81_FR_81279 81 FR 81057 - Certain Cold-Rolled Steel Flat Products From the People's Republic of China: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders

81 FR 81057 - Certain Cold-Rolled Steel Flat Products From the People's Republic of China: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders

DEPARTMENT OF COMMERCE
International Trade Administration

Federal Register Volume 81, Issue 222 (November 17, 2016)

Page Range81057-81062
FR Document2016-27850

In response to requests from ArcelorMittal USA LLC, Nucor Corporation, United States Steel Corporation, and AK Steel Corporation, as well as Steel Dynamics, Inc. and California Steel Industries, (collectively, Domestic Producers), the Department of Commerce (the Department) is initiating anti-circumvention inquiries to determine whether imports of certain cold-rolled steel flat products (CRS), which are produced in the Socialist Republic of Vietnam (Vietnam) from hot- rolled steel produced in the People's Republic of China (PRC), are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on CRS from the PRC.

Federal Register, Volume 81 Issue 222 (Thursday, November 17, 2016)
[Federal Register Volume 81, Number 222 (Thursday, November 17, 2016)]
[Notices]
[Pages 81057-81062]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-27850]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-029, C-570-030]


Certain Cold-Rolled Steel Flat Products From the People's 
Republic of China: Initiation of Anti-Circumvention Inquiries on the 
Antidumping Duty and Countervailing Duty Orders

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

SUMMARY: In response to requests from ArcelorMittal USA LLC, Nucor 
Corporation, United States Steel Corporation, and AK Steel Corporation, 
as well as Steel Dynamics, Inc. and California Steel Industries, 
(collectively, Domestic Producers), the Department of Commerce (the 
Department) is initiating anti-circumvention inquiries to determine 
whether imports of certain cold-rolled steel flat products (CRS), which 
are produced in the Socialist Republic of Vietnam (Vietnam) from hot-
rolled steel produced in the People's Republic of China (PRC), are 
circumventing the antidumping duty (AD) and countervailing duty (CVD) 
orders on CRS from the PRC.

DATES: Effective November 17, 2016.

FOR FURTHER INFORMATION CONTACT: John K. Drury or Victoria Cho, AD/CVD 
Operations, Office VI, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW., Washington, DC 20230; telephone: (202) 482-0195 or (202) 482-5075, 
respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On July 28, 2015, AK Steel Corporation, ArcelorMittal USA EEC, 
Nucor Corporation, Steel Dynamics, Inc., and the United States Steel 
Corporation (collectively, Petitioners) filed petitions seeking the 
imposition of antidumping and countervailing duties on imports of CRS 
from Brazil, the People's Republic of China, India, Japan, the Republic 
of Korea, the Netherlands, Russia, and the United Kingdom. Following 
the Department's final affirmative determinations of dumping and 
countervailable subsidies,\1\ and the U.S. International Trade 
Commission (ITC)'s finding of material injury,\2\ the Department issued 
AD and CVD orders on imports of CRS from the PRC.\3\
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    \1\ See Certain Cold-Rolled Steel Flat Products From the 
People's Republic of China: Final Affirmative Countervailing Duty 
Determination and Final Partial Affirmative Critical Circumstances 
Determination, FR 81 (May 24, 2016).
    \2\ See Cold-Rolled Steel Flat Products From China and Japan; 
Determinations, 81 FR 45305 (July 13, 2016)
    \3\ See Certain Cold-Rolled Steel Flat Products From Japan and 
the People's Republic of China: Antidumping Duty Orders, 81 FR 45956 
(July 14, 2016) (AD Order); see also Certain Cold-Rolled Steel Flat 
Products From the People's Republic of China: Countervailing Duty 
Order, 81 FR 45960 (July 14, 2016) (CVD Order) (collectively, 
Orders).
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    On September 22, 2016, pursuant to section 781(b) of the Tariff Act 
of 1930, as amended (the Act) and 19 CFR 351.225(h), Steel Dynamics, 
Inc. and California Steel Industries submitted a request for the 
Department to initiate anti-circumvention inquiries to determine 
whether producers of CRS in Vietnam are circumventing the Orders by 
exporting to the United States CRS which is completed or assembled in 
Vietnam using hot-rolled steel (HRS) sourced from the PRC.\4\ On 
September 27, 2016, ArcelorMittal USA LLC, Nucor Corporation, United 
States Steel Corporation, and AK Steel Corporation also submitted a 
request for the Department to initiate anti-circumvention inquiries and 
issue preliminary determinations of circumvention to suspend 
liquidation of imports of CRS from Vietnam.\5\ On October 13, 2016, we 
received comments supporting the allegation from the United 
Steelworkers.\6\ Domestic Producers request that the Department treat 
CRS imports from Vietnam as subject merchandise under the scope of the 
Orders and impose cash deposit requirements on all imports of CRS from 
Vietnam.
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    \4\ See Letter from Schagrin Associates to the Secretary of 
Commerce, ``Certain Cold-Rolled Steel Flat Products from China: 
Request for Circumvention Ruling,'' dated September 22, 2016 
(Schagrin Request).
    \5\ See Letter from Kelley Drye & Warren LLP to the Secretary of 
Commerce, ``Certain Cold-Rolled Steel Flat Products From the 
People's Republic of China--Request for Circumvention Ruling 
Pursuant to Section 781(b) of the Tariff Act of 1930,'' dated 
September 27, 2016 (Kelley Drye Request).
    \6\ See Letter from United Steelworkers to the Secretary of 
Commerce, ``Certain Cold-Rolled Steel Flat Products from the 
People's Republic of China,'' dated October 13, 2016.
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    On October 17, 2016, we received comments objecting to the 
allegation from Metallia U.S.A., LLC, Metallia, A Division of Hartree 
Partners, LP, Nippon Steel and Sumiken Bussan Americas Inc., Mitsui & 
Co. (U.S.A.), Inc., and Marubeni-Itochu Steel America Inc. (MISA).\7\ 
Also on October 17, 2016, we

