, the Republic
of Korea, the Netherlands, Russia, and the United Kingdom. Following
the Department's final affirmative determinations of dumping and
countervailable subsidies,\1\ and the U.S. International Trade
Commission (ITC)'s finding of material injury,\2\ the Department issued
AD and CVD orders on imports of CRS from the PRC.\3\
---------------------------------------------------------------------------
\1\ See Certain Cold-Rolled Steel Flat Products From the
People's Republic of China: Final Affirmative Countervailing Duty
Determination and Final Partial Affirmative Critical Circumstances
Determination, FR 81 (May 24, 2016).
\2\ See Cold-Rolled Steel Flat Products From China and Japan;
Determinations, 81 FR 45305 (July 13, 2016)
\3\ See Certain Cold-Rolled Steel Flat Products From Japan and
the People's Republic of China: Antidumping Duty Orders, 81 FR 45956
(July 14, 2016) (AD Order); see also Certain Cold-Rolled Steel Flat
Products From the People's Republic of China: Countervailing Duty
Order, 81 FR 45960 (July 14, 2016) (CVD Order) (collectively,
Orders).
---------------------------------------------------------------------------
On September 22, 2016, pursuant to section 781(b) of the Tariff Act
of 1930, as amended (the Act) and 19 CFR 351.225(h), Steel Dynamics,
Inc. and California Steel Industries submitted a request for the
Department to initiate anti-circumvention inquiries to determine
whether producers of CRS in Vietnam are circumventing the Orders by
exporting to the United States CRS which is completed or assembled in
Vietnam using hot-rolled steel (HRS) sourced from the PRC.\4\ On
September 27, 2016, ArcelorMittal USA LLC, Nucor Corporation, United
States Steel Corporation, and AK Steel Corporation also submitted a
request for the Department to initiate anti-circumvention inquiries and
issue preliminary determinations of circumvention to suspend
liquidation of imports of CRS from Vietnam.\5\ On October 13, 2016, we
received comments supporting the allegation from the United
Steelworkers.\6\ Domestic Producers request that the Department treat
CRS imports from Vietnam as subject merchandise under the scope of the
Orders and impose cash deposit requirements on all imports of CRS from
Vietnam.
---------------------------------------------------------------------------
\4\ See Letter from Schagrin Associates to the Secretary of
Commerce, ``Certain Cold-Rolled Steel Flat Products from China:
Request for Circumvention Ruling,'' dated September 22, 2016
(Schagrin Request).
\5\ See Letter from Kelley Drye & Warren LLP to the Secretary of
Commerce, ``Certain Cold-Rolled Steel Flat Products From the
People's Republic of China--Request for Circumvention Ruling
Pursuant to Section 781(b) of the Tariff Act of 1930,'' dated
September 27, 2016 (Kelley Drye Request).
\6\ See Letter from United Steelworkers to the Secretary of
Commerce, ``Certain Cold-Rolled Steel Flat Products from the
People's Republic of China,'' dated October 13, 2016.
---------------------------------------------------------------------------
On October 17, 2016, we received comments objecting to the
allegation from Metallia U.S.A., LLC, Metallia, A Division of Hartree
Partners, LP, Nippon Steel and Sumiken Bussan Americas Inc., Mitsui &
Co. (U.S.A.), Inc., and Marubeni-Itochu Steel America Inc. (MISA).\7\
Also on October 17, 2016, we
[[Page 81058]]
received comments objecting to the allegation from Minmetals, Inc.
(Minmetals).\8\ On October 17, 2016, we also received comments
objecting to the allegation from POSCO-Vietnam Co., Ltd. (POSCO
Vietnam).\9\ On October 21, 2016, we received comments objecting to the
allegation from China Steel Sumikin Vietnam Joint Stock Company.\10\
Also on October 26, 2016, we received comments objecting to the
allegation from Summit Global Trading, a Subsidiary of Sumitomo
Corporation of Americas (Sumitomo).\11\ On October 28, 2016, we
received comments objecting to the allegation from thyssenkrupp
Materials NA, Inc. (thyssenkrupp).\12\ On October 31, 2016, we also
received comments objecting to the allegation on behalf of Hoa Sen
Group (HSG) \13\ and Maruichi Sun Steel Joint Stock Company
(Maruichi).\14\ On November 1, 2016, we received comments objecting to
the allegation from behalf of from Vietnam Competition Authority.\15\
---------------------------------------------------------------------------
\7\ See Letter from Morris, Manning & Martin, LLP to the
Secretary of Commerce, ``Certain Cold-Rolled Steel Flat Products and
Corrosion-Resistant Steel Products from the People's Republic of
China: Response to Request for Anti-Circumvention Inquiry,'' dated
October 17, 2016.
