Diamond Sawblades and Parts Thereof From the People's Republic of China: Initiation of Anti-Circumvention Inquiry, 57709-57714 [2017-26398]

Download as PDF Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices between the first and second or third and fourth anniversary of the publication of an antidumping duty order under 19 CFR 351.211 or a determination under 19 CFR 351.218(f)(4) to continue an order or suspended investigation (after sunset review), the Secretary, if requested by a domestic interested party within 30 days of the date of publication of the notice of initiation of the review, will determine whether antidumping duties have been absorbed by an exporter or producer subject to the review if the subject merchandise is sold in the United States through an importer that is affiliated with such exporter or producer. The request must include the name(s) of the exporter or producer for which the inquiry is requested. Gap Period Liquidation For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures ‘‘gap’’ period, of the order, if such a gap period is applicable to the POR. sradovich on DSK3GMQ082PROD with NOTICES Administrative Protective Orders and Letters of Appearance Interested parties must submit applications for disclosure under administrative protective orders in accordance with the procedures outlined in the Department’s regulations at 19 CFR 351.305. Those procedures apply to administrative reviews included in this notice of initiation. Parties wishing to participate in any of these administrative reviews should ensure that they meet the requirements of these procedures (e.g., the filing of separate letters of appearance as discussed at 19 CFR 351.103(d)). Factual Information Requirements The Department’s regulations identify 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). These regulations require 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 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 regulations, at 19 CFR 351.301, also provide specific time limits for such factual submissions based on the type of factual information being submitted. Please review the final rule, available at http://enforcement.trade.gov/frn/2013/ 1304frn/2013-08227.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.8 Parties are hereby reminded that revised certification requirements are in effect for company/ government officials as well as their representatives. All segments of any antidumping duty or countervailing duty proceedings initiated on or after August 16, 2013, should use the formats for the revised certifications provided at the end of the Final Rule.9 The Department intends to reject factual submissions in any proceeding segments if the submitting party does not comply with applicable revised certification requirements. Extension of Time Limits Regulation Parties may request an extension of time limits before a time limit established under Part 351 expires, or as otherwise specified by the Secretary. See 19 CFR 351.302. In general, an extension request will be considered untimely if it is filed after the time limit established under Part 351 expires. For submissions which are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. on the due date. Examples include, but are not limited to: (1) Case and rebuttal briefs, filed pursuant to 19 CFR 351.309; (2) factual information to value factors under 19 CFR 351.408(c), or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2), filed pursuant to 19 8 See section 782(b) of the Act. Certification of Factual Information To Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also the frequently asked questions regarding the Final Rule, available at http://enforcement.trade.gov/tlei/notices/factual_ info_final_rule_FAQ_07172013.pdf. 9 See However, as noted in that initiation notice, this company was excluded from the CVD order as a result of litigation. See Oil Country Tubular Goods from the Republic of Turkey: Amendment of Countervailing Duty Order, 82 FR 46483 (October 26, 2017). This notice serves as a correction. VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 57709 CFR 351.301(c)(3) and rebuttal, clarification and correction filed pursuant to 19 CFR 351.301(c)(3)(iv); (3) comments concerning the selection of a surrogate country and surrogate values and rebuttal; (4) comments concerning U.S. Customs and Border Protection data; and (5) quantity and value questionnaires. Under certain circumstances, the Department may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, the Department will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. This modification also requires that an extension request must be made in a separate, stand-alone submission, and clarifies the circumstances under which the Department will grant untimelyfiled requests for the extension of time limits. These modifications are effective for all segments initiated on or after October 21, 2013. Please review the final rule, available at http:// www.gpo.gov/fdsys/pkg/FR-2013-09-20/ html/2013-22853.htm, prior to submitting factual information in these segments. These initiations and this notice are in accordance with section 751(a) of the Act (19 U.S.C. 1675(a)) and 19 CFR 351.221(c)(1)(i). Dated: December 1, 2017. James Maeder, Senior Director performing the duties of Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations. [FR Doc. 2017–26383 Filed 12–6–17; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–570–900] Diamond Sawblades and Parts Thereof From the People’s Republic of China: Initiation of Anti-Circumvention Inquiry Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY: In response to a request from Diamond Sawblades Manufacturers’ Coalition (the petitioner), the Department of Commerce (the Department) is initiating an anticircumvention inquiry to determine whether certain imports of diamond sawblades and parts thereof (diamond sawblades) comprised of cores and AGENCY: E:\FR\FM\07DEN1.SGM 07DEN1 57710 Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices segments produced in the People’s Republic of China (PRC) and joined into finished diamond sawblades in, and exported from, Thailand are circumventing the antidumping duty order on diamond sawblades from the PRC. DATES: Applicable December 7, 2017. FOR FURTHER INFORMATION CONTACT: Yang Jin Chun, AD/CVD Operations Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–5760. SUPPLEMENTARY INFORMATION: sradovich on DSK3GMQ082PROD with NOTICES Background Effective January 23, 2009, the Department published the antidumping duty order on diamond sawblades from the PRC.1 On August 9, 2017, the petitioner filed a request for a circumvention ruling, requesting that the Department issue a determination of circumvention and suspend liquidation of certain diamond sawblades exported from Thailand.2 Specifically, the petitioner requests a circumvention ruling for three companies, Diamond Tools Technology (Diamond Tools), Bosun Tools (Thailand) Co., Ltd. (Bosun), and Kingthai Diamond Tools (Kingthai).3 The petitioner requests that, in the alternative, and to the extent that the Department decides it to be more appropriate, the Department address circumvention issues in a changed circumstances review.4 On September 22, 2017, we received a letter from Bosun Tools Co., Ltd. (Bosun China) and its affiliate Bosun Tools (Thailand) Co., Ltd. (Bosun Thailand) (collectively Bosun), arguing that Bosun Thailand has not engaged in the alleged activity of joining cores and segments made in the PRC and exporting them to the United States. 1 See Diamond Sawblades and Parts Thereof from the People’s Republic of China and the Republic of Korea: Antidumping Duty Orders, 74 FR 57145 (November 4, 2009). 2 See the Letter from the petitioner, ‘‘Diamond Sawblades and Parts Thereof from the People’s Republic of China: Request for Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 1930 or in the Alternative a Changed Circumstances Review Pursuant to Section 751(b) of the Act,’’ dated August 9, 2017 (the petitioner’s circumvention ruling request), as amended in ‘‘Supplemental Submission Regarding Request for Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 1930 or in the Alternative a Changed Circumstances Review Pursuant to Section 751(b) of the Act,’’ dated September 14, 2017 (supplement to the petitioner’s circumvention ruling request). 3 See Supplement to the petitioner’s circumvention ruling request at 10–12. 4 See the petitioner’s circumvention ruling request at 22. VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 Bosun claims that the petitioner did not support its allegation with any evidence with respect to Bosun. Bosun explains that the petitioner did not cite to record evidence supporting its allegation of limited manufacturing operations at Bosun Thailand, although the affiliation between Bosun China and Bosun Thailand is on the public record in the last completed administrative review of the order.5 On October 2, 2017, the Department issued a supplemental questionnaire to the petitioner requesting additional information.6 On October 16, 2017, the petitioner submitted its response to the Department’s supplemental questionnaire.7 On October 26, 2017, Diamond Tools submitted its opposition to the petitioner’s request for a circumvention ruling. In it, Diamond Tools denies that it circumvented the antidumping duty order on diamond sawblades from the PRC. Diamond Tools contends that the Department determined in the investigation that the country in which the cores and segments are joined is the country of origin.8 Diamond Tools argues that the U.S. Court of International Trade upheld the Department’s decision with respect to the country of origin in the investigation.9 Scope of the Order The products covered by the order are all finished circular sawblades, whether slotted or not, with a working part that is comprised of a diamond segment or segments, and parts thereof, regardless of specification or size, except as specifically excluded below. Within the scope of the order are semi-finished diamond sawblades, including diamond sawblade cores and diamond sawblade segments. Diamond sawblade cores are circular steel plates, whether or not 5 See Bosun’s Response to DSMC’s Request for Anti-Circumvention Inquiry dated September 22, 2017. 