[[Page 81058]]

received comments objecting to the allegation from Minmetals, Inc. 
(Minmetals).\8\ On October 17, 2016, we also received comments 
objecting to the allegation from POSCO-Vietnam Co., Ltd. (POSCO 
Vietnam).\9\ On October 21, 2016, we received comments objecting to the 
allegation from China Steel Sumikin Vietnam Joint Stock Company.\10\ 
Also on October 26, 2016, we received comments objecting to the 
allegation from Summit Global Trading, a Subsidiary of Sumitomo 
Corporation of Americas (Sumitomo).\11\ On October 28, 2016, we 
received comments objecting to the allegation from thyssenkrupp 
Materials NA, Inc. (thyssenkrupp).\12\ On October 31, 2016, we also 
received comments objecting to the allegation on behalf of Hoa Sen 
Group (HSG) \13\ and Maruichi Sun Steel Joint Stock Company 
(Maruichi).\14\ On November 1, 2016, we received comments objecting to 
the allegation from behalf of from Vietnam Competition Authority.\15\
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    \7\ See Letter from Morris, Manning & Martin, LLP to the 
Secretary of Commerce, ``Certain Cold-Rolled Steel Flat Products and 
Corrosion-Resistant Steel Products from the People's Republic of 
China: Response to Request for Anti-Circumvention Inquiry,'' dated 
October 17, 2016.
    \8\ See Letter from Minmetals, Inc. to the Secretary of 
Commerce, dated October 17, 2016.
    \9\ See Letter from Arnold and Porter, LLP to the Secretary of 
Commerce, ``Cold-Rolled Steel Flat Products from China: Response to 
Petitioners' Circumvention Allegation,'' dated October 17, 2016 
(POSCO Vietnam Submission).
    \10\ See Letter from Mowry & Grimson, PLLC and Sidley Austin LLP 
to the Secretary of Commerce, ``Certain Corrosion-Resistant Steel 
Products from China--Response to Petitioners' Circumvention 
Allegations,'' dated October 20, 2016.
    \11\ See Letter from Sandler, Travis, and Rosenberg, P.A. to the 
Secretary of Commerce, ``Certain Corrosion-Resistant Steel Products 
from the People's Republic of China: Response to Request for Anti-
Circumvention Inquiry,'' dated October 26, 2016.
    \12\ See Letter from Crowell and Moring, LLP to the Secretary of 
Commerce, ``Certain Corrosion-Resistant and Cold-Rolled Steel 
Products from the People's Republic of China: Comments Opposing 
Petitioners' Circumvention Allegations,'' dated October 28, 2016.
    \13\ See Letter from Curtis, Mallet-Prevost, Colt & Mosle, LLP 
to the Secretary of Commerce, ``Opposition to Request for Anti-
Circumvention Inquiry Certain Corrosion-Resistant Steel Products and 
Cold-Rolled Steel Flat Products from the People's Republic of 
China,'' dated October 31, 2016.
    \14\ See Letter from Curtis, Mallet-Prevost, Colt & Mosle, LLP 
to the Secretary of Commerce, ``Opposition to Request for Anti-
Circumvention Inquiry Certain Corrosion-Resistant Steel Products and 
Cold-Rolled Steel Flat Products from the People's Republic of 
China,'' dated October 31, 2016.
    \15\ See the Letter from the Vietnam Competition Authority to 
the Secretary of Commerce, ``Certain Corrosion-Resistant Steel 
Products from China; Certain Cold-Rolled Steel Flat Products from 
China--Opposition to Initiation of Anticircumvention Proceedings,'' 
dated November 1, 2016.
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Scope of the Orders