\8\ See Letter from Minmetals, Inc. to the Secretary of
Commerce, dated October 17, 2016.
\9\ See Letter from Arnold and Porter, LLP to the Secretary of
Commerce, ``Cold-Rolled Steel Flat Products from China: Response to
Petitioners' Circumvention Allegation,'' dated October 17, 2016
(POSCO Vietnam Submission).
\10\ See Letter from Mowry & Grimson, PLLC and Sidley Austin LLP
to the Secretary of Commerce, ``Certain Corrosion-Resistant Steel
Products from China--Response to Petitioners' Circumvention
Allegations,'' dated October 20, 2016.
\11\ See Letter from Sandler, Travis, and Rosenberg, P.A. to the
Secretary of Commerce, ``Certain Corrosion-Resistant Steel Products
from the People's Republic of China: Response to Request for Anti-
Circumvention Inquiry,'' dated October 26, 2016.
\12\ See Letter from Crowell and Moring, LLP to the Secretary of
Commerce, ``Certain Corrosion-Resistant and Cold-Rolled Steel
Products from the People's Republic of China: Comments Opposing
Petitioners' Circumvention Allegations,'' dated October 28, 2016.
\13\ See Letter from Curtis, Mallet-Prevost, Colt & Mosle, LLP
to the Secretary of Commerce, ``Opposition to Request for Anti-
Circumvention Inquiry Certain Corrosion-Resistant Steel Products and
Cold-Rolled Steel Flat Products from the People's Republic of
China,'' dated October 31, 2016.
\14\ See Letter from Curtis, Mallet-Prevost, Colt & Mosle, LLP
to the Secretary of Commerce, ``Opposition to Request for Anti-
Circumvention Inquiry Certain Corrosion-Resistant Steel Products and
Cold-Rolled Steel Flat Products from the People's Republic of
China,'' dated October 31, 2016.
\15\ See the Letter from the Vietnam Competition Authority to
the Secretary of Commerce, ``Certain Corrosion-Resistant Steel
Products from China; Certain Cold-Rolled Steel Flat Products from
China--Opposition to Initiation of Anticircumvention Proceedings,''
dated November 1, 2016.
---------------------------------------------------------------------------
Scope of the Orders
The products covered by the orders are certain cold-rolled (cold-
reduced), flat-rolled steel products, whether or not annealed, painted,
varnished, or coated with plastics or other nonmetallic substances. The
products covered do not include those that are clad, plated, or coated
with metal. The products covered include coils that have a width or
other lateral measurement (``width'') of 12.7 mm or greater, regardless
of form of coil (e.g., in successively superimposed layers, spirally
oscillating, etc.). The products covered also include products not in
coils (e.g., in straight lengths) of a thickness less than 4.75 mm and
a width that is 12.7 mm or greater and that measures at least 10 times
the thickness. The products covered also include products not in coils
(e.g., in straight lengths) of a thickness of 4.75 mm or more and a
width exceeding 150 mm and measuring at least twice the thickness. The
products described above may be rectangular, square, circular, or other
shape and include products of either rectangular or non-rectangular
cross-section where such cross-section is achieved subsequent to the
rolling process, i.e., products which have been ``worked after
rolling'' (e.g., products which have been beveled or rounded at the
edges). For purposes of the width and thickness requirements referenced
above:
(1) Where the nominal and actual measurements vary, a product is
within the scope if application of either the nominal or actual
measurement would place it within the scope based on the definitions
set forth above, and
(2) where the width and thickness vary for a specific product
(e.g., the thickness of certain products with non-rectangular cross-
section, the width of certain products with nonrectangular shape,
etc.), the measurement at its greatest width or thickness applies.