6 See the Department’s supplemental questionnaire to the petitioner dated October 2, 2017. 7 See the petitioner’s supplemental response dated October 16, 2017 (the petitioner’s supplemental response). 8 See Diamond Tools’ letter, ‘‘Diamond Sawblades & Parts Thereof from the People’s Republic of China: Response to Request by Diamond Sawblades Manufacturers’ Coalition for Anti-Circumvention Ruling’’ dated October 26, 2017 at 3 (citing Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People’s Republic of China, 71 FR 29303 (May 22, 2006) (Final Determination— China), and accompanying Issues and Decision Memorandum (I&D Memo) at Comment 4). 9 Id. at 4 (citing Advanced Tech. & Materials Co. v. United States, No. 09–00511, slip op. 11–122, 2011 Ct. Intl. Trade LEXIS 136, *1 at *9-*15 (Ct. Int’l Trade Oct. 12, 2011)). PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 attached to non-steel plates, with slots. Diamond sawblade cores are manufactured principally, but not exclusively, from alloy steel. A diamond sawblade segment consists of a mixture of diamonds (whether natural or synthetic, and regardless of the quantity of diamonds) and metal powders (including, but not limited to, iron, cobalt, nickel, tungsten carbide) that are formed together into a solid shape (from generally, but not limited to, a heating and pressing process). Sawblades with diamonds directly attached to the core with a resin or electroplated bond, which thereby do not contain a diamond segment, are not included within the scope of the order. Diamond sawblades and/or sawblade cores with a thickness of less than 0.025 inches, or with a thickness greater than 1.1 inches, are excluded from the scope of the order. Circular steel plates that have a cutting edge of non-diamond material, such as external teeth that protrude from the outer diameter of the plate, whether or not finished, are excluded from the scope of the order. Diamond sawblade cores with a Rockwell C hardness of less than 25 are excluded from the scope of the order. Diamond sawblades and/or diamond segment(s) with diamonds that predominantly have a mesh size number greater than 240 (such as 250 or 260) are excluded from the scope of the order. Merchandise subject to the order is typically imported under heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United States (HTSUS). When packaged together as a set for retail sale with an item that is separately classified under headings 8202 to 8205 of the HTSUS, diamond sawblades or parts thereof may be imported under heading 8206.00.00.00 of the HTSUS. On October 11, 2011, the Department included the 6804.21.00.00 HTSUS classification number to the customs case reference file, pursuant to a request by CBP.10 The tariff classification is provided for convenience and customs purposes; however, the written description of the scope of the order is dispositive. Merchandise Subject to the AntiCircumvention Inquiry This anti-circumvention inquiry covers diamond sawblades exported from Thailand to the United States that are produced by Diamond Tools from cores and segments of PRC origin. If warranted, the Department may, based 10 See Diamond Sawblades and Parts Thereof from the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review, 76 FR 76128 (December 6, 2011). E:\FR\FM\07DEN1.SGM 07DEN1 Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices on additional evidence it receives from interested parties regarding potential anti-circumvention of the PRC Sawblades Order by other Thai companies, consider conducting additional inquiries concurrently. The petitioner requests that the Department treat diamond sawblades assembled in Thailand with cores and segments from the PRC as subject merchandise under the scope of the antidumping duty order on diamond sawblades from the PRC. Initiation of Anti-Circumvention Inquiry Section 781(b)(1) of The Tariff Act of 1930, as amended (the Act), provides that the Department may find circumvention of an antidumping or countervailing duty order if: (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, the petitioner provided information available to them with respect to these criteria.11 sradovich on DSK3GMQ082PROD with NOTICES A. Merchandise of the Same Class or Kind The petitioner claims that, in accordance with section 781(b)(1)(A)(i) of the Act, diamond sawblades exported from Thailand to the United States are identical to diamond sawblades exported from the PRC to the United Sates subject to the antidumping duty order. The petitioner contends that, because cores, segments, and diamond sawblades are all one class or kind of subject merchandise, a process that simply transforms one of these items to another should not serve as an avenue 11 See section 781(b)(1) of the Act. VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 for PRC producers to evade the antidumping duty order.12 B. Completion of Merchandise in a Third Country Before Importation Into the United States The petitioner contends that, in Thailand, cores made in the PRC are being joined to segments made in the PRC and undergo a minor welding operation and minor processing before they are imported into the United States.13 The petitioner claims that PRC producers with facilities in Thailand for which it requests an anti-circumvention inquiry are as follows: Bosun Tools Co., Ltd., Hebei Jikai Group, and Wuhan Wanbang Laser Diamond Tools Co., Ltd.14 The petitioner also notes that, pursuant to an investigation under the Enforce and Protect Act, CBP recently issued a Notice of Interim Measures finding a reasonable suspicion that Diamond Tools was evading the order.15 C. Minor or Insignificant Process The petitioner explains that, in accordance with section 781(b)(1)(C) of the Act, the Department considers whether the assembly or completion that occurs in the other foreign country is minor or insignificant. The petitioner states that, under section 781(b)(2)(A)(E) of the Act, the Department considers five factors to determine whether the process of assembly or completion is minor or insignificant. The petitioner alleges that, based on these factors, the completion of the merchandise in Thailand is minor and insignificant.16 1. Level of Investment in Thailand The petitioner argues that there is little evidence of any significant level of investment in Thailand for production activities beyond joining cores and 12 See the petitioner’s circumvention ruling request at 13–14 and Exhibit 9 for U.S. imports of diamond sawblades from the PRC and Thailand under the same HTSUS subheadings. 13 See the petitioner’s circumvention ruling request at 14–15 and Exhibits 10–12. See also the petitioner’s supplemental response at 2–6 and Exhibits 5–6. 14 See the petitioner’s circumvention ruling request at 14–15 and Exhibits 1, 4, and 5. See also supplement to the petitioner’s circumvention ruling request at 10 for Wuhan Wanbang Laser Diamond Tools Co., Ltd. 15 See the petitioner’s circumvention ruling request at 9 and Exhibit 8 (where the petitioner cites to Memorandum from Troy P. Riley, Executive Director, Trade Remedy & Law Enf’t Directorate, to Yan Li, Diamond Tools Tech., ‘‘re: Notice of interim measures taken as to Diamond Tools Technology LLC concerning a reasonable suspicion as to evasion of the antidumping duty order on Diamond Sawblades from the People’s Republic of China,’’ dated June 27, 2017 (Notice of Interim Measures). 16 See the petitioner’s circumvention ruling request at 16. PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 57711 segments and laser welding.17 In other words, according to the petitioner, diamond sawblades production facilities in Thailand are not sophisticated enough to produce segments. The petitioner explains that the production of segments is a complex process that requires detailed expertise in metallurgy and technical experience in bonding of diamond powders and metal powders in the production process and the performance of diamond sawblades for particular applications. The petitioner claims that only highly skilled technicians can perform such production processes, while laser-welding is a highlyautomated process that essentially only requires a person who can operate a keyboard.18 The petitioner claims further that other methods of joining cores and segments, e.g., silver soldering or sintering, are even less sophisticated than laser-welding.19 The petitioner distinguishes the level of capital investment between segment production and laser-welding. The petitioner explains that segment production requires significant capital investment for equipment such as weighing scales, mixing equipment, granulating equipment, cold pressing equipment, sintering presses, inspecting equipment, and radius grinding equipment. The petitioner claims that, in particular, the induction and resistance presses used in segment production represent a substantial capital investment. The petitioner contends that the capital investment required for joining cores and segments is essentially limited to a piece of laserwelding equipment. The petitioner distinguishes the level of costs between segment production and joining cores and segments. According to the petitioner, the production cost for finished diamond sawblades segments may represent approximately 70 percent of the cost of producing a finished diamond sawblade, whereas joining cores and segments typically accounts for a much smaller percentage of the cost of production, often as low as 0.5 percent of the cost of a finished diamond 17 See the petitioner’s circumvention ruling request at 16–18 and Exhibits 8, 10, 11, and 12. See also the petitioner’s supplemental response at 9–10 and Exhibits 5–6. 18 See the petitioner’s circumvention ruling request at 16–17. 