    The products covered by the orders are certain cold-rolled (cold-
reduced), flat-rolled steel products, whether or not annealed, painted, 
varnished, or coated with plastics or other nonmetallic substances. The 
products covered do not include those that are clad, plated, or coated 
with metal. The products covered include coils that have a width or 
other lateral measurement (``width'') of 12.7 mm or greater, regardless 
of form of coil (e.g., in successively superimposed layers, spirally 
oscillating, etc.). The products covered also include products not in 
coils (e.g., in straight lengths) of a thickness less than 4.75 mm and 
a width that is 12.7 mm or greater and that measures at least 10 times 
the thickness. The products covered also include products not in coils 
(e.g., in straight lengths) of a thickness of 4.75 mm or more and a 
width exceeding 150 mm and measuring at least twice the thickness. The 
products described above may be rectangular, square, circular, or other 
shape and include products of either rectangular or non-rectangular 
cross-section where such cross-section is achieved subsequent to the 
rolling process, i.e., products which have been ``worked after 
rolling'' (e.g., products which have been beveled or rounded at the 
edges). For purposes of the width and thickness requirements referenced 
above:
    (1) Where the nominal and actual measurements vary, a product is 
within the scope if application of either the nominal or actual 
measurement would place it within the scope based on the definitions 
set forth above, and
    (2) where the width and thickness vary for a specific product 
(e.g., the thickness of certain products with non-rectangular cross-
section, the width of certain products with nonrectangular shape, 
etc.), the measurement at its greatest width or thickness applies.
    Steel products included in the scope of the orders are products in 
which: (1) Iron predominates, by weight, over each of the other 
contained elements; (2) the carbon content is 2 percent or less, by 
weight; and (3) none of the elements listed below exceeds the quantity, 
by weight, respectively indicated:

 2.50 percent of manganese, or
 3.30 percent of silicon, or
 1.50 percent of copper, or
 1.50 percent of aluminum, or
 1.25 percent of chromium, or
 0.30 percent of cobalt, or
 0.40 percent of lead, or
 2.00 percent of nickel, or
 0.30 percent of tungsten (also called wolfram), or
 0.80 percent of molybdenum, or
 0.10 percent of niobium (also called columbium), or
 0.30 percent of vanadium, or
 0.30 percent of zirconium

