Quartz Surface Products From the People's Republic of China: Initiation of Scope and Circumvention Inquiries of the Antidumping Duty and Countervailing Duty Orders, 6844-6848 [2022-02488]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 87, Number 25 (Monday, February 7, 2022)]
[Notices]
[Pages 6844-6848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02488]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-084, C-570-085]


Quartz Surface Products From the People's Republic of China: 
Initiation of Scope and Circumvention Inquiries of the Antidumping Duty 
and Countervailing Duty Orders

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

SUMMARY: The Department of Commerce (Commerce) is self-initiating a 
scope inquiry, pursuant to U.S. trade remedy laws, to determine whether 
imports of quartz surface products (QSP), completed in Malaysia using 
inputs manufactured in the People's Republic of China (China), are 
covered by the antidumping duty (AD) and countervailing duty (CVD) 
orders on QSP from China (collectively, the Orders). In addition, in 
accordance with our regulations, Commerce is also self-initiating a 
country-wide circumvention inquiry to determine whether imports of QSP, 
if not covered by the scope of the Orders, are nonetheless 
circumventing the Orders, and is aligning both scope and circumvention 
inquiries in accordance with our regulations.

DATES: Applicable February 7, 2022.

FOR FURTHER INFORMATION CONTACT: Ajay Menon at (202) 482-0208, AD/CVD 
Operations, Office II or Barb Rawdon at (202) 482-0474, Office of 
Policy, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, 
DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On April 17, 2018, Cambria Company LLC filed petitions seeking the 
imposition of AD and CVD duties on imports of QSP from China.\1\ 
Following Commerce's affirmative determinations of dumping and 
countervailable

[[Page 6845]]

subsidies,\2\ and the U.S. International Trade Commission (ITC)'s 
finding of material injury,\3\ Commerce issued the Orders.\4\
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    \1\ See Certain Quartz Surface Products from the People's 
Republic of China: Initiation of Less-Than-Fair-Value Investigation, 
83 FR 22613 (May 16, 2018); Certain Quartz Surface Products from the 
People's Republic of China: Initiation of Countervailing Duty 
Investigation, 83 FR 22618 (May 16, 2018).
    \2\ See Certain Quartz Surface Products from the People's 
Republic of China: Final Affirmative Determination of Sales at Less 
Than Fair Value, and Final Affirmative Determination of Critical 
Circumstances, 84 FR 23767 (May 23, 2019); Certain Quartz Surface 
Products from the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, and Final Affirmative 
Determination of Critical Circumstances, 84 FR 23760 (May 23, 2019).
    \3\ See Quartz Surface Products from China; Determinations, 84 
FR 32216 (July 5, 2019); see also Quartz Surface Products from 
China, Inv Nos. 701-TA-606 and 731-TA-1416, USITC Pub. 4913 (Final).
    \4\ See Certain Quartz Surface Products from the People's 
Republic of China: Antidumping and Countervailing Duty Orders, 84 FR 
33053 (July 11, 2019) (Orders).
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Scope of the Orders

    The products covered by the Orders are certain QSP from China, 
whether finished or unfinished. Such products ``consist of slabs and 
other surfaces created from a mixture of materials that includes 
predominately silica (e.g., quartz, quartz powder, cristobalite) as 
well as a resin binder (e.g., an unsaturated polyester). The 
incorporation of other materials, including, but not limited to, 
pigments, cement, or other additives does not remove the merchandise 
from the scope of the Orders. However, the scope of the Orders only 
includes products where the silica content is greater than any other 
single material, by actual weight.'' For a full description of the 
scope of the Orders, see the ``Scope of the Orders,'' in the appendix 
to this notice.

