Boltless Steel Shelving Units Prepacked for Sale From the People's Republic of China: Initiation of Circumvention Inquiry on the Antidumping Duty and Countervailing Duty Orders, 75592-75594 [2022-26788]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 87, Number 236 (Friday, December 9, 2022)]
[Notices]
[Pages 75592-75594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26788]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-018, C-570-019]


Boltless Steel Shelving Units Prepacked for Sale From the 
People's Republic of China: Initiation of Circumvention Inquiry on the 
Antidumping Duty and Countervailing Duty Orders

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

SUMMARY: In response to a request from Edsal Manufacturing Company, 
Inc. (Edsal), the U.S. Department of Commerce (Commerce) is initiating 
a circumvention inquiry to determine whether imports of boltless steel 
shelving units prepackaged for sale (boltless steel shelving), which 
are completed or assembled in Malaysia using certain components from 
the People's Republic of China (China), are circumventing the 
antidumping duty (AD) and countervailing duty (CVD) orders on boltless 
steel shelving from China.

DATES: Applicable December 9, 2022.

FOR FURTHER INFORMATION CONTACT: Kabir Archuletta, AD/CVD Operations, 
Office V, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW, Washington, DC 20230; telephone: (202) 482-2593.

SUPPLEMENTARY INFORMATION:

Background

    On October 20, 2022, pursuant to section 781(b) of the Tariff Act 
of 1930, as amended (the Act), and 19 CFR 351.226(c), Edsal filed a 
circumvention inquiry request alleging that boltless

[[Page 75593]]

steel shelving completed or assembled in Malaysia using certain 
components manufactured in China and imported to the United States are 
circumventing the Orders \1\ and, accordingly, should be included 
within the scope of the Orders.\2\ On November 21, 2022, we extended 
the deadline to initiate this circumvention inquiry by 15 days, to 
December 5, 2022, in accordance with 19 CFR 351.226(d)(1).\3\
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    \1\ See Boltless Steel Shelving Units Prepackaged for Sale from 
the People's Republic of China: Antidumping Duty Order, 80 FR 63741 
(October 21, 2015); Boltless Steel Shelving Units Prepackaged for 
Sale from the People's Republic of China: Amended Final Affirmative 
Countervailing Duty Determination and Countervailing Duty Order, 80 
FR 63745 (October 21, 2015) (collectively, Orders).
    \2\ See Edsal's Letter, ``Boltless Steel Shelving Units 
Prepackaged for Sale from China--Petitioner's Request for 
Circumvention Ruling Pursuant to Section 781(b), as Amended,'' dated 
October 20, 2022.
    \3\ See Memorandum, ``Extension of Time to Determine Whether to 
Initiate Circumvention Inquiry,'' dated November 21, 2022.
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Scope of the Orders

    The merchandise covered by these Orders is boltless steel shelving 
units prepackaged for sale. Merchandise covered by these Orders is 
currently classified in the Harmonized Tariff Schedule of the United 
States (HTSUS) under subheadings 9403.20.0018, 9403.20.0020, 
9403.20.0025, and 9403.20.0026, but may also enter through HTSUS 
9403.10.0040. Although these HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of the Orders is dispositive. For a complete description of the scope 
of the Orders, see the Initiation Memorandum.\4\
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    \4\ See Memorandum, ``Boltless Steel Shelving Units Prepackaged 
for Sale from the People's Republic of China: Initiation of 
Circumvention Inquiries,'' dated concurrently with, and hereby 
adopted by, this notice (Initiation Memorandum).
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Merchandise Subject to the Circumvention Inquiry

    This circumvention inquiry covers boltless steel shelving that has 
been completed or assembled in Malaysia using, at a minimum, the key 
components of boltless steel shelving, i.e., vertical posts and 
horizontal beams, from China, that are then subsequently exported to 
the United States.