19 The Department considers that this portion of the petitioner’s circumvention ruling request is relevant to the consideration contained in section 781(b)(2)(C) (‘‘the nature of the production process in the foreign country’’). E:\FR\FM\07DEN1.SGM 07DEN1 57712 Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices sawblade.20 The petitioner also asserts that laser welding requires a relatively small capital investment because the only piece of machinery needed to join cores and segments through laser welding is a laser welder itself.21 The petitioner argues that, for these reasons, the joining operations require very minimal investment.22 2. Level of Research and Development The petitioner argues that, because laser-welding is a highly-automated process and other methods of joining cores and segments are less sophisticated than laser-welding, entities joining the PRC cores and segments in Thailand do not, and do not need to, invest in research and development in Thailand.23 sradovich on DSK3GMQ082PROD with NOTICES 3. Nature of Production Process The petitioner states that there is very minimal additional processing done in Thailand to diamond sawblades produced in the PRC and exported to Thailand and later re-exported to the United States. The petitioner reiterates that joining cores and segments is a highly automated process and, compared to segment production, welding of cores and segments is a minimal step in the overall production process.24 As mentioned above, the petitioner explains that the production of segments is a complex process that requires detailed expertise in metallurgy and technical experience in bonding of diamond powders and metal powders in the production process and the performance of diamond sawblades for particular applications. The petitioner claims that only highly skilled technicians can perform such production processes, while laserwelding is a highly-automated process that essentially only requires a person who can operate a keyboard.25 The petitioner claims further that other methods of joining cores and segments, 20 See the petitioner’s circumvention ruling request at 17. The Department considers that this portion of the petitioner’s circumvention ruling request is relevant to the consideration contained in section 781(b)(1)(D) (‘‘the value of the merchandise produced in the foreign country to which the antidumping order applies is a significant portion of the total value of the merchandise exported to the United States’’). 21 See the petitioner’s supplemental response at 9–10 and Exhibits 5. 22 See the petitioner’s circumvention ruling request at 16–18. See also the petitioner’s supplemental response at 9–10 and Exhibits 5–6. 23 See the petitioner’s circumvention ruling request at 18. See also the petitioner’s supplemental response at 10–12 and Exhibits 5–6. 24 See the petitioner’s circumvention ruling request at 18. See also the petitioner’s supplemental response at 12–14 and Exhibits 5, 6, 11, and 12. 25 See the petitioner’s circumvention ruling request at 16–17. VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 e.g., silver soldering or sintering, are even less sophisticated than laserwelding. 4. Extent of Production Facilities in Thailand The petitioner explains that, before the imposition of the antidumping duty order on diamond sawblades from the PRC in 2009, Thailand had very minimal exports of diamond sawblades to the United States. The petitioner contends that little, if any, of the increase of exports of diamond sawblades from Thailand—from $1.8 million in 2006 to $5.8 million in 2012 to $11.4 million in 2013 to $41.7 million in 2016—is due to an increase in production facilities in Thailand.26 The petitioner explains that evidence indicates very limited investment in building facilities in Thailand for production of diamond sawblades.27 5. Value of Processing in Thailand The petitioner reiterates that the joining of cores and segments constitutes a small portion of the cost and represents the smallest portion of the production costs of diamond sawblades imported into the United States. The petitioner provides information indicating that cores and segments produced in the PRC represent the vast majority of the value of the products exported to the United States.28 D. Value of Merchandise Produced in the PRC Is a Significant Portion of the Total Value of the Merchandise Exported to the United States The petitioner explains that the value of the segments and cores produced in China represent the vast majority of the value of the products exported to the United States.29 Further, the petitioner states that the cost breakdown of a typical finished diamond sawblade shows that manufacture of the segments and the core comprise the bulk of its value.30 E. Additional Factors To Consider in Determining Whether Action Is Necessary Section 781(b)(3) of the Act directs the Department to consider additional 26 See the petitioner’s circumvention ruling request at 19 and Exhibit 9. See also the petitioner’s supplemental response at 14–16 and Exhibit 7. 27 See the petitioner’s circumvention ruling request at 19. See also the petitioner’s supplemental response at 14–16 and Exhibit 9. 28 See the petitioner’s circumvention ruling request at 19–20. See also the petitioner’s supplemental response at 16–17 and Exhibits 5–6. 29 See the petitioner’s circumvention ruling request at 20. 30 See the petitioner’s supplemental response at 7. PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 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.’’ The petitioner claims an increase of the imports of diamond sawblades from Thailand from $0.4 million in 2005, before the investigation, to $4 million at the time of the imposition of the antidumping duty order in 2009 to $40.5 million in 2015 and $41.7 million in 2016 represents a noticeable shift in patterns of trade since the Department issued the antidumping duty order. Moreover, the petitioner provided import statistics showing a significant increase in U.S. imports of diamond sawblades from Thailand between 2005 and 2015 and in particular, massive increases in imports between 2010– 2015.31 The petitioner argues that there is evidence of affiliation between PRC producers and their Thai counterparts that are engaged in circumvention of the antidumping duty order. For example, the petitioner claims that Wuhan Wanbang Laser Diamond Tools Co., Ltd., has established an affiliate in Thailand, i.e., Diamond Tools Technology (Thailand), for which CBP determined that there is a reasonable suspicion that Diamond Tools has entered merchandise into the United States through evasion.32 The petitioner explains that PRC producers of diamond sawblades, e.g., Bosun Tools Co., Ltd. have opened facilities in Thailand.33 Analysis of the Allegation Based on our analysis of the petitioner’s anti-circumvention allegation and the information provided therein, we find that an anticircumvention inquiry of the antidumping duty order on diamond 31 See the petitioner’s circumvention ruling request at Exhibit 9. 32 See the petitioner’s circumvention ruling request at 21–22. 33 See the petitioner’s circumvention ruling request at Exhibit 8 and supplement to the petitioner’s circumvention ruling request at 10 for Wuhan Wanbang Laser Diamond Tools Co., Ltd., and Diamond Tools Technology (Thailand) as an example. E:\FR\FM\07DEN1.SGM 07DEN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices sawblades from the PRC is warranted with respect to Diamond Tools. If warranted, the Department may, based on additional evidence it receives from interested parties regarding potential anti-circumvention of the PRC Sawblades Order by other Thai companies, consider conducting additional inquiries concurrently. With regard to whether the merchandise from Thailand is of the same class or kind as the merchandise produced in the PRC, the petitioner presented information to the Department indicating that, in accordance with section 781(b)(1)(A) of the Act, the merchandise being produced in and/or exported from Thailand is of the same class or kind as diamond sawblades produced in the PRC, which is subject to the antidumping duty order.34 Consequently, we find that the petitioner provided sufficient information in its request regarding the class or kind of merchandise to support the initiation of this anti-circumvention inquiry. With regard to completion or assembly of merchandise in a foreign country, in accordance with section 781(b)(1)(B) of the Act, the petitioner also presented to us two affidavits and the CBP Notice of Interim Measures indicating that diamond sawblades exported from Thailand to the United States by Diamond Tools are produced in Thailand using cores and segments produced and exported from the PRC.35 We find that the information presented by the petitioner regarding this criterion supports its request to initiate this anticircumvention inquiry with respect to Diamond Tools. The Department finds that the petitioner sufficiently addressed the factors described in section 781(b)(1)(C) and (2) of the Act regarding whether the process of assembly or completion of finished diamond sawblades in Thailand is minor or insignificant with respect to Diamond Tools. In particular, the petitioner provided information indicating that: (1) The level of investment in the production facilities is minimal when compared with the level of investment for the facilities used in the production of segments; (2) there is little or no research and development taking place in Thailand; (3) the joining process involves the highly automated laser-welding, or other simpler joining methods, of cores 34 See the petitioner’s circumvention ruling request at 13–14 and Exhibit 9. 35 See the petitioner’s circumvention ruling request at 14–15 and Exhibits 9–12. See also the petitioner’s supplemental response at 2–6 and Exhibits 5, 6, and 9. VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 and segments produced in the PRC and subject to the antidumping duty order; (4) the production facilities in Thailand are more limited than facilities in the PRC; and (5) the value of the processing performed in Thailand is a small proportion of the value of the diamond sawblades imported into the United States. In addition, according to the petitioner, in an ongoing investigation under the Enforce and Protect Act, CBP has issued an interim measure stating that there is a reasonable suspicion that Diamond Tools has entered subject merchandise into the United States through evasion of the antidumping duty order on diamond sawblades from the PRC.36 With respect to the value of the merchandise produced in the PRC, pursuant to section 781(b)(1)(D) of the Act, the petitioner provided information indicating that the value of cores and segments produced in the PRC represents the vast majority of the value of the products exported to the United States.37 We find that the evidence presented by the petitioner address the requirements of this factor, as discussed above, for the purposes of initiating this anti-circumvention inquiry.38 In the final determinations of the antidumping duty investigations of diamond sawblades from the PRC and the Republic of Korea (Korea), we determined that the country in which cores and segments are joined is the country of origin of the finished diamond sawblades based on our factual findings that ‘‘the attachment process imparts the essential quality of the diamond sawblade, coupled with the substantial capital investment and technical expertise that is required for the attachment process.’’ 