Steel products included in the scope of the orders are products in
which: (1) Iron predominates, by weight, over each of the other
contained elements; (2) the carbon content is 2 percent or less, by
weight; and (3) none of the elements listed below exceeds the quantity,
by weight, respectively indicated:
2.50 percent of manganese, or
3.30 percent of silicon, or
1.50 percent of copper, or
1.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
2.00 percent of nickel, or
0.30 percent of tungsten (also called wolfram), or
0.80 percent of molybdenum, or
0.10 percent of niobium (also called columbium), or
0.30 percent of vanadium, or
0.30 percent of zirconium
Unless specifically excluded, products are included in this scope
regardless of levels of boron and titanium.
For example, specifically included in this scope are vacuum
degassed, fully stabilized (commonly referred to as interstitial-free
(IF)) steels, high strength low alloy (HSLA) steels, motor lamination
steels, Advanced High Strength Steels (AHSS), and Ultra High Strength
Steels (UHSS). If steels are recognized as low carbon steels with
micro-alloying levels of elements such as titanium and/or niobium added
to stabilize carbon and nitrogen elements. HSLA steels are recognized
as steels with micro-alloying levels of elements such as chromium,
copper, niobium, titanium, vanadium, and molybdenum. Motor lamination
steels contain micro-alloying levels of elements such as silicon and
aluminum. AHSS and UHSS are considered high tensile strength and high
elongation steels, although AHSS and UHSS are covered whether or not
they are high tensile strength or high elongation steels.
Subject merchandise includes cold-rolled steel that has been
further processed in a third country, including but not limited to
annealing, tempering, painting, varnishing, trimming, cutting,
punching, and/or slitting, or any other processing that would not
otherwise remove the merchandise from the scope of the orders if
performed in the country of manufacture of the cold-rolled steel.
All products that meet the written physical description, and in
which the chemistry quantities do not exceed any one of the noted
element levels listed above, are within the scope of the orders unless
specifically excluded. The following products are outside of and/or
specifically excluded from the scope of the orders:
Ball bearing steels; \16\
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\16\ Ball bearing steels are defined as steels which contain, in
addition to iron, each of the following elements by weight in the
amount specified: (i) Not less than 0.95 nor more than 1.13 percent
of carbon; (ii) not less than 0.22 nor more than 0.48 percent of
manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv)
none, or not more than 0.03 percent of phosphorus; (v) not less than
0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25
nor more than 1.65 percent of chromium; (vii) none, or not more than
0.28 percent of nickel; (viii) none, or not more than 0.38 percent
of copper; and (ix) none, or not more than 0.09 percent of
molybdenum.
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Tool steels; \17\
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\17\ Tool steels are defined as steels which contain the
following combinations of elements in the quantity by weight
respectively indicated: (i) More than 1.2 percent carbon and more
than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon
and 1.25 percent or more but less than 10.5 percent chromium; or
(iii) not less than 0.85 percent carbon and 1 percent to 1.8
percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent,
inclusive, chromium and 0.9 percent to 1.4 percent, inclusive,
molybdenum; or (v) not less than 0.5 percent carbon and not less
than 3.5 percent molybdenum; or (vi) not less than 0.5 percent
carbon and not less than 5.5 percent tungsten.
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[[Page 81059]]
Silico-manganese steel; \18\
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\18\ Silico-manganese steel is defined as steels containing by
weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or
more but not more than 1.9 percent of manganese, and (iii) 0.6
percent or more but not more than 2.3 percent of silicon.
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Grain-oriented electrical steels (GOES) as defined in the
final determination of the U.S. Department of Commerce in Grain-
Oriented Electrical Steel From Germany, Japan, and Poland.\19\
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\19\ Grain-Oriented Electrical Steel From Germany, Japan, and
Poland: Final Determinations of Sales at Less Than Fair Value and
Certain Final Affirmative Determination of Critical Circumstances,
79 FR 42,501, 42,503 (Dep't of Commerce, July 22, 2014). This
determination defines grain-oriented electrical steel as ``a flat-
rolled alloy steel product containing by weight at least 0.6 percent
but not more than 6 percent of silicon, not more than 0.08 percent
of carbon, not more than 1.0 percent of aluminum, and no other
element in an amount that would give the steel the characteristics
of another alloy steel, in coils or in straight lengths.''