    Unless specifically excluded, products are included in this scope 
regardless of levels of boron and titanium.
    For example, specifically included in this scope are vacuum 
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high strength low alloy (HSLA) steels, motor lamination 
steels, Advanced High Strength Steels (AHSS), and Ultra High Strength 
Steels (UHSS). If steels are recognized as low carbon steels with 
micro-alloying levels of elements such as titanium and/or niobium added 
to stabilize carbon and nitrogen elements. HSLA steels are recognized 
as steels with micro-alloying levels of elements such as chromium, 
copper, niobium, titanium, vanadium, and molybdenum. Motor lamination 
steels contain micro-alloying levels of elements such as silicon and 
aluminum. AHSS and UHSS are considered high tensile strength and high 
elongation steels, although AHSS and UHSS are covered whether or not 
they are high tensile strength or high elongation steels.
    Subject merchandise includes cold-rolled steel that has been 
further processed in a third country, including but not limited to 
annealing, tempering, painting, varnishing, trimming, cutting, 
punching, and/or slitting, or any other processing that would not 
otherwise remove the merchandise from the scope of the orders if 
performed in the country of manufacture of the cold-rolled steel.
    All products that meet the written physical description, and in 
which the chemistry quantities do not exceed any one of the noted 
element levels listed above, are within the scope of the orders unless 
specifically excluded. The following products are outside of and/or 
specifically excluded from the scope of the orders:
     Ball bearing steels; \16\
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    \16\ Ball bearing steels are defined as steels which contain, in 
addition to iron, each of the following elements by weight in the 
amount specified: (i) Not less than 0.95 nor more than 1.13 percent 
of carbon; (ii) not less than 0.22 nor more than 0.48 percent of 
manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) 
none, or not more than 0.03 percent of phosphorus; (v) not less than 
0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 
nor more than 1.65 percent of chromium; (vii) none, or not more than 
0.28 percent of nickel; (viii) none, or not more than 0.38 percent 
of copper; and (ix) none, or not more than 0.09 percent of 
molybdenum.
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     Tool steels; \17\
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    \17\ Tool steels are defined as steels which contain the 
following combinations of elements in the quantity by weight 
respectively indicated: (i) More than 1.2 percent carbon and more 
than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon 
and 1.25 percent or more but less than 10.5 percent chromium; or 
(iii) not less than 0.85 percent carbon and 1 percent to 1.8 
percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, 
inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, 
molybdenum; or (v) not less than 0.5 percent carbon and not less 
than 3.5 percent molybdenum; or (vi) not less than 0.5 percent 
carbon and not less than 5.5 percent tungsten.

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[[Page 81059]]

     Silico-manganese steel; \18\
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    \18\ Silico-manganese steel is defined as steels containing by 
weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or 
more but not more than 1.9 percent of manganese, and (iii) 0.6 
percent or more but not more than 2.3 percent of silicon.
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     Grain-oriented electrical steels (GOES) as defined in the 
final determination of the U.S. Department of Commerce in Grain-
Oriented Electrical Steel From Germany, Japan, and Poland.\19\
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    \19\ Grain-Oriented Electrical Steel From Germany, Japan, and 
Poland: Final Determinations of Sales at Less Than Fair Value and 
Certain Final Affirmative Determination of Critical Circumstances, 
79 FR 42,501, 42,503 (Dep't of Commerce, July 22, 2014). This 
determination defines grain-oriented electrical steel as ``a flat-
rolled alloy steel product containing by weight at least 0.6 percent 
but not more than 6 percent of silicon, not more than 0.08 percent 
of carbon, not more than 1.0 percent of aluminum, and no other 
element in an amount that would give the steel the characteristics 
of another alloy steel, in coils or in straight lengths.''
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     Non-Oriented Electrical Steels (NOES), as defined in the 
antidumping orders issued by the U.S. Department of Commerce in Non-
Oriented Electrical Steel From the People's Republic of China, Germany, 
Japan, the Republic of Korea, Sweden, and Taiwan.\20\
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    \20\ Non-Oriented Electrical Steel From the People's Republic of 
China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan: 
Antidumping Duty Orders, 79 FR 71,741, 71,741-42 (Dep't of Commerce, 
Dec. 3, 2014). The orders define NOES as ``cold-rolled, flat-rolled, 
alloy steel products, whether or not in coils, regardless of width, 
having an actual thickness of 0.20 mm or more, in which the core 
loss is substantially equal in any direction of magnetization in the 
plane of the material. The term `substantially equal' means that the 
cross grain direction of core loss is no more than 1.5 times the 
straight grain direction (i.e., the rolling direction) of core loss. 
NOES has a magnetic permeability that does not exceed 1.65 Tesla 
when tested at a field of 800 A/m (equivalent to 10 Oersteds) along 
(i.e., parallel to) the rolling direction of the sheet (i.e., B800 
value). NOES contains by weight more than 1.00 percent of silicon 
but less than 3.5 percent of silicon, not more than 0.08 percent of 
carbon, and not more than 1.5 percent of aluminum. NOES has a 
surface oxide coating, to which an insulation coating may be 
applied.''
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    The products subject to the orders are currently classified in the 
Harmonized Tariff Schedule of the United States (HTSUS) under item 
numbers: 7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0070, 
7209.16.0091, 7209.17.0030, 7209.17.0060, 7209.17.0070, 7209.17.0091, 
7209.18.1530, 7209.18.1560, 7209.18.2510, 7209.18.2520, 7209.18.2580, 
7209.18.6020, 7209.18.6090, 7209.25.0000, 7209.26.0000, 7209.27.0000, 
7209.28.0000, 7209.90.0000, 7210.70.3000, 7211.23.1500, 7211.23.2000, 
7211.23.3000, 7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6075, 
7211.23.6085, 7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 
7211.29.6080, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7225.50.6000, 
7225.50.8015, 7225.50.8085, 7225.99.0090, 7226.92.5000, 7226.92.7050, 
and 7226.92.8050.
    The products subject to the orders may also enter under the 
following HTSUS numbers: 7210.90.9000, 7212.50.0000, 7215.10.0010, 
7215.10.0080, 7215.50.0016, 7215.50.0018, 7215.50.0020, 7215.50.0061, 
7215.50.0063, 7215.50.0065, 7215.50.0090, 7215.90.5000, 7217.10.1000, 
7217.10.2000, 7217.10.3000, 7217.10.7000, 7217.90.1000, 7217.90.5030, 
7217.90.5060, 7217.90.5090, 7225.19.0000, 7226.19.1000, 7226.19.9000, 
7226.99.0180, 7228.50.5015, 7228.50.5040, 7228.50.5070, 7228.60.8000, 
and 7229.90.1000.
    The HTSUS subheadings above are provided for convenience and 
customs purposes only. The written description of the scope of the 
orders is dispositive.