39 In making these factual findings, we relied on specific information provided by respondents in the investigations.40 The CIT upheld our decisions with respect to the country of origin.41 However, we 36 See the petitioner’s circumvention ruling request at 9 and Exhibit 8. See also the petitioner’s supplemental response at 5–6 and Exhibit 9. 37 See the petitioner’s circumvention ruling request at 20. See also the petitioner’s supplemental response at 16–17 and Exhibits 5–6. 38 See, e.g., the petitioner’s supplemental response at Exhibits 5–6 and 9. 39 See Final Determination—China and accompanying I&D Memo at Comment 4, and Notice of Final Determination of Sales at Less Than Fair Value and Final Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 FR 29310 (May 22, 2006) (Final Determination—Korea), and accompanying I&D Memo at Comment 3 (collectively, Final Determinations). 40 Id. 41 See Advanced Tech. & Materials Co. v. United States, No. 09–00511, slip op. 11–122, at 7–10 (Ct. Int’l Trade Oct. 12, 2011) (upholding Final PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 57713 do not have sufficient information on the record indicating whether substantial investments have been made to the Thai companies in question for the joining process in Thailand. Also, we do not have sufficient information on the record about the technical expertise required for the joining process in Thailand.42 Moreover, our findings in the Final Determinations were made in the context of a countryof-origin determination, whereas we are considering the petitioner’s request under the anti-circumvention provisions of the statute contained in section 781(b) of the Act. Therefore, we do not find the Final Determinations foreclose initiation of an anti-circumvention inquiry. Finally, with respect to the additional factors listed under section 781(b)(3) of the Act, we find that the petitioner presented evidence indicating that shipments of finished diamond sawblades from Thailand to the United States increased since the imposition of the antidumping duty order, further supporting initiation of these anticircumvention inquiries.43 Accordingly, in accordance with section 781(b) of the Act, we are initiating a formal anticircumvention inquiry concerning the antidumping duty order on diamond sawblades from the PRC with respect to Diamond Tools. In connection with this anticircumvention inquiry, in order to determine, among other things: (1) The extent to which PRC-sourced cores and segments are further processed into finished diamond sawblades in Thailand before the finished diamond sawblades are exported to the United States; and (2) whether the process of turning PRC-sourced cores and segments into finished diamond sawblades is minor or insignificant, the Department intends to issue questionnaires to solicit information from Diamond Tools related to these factors. The Department also intends to issue questionnaires to solicit information from Diamond Tools concerning its shipments of finished diamond sawblades to the United States Determinations—China), and Diamond Sawblades Manufacturers Coalition v. United States, 06– 00248, slip op. 13–130, at 23–25 (Ct. Intl Trade Oct. 24, 2013) (upholding Final Determinations—Korea). 42 See Clearon Corp. v. United States, No. 13– 00073, slip op. 14–88, at 33, 2014 WL 3643332, at *14 (Ct. Int’l Trade July 24, 2014) (‘‘Although Commerce can and does take into consideration its policies and methodologies as expressed in different administrative case precedent when making its determination, it cannot take the factual information underlying those decisions into consideration unless those facts are properly on the record of the proceeding before it.’’). 43 See the petitioner’s circumvention ruling request at Exhibit 9. E:\FR\FM\07DEN1.SGM 07DEN1 57714 Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices sradovich on DSK3GMQ082PROD with NOTICES and the origin of the imported cores and segments being joined into finished diamond sawblades. 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. Based on these allegations, we are initiating an anti-circumvention inquiry concerning the antidumping duty order on diamond sawblades from the PRC, pursuant to section 781(b) of the Act and 19 CFR 351.225(h), with respect to such merchandise from Thailand as described above. Because we are initiating this anti-circumvention inquiry, we are not initiating a changed circumstances review. While we believe sufficient factual information has been submitted by the petitioner to support the initiation of an anti-circumvention inquiry, we do not find that the record supports the simultaneous issuance of a preliminary ruling. An anti-circumvention inquiry is typically complicated by its nature and can require information regarding production in both the country subject to the order and the third country in which the production of finished merchandise is completed. As we explained above, the Department intends to request additional information regarding the statutory criteria to determine whether shipments of finished diamond sawblades from Thailand are circumventing the antidumping duty order on diamond sawblades 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 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 this anticircumvention inquiry. 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 this anticircumvention inquiry (i.e., diamond sawblades finished in Thailand by the joining of cores and segments from the PRC) and an explanation of the reasons VerDate Sep<11>2014 18:50 Dec 06, 2017 Jkt 244001 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 CBP to suspend liquidation and require a cash deposit of estimated antidumping 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 section 781(b) of the Act and 19 CFR 351.225(h). Dated: December 1, 2017. Gary Taverman, Deputy Assistant Secretaryfor Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. [FR Doc. 2017–26398 Filed 12–6–17; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–570–831] Fresh Garlic From the People’s Republic of China: Notice of Court Decision Not in Harmony With Final Results of Administrative Review and Notice of Amended Final Results Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY: On September 19, 2017, the United States Court of International Trade (the CIT) entered final judgment sustaining the Department of Commerce’s (the Department) second remand results pertaining to 18th administrative review of the antidumping duty order on fresh garlic from the People’s Republic of China (PRC) for Hebei Golden Trading Co., Ltd. (Golden Bird) and Shenzhen Xinboda Industrial Co., Ltd. (Xinboda). The Department is notifying the public that the final judgment in this case is not in harmony with the final results and partial rescission of the 18th antidumping duty administrative review and that the Department has amended the dumping margins found for Xinboda and Golden Bird. AGENCY: PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 DATES: Applicable September 29, 2017. FOR FURTHER INFORMATION CONTACT: Chien-Min Yang, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–5484. SUPPLEMENTARY INFORMATION: Background On June 30, 2014, the Department published the Final Results pertaining to mandatory respondents Golden Bird and Xinboda, along with other exporters.1 In the Final Results, the Department selected the Philippines as the primary surrogate country and relied on total adverse facts available (AFA) with respect to Golden Bird and found that the company was part of the PRCwide entity.2 The Department calculated a rate of $1.82 per kilogram for Xinboda. On November 30, 2015, the CIT remanded for the Department to: (1) Consider evidence on the record concerning Golden Bird’s independence from government control to determine whether the company is entitled to separate rate status based solely on that evidence, and if so, to determine an appropriate dumping margin specific to Golden Bird, taking into consideration the Department’s sustained determination to select total AFA and applying the law extant at the time of the Final Results; (2) reconsider its surrogate country selection in the light of the Court’s ruling concerning its interpretation of ‘‘significant producer.’’ 3 On February 29, 2016, the Department filed the Final Remand Results.4 In accordance with the Final Remand Results, the Department found, under protest, that Golden Bird is not part of the PRC wide entity and assigned a new separate AFA rate of $2.24 per kilogram, which represented Xinboda’s highest transaction-specific margin from the instant administrative review.5 The Department continued to find that the Philippines was a significant producer, taking into account the ‘‘comparative’’ 1 See Fresh Garlic from the People’s Republic of China: Final Results and Partial Rescission of the 18th Antidumping Duty Administrative Review; 2011–2012, 79 FR 36721 (June 30, 2014) (Final Results), and accompanying Issues and Decision Memorandum (IDM). 2 See IDM. 3 See Fresh Garlic Producers Association v. United States, 121 F. Supp. 3d 1313 (CIT 2015). 4 See Memorandum to The File, ‘‘Final Results of Redetermination Pursuant to Remand: Fresh Garlic from the People’s Republic of China,’’ (February 29, 2016) (Final Remand Results). 5 Id. at 6. E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