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Non-Oriented Electrical Steels (NOES), as defined in the
antidumping orders issued by the U.S. Department of Commerce in Non-
Oriented Electrical Steel From the People's Republic of China, Germany,
Japan, the Republic of Korea, Sweden, and Taiwan.\20\
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\20\ Non-Oriented Electrical Steel From the People's Republic of
China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan:
Antidumping Duty Orders, 79 FR 71,741, 71,741-42 (Dep't of Commerce,
Dec. 3, 2014). The orders define NOES as ``cold-rolled, flat-rolled,
alloy steel products, whether or not in coils, regardless of width,
having an actual thickness of 0.20 mm or more, in which the core
loss is substantially equal in any direction of magnetization in the
plane of the material. The term `substantially equal' means that the
cross grain direction of core loss is no more than 1.5 times the
straight grain direction (i.e., the rolling direction) of core loss.
NOES has a magnetic permeability that does not exceed 1.65 Tesla
when tested at a field of 800 A/m (equivalent to 10 Oersteds) along
(i.e., parallel to) the rolling direction of the sheet (i.e., B800
value). NOES contains by weight more than 1.00 percent of silicon
but less than 3.5 percent of silicon, not more than 0.08 percent of
carbon, and not more than 1.5 percent of aluminum. NOES has a
surface oxide coating, to which an insulation coating may be
applied.''
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The products subject to the orders are currently classified in the
Harmonized Tariff Schedule of the United States (HTSUS) under item
numbers: 7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0070,
7209.16.0091, 7209.17.0030, 7209.17.0060, 7209.17.0070, 7209.17.0091,
7209.18.1530, 7209.18.1560, 7209.18.2510, 7209.18.2520, 7209.18.2580,
7209.18.6020, 7209.18.6090, 7209.25.0000, 7209.26.0000, 7209.27.0000,
7209.28.0000, 7209.90.0000, 7210.70.3000, 7211.23.1500, 7211.23.2000,
7211.23.3000, 7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6075,
7211.23.6085, 7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030,
7211.29.6080, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7225.50.6000,
7225.50.8015, 7225.50.8085, 7225.99.0090, 7226.92.5000, 7226.92.7050,
and 7226.92.8050.
The products subject to the orders may also enter under the
following HTSUS numbers: 7210.90.9000, 7212.50.0000, 7215.10.0010,
7215.10.0080, 7215.50.0016, 7215.50.0018, 7215.50.0020, 7215.50.0061,
7215.50.0063, 7215.50.0065, 7215.50.0090, 7215.90.5000, 7217.10.1000,
7217.10.2000, 7217.10.3000, 7217.10.7000, 7217.90.1000, 7217.90.5030,
7217.90.5060, 7217.90.5090, 7225.19.0000, 7226.19.1000, 7226.19.9000,
7226.99.0180, 7228.50.5015, 7228.50.5040, 7228.50.5070, 7228.60.8000,
and 7229.90.1000.
The HTSUS subheadings above are provided for convenience and
customs purposes only. The written description of the scope of the
orders is dispositive.
Merchandise Subject to the Anti-Circumvention Inquiries
These anti-circumvention inquiries cover CRS exported from Vietnam
produced from HRS exported from the PRC.
Initiation of Anti-Circumvention Inquiries
Section 781(b)(1) of the Act provides that the Department may find
circumvention of an AD or CVD 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 an anti-circumvention inquiry, under section 781(b)(1) of
the Act, the Department relies on 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 the
subject of an antidumping or countervailing duty order or finding; (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 merchandise which is 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 section
(B) is minor or insignificant; (D) the value of the merchandise
produced in the foreign country to which the AD or CVD order applies is
a significant portion of the total value of the merchandise exported to
the United States; and (E) the administering authority determines that
action is appropriate to prevent evasion of such order or finding. As
discussed below, Domestic Producers provided evidence with respect to
these criteria.