Initiation of Circumvention Inquiry

    Section 351.226(d) of Commerce's regulations states that if 
Commerce determines that a request for a circumvention inquiry 
satisfies the requirements of 19 CFR 351.226(c), then Commerce ``will 
accept the request and initiate a circumvention inquiry.'' Section 
351.226(c)(1) of Commerce's regulations, in turn, requires that each 
request for a circumvention inquiry allege ``that the elements 
necessary for a circumvention determination under section 781 of the 
Act exist'' and be ``accompanied by information reasonably available to 
the interested party supporting these allegations.'' Edsal alleged 
circumvention pursuant to section 781(b) of the Act (merchandise 
completed or assembled in other foreign countries).
    According to section 781(b)(1) of the Act, after taking into 
account any advice provided by the U.S. International Trade Commission 
(ITC) under section 781(e) of the Act, Commerce may find merchandise 
imported into the United States to be covered by the scope of an 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 AD order or finding or a CVD order; (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 finding or is produced in the foreign 
country with respect to which such order or finding applies; (C) the 
process of assembly or completion in the foreign country referred to in 
subparagraph (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 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 the value of 
processing performed in the foreign country represents a small 
proportion of the value of the merchandise imported into the United 
States.
    In addition, section 781(b)(3) of the Act sets forth additional 
factors to consider in determining whether to include merchandise 
completed or assembled in a third country within the scope of an AD or 
CVD 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 that was shipped to the 
third country for completion or assembly is affiliated with the person 
in the third country who assembles or completes the merchandise that is 
subsequently imported into the United States; and (C) whether imports 
of the merchandise into the third country that was completed or 
assembled have increased after the initiation of the investigation 
which resulted in the issuance of the order or finding.
    Based on our analysis of Edsal's circumvention request, we 
determined that Edsal's request satisfied the criteria under 19 CFR 
351.226(c), and thus, pursuant to 19 CFR 351.226(d)(1)(ii), we have 
accepted the request and are initiating the requested circumvention 
inquiry of the Orders. For a full discussion of the basis for our 
decision to initiate the requested circumvention inquiry, see the 
Initiation Memorandum.\5\ Moreover, as explained in the Initiation 
Memorandum, based on the information provided by Edsal, we are 
initiating a country-wide circumvention inquiry. Commerce has taken 
this approach in prior circumvention inquiries where the facts 
warranted initiation on a country-wide basis.\6\
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    \5\ See Initiation Memorandum.
    \6\ See, e.g., Certain Corrosion-Resistant Steel Products from 
the Republic of Korea and Taiwan: Initiation of Anti-Circumvention 
Inquiries on the Antidumping Duty and Countervailing Duty Orders, 83 
FR 37785 (August 2, 2018); Carbon 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); and 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).
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    Consistent with the approach taken in prior circumvention inquiries 
that Commerce initiated on a country-wide basis, we intend to solicit 
information from certain companies in Malaysia concerning their 
production of boltless steel shelving and their shipments thereof to 
the United States. A company's failure to completely respond to 
Commerce'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.
    For companion AD and CVD proceedings, ``the Secretary will initiate

[[Page 75594]]

and conduct a single inquiry with respect to the product at issue for 
both orders only on the record of the antidumping proceeding.'' \7\ 
Further, once ``the Secretary issues a final circumvention 
determination on the record of the antidumping duty proceeding, the 
Secretary will include a copy of that determination on the record of 
the countervailing duty proceeding.'' \8\ Accordingly, once Commerce 
concludes this circumvention inquiry, Commerce intends to place its 
final circumvention determination on the record of the companion CVD 
proceeding.
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    \7\ See 19 CFR 351.226(m)(2).
    \8\ Id.
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Suspension of Liquidation

    Pursuant to 19 CFR 351.226(l)(1), Commerce will notify U.S. Customs 
and Border Protection (CBP) of its initiation of the requested 
circumvention inquiries and direct CBP to continue the suspension of 
liquidation of entries of products subject to the circumvention 
inquiries that were already subject to the suspension of liquidation 
and 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 circumvention 
determinations, Commerce will follow the suspension of liquidation 
rules under 19 CFR 351.226(l)(2)-(4).

Notification to Interested Parties

    In accordance with 19 CFR 351.226(d) and section 781(b) of the Act, 
Commerce has determined that Edsal's request for a circumvention 
inquiry satisfies the requirements of 19 CFR 351.226(c). Accordingly, 
Commerce is notifying all interested parties of the initiation of a 
circumvention inquiry to determine whether U.S. imports of boltless 
steel shelving that have been completed or assembled in, and exported 
from, Malaysia using certain components manufactured in China, are 
circumventing the Orders. We included a description of the products 
that are subject to the circumvention inquiry, and an explanation of 
the reasons for Commerce's decision to initiate these inquiries, in the 
accompanying Initiation Memorandum.\9\ In accordance with 19 CFR 
351.226(e)(2), Commerce intends to issue its preliminary determination 
in these circumvention proceedings no later than 150 days from the date 
of publication of this notice in the Federal Register.
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    \9\ See Initiation Memorandum.
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    This notice is published in accordance with section 781(b) of the 
Act and 19 CFR 351.226(d)(1)(ii).

    Dated: December 5, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix

List of Topics Discussed in the Circumvention Initiation Memorandum

I. Summary
II. Background
III. Scope of the Orders
IV. Merchandise Subject to the Circumvention Inquiry
V. Statutory and Regulatory Framework for Circumvention Inquiries
VI. Statutory Analysis for the Circumvention Inquiry
VII. Country-Wide Circumvention Inquiry
VIII. Recommendation

[FR Doc. 2022-26788 Filed 12-8-22; 8:45 am]
BILLING CODE 3510-DS-P