Statutory and Regulatory Requirements To Initiate Scope and 
Circumvention Inquiries

    Pursuant to 19 CFR 351.225(b), if Commerce ``determines from 
available information that an inquiry is warranted to determine whether 
a product is covered by the scope of an order,'' then Commerce ``may 
initiate a scope inquiry and publish a notice of initiation in the 
Federal Register.''
    Furthermore, section 351.226(b) of Commerce's regulations states 
that if Commerce ``determines from available information that an 
inquiry is warranted into the question of whether the elements 
necessary for a circumvention determination under section 781 of the 
Act exist,'' Commerce ``may initiate a circumvention inquiry and 
publish a notice of initiation in the Federal Register.'' Section 
781(b)(1) of the Act provides that Commerce may find circumvention of 
an AD or CVD order when merchandise of the same class or kind subject 
to the order is completed or assembled in a foreign country other than 
the country to which the order applies. In conducting circumvention 
inquiries, under section 781(b)(1) of the Act, Commerce relies on the 
following criteria: (A) Merchandise imported into the United States is 
of the same class or kind as any merchandise produced in a foreign 
country that is the subject of an antidumping or countervailing duty 
order or finding, (B) before importation into the United States, such 
imported merchandise is completed or assembled in another foreign 
country from merchandise which is subject to the order or merchandise 
which is produced in the foreign country that is subject to the order, 
(C) the process of assembly or completion in the foreign country 
referred to in section (B) is minor or insignificant, (D) the value of 
the merchandise produced in the foreign country to which the AD or CVD 
order applies is a significant portion of the total value of the 
merchandise exported to the United States, and (E) the administering 
authority determines that action is appropriate to prevent evasion of 
such order or finding.
    In determining whether or not the process of assembly or completion 
in a third country is minor or insignificant under section 781(b)(1)(C) 
of the Act, section 781(b)(2) of the Act directs Commerce to consider: 
(A) The level of investment in the foreign country, (B) the level of 
research and development in the foreign country, (C) the nature of the 
production process in the foreign country, (D) the extent of production 
facilities in the foreign country, and (E) whether or not the value of 
processing performed in the foreign country represents a small 
proportion of the value of the merchandise imported into the United 
States. However, no single factor, by itself, controls Commerce's 
determination of whether the process of assembly or completion in a 
third country is minor or insignificant.\5\ Accordingly, it is 
Commerce's practice to evaluate each of these five factors as they 
exist in the third country, depending on the totality of the 
circumstances of the particular circumvention inquiry.\6\
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    \5\ See Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act (SAA), H.R. Doc. No. 103-316 (1994) at 
893.
    \6\ See Uncovered Innerspring Units from the People's Republic 
of China: Final Affirmative Determination of Circumvention of the 
Antidumping Duty Order, 83 FR 65626 (December 21, 2018), and 
accompanying Issues and Decision Memorandum at 4.
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    In addition, section 781(b)(3) of the Act sets forth additional 
factors to consider in determining whether to include merchandise 
assembled or completed in a third country within the scope of an 
antidumping and/or countervailing duty order. Specifically, Commerce 
shall take into account such factors as: (A) The pattern of trade, 
including sourcing patterns; (B) whether the manufacturer or exporter 
of the merchandise is affiliated with the person who, in the third 
country, uses the merchandise to complete or assemble the merchandise 
which is subsequently imported into the United States; and (C) whether 
imports of the merchandise into the third country have increased after 
the initiation of the investigation that resulted in the issuance of 
such order or finding.
    As described below, Commerce is self-initiating concurrent scope 
and circumvention inquiries.

Merchandise Subject to the Scope and Circumvention Inquiries

    Commerce has placed information on the administrative record, as 
attachments to its Initiation Memo, that indicates that certain QSP or 
QSP inputs produced in China undergo further processing in Malaysia 
before being exported to the United States.\7\ That QSP exported from 
Malaysia to the United States is the merchandise at issue in both the 
scope and circumvention inquiry initiations.
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    \7\ See Memorandum, ``Certain Quartz Surface Products from the 
People's Republic of China: Initiation of Scope and Circumvention 
Inquiries of the Antidumping Duty and Countervailing Duty Orders 
(Initiation Memo). This memo is a public document dated concurrently 
with, and hereby adopted by, this notice and on file electronically 
via ACCESS. Access to documents filed via ACCESS is also available 
in the Central Records Unit, Room B8024 of the main Department of 
Commerce building.
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(1) Available Information Supports Initiation of a Scope Inquiry