A. Merchandise of the Same Class or Kind
Domestic Producers claim that CRS exported to the United States is
the same class or kind as that covered by the Orders in these
inquiries.\21\ Domestic Producers provided evidence to show that the
merchandise from Vietnam enters the United States under the same tariff
classification as subject merchandise.\22\
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\21\ See Schagrin Request, at 8; Kelley Drye Request, at 8. See
also sections 781(b)(1)(A)(i) and (iii) of the Act.
\22\ See Kelley Drye Request, at Attachment 1.
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B. Completion of Merchandise in a Foreign Country
Domestic Producers note that section 781(b)(l)(B)(ii) of the Act
requires that ``the Department must also determine whether, prior to
importation into the United States, the merchandise in the third
country is completed from merchandise produced in the country subject
to the antidumping or countervailing duty order.'' \23\ Domestic
Producers presented evidence showing after the publication of the
preliminary affirmative CVD determination in December 2015, how the
imports of CRS from Vietnam to the United States more than tripled than
the previous two years combined. Additionally, Domestic Producers
provide evidence that no capacity currently exists in Vietnam to
produce HRS and, thus, they contend any CRS manufactured in Vietnam
must use imported HRS.\24\ Domestic Producers also provide information
reflecting that imports into the United States of CRS from the PRC
significantly decreased after the imposition of the Orders, and imports
into the United States of CRS from Vietnam, as well as imports into
Vietnam of Chinese HRS, also increased significantly.\25\ Finally,
Domestic Producers state that Minmetals, a U.S. trading company,
currently has arrangements to ship HRS from the PRC to Vietnam and
convert
[[Page 81060]]
the HRS to CRS for export to the United States with the purpose of
evading the Orders.\26\
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\23\ Id., at 8.
\24\ See Schagrin Request, at 10; see also Kelley Drye Request,
at 8-9.
\25\ See Schagrin Request, at 11-14; see also Kelley Drye
Request, at 9-10.
\26\ See Schagrin Request, at 15 and Exhibit 10.
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C. Minor or Insignificant Process
Domestic Producers maintain that the process for completing CRS
from HRS is minor or insignificant. Under section 781(b)(2) of the Act,
the Department considers five factors to determine whether the process
of assembly or completion is minor or insignificant. Domestic Producers
allege that the production of HRS in the PRC, which is subsequently
further processed into CRS in Vietnam, comprises the majority of the
value associated with the merchandise imported into the United States,
and that the processing of HRS into CRS in Vietnam adds relatively
little value.
(1) Level of Investment
Domestic Producers contend that the level of investment necessary
to construct a factory which can produce CRS from HRS in Vietnam is
insignificant. In support of its contention, Domestic Producers compare
the investment necessary to install a re-rolling facility with the
investment necessary to produce HRS using a fully-integrated production
process for melting iron and making steel.\27\ Domestic Producers
estimate that the investment necessary to construct a re-rolling
facility in Vietnam that uses HRS substrate to produce CRS would be
between $28 million at $70 million.\28\ In contrast, Domestic Producers
estimate that the investment necessary to construct a fully integrated
steel production facility, including a blast furnace and basic oxygen
furnace, in the PRC would be between $295 million and $10.1
billion.\29\ Domestic Producers also argue that using investment levels
in the PRC for a basic steel making, including a blast furnace and
basic oxygen furnace, as opposed to an electric arc furnace, is
appropriate as approximately 90 percent of the steel production in the
PRC comes from fully integrated steel mills.\30\
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\27\ See Schagrin Request, at 16-17; see also Kelley Drye
Request, at 11-13.
\28\ See Schagrin Request, at 17; see also Kelley Drye Request,
at 12.
\29\ See Schagrin Request, at 16; see also Kelley Drye Request,
at 12 and Attachment 9.
\30\ See Kelley Drye Request, at 12.
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(2) Level of Research and Development
Domestic Producers assert that the level of research and
development in Vietnam is either minimal or non-existent. Domestic
Producers state that Vietnam is importing technology from other
sources, rather than developing its own technology.\31\ As an example
of the importation of technology into Vietnam, Domestic Producers
provided evidence that ``Dong A, a Vietnamese steel company, recently
announced that it is installing European and Japanese equipment in a
new facility that includes a pickling line and a cold-rolling mill.''