Merchandise Subject to the Anti-Circumvention Inquiries

    These anti-circumvention inquiries cover CRS exported from Vietnam 
produced from HRS exported from the PRC.

Initiation of Anti-Circumvention Inquiries

    Section 781(b)(1) of the Act provides that the Department may find 
circumvention of an AD or CVD order when merchandise of the same class 
or kind subject to the order is completed or assembled in a foreign 
country other than the country to which the order applies. In 
conducting an anti-circumvention inquiry, under section 781(b)(1) of 
the Act, the Department relies on the following criteria: (A) 
Merchandise imported into the United States is of the same class or 
kind as any merchandise produced in a foreign country that is the 
subject of an antidumping or countervailing duty order or finding; (B) 
before importation into the United States, such imported merchandise is 
completed or assembled in another foreign country from merchandise 
which is subject to the order or merchandise which is produced in the 
foreign country that is subject to the order; (C) the process of 
assembly or completion in the foreign country referred to in section 
(B) is minor or insignificant; (D) the value of the merchandise 
produced in the foreign country to which the AD or CVD order applies is 
a significant portion of the total value of the merchandise exported to 
the United States; and (E) the administering authority determines that 
action is appropriate to prevent evasion of such order or finding. As 
discussed below, Domestic Producers provided evidence with respect to 
these criteria.

A. Merchandise of the Same Class or Kind

    Domestic Producers claim that CRS exported to the United States is 
the same class or kind as that covered by the Orders in these 
inquiries.\21\ Domestic Producers provided evidence to show that the 
merchandise from Vietnam enters the United States under the same tariff 
classification as subject merchandise.\22\
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    \21\ See Schagrin Request, at 8; Kelley Drye Request, at 8. See 
also sections 781(b)(1)(A)(i) and (iii) of the Act.
    \22\ See Kelley Drye Request, at Attachment 1.
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B. Completion of Merchandise in a Foreign Country