    The scope covers merchandise which ``has been finished, packaged, 
or otherwise fabricated in a third country, including by cutting, 
polishing, curing, edging, thermoforming, attaching to, or packaging 
with another product, or any other finishing, packaging, or fabrication 
that would not otherwise remove the merchandise from the scope of the 
orders if performed in the country of manufacture of the quartz surface 
products.'' Accordingly, Commerce is self-initiating this scope inquiry 
to determine if QSP or QSP inputs produced in China and further 
processed in Malaysia before being exported to the United States meet 
this description. We are seeking to determine whether in-scope QSP or 
QSP inputs leave China and undergo minor processing in Malaysia before 
being

[[Page 6846]]

exported to the United States. If the Chinese-origin, in-scope 
merchandise that undergoes minor processing in Malaysia results in 
merchandise that still corresponds to the description of in-scope 
merchandise outlined in the Orders, Commerce will find that the 
merchandise meeting the scope description is covered by the Orders. For 
those products for which Commerce finds that the merchandise is covered 
by the Orders, Commerce may rescind the circumvention inquiry, pursuant 
to 19 CFR 351.226(f)(6).

(2) Available Information Also Supports Initiation of a Circumvention 
Inquiry

    Based on available information, we also determine the initiation of 
a circumvention inquiry is warranted to determine whether certain 
imports of QSP, completed in Malaysia using certain QSP inputs 
manufactured in China, are circumventing the Orders.\8\ Commerce has 
made this determination in accordance with its analysis of the factors 
set forth in section 781(b) of the Act and 19 CFR 351.226(i).\9\
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    \8\ See Initiation Memo. As explained in the Initiation Memo, 
the available information supports initiating this circumvention 
inquiry on a country-wide basis. Commerce has taken this approach in 
prior circumvention inquiries, where the facts supported initiation 
on a country-wide basis. See, e.g., Oil Country Tubular Goods from 
the People's Republic of China: Initiation of Anti-Circumvention 
Inquiries on the Antidumping and Countervailing Duty Orders, 85 FR 
71877, 71878-79 (November 12, 2020); Stainless Steel Sheet and Strip 
from the People's Republic of China: Initiation of Anti-
Circumvention and Scope Inquiries on the Antidumping and 
Countervailing Duty Orders, 85 FR 29401, 29402 (May 15, 2020); 
Corrosion-Resistant Steel Products from the People's Republic of 
China: Initiation of Anti-Circumvention Inquiries on the Antidumping 
Duty and Countervailing Duty Orders, 84 FR 43585 (August 21, 2019); 
see also Steel Butt-Weld Pipe Fittings from the People's Republic of 
China: Initiation of Anti-Circumvention Inquiry on the Antidumping 
Duty Order, 82 FR 40556, 40560 (August 25, 2017) (stating at 
initiation that Commerce would evaluate the extent to which a 
country-wide finding applicable to all exports might be warranted); 
Certain Corrosion-Resistant Steel Products from the People's 
Republic of China: Initiation of Anti-Circumvention Inquiries on the 
Antidumping Duty and Countervailing Duty Orders, 81 FR 79454, 79458 
(November 14, 2016) (stating at initiation that Commerce would 
evaluate the extent to which a country-wide finding applicable to 
all exports might be warranted).
    \9\ See Initiation Memo.
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    Commerce has determined that it is appropriate to first determine 
whether the merchandise is covered by the scope of the Orders through a 
scope inquiry, before considering whether the merchandise is 
circumventing the Orders. Accordingly, Commerce will initially conduct 
its scope inquiry of the merchandise at issue, and then once it has 
made a determination as to the scope coverage status of the 
merchandise, it will determine whether to continue with the 
circumvention inquiry. If Commerce determines QSP or QSP inputs leaving 
China that are not covered by the scope of the Orders undergo further 
processing in Malaysia and this further processing consequently results 
in the production of in-scope merchandise, this merchandise would be 
subject to the scope of the Orders. Under that scenario, Commerce may 
apply its scope determination, in accordance with 19 CFR 351.225(m)(1), 
on a producer-specific, exporter-specific, or importer-specific basis, 
or on country-wide basis, regardless of the producer, exporter or 
importer of the products being exported from Malaysia to the United 
States.
    If Commerce determines that QSP or QSP inputs completed in Malaysia 
and exported to the United States are not covered by the scope of the 
Orders, in whole or in part, Commerce may then determine to immediately 
continue with the circumvention inquiry of that merchandise. If as a 
result of a circumvention inquiry Commerce determines that the products 
subject to the inquiry are circumventing the Orders, then in accordance 
with 19 CFR 351.226(m)(1), Commerce may apply its determination on a 
producer-specific, exporter-specific, or importer specific basis, or on 
a country-wide basis, regardless of the producer, exporter or importer 
of the products being exported from Malaysia to the United States.
    Pursuant to 19 CFR 351.226(f)(7), Commerce may ``alter or extend'' 
time limits under the circumvention inquiry as necessary to make 
certain all parties to each or both segments of the proceeding are able 
to file comments and factual information, as necessary.