\32\
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\31\ See Schagrin Request, at 17-18; see also Kelley Drye
Request at 13.
\32\ See Kelley Drye Request at 13 and Attachment 11.
---------------------------------------------------------------------------
(3) Nature of Production Process
According to Domestic Producers, the production process undertaken
by Vietnamese producers of CRS is less complex than steelmaking, and
minimal in nature.\33\ Citing to a report from the ITC,\34\ Domestic
Producers describe the process to produce HRS as consisting of three
distinct states: Melting and refining, casting molten steel into semi-
finished forms, and hot-rolling the semi-finished forms into HRS.\35\
In contrast, Domestic Producers provide information indicating that the
production of CRS from HRS involves only cleaning and pickling,
rolling, annealing, and tempering.\36\
---------------------------------------------------------------------------
\33\ See Schagrin Request, at 18; see also Kelley Drye Request
at 14.
\34\ See Certain Hot-Rolled Steel Flat Products from Australia,
Brazil, Japan, Korea, the Netherlands, Turkey, and The United
Kingdom, Inv. Nos. 70t-TA-545-547 and 73l-TA-1291-1297, USITC
Pub.4570 (October 2015) (Preliminary) at I-19. Domestic Producers
attached the report as Attachment 12.
\35\ See Kelley Drye Request, at 14-16 and Attachment 12.
\36\ Id., at 17. Domestic Producers cite to Certain Hot-Rolled
Steel Flat Products from Australia, Brazil, Japan, Korea, the
Netherlands, Turkey, and The United Kingdom, Inv. Nos. 70t-TA-545-
547 and 73l-TA-1291-1297, USITC Pub. 4570 (Oct.2015) (Preliminary)
at I-21 in support of their description of the CRS production
process.
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(4) Extent of Production Facilities in Vietnam
Domestic Producers provide information indicating that production
facilities in Vietnam are more limited compared to facilities in the
PRC.\37\ As noted above, Domestic Producers maintain that Vietnam has
no HRS capacity. Domestic Producers claim that Vietnam has fewer than a
dozen large producers of flat steel products. Moreover, Domestic
Producers indicate that Vietnam has limited production facilities that
would allow for production of CRS to support the significant increase
of imports into the United States from Vietnam.\38\
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\37\ See Schagrin Request, at 18. Domestic Producers cite to
report on the state of the steel industry in Vietnam in support of
their statements. See Nozomu Kawabata, ``The Vietnamese Iron and
Steel Industry in Transition to a Market Economy--Attainments and
Challenges,'' at 14, 20, & 35 (May, 2016) (Tohoku Economics Research
Group, Tohoku University, Discussion Paper No. 349) (Kawabata
Report), attached as Exhibit 4 to the Request.
\38\ See Kelley Drye Request, at 17-18.
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(5) Value of Processing in Vietnam
Domestic Producers assert that producing HRS in the PRC accounts
for a large percentage of the total value of CRS that is produced in
Vietnam using HRS from the PRC. Using information from the recent CRS
investigation by the ITC, Domestic Producers state that the price of
HRS is consistently between 80 percent and 90 percent of the value of
CRS.\39\ Using another approach, focusing solely on the cost of
production in Vietnam, Domestic Producers estimate that the cost of
manufacture for the CRS operations value added in Vietnam is less than
ten percent.\40\ As noted above, Domestic Producers argue that the vast
majority of the processing and value of CRS comes from HRS. The value
of processing CRS in Vietnam is a minor part of the total cost of
manufacture, unlikely to exceed 20 percent of the total value. Thus,
the value of the merchandise produced in China is estimated to be at
least 80 percent of the total value of the merchandise shipped to the
United States.\41\
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\39\ See Schagrin Request, at 18-19.
\40\ See Kelley Drye Request, at 18-19 and Attachment 14.
\41\ See Kelley Drye Request, at 19.
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D. Additional Factors To Consider in Determining Whether Action Is
Necessary
Section 781(b)(3) of the Act directs the Department to consider
additional factors in determining whether to include merchandise
assembled or completed in a foreign country within the scope of the
order, such as: ``(A) the pattern of trade, including sourcing
patterns, (B) whether the manufacturer or exporter of the merchandise .
