Diamond Sawblades and Parts Thereof From the People's Republic of China: Initiation of Anti-Circumvention Inquiry, 57709-57714 [2017-26398]
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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entered, or withdrawn from warehouse,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.
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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
https://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
https://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.
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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 https://
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:
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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:
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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.
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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)).
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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).
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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
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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.
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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.
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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’’).
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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
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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.
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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.
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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.
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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
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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.
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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
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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.
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]]>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]
-----------------------------------------------------------------------
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\
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\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'').
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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\
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\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.
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The petitioner argues that, for these reasons, the joining
operations require very minimal investment.\22\
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\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.
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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\
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\23\ See the petitioner's circumvention ruling request at 18.
See also the petitioner's supplemental response at 10-12 and
Exhibits 5-6.
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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.
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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\
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\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.
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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.
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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\
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\29\ See the petitioner's circumvention ruling request at 20.
\30\ See the petitioner's supplemental response at 7.
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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\
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\31\ See the petitioner's circumvention ruling request at
Exhibit 9.
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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\
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\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.
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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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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