Suspension of Liquidation

(1) Scope Inquiry

    Pursuant to 19 CFR 351.225(l)(1), when Commerce self-initiates a 
scope inquiry under 19 CFR 351.225(b), Commerce will notify CBP of the 
initiation and direct CBP to continue the suspension of liquidation of 
entries of products subject to the scope inquiry that were already 
subject to the suspension of liquidation, and to apply the cash deposit 
rate that would be applicable if the product were determined to be 
covered by the scope of the order. Accordingly, Commerce will notify 
CBP of the initiation of the scope inquiry and direct CBP to continue 
to suspend (unliquidated) entries of the products subject to the scope 
inquiry that were already subject to the suspension of liquidation. In 
addition, Commerce will direct CBP to apply the cash deposit rate that 
would be applicable if the products were determined to be covered by 
the scope of the Orders.
    Should Commerce issue preliminary or final scope rulings, Commerce 
will follow the suspension of liquidation rules under 19 CFR 
351.225(l)(2)-(4). In the event that Commerce issues preliminary or 
final scope rulings that the products are covered by the scope of the 
Orders, Commerce will instruct CBP to continue the suspension of 
liquidation of previously suspended entries and to apply the applicable 
cash deposit rate. Commerce will also instruct CBP to begin the 
suspension of liquidation and application of cash deposits for any 
unliquidated entries not yet suspended, entered, or withdrawn from 
warehouse, for consumption, on or after the date of initiation of the 
scope inquiry pursuant to paragraphs (l)(2)(ii) and (l)(3)(ii). In 
addition, pursuant to paragraphs (l)(2)(iii)(A) and (l)(3)(iii)(A), 
Commerce normally will instruct CBP to begin the suspension of 
liquidation and application of cash deposits for any unliquidated 
entries not yet suspended, entered, or withdrawn from warehouse, for 
consumption, prior to the date of initiation of the scope inquiry, but 
not for such entries prior to November 4, 2021, the effective date of 
these provisions in the Final Rule.\10\ These rules will not affect 
CBP's authority to take any additional action with respect to the 
suspension of liquidation or related measures for these entries, as 
stated in 19 CFR 351.225(l)(5).
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    \10\ See Regulations to Improve Administration and Enforcement 
of Antidumping and Countervailing Duty Laws, 86 FR 52300, 52327 
(September 20, 2021) (Final Rule).
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(2) Circumvention Inquiry

    Pursuant to 19 CFR 351.226(l)(1), when Commerce self-initiates a 
circumvention inquiry under 19 CFR 351.226(b), Commerce will notify CBP 
of the initiation and direct CBP to continue the suspension of 
liquidation of entries of products subject to the circumvention inquiry 
that were already subject to the suspension of liquidation, and to 
apply the cash deposit rate that would be applicable if the product 
were determined to be circumventing the order. Accordingly, Commerce 
will notify CBP of the initiation of the circumvention inquiry and 
direct CBP to continue to suspend (unliquidated) entries of the 
products subject to the circumvention inquiry that were already subject 
to the suspension of liquidation. In addition, Commerce will direct CBP 
to apply the cash deposit rate that would be applicable if the products