[Federal Register Volume 82, Number 234 (Thursday, December 7, 2017)]
[Notices]
[Pages 57709-57714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26398]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-900]


Diamond Sawblades and Parts Thereof From the People's Republic of 
China: Initiation of Anti-Circumvention Inquiry

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a request from Diamond Sawblades Manufacturers' 
Coalition (the petitioner), the Department of Commerce (the Department) 
is initiating an anti-circumvention inquiry to determine whether 
certain imports of diamond sawblades and parts thereof (diamond 
sawblades) comprised of cores and

[[Page 57710]]

segments produced in the People's Republic of China (PRC) and joined 
into finished diamond sawblades in, and exported from, Thailand are 
circumventing the antidumping duty order on diamond sawblades from the 
PRC.

DATES: Applicable December 7, 2017.

FOR FURTHER INFORMATION CONTACT: Yang Jin Chun, AD/CVD Operations 
Office I, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW., Washington, DC 20230; telephone: (202) 482-5760.

SUPPLEMENTARY INFORMATION: 

Background

    Effective January 23, 2009, the Department published the 
antidumping duty order on diamond sawblades from the PRC.\1\ On August 
9, 2017, the petitioner filed a request for a circumvention ruling, 
requesting that the Department issue a determination of circumvention 
and suspend liquidation of certain diamond sawblades exported from 
Thailand.\2\ Specifically, the petitioner requests a circumvention 
ruling for three companies, Diamond Tools Technology (Diamond Tools), 
Bosun Tools (Thailand) Co., Ltd. (Bosun), and Kingthai Diamond Tools 
(Kingthai).\3\ The petitioner requests that, in the alternative, and to 
the extent that the Department decides it to be more appropriate, the 
Department address circumvention issues in a changed circumstances 
review.\4\
---------------------------------------------------------------------------

    \1\ See Diamond Sawblades and Parts Thereof from the People's 
Republic of China and the Republic of Korea: Antidumping Duty 
Orders, 74 FR 57145 (November 4, 2009).
    \2\ See the Letter from the petitioner, ``Diamond Sawblades and 
Parts Thereof from the People's Republic of China: Request for 
Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 
1930 or in the Alternative a Changed Circumstances Review Pursuant 
to Section 751(b) of the Act,'' dated August 9, 2017 (the 
petitioner's circumvention ruling request), as amended in 
``Supplemental Submission Regarding Request for Circumvention Ruling 
Pursuant to Section 781(b) of the Tariff Act of 1930 or in the 
Alternative a Changed Circumstances Review Pursuant to Section 
751(b) of the Act,'' dated September 14, 2017 (supplement to the 
petitioner's circumvention ruling request).
    \3\ See Supplement to the petitioner's circumvention ruling 
request at 10-12.
    \4\ See the petitioner's circumvention ruling request at 22.
---------------------------------------------------------------------------

    On September 22, 2017, we received a letter from Bosun Tools Co., 
Ltd. (Bosun China) and its affiliate Bosun Tools (Thailand) Co., Ltd. 
(Bosun Thailand) (collectively Bosun), arguing that Bosun Thailand has 
not engaged in the alleged activity of joining cores and segments made 
in the PRC and exporting them to the United States. Bosun claims that 
the petitioner did not support its allegation with any evidence with 
respect to Bosun. Bosun explains that the petitioner did not cite to 
record evidence supporting its allegation of limited manufacturing 
operations at Bosun Thailand, although the affiliation between Bosun 
China and Bosun Thailand is on the public record in the last completed 
administrative review of the order.\5\
---------------------------------------------------------------------------

    \5\ See Bosun's Response to DSMC's Request for Anti-
Circumvention Inquiry dated September 22, 2017.
---------------------------------------------------------------------------

    On October 2, 2017, the Department issued a supplemental 
questionnaire to the petitioner requesting additional information.\6\ 
On October 16, 2017, the petitioner submitted its response to the 
Department's supplemental questionnaire.\7\ On October 26, 2017, 
Diamond Tools submitted its opposition to the petitioner's request for 
a circumvention ruling. In it, Diamond Tools denies that it 
circumvented the antidumping duty order on diamond sawblades from the 
PRC. Diamond Tools contends that the Department determined in the 
investigation that the country in which the cores and segments are 
joined is the country of origin.\8\ Diamond Tools argues that the U.S. 
Court of International Trade upheld the Department's decision with 
respect to the country of origin in the investigation.\9\
---------------------------------------------------------------------------

    \6\ See the Department's supplemental questionnaire to the 
petitioner dated October 2, 2017.
    \7\ See the petitioner's supplemental response dated October 16, 
2017 (the petitioner's supplemental response).
    \8\ See Diamond Tools' letter, ``Diamond Sawblades & Parts 
Thereof from the People's Republic of China: Response to Request by 
Diamond Sawblades Manufacturers' Coalition for Anti-Circumvention 
Ruling'' dated October 26, 2017 at 3 (citing Final Determination of 
Sales at Less Than Fair Value and Final Partial Affirmative 
Determination of Critical Circumstances: Diamond Sawblades and Parts 
Thereof from the People's Republic of China, 71 FR 29303 (May 22, 
2006) (Final Determination--China), and accompanying Issues and 
Decision Memorandum (I&D Memo) at Comment 4).
    \9\ Id. at 4 (citing Advanced Tech. & Materials Co. v. United 
States, No. 09-00511, slip op. 11-122, 2011 Ct. Intl. Trade LEXIS 
136, *1 at *9-*15 (Ct. Int'l Trade Oct. 12, 2011)).
---------------------------------------------------------------------------