    Domestic Producers note that section 781(b)(l)(B)(ii) of the Act 
requires that ``the Department must also determine whether, prior to 
importation into the United States, the merchandise in the third 
country is completed from merchandise produced in the country subject 
to the antidumping or countervailing duty order.'' \23\ Domestic 
Producers presented evidence showing after the publication of the 
preliminary affirmative CVD determination in December 2015, how the 
imports of CRS from Vietnam to the United States more than tripled than 
the previous two years combined. Additionally, Domestic Producers 
provide evidence that no capacity currently exists in Vietnam to 
produce HRS and, thus, they contend any CRS manufactured in Vietnam 
must use imported HRS.\24\ Domestic Producers also provide information 
reflecting that imports into the United States of CRS from the PRC 
significantly decreased after the imposition of the Orders, and imports 
into the United States of CRS from Vietnam, as well as imports into 
Vietnam of Chinese HRS, also increased significantly.\25\ Finally, 
Domestic Producers state that Minmetals, a U.S. trading company, 
currently has arrangements to ship HRS from the PRC to Vietnam and 
convert

[[Page 81060]]

the HRS to CRS for export to the United States with the purpose of 
evading the Orders.\26\
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    \23\ Id., at 8.
    \24\ See Schagrin Request, at 10; see also Kelley Drye Request, 
at 8-9.
    \25\ See Schagrin Request, at 11-14; see also Kelley Drye 
Request, at 9-10.
    \26\ See Schagrin Request, at 15 and Exhibit 10.
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C. Minor or Insignificant Process