[[Page 6847]]

were determined to be circumventing the Orders.
    Should Commerce issue preliminary or final circumvention 
determinations, Commerce will follow the suspension of liquidation 
rules under 19 CFR 351.226(l)(2)-(4). In the event that Commerce issues 
affirmative preliminary or final circumvention determinations that the 
products are circumventing the Orders, Commerce will instruct CBP to 
continue the suspension of liquidation of previously suspended entries 
and to apply the applicable cash deposit rate. Commerce will also 
instruct CBP to begin the suspension of liquidation and application of 
cash deposits for any unliquidated entries not yet suspended, entered, 
or withdrawn from warehouse, for consumption, on or after the date of 
publication of the notice of initiation of the circumvention inquiry 
pursuant to paragraphs (l)(2)(ii) and (l)(3)(ii). In addition, pursuant 
to paragraphs (l)(2)(iii)(A) and (l)(3)(iii)(A), Commerce may instruct 
CBP to begin the suspension of liquidation and application of cash 
deposits for any unliquidated entries not yet suspended, entered, or 
withdrawn from warehouse, for consumption, prior to the date of 
initiation of the circumvention inquiry, but not for such entries prior 
to November 4, 2021, the effective date of these provisions in the 
Final Rule.\11\ These rules will not affect CBP's authority to take any 
additional action with respect to the suspension of liquidation or 
related measures for these entries, as stated in 19 CFR 351.226(l)(5).
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    \11\ Id., 86 FR at 52345.
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Notification to Interested Parties

    In accordance with sections 19 CFR 351.225(b) and 351.226(b), and 
781(b) of the Act, Commerce determines that available information 
supports initiating both scope and circumvention inquiries to determine 
whether certain imports of QSP, completed in and exported from Malaysia 
using certain QSP inputs manufactured in China, are subject to or 
circumventing the Orders. Accordingly, Commerce is notifying all 
interested parties of the initiation of scope and circumvention 
inquiries. In addition, we have included a description of the products 
that are the subject of these inquiries, and an explanation of the 
reasons for Commerce's decision to initiate these inquiries as provided 
above and in the accompanying Initiation Memo. Pursuant to 19 CFR 
351.225(e)(3) and 351.226(e)(3), due to the interrelated nature of the 
scope and circumvention inquiries, Commerce is aligning the deadlines 
for the scope inquiry with the circumvention inquiry and will conduct 
the scope inquiry first for the reasons explained above.
    Pursuant to 19 CFR 351.225(f)(1), interested parties have until 
March 2, 2022, to submit one set of comments and factual information 
addressing the self-initiation of the scope inquiry. Under 19 CFR 
351.225(l)(2)(iii)(B) and (l)(3)(iii)(B), interested parties may timely 
request that Commerce adopt an alternative date to begin the suspension 
of liquidation and application of cash deposits under paragraphs 
(l)(2)(ii)(A) and (l)(3)(iii)(A). A request for Commerce to adopt an 
alternative date must be based on a specific argument supported by 
evidence establishing the appropriateness of that alternative date.\12\ 
If parties wish to make such a request, that request must be included 
with the set of comments and factual information submitted to Commerce 
pursuant to 19 CFR 351.225(f)(1).
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    \12\ See Final Rule, 86 FR 52326-29, for further information.
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    Interested parties will then have until March 16, 2022 to submit 
comments and factual information to rebut, clarify, or correct factual 
information submitted by the other interested parties (including 
rebuttal in response to any requests made under 19 CFR 
351.225(l)(2)(iii)(B) and (l)(3)(iii)(B)). At this time, we are not 
soliciting or accepting comments on the self-initiation of the 
circumvention inquiry. Should Commerce determine to proceed with the 
circumvention inquiry after finalizing its scope determination, 
Commerce will notify interested parties on the segment-specific service 
list of an opportunity to comment.
    In accordance with section 19 CFR 351.225(e), unless the scope 
inquiry is rescinded, in whole or in part, Commerce intends to issue 
its final scope ruling within 120 days after the date on which the 
scope inquiry was initiated. Furthermore, in accordance with section 
781(f) of the Act and 19 CFR 351.226(e)(2), unless the circumvention 
inquiry is rescinded, in whole or in part, Commerce intends to issue 
its final circumvention determination within 300 days from the date of 
publication of the notice of initiation of a circumvention inquiry in 
the Federal Register.
    This notice is published in accordance with 19 CFR 351.225(b) and 
351.226(b) and section 781(b) of the Act.