Scope of the Order

    The products covered by the order are all finished circular 
sawblades, whether slotted or not, with a working part that is 
comprised of a diamond segment or segments, and parts thereof, 
regardless of specification or size, except as specifically excluded 
below. Within the scope of the order are semi-finished diamond 
sawblades, including diamond sawblade cores and diamond sawblade 
segments. Diamond sawblade cores are circular steel plates, whether or 
not attached to non-steel plates, with slots. Diamond sawblade cores 
are manufactured principally, but not exclusively, from alloy steel. A 
diamond sawblade segment consists of a mixture of diamonds (whether 
natural or synthetic, and regardless of the quantity of diamonds) and 
metal powders (including, but not limited to, iron, cobalt, nickel, 
tungsten carbide) that are formed together into a solid shape (from 
generally, but not limited to, a heating and pressing process).
    Sawblades with diamonds directly attached to the core with a resin 
or electroplated bond, which thereby do not contain a diamond segment, 
are not included within the scope of the order. Diamond sawblades and/
or sawblade cores with a thickness of less than 0.025 inches, or with a 
thickness greater than 1.1 inches, are excluded from the scope of the 
order. Circular steel plates that have a cutting edge of non-diamond 
material, such as external teeth that protrude from the outer diameter 
of the plate, whether or not finished, are excluded from the scope of 
the order. Diamond sawblade cores with a Rockwell C hardness of less 
than 25 are excluded from the scope of the order. Diamond sawblades 
and/or diamond segment(s) with diamonds that predominantly have a mesh 
size number greater than 240 (such as 250 or 260) are excluded from the 
scope of the order.
    Merchandise subject to the order is typically imported under 
heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). When packaged together as a set for retail sale with an 
item that is separately classified under headings 8202 to 8205 of the 
HTSUS, diamond sawblades or parts thereof may be imported under heading 
8206.00.00.00 of the HTSUS. On October 11, 2011, the Department 
included the 6804.21.00.00 HTSUS classification number to the customs 
case reference file, pursuant to a request by CBP.\10\
---------------------------------------------------------------------------

    \10\ See Diamond Sawblades and Parts Thereof from the Republic 
of Korea: Preliminary Results of Antidumping Duty Administrative 
Review, 76 FR 76128 (December 6, 2011).
---------------------------------------------------------------------------

    The tariff classification is provided for convenience and customs 
purposes; however, the written description of the scope of the order is 
dispositive.

Merchandise Subject to the Anti-Circumvention Inquiry

    This anti-circumvention inquiry covers diamond sawblades exported 
from Thailand to the United States that are produced by Diamond Tools 
from cores and segments of PRC origin. If warranted, the Department 
may, based

[[Page 57711]]

on additional evidence it receives from interested parties regarding 
potential anti-circumvention of the PRC Sawblades Order by other Thai 
companies, consider conducting additional inquiries concurrently.
    The petitioner requests that the Department treat diamond sawblades 
assembled in Thailand with cores and segments from the PRC as subject 
merchandise under the scope of the antidumping duty order on diamond 
sawblades from the PRC.

Initiation of Anti-Circumvention Inquiry

    Section 781(b)(1) of The Tariff Act of 1930, as amended (the Act), 
provides that the Department may find circumvention of an antidumping 
or countervailing duty order if: (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, the 
petitioner provided information available to them with respect to these 
criteria.\11\
---------------------------------------------------------------------------

    \11\ See section 781(b)(1) of the Act.
---------------------------------------------------------------------------

A. Merchandise of the Same Class or Kind

    The petitioner claims that, in accordance with section 
781(b)(1)(A)(i) of the Act, diamond sawblades exported from Thailand to 
the United States are identical to diamond sawblades exported from the 
PRC to the United Sates subject to the antidumping duty order. The 
petitioner contends that, because cores, segments, and diamond 
sawblades are all one class or kind of subject merchandise, a process 
that simply transforms one of these items to another should not serve 
as an avenue for PRC producers to evade the antidumping duty order.\12\
---------------------------------------------------------------------------

    \12\ See the petitioner's circumvention ruling request at 13-14 
and Exhibit 9 for U.S. imports of diamond sawblades from the PRC and 
Thailand under the same HTSUS subheadings.
---------------------------------------------------------------------------

B. Completion of Merchandise in a Third Country Before Importation Into 
the United States

    The petitioner contends that, in Thailand, cores made in the PRC 
are being joined to segments made in the PRC and undergo a minor 
welding operation and minor processing before they are imported into 
the United States.\13\ The petitioner claims that PRC producers with 
facilities in Thailand for which it requests an anti-circumvention 
inquiry are as follows: Bosun Tools Co., Ltd., Hebei Jikai Group, and 
Wuhan Wanbang Laser Diamond Tools Co., Ltd.\14\ The petitioner also 
notes that, pursuant to an investigation under the Enforce and Protect 
Act, CBP recently issued a Notice of Interim Measures finding a 
reasonable suspicion that Diamond Tools was evading the order.\15\
---------------------------------------------------------------------------

    \13\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 10-12. See also the petitioner's supplemental response 
at 2-6 and Exhibits 5-6.
    \14\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 1, 4, and 5. See also supplement to the petitioner's 
circumvention ruling request at 10 for Wuhan Wanbang Laser Diamond 
Tools Co., Ltd.
    \15\ See the petitioner's circumvention ruling request at 9 and 
Exhibit 8 (where the petitioner cites to Memorandum from Troy P. 
Riley, Executive Director, Trade Remedy & Law Enf't Directorate, to 
Yan Li, Diamond Tools Tech., ``re: Notice of interim measures taken 
as to Diamond Tools Technology LLC concerning a reasonable suspicion 
as to evasion of the antidumping duty order on Diamond Sawblades 
from the People's Republic of China,'' dated June 27, 2017 (Notice 
of Interim Measures).
---------------------------------------------------------------------------

C. Minor or Insignificant Process

    The petitioner explains that, in accordance with section 
781(b)(1)(C) of the Act, the Department considers whether the assembly 
or completion that occurs in the other foreign country is minor or 
insignificant. The petitioner states that, under section 781(b)(2)(A)-
(E) of the Act, the Department considers five factors to determine 
whether the process of assembly or completion is minor or 
insignificant. The petitioner alleges that, based on these factors, the 
completion of the merchandise in Thailand is minor and 
insignificant.\16\
---------------------------------------------------------------------------

    \16\ See the petitioner's circumvention ruling request at 16.
---------------------------------------------------------------------------

1. Level of Investment in Thailand
    The petitioner argues that there is little evidence of any 
significant level of investment in Thailand for production activities 
beyond joining cores and segments and laser welding.\17\ In other 
words, according to the petitioner, diamond sawblades production 
facilities in Thailand are not sophisticated enough to produce 
segments. The petitioner explains that the production of segments is a 
complex process that requires detailed expertise in metallurgy and 
technical experience in bonding of diamond powders and metal powders in 
the production process and the performance of diamond sawblades for 
particular applications. The petitioner claims that only highly skilled 
technicians can perform such production processes, while laser-welding 
is a highly-automated process that essentially only requires a person 
who can operate a keyboard.\18\ The petitioner claims further that 
other methods of joining cores and segments, e.g., silver soldering or 
sintering, are even less sophisticated than laser-welding.\19\
---------------------------------------------------------------------------

    \17\ See the petitioner's circumvention ruling request at 16-18 
and Exhibits 8, 10, 11, and 12. See also the petitioner's 
supplemental response at 9-10 and Exhibits 5-6.
    \18\ See the petitioner's circumvention ruling request at 16-17.
    \19\ The Department considers that this portion of the 
petitioner's circumvention ruling request is relevant to the 
consideration contained in section 781(b)(2)(C) (``the nature of the 
production process in the foreign country'').
---------------------------------------------------------------------------

    The petitioner distinguishes the level of capital investment 
between segment production and laser-welding. The petitioner explains 
that segment production requires significant capital investment for 
equipment such as weighing scales, mixing equipment, granulating 
equipment, cold pressing equipment, sintering presses, inspecting 
equipment, and radius grinding equipment. The petitioner claims that, 
in particular, the induction and resistance presses used in segment 
production represent a substantial capital investment. The petitioner 
contends that the capital investment required for joining cores and 
segments is essentially limited to a piece of laser-welding equipment.
    The petitioner distinguishes the level of costs between segment 
production and joining cores and segments. According to the petitioner, 
the production cost for finished diamond sawblades segments may 
represent approximately 70 percent of the cost of producing a finished 
diamond sawblade, whereas joining cores and segments typically accounts 
for a much smaller percentage of the cost of production, often as low 
as 0.5 percent of the cost of a finished diamond