. . is affiliated with the person who uses the merchandise. . . to
assemble or complete in the foreign country the merchandise that is
subsequently imported into the United States, and (C) whether imports
into the foreign country of the merchandise. . . have increased after
the initiation of the investigation which resulted in the issuance of
such order or finding.''
(1) Pattern of Trade
Domestic Producers provide information reflecting that at the time
the petitions were filed for the original investigations of CRS from
the PRC, Vietnam was not a source of U.S. imports of CRS in 2014.
Domestic
[[Page 81061]]
Producers provide information reflecting imports of CRS from Vietnam to
the United States through July 2015 were low.\42\ However, subsequent
to the preliminary injury determination by the ITC, the final quarter
of 2015 saw increased imports of CRS from Vietnam to the United
States.\43\ Domestic Producers provide information demonstrating that
after the Department's preliminary affirmative CVD determination for
CRS from the PRC in December 2015, imports of CRS from Vietnam into the
United States surged dramatically.\44\ Domestic Producers further
provide evidence that imports of CRS from the PRC to the United States
decreased substantially over the same time period.\45\ No other factual
information on the record contradicts this claim.
---------------------------------------------------------------------------
\42\ See Kelley Drye Request, at 19-20 and Attachment 1.
\43\ Id., at 20
\44\ Id.
\45\ Id., at 5-6.
---------------------------------------------------------------------------
(2) Affiliation
Domestic Producers have not provided any allegation of affiliation
between producers of HRS in the PRC and producers of CRS in Vietnam.
(3) Increase of HRS Shipments From the PRC to Vietnam After Initiations
of the AD and CVD Investigations of CRS From the PRC
Domestic Producers presented evidence indicating that imports of
HRS from the PRC to Vietnam have increased since the initiation of the
investigations of CRS from the PRC.\46\ No other factual information on
the record contradicts this claim.
---------------------------------------------------------------------------
\46\ See Schagrin Request, at 11-14; see also Kelley Drye
Request, at 21 and Attachment 3.
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Analysis of the Allegations
Based on our analysis of Domestic Producers anti-circumvention
allegations and the information provided therein, the Department
determines that anti-circumvention inquiries of the AD and CVD orders
on CRS from the PRC are warranted.
With regard to whether the merchandise from Vietnam is of the same
class or kind as the merchandise produced in the PRC, Domestic
Producers presented information to the Department indicating that,
pursuant to section 781(b)(1)(A) of the Act, the merchandise being
produced in and/or exported from Vietnam is of the same class or kind
as CRS produced in the PRC, which is subject to the Orders.\47\
Consequently, the Department finds that Domestic Producers provided
sufficient information in their requests regarding the class or kind of
merchandise to support the initiation of these anti-circumvention
inquiries.
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\47\ See Schagrin Request, at 9; see also Kelly Dry Request, at
8 and Attachment 1.
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With regard to completion or assembly of merchandise in a foreign
country, pursuant to section 781(b)(1)(B) of the Act, Domestic
Producers also presented information to the Department indicating that
the CRS exported from Vietnam to the United States is produced in
Vietnam using HRS from the PRC.\48\ We find that the information
presented by Domestic Producers regarding this criterion supports its
request to initiate these anti-circumvention inquiries.
---------------------------------------------------------------------------
\48\ See Schagrin Request, at 6 and 11-18 and Exhibits 1-2, 4-5,
7 and 13; see also Kelly Dry Request, at 8-11 and Attachments 1-5.
---------------------------------------------------------------------------
The Department finds that Domestic Producers sufficiently addressed
the factors described in section 781(b)(1)(C) and 781(b)(2) of the Act
regarding whether the process of assembly or completion of CRS in
Vietnam is minor or insignificant. In particular, information in
Domestic Producers' submission indicates that: (1) The level of
investment in re-rolling facilities is minimal when compared with the
level of investment for basic steel making facilities; (2) there is
little or no research and development taking place in Vietnam; (3) the
CRS production processes involve the simple processing of HRS from a
country subject to the Orders; (4) the CRS production facilities in
Vietnam are more limited compared to facilities in the PRC; and (5) the
value of the processing performed in Vietnam is a small proportion of
the value of the CRS imported into the United States, as the production
of HRS in the PRC accounts for 80 to 90 percent of the value of
finished CRS.