    Dated: January 31, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix--Scope of the Orders

    The scope of the orders covers certain quartz surface products. 
Quartz surface products consist of slabs and other surfaces created 
from a mixture of materials that includes predominately silica 
(e.g., quartz, quartz powder, cristobalite) as well as a resin 
binder (e.g., an unsaturated polyester). The incorporation of other 
materials, including, but not limited to, pigments, cement, or other 
additives does not remove the merchandise from the scope of the 
orders. However, the scope of the orders only includes products 
where the silica content is greater than any other single material, 
by actual weight.
    Quartz surface products are typically sold as rectangular slabs 
with a total surface area of approximately 45 to 60 square feet and 
a nominal thickness of one, two, or three centimeters. However, the 
scope of the orders includes surface products of all other sizes, 
thicknesses, and shapes. In addition to slabs, the scope of the 
orders includes, but is not limited to, other surfaces such as 
countertops, backsplashes, vanity tops, bar tops, work tops, 
tabletops, flooring, wall facing, shower surrounds, fire place 
surrounds, mantels, and tiles. Certain quartz surface products are 
covered by the orders whether polished or unpolished, cut or uncut, 
fabricated or not fabricated, cured or uncured, edged or not edged, 
finished or unfinished, thermoformed or not thermoformed, packaged 
or unpackaged, and regardless of the type of surface finish.
    In addition, quartz surface products are covered by the orders 
whether or not they are imported attached to, or in conjunction 
with, non-subject merchandise such as sinks, sink bowls, vanities, 
cabinets, and furniture. If quartz surface products are imported 
attached to, or in conjunction with, such non-subject merchandise, 
only the quartz surface product is covered by the scope. Subject 
merchandise includes material matching the above description that 
has been finished, packaged, or otherwise fabricated in a third 
country, including by cutting, polishing, curing, edging, 
thermoforming, attaching to, or packaging with another product, or 
any other finishing, packaging, or fabrication that would not 
otherwise remove the merchandise from the scope of the orders if 
performed in the country of manufacture of the quartz surface 
products.
    The scope of the orders does not cover quarried stone surface 
products, such as granite, marble, soapstone, or quartzite. 
Specifically excluded from the scope of the orders are crushed glass 
surface products. Crushed glass surface products must meet each of 
the following criteria to qualify for this exclusion: (1) The 
crushed glass content is greater than any other single material, by 
actual weight; (2) there are pieces of crushed glass visible across 
the surface of the product; (3) at least some of the individual 
pieces of crushed glass that are visible across the surface are 
larger than one centimeter wide as measured at their widest cross-
section (glass pieces); and (4) the distance between

[[Page 6848]]

any single glass piece and the closest separate glass piece does not 
exceed three inches.
    The products subject to the scope are currently classified in 
the Harmonized Tariff Schedule of the United States (HTSUS) under 
the following subheading: 6810.99.0010. Subject merchandise may also 
enter under subheadings 6810.11.0010, 6810.11.0070, 6810.19.1200, 
6810.19.1400, 6810.19.5000, 6810.91.0000, 6810.99.0080, 
6815.99.4070, 2506.10.0010, 2506.10.0050, 2506.20.0010, 
2506.20.0080, and 7016.90.10. The HTSUS subheadings set forth above 
are provided for convenience and U.S. Customs purposes only. The 
written description of the scope of the orders is dispositive.
    If we determine that all relevant QSP is subject to the China 
Orders, then further analysis under section 781(b) of the Act may be 
unnecessary and the circumvention inquiry may be rescinded.

[FR Doc. 2022-02488 Filed 2-4-22; 8:45 am]
BILLING CODE 3510-DS-P