[[Page 57712]]

sawblade.\20\ The petitioner also asserts that laser welding requires a 
relatively small capital investment because the only piece of machinery 
needed to join cores and segments through laser welding is a laser 
welder itself.\21\
---------------------------------------------------------------------------

    \20\ See the petitioner's circumvention ruling request at 17. 
The Department considers that this portion of the petitioner's 
circumvention ruling request is relevant to the consideration 
contained in section 781(b)(1)(D) (``the value of the merchandise 
produced in the foreign country to which the antidumping order 
applies is a significant portion of the total value of the 
merchandise exported to the United States'').
    \21\ See the petitioner's supplemental response at 9-10 and 
Exhibits 5.
---------------------------------------------------------------------------

    The petitioner argues that, for these reasons, the joining 
operations require very minimal investment.\22\
---------------------------------------------------------------------------

    \22\ See the petitioner's circumvention ruling request at 16-18. 
See also the petitioner's supplemental response at 9-10 and Exhibits 
5-6.
---------------------------------------------------------------------------

2. Level of Research and Development
    The petitioner argues that, because laser-welding is a highly-
automated process and other methods of joining cores and segments are 
less sophisticated than laser-welding, entities joining the PRC cores 
and segments in Thailand do not, and do not need to, invest in research 
and development in Thailand.\23\
---------------------------------------------------------------------------

    \23\ See the petitioner's circumvention ruling request at 18. 
See also the petitioner's supplemental response at 10-12 and 
Exhibits 5-6.
---------------------------------------------------------------------------

3. Nature of Production Process
    The petitioner states that there is very minimal additional 
processing done in Thailand to diamond sawblades produced in the PRC 
and exported to Thailand and later re-exported to the United States. 
The petitioner reiterates that joining cores and segments is a highly 
automated process and, compared to segment production, welding of cores 
and segments is a minimal step in the overall production process.\24\ 
As mentioned above, the petitioner explains that the production of 
segments is a complex process that requires detailed expertise in 
metallurgy and technical experience in bonding of diamond powders and 
metal powders in the production process and the performance of diamond 
sawblades for particular applications. The petitioner claims that only 
highly skilled technicians can perform such production processes, while 
laser-welding is a highly-automated process that essentially only 
requires a person who can operate a keyboard.\25\ The petitioner claims 
further that other methods of joining cores and segments, e.g., silver 
soldering or sintering, are even less sophisticated than laser-welding.
---------------------------------------------------------------------------

    \24\ See the petitioner's circumvention ruling request at 18. 
See also the petitioner's supplemental response at 12-14 and 
Exhibits 5, 6, 11, and 12.
    \25\ See the petitioner's circumvention ruling request at 16-17.
---------------------------------------------------------------------------

4. Extent of Production Facilities in Thailand
    The petitioner explains that, before the imposition of the 
antidumping duty order on diamond sawblades from the PRC in 2009, 
Thailand had very minimal exports of diamond sawblades to the United 
States. The petitioner contends that little, if any, of the increase of 
exports of diamond sawblades from Thailand--from $1.8 million in 2006 
to $5.8 million in 2012 to $11.4 million in 2013 to $41.7 million in 
2016--is due to an increase in production facilities in Thailand.\26\ 
The petitioner explains that evidence indicates very limited investment 
in building facilities in Thailand for production of diamond 
sawblades.\27\
---------------------------------------------------------------------------

    \26\ See the petitioner's circumvention ruling request at 19 and 
Exhibit 9. See also the petitioner's supplemental response at 14-16 
and Exhibit 7.
    \27\ See the petitioner's circumvention ruling request at 19. 
See also the petitioner's supplemental response at 14-16 and Exhibit 
9.
---------------------------------------------------------------------------

5. Value of Processing in Thailand
    The petitioner reiterates that the joining of cores and segments 
constitutes a small portion of the cost and represents the smallest 
portion of the production costs of diamond sawblades imported into the 
United States. The petitioner provides information indicating that 
cores and segments produced in the PRC represent the vast majority of 
the value of the products exported to the United States.\28\
---------------------------------------------------------------------------

    \28\ See the petitioner's circumvention ruling request at 19-20. 
See also the petitioner's supplemental response at 16-17 and 
Exhibits 5-6.
---------------------------------------------------------------------------

D. Value of Merchandise Produced in the PRC Is a Significant Portion of 
the Total Value of the Merchandise Exported to the United States

    The petitioner explains that the value of the segments and cores 
produced in China represent the vast majority of the value of the 
products exported to the United States.\29\ Further, the petitioner 
states that the cost breakdown of a typical finished diamond sawblade 
shows that manufacture of the segments and the core comprise the bulk 
of its value.\30\
---------------------------------------------------------------------------

    \29\ See the petitioner's circumvention ruling request at 20.
    \30\ See the petitioner's supplemental response at 7.
---------------------------------------------------------------------------

E. 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.'' The petitioner claims an increase of the 
imports of diamond sawblades from Thailand from $0.4 million in 2005, 
before the investigation, to $4 million at the time of the imposition 
of the antidumping duty order in 2009 to $40.5 million in 2015 and 
$41.7 million in 2016 represents a noticeable shift in patterns of 
trade since the Department issued the antidumping duty order. Moreover, 
the petitioner provided import statistics showing a significant 
increase in U.S. imports of diamond sawblades from Thailand between 
2005 and 2015 and in particular, massive increases in imports between 
2010-2015.\31\
---------------------------------------------------------------------------

    \31\ See the petitioner's circumvention ruling request at 
Exhibit 9.
---------------------------------------------------------------------------

    The petitioner argues that there is evidence of affiliation between 
PRC producers and their Thai counterparts that are engaged in 
circumvention of the antidumping duty order. For example, the 
petitioner claims that Wuhan Wanbang Laser Diamond Tools Co., Ltd., has 
established an affiliate in Thailand, i.e., Diamond Tools Technology 
(Thailand), for which CBP determined that there is a reasonable 
suspicion that Diamond Tools has entered merchandise into the United 
States through evasion.\32\ The petitioner explains that PRC producers 
of diamond sawblades, e.g., Bosun Tools Co., Ltd. have opened 
facilities in Thailand.\33\
---------------------------------------------------------------------------

    \32\ See the petitioner's circumvention ruling request at 21-22.
    \33\ See the petitioner's circumvention ruling request at 
Exhibit 8 and supplement to the petitioner's circumvention ruling 
request at 10 for Wuhan Wanbang Laser Diamond Tools Co., Ltd., and 
Diamond Tools Technology (Thailand) as an example.
---------------------------------------------------------------------------

Analysis of the Allegation

    Based on our analysis of the petitioner's anti-circumvention 
allegation and the information provided therein, we find that an anti-
circumvention inquiry of the antidumping duty order on diamond