    Domestic Producers maintain that the process for completing CRS 
from HRS is minor or insignificant. Under section 781(b)(2) of the Act, 
the Department considers five factors to determine whether the process 
of assembly or completion is minor or insignificant. Domestic Producers 
allege that the production of HRS in the PRC, which is subsequently 
further processed into CRS in Vietnam, comprises the majority of the 
value associated with the merchandise imported into the United States, 
and that the processing of HRS into CRS in Vietnam adds relatively 
little value.
(1) Level of Investment
    Domestic Producers contend that the level of investment necessary 
to construct a factory which can produce CRS from HRS in Vietnam is 
insignificant. In support of its contention, Domestic Producers compare 
the investment necessary to install a re-rolling facility with the 
investment necessary to produce HRS using a fully-integrated production 
process for melting iron and making steel.\27\ Domestic Producers 
estimate that the investment necessary to construct a re-rolling 
facility in Vietnam that uses HRS substrate to produce CRS would be 
between $28 million at $70 million.\28\ In contrast, Domestic Producers 
estimate that the investment necessary to construct a fully integrated 
steel production facility, including a blast furnace and basic oxygen 
furnace, in the PRC would be between $295 million and $10.1 
billion.\29\ Domestic Producers also argue that using investment levels 
in the PRC for a basic steel making, including a blast furnace and 
basic oxygen furnace, as opposed to an electric arc furnace, is 
appropriate as approximately 90 percent of the steel production in the 
PRC comes from fully integrated steel mills.\30\
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    \27\ See Schagrin Request, at 16-17; see also Kelley Drye 
Request, at 11-13.
    \28\ See Schagrin Request, at 17; see also Kelley Drye Request, 
at 12.
    \29\ See Schagrin Request, at 16; see also Kelley Drye Request, 
at 12 and Attachment 9.
    \30\ See Kelley Drye Request, at 12.
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(2) Level of Research and Development
    Domestic Producers assert that the level of research and 
development in Vietnam is either minimal or non-existent. Domestic 
Producers state that Vietnam is importing technology from other 
sources, rather than developing its own technology.\31\ As an example 
of the importation of technology into Vietnam, Domestic Producers 
provided evidence that ``Dong A, a Vietnamese steel company, recently 
announced that it is installing European and Japanese equipment in a 
new facility that includes a pickling line and a cold-rolling mill.'' 
\32\
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    \31\ See Schagrin Request, at 17-18; see also Kelley Drye 
Request at 13.
    \32\ See Kelley Drye Request at 13 and Attachment 11.
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(3) Nature of Production Process
    According to Domestic Producers, the production process undertaken 
by Vietnamese producers of CRS is less complex than steelmaking, and 
minimal in nature.\33\ Citing to a report from the ITC,\34\ Domestic 
Producers describe the process to produce HRS as consisting of three 
distinct states: Melting and refining, casting molten steel into semi-
finished forms, and hot-rolling the semi-finished forms into HRS.\35\ 
In contrast, Domestic Producers provide information indicating that the 
production of CRS from HRS involves only cleaning and pickling, 
rolling, annealing, and tempering.\36\
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    \33\ See Schagrin Request, at 18; see also Kelley Drye Request 
at 14.
    \34\ See Certain Hot-Rolled Steel Flat Products from Australia, 
Brazil, Japan, Korea, the Netherlands, Turkey, and The United 
Kingdom, Inv. Nos. 70t-TA-545-547 and 73l-TA-1291-1297, USITC 
Pub.4570 (October 2015) (Preliminary) at I-19. Domestic Producers 
attached the report as Attachment 12.
    \35\ See Kelley Drye Request, at 14-16 and Attachment 12.
    \36\ Id., at 17. Domestic Producers cite to Certain Hot-Rolled 
Steel Flat Products from Australia, Brazil, Japan, Korea, the 
Netherlands, Turkey, and The United Kingdom, Inv. Nos. 70t-TA-545-
547 and 73l-TA-1291-1297, USITC Pub. 4570 (Oct.2015) (Preliminary) 
at I-21 in support of their description of the CRS production 
process.
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(4) Extent of Production Facilities in Vietnam
    Domestic Producers provide information indicating that production 
facilities in Vietnam are more limited compared to facilities in the 
PRC.\37\ As noted above, Domestic Producers maintain that Vietnam has 
no HRS capacity. Domestic Producers claim that Vietnam has fewer than a 
dozen large producers of flat steel products. Moreover, Domestic 
Producers indicate that Vietnam has limited production facilities that 
would allow for production of CRS to support the significant increase 
of imports into the United States from Vietnam.\38\
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    \37\ See Schagrin Request, at 18. Domestic Producers cite to 
report on the state of the steel industry in Vietnam in support of 
their statements. See Nozomu Kawabata, ``The Vietnamese Iron and 
Steel Industry in Transition to a Market Economy--Attainments and 
Challenges,'' at 14, 20, & 35 (May, 2016) (Tohoku Economics Research 
Group, Tohoku University, Discussion Paper No. 349) (Kawabata 
Report), attached as Exhibit 4 to the Request.
    \38\ See Kelley Drye Request, at 17-18.
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(5) Value of Processing in Vietnam
    Domestic Producers assert that producing HRS in the PRC accounts 
for a large percentage of the total value of CRS that is produced in 
Vietnam using HRS from the PRC. Using information from the recent CRS 
investigation by the ITC, Domestic Producers state that the price of 
HRS is consistently between 80 percent and 90 percent of the value of 
CRS.\39\ Using another approach, focusing solely on the cost of 
production in Vietnam, Domestic Producers estimate that the cost of 
manufacture for the CRS operations value added in Vietnam is less than 
ten percent.\40\ As noted above, Domestic Producers argue that the vast 
majority of the processing and value of CRS comes from HRS. The value 
of processing CRS in Vietnam is a minor part of the total cost of 
manufacture, unlikely to exceed 20 percent of the total value. Thus, 
the value of the merchandise produced in China is estimated to be at 
least 80 percent of the total value of the merchandise shipped to the 
United States.\41\
---------------------------------------------------------------------------

    \39\ See Schagrin Request, at 18-19.
    \40\ See Kelley Drye Request, at 18-19 and Attachment 14.
    \41\ See Kelley Drye Request, at 19.
---------------------------------------------------------------------------

D. Additional Factors To Consider in Determining Whether Action Is 
Necessary

    Section 781(b)(3) of the Act directs the Department to consider 
additional factors in determining whether to include merchandise 
assembled or completed in a foreign country within the scope of the 
order, such as: ``(A) the pattern of trade, including sourcing 
patterns, (B) whether the manufacturer or exporter of the merchandise . 
. . is affiliated with the person who uses the merchandise. . . to 
assemble or complete in the foreign country the merchandise that is 
subsequently imported into the United States, and (C) whether imports 
into the foreign country of the merchandise. . . have increased after 
the initiation of the investigation which resulted in the issuance of 
such order or finding.''
(1) Pattern of Trade
    Domestic Producers provide information reflecting that at the time 
the petitions were filed for the original investigations of CRS from 
the PRC, Vietnam was not a source of U.S. imports of CRS in 2014. 
Domestic