With respect to the value of the merchandise produced in the PRC,
pursuant to section 781(b)(1)(D) of the Act, Domestic Producers relied
on published sources, a simulated cost structure for producing CRS in
Vietnam, and arguments in the ``minor or insignificant process''
portion of its anti-circumvention allegation to indicate that the value
of the key material, HRS, produced in the PRC may be significant
relative to the total value of the CRS exported to the United States.
We find that this information adequately meets the requirements of this
factor, as discussed above, for the purposes of initiating these anti-
circumvention inquiries.
Finally, with respect to the additional factors listed under
section 781(b)(3) of the Act, we find that Domestic Producers presented
evidence indicating that shipments of CRS from Vietnam to the United
States increased since the imposition of the Orders and that shipments
of HRS from the PRC to Vietnam also increased since the Orders took
effect, further supporting initiation of these anti-circumvention
inquiries. Accordingly, we are initiating a formal anti-circumvention
inquiry concerning the AD and CVD Orders on CRS from the PRC, pursuant
to section 781(b) of the Act.
In connection with these anti-circumvention inquiries, in order to
determine, (1) the extent to which PRC-sourced HRS is further processed
into CRS in Vietnam before shipment to the United States, (2) the
extent to which a country-wide finding applicable to all exports might
be warranted, as alleged by Domestic Producers, and (3) whether the
process of turning PRC-sourced HRS into CRS is minor or insignificant,
the Department intends to issue questionnaires to solicit information
from interested parties. The Department intends to issue questionnaires
to solicit information from the Vietnamese producers and exporters
concerning their shipments of CRS to the United States and the origin
of the imported HRS being processed into CRS. A company's failure to
respond completely to the Department's requests for information may
result in the application of partial or total facts available, pursuant
to section 776(a) of the Act, which may include adverse inferences,
pursuant to section 776(b) of the Act.
While we believe sufficient factual information has been submitted
by Domestic Producers supporting their request for inquiries, we do not
find that the record supports the simultaneous issuance of a
preliminary ruling. Such inquiries are by their nature typically
complicated and can require information regarding production in both
the country subject to the order and the third country completing the
product. As noted above, the Department intends to request additional
information regarding the statutory criteria to determine whether
shipments of CRS from Vietnam are circumventing the AD and CVD orders
on CRS from the PRC. Thus, with further development of the record
required before a preliminary ruling can be issued, the Department does
not find it appropriate to issue a preliminary ruling at this time.
Notification to Interested Parties
In accordance with 19 CFR 351.225(e), the Department finds that the
issue of whether a product is
[[Page 81062]]
included within the scope of an order cannot be determined based solely
upon the application and the descriptions of the merchandise.
Accordingly, the Department will notify by mail all parties on the
Department's scope service list of the initiation of these anti-
circumvention inquiries. In addition, in accordance with 19 CFR
351.225(f)(1)(i) and (ii), in this notice of initiation issued under 19
CFR 351.225(e), we have included a description of the product that is
the subject of these anti-circumvention inquiries (i.e., CRS that
contains the characteristics as provided in the scope of the Orders)
and an explanation of the reasons for the Department's decision to
initiate an anti-circumvention inquiry, as provided above.
In accordance with 19 CFR 351.225(l)(2), if the Department issues a
preliminary affirmative determination, we will then instruct U.S.
Customs and Border Protection to suspend liquidation and require a cash
deposit of estimated antidumping and countervailing duties, at the
applicable rate, for each unliquidated entry of the merchandise at
issue, entered or withdrawn from warehouse for consumption on or after
the date of initiation of the inquiry. The Department will establish a
schedule for questionnaires and comments on the issues. In accordance
with section 781(f) of the Act and 19 CFR 351.225(f)(5), the Department
intends to issue its final determination within 300 days of the date of
publication of this initiation.
This notice is published in accordance with 19 CFR 351.225(f).
Dated: November 4, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2016-27850 Filed 11-16-16; 8:45 am]
BILLING CODE 3510-DS-P