[[Page 57713]]

sawblades from the PRC is warranted with respect to Diamond Tools. If 
warranted, the Department may, based on additional evidence it receives 
from interested parties regarding potential anti-circumvention of the 
PRC Sawblades Order by other Thai companies, consider conducting 
additional inquiries concurrently.
    With regard to whether the merchandise from Thailand is of the same 
class or kind as the merchandise produced in the PRC, the petitioner 
presented information to the Department indicating that, in accordance 
with section 781(b)(1)(A) of the Act, the merchandise being produced in 
and/or exported from Thailand is of the same class or kind as diamond 
sawblades produced in the PRC, which is subject to the antidumping duty 
order.\34\ Consequently, we find that the petitioner provided 
sufficient information in its request regarding the class or kind of 
merchandise to support the initiation of this anti-circumvention 
inquiry.
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    \34\ See the petitioner's circumvention ruling request at 13-14 
and Exhibit 9.
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    With regard to completion or assembly of merchandise in a foreign 
country, in accordance with section 781(b)(1)(B) of the Act, the 
petitioner also presented to us two affidavits and the CBP Notice of 
Interim Measures indicating that diamond sawblades exported from 
Thailand to the United States by Diamond Tools are produced in Thailand 
using cores and segments produced and exported from the PRC.\35\ We 
find that the information presented by the petitioner regarding this 
criterion supports its request to initiate this anti-circumvention 
inquiry with respect to Diamond Tools.
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    \35\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 9-12. See also the petitioner's supplemental response 
at 2-6 and Exhibits 5, 6, and 9.
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    The Department finds that the petitioner sufficiently addressed the 
factors described in section 781(b)(1)(C) and (2) of the Act regarding 
whether the process of assembly or completion of finished diamond 
sawblades in Thailand is minor or insignificant with respect to Diamond 
Tools. In particular, the petitioner provided information indicating 
that: (1) The level of investment in the production facilities is 
minimal when compared with the level of investment for the facilities 
used in the production of segments; (2) there is little or no research 
and development taking place in Thailand; (3) the joining process 
involves the highly automated laser-welding, or other simpler joining 
methods, of cores and segments produced in the PRC and subject to the 
antidumping duty order; (4) the production facilities in Thailand are 
more limited than facilities in the PRC; and (5) the value of the 
processing performed in Thailand is a small proportion of the value of 
the diamond sawblades imported into the United States. In addition, 
according to the petitioner, in an ongoing investigation under the 
Enforce and Protect Act, CBP has issued an interim measure stating that 
there is a reasonable suspicion that Diamond Tools has entered subject 
merchandise into the United States through evasion of the antidumping 
duty order on diamond sawblades from the PRC.\36\
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    \36\ See the petitioner's circumvention ruling request at 9 and 
Exhibit 8. See also the petitioner's supplemental response at 5-6 
and Exhibit 9.
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    With respect to the value of the merchandise produced in the PRC, 
pursuant to section 781(b)(1)(D) of the Act, the petitioner provided 
information indicating that the value of cores and segments produced in 
the PRC represents the vast majority of the value of the products 
exported to the United States.\37\ We find that the evidence presented 
by the petitioner address the requirements of this factor, as discussed 
above, for the purposes of initiating this anti-circumvention 
inquiry.\38\
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    \37\ See the petitioner's circumvention ruling request at 20. 
See also the petitioner's supplemental response at 16-17 and 
Exhibits 5-6.
    \38\ See, e.g., the petitioner's supplemental response at 
Exhibits 5-6 and 9.
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    In the final determinations of the antidumping duty investigations 
of diamond sawblades from the PRC and the Republic of Korea (Korea), we 
determined that the country in which cores and segments are joined is 
the country of origin of the finished diamond sawblades based on our 
factual findings that ``the attachment process imparts the essential 
quality of the diamond sawblade, coupled with the substantial capital 
investment and technical expertise that is required for the attachment 
process.'' \39\ In making these factual findings, we relied on specific 
information provided by respondents in the investigations.\40\ The CIT 
upheld our decisions with respect to the country of origin.\41\ 
However, we do not have sufficient information on the record indicating 
whether substantial investments have been made to the Thai companies in 
question for the joining process in Thailand. Also, we do not have 
sufficient information on the record about the technical expertise 
required for the joining process in Thailand.\42\ Moreover, our 
findings in the Final Determinations were made in the context of a 
country-of-origin determination, whereas we are considering the 
petitioner's request under the anti-circumvention provisions of the 
statute contained in section 781(b) of the Act. Therefore, we do not 
find the Final Determinations foreclose initiation of an anti-
circumvention inquiry.
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    \39\ See Final Determination--China and accompanying I&D Memo at 
Comment 4, and Notice of Final Determination of Sales at Less Than 
Fair Value and Final Determination of Critical Circumstances: 
Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 
FR 29310 (May 22, 2006) (Final Determination--Korea), and 
accompanying I&D Memo at Comment 3 (collectively, Final 
Determinations).
    \40\ Id.
    \41\ See Advanced Tech. & Materials Co. v. United States, No. 
09-00511, slip op. 11-122, at 7-10 (Ct. Int'l Trade Oct. 12, 2011) 
(upholding Final Determinations--China), and Diamond Sawblades 
Manufacturers Coalition v. United States, 06-00248, slip op. 13-130, 
at 23-25 (Ct. Intl Trade Oct. 24, 2013) (upholding Final 
Determinations--Korea).
    \42\ See Clearon Corp. v. United States, No. 13-00073, slip op. 
14-88, at 33, 2014 WL 3643332, at *14 (Ct. Int'l Trade July 24, 
2014) (``Although Commerce can and does take into consideration its 
policies and methodologies as expressed in different administrative 
case precedent when making its determination, it cannot take the 
factual information underlying those decisions into consideration 
unless those facts are properly on the record of the proceeding 
before it.'').
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    Finally, with respect to the additional factors listed under 
section 781(b)(3) of the Act, we find that the petitioner presented 
evidence indicating that shipments of finished diamond sawblades from 
Thailand to the United States increased since the imposition of the 
antidumping duty order, further supporting initiation of these anti-
circumvention inquiries.\43\ Accordingly, in accordance with section 
781(b) of the Act, we are initiating a formal anti-circumvention 
inquiry concerning the antidumping duty order on diamond sawblades from 
the PRC with respect to Diamond Tools.
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    \43\ See the petitioner's circumvention ruling request at 
Exhibit 9.
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    In connection with this anti-circumvention inquiry, in order to 
determine, among other things: (1) The extent to which PRC-sourced 
cores and segments are further processed into finished diamond 
sawblades in Thailand before the finished diamond sawblades are 
exported to the United States; and (2) whether the process of turning 
PRC-sourced cores and segments into finished diamond sawblades is minor 
or insignificant, the Department intends to issue questionnaires to 
solicit information from Diamond Tools related to these factors. The 
Department also intends to issue questionnaires to solicit information 
from Diamond Tools concerning its shipments of finished diamond 
sawblades to the United States

[[Page 57714]]

and the origin of the imported cores and segments being joined into 
finished diamond sawblades. 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.
    Based on these allegations, we are initiating an anti-circumvention 
inquiry concerning the antidumping duty order on diamond sawblades from 
the PRC, pursuant to section 781(b) of the Act and 19 CFR 351.225(h), 
with respect to such merchandise from Thailand as described above. 
Because we are initiating this anti-circumvention inquiry, we are not 
initiating a changed circumstances review.
    While we believe sufficient factual information has been submitted 
by the petitioner to support the initiation of an anti-circumvention 
inquiry, we do not find that the record supports the simultaneous 
issuance of a preliminary ruling. An anti-circumvention inquiry is 
typically complicated by its nature and can require information 
regarding production in both the country subject to the order and the 
third country in which the production of finished merchandise is 
completed. As we explained above, the Department intends to request 
additional information regarding the statutory criteria to determine 
whether shipments of finished diamond sawblades from Thailand are 
circumventing the antidumping duty order on diamond sawblades 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 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 this anti-circumvention inquiry. 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 this anti-
circumvention inquiry (i.e., diamond sawblades finished in Thailand by 
the joining of cores and segments from the PRC) 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 CBP to suspend liquidation and 
require a cash deposit of estimated antidumping 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 section 781(b) of the 
Act and 19 CFR 351.225(h).

    Dated: December 1, 2017.
Gary Taverman,
Deputy Assistant Secretaryfor Antidumping and Countervailing Duty 
Operations, performing the non[hyphen]exclusive functions and duties of 
the Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2017-26398 Filed 12-6-17; 8:45 am]
 BILLING CODE 3510-DS-P