[[Page 81061]]

Producers provide information reflecting imports of CRS from Vietnam to 
the United States through July 2015 were low.\42\ However, subsequent 
to the preliminary injury determination by the ITC, the final quarter 
of 2015 saw increased imports of CRS from Vietnam to the United 
States.\43\ Domestic Producers provide information demonstrating that 
after the Department's preliminary affirmative CVD determination for 
CRS from the PRC in December 2015, imports of CRS from Vietnam into the 
United States surged dramatically.\44\ Domestic Producers further 
provide evidence that imports of CRS from the PRC to the United States 
decreased substantially over the same time period.\45\ No other factual 
information on the record contradicts this claim.
---------------------------------------------------------------------------

    \42\ See Kelley Drye Request, at 19-20 and Attachment 1.
    \43\ Id., at 20
    \44\ Id.
    \45\ Id., at 5-6.
---------------------------------------------------------------------------

(2) Affiliation
    Domestic Producers have not provided any allegation of affiliation 
between producers of HRS in the PRC and producers of CRS in Vietnam.
(3) Increase of HRS Shipments From the PRC to Vietnam After Initiations 
of the AD and CVD Investigations of CRS From the PRC
    Domestic Producers presented evidence indicating that imports of 
HRS from the PRC to Vietnam have increased since the initiation of the 
investigations of CRS from the PRC.\46\ No other factual information on 
the record contradicts this claim.
---------------------------------------------------------------------------

    \46\ See Schagrin Request, at 11-14; see also Kelley Drye 
Request, at 21 and Attachment 3.
---------------------------------------------------------------------------

Analysis of the Allegations

    Based on our analysis of Domestic Producers anti-circumvention 
allegations and the information provided therein, the Department 
determines that anti-circumvention inquiries of the AD and CVD orders 
on CRS from the PRC are warranted.
    With regard to whether the merchandise from Vietnam is of the same 
class or kind as the merchandise produced in the PRC, Domestic 
Producers presented information to the Department indicating that, 
pursuant to section 781(b)(1)(A) of the Act, the merchandise being 
produced in and/or exported from Vietnam is of the same class or kind 
as CRS produced in the PRC, which is subject to the Orders.\47\ 
Consequently, the Department finds that Domestic Producers provided 
sufficient information in their requests regarding the class or kind of 
merchandise to support the initiation of these anti-circumvention 
inquiries.
---------------------------------------------------------------------------

    \47\ See Schagrin Request, at 9; see also Kelly Dry Request, at 
8 and Attachment 1.
---------------------------------------------------------------------------

    With regard to completion or assembly of merchandise in a foreign 
country, pursuant to section 781(b)(1)(B) of the Act, Domestic 
Producers also presented information to the Department indicating that 
the CRS exported from Vietnam to the United States is produced in 
Vietnam using HRS from the PRC.\48\ We find that the information 
presented by Domestic Producers regarding this criterion supports its 
request to initiate these anti-circumvention inquiries.
---------------------------------------------------------------------------

    \48\ See Schagrin Request, at 6 and 11-18 and Exhibits 1-2, 4-5, 
7 and 13; see also Kelly Dry Request, at 8-11 and Attachments 1-5.
---------------------------------------------------------------------------

    The Department finds that Domestic Producers sufficiently addressed 
the factors described in section 781(b)(1)(C) and 781(b)(2) of the Act 
regarding whether the process of assembly or completion of CRS in 
Vietnam is minor or insignificant. In particular, information in 
Domestic Producers' submission indicates that: (1) The level of 
investment in re-rolling facilities is minimal when compared with the 
level of investment for basic steel making facilities; (2) there is 
little or no research and development taking place in Vietnam; (3) the 
CRS production processes involve the simple processing of HRS from a 
country subject to the Orders; (4) the CRS production facilities in 
Vietnam are more limited compared to facilities in the PRC; and (5) the 
value of the processing performed in Vietnam is a small proportion of 
the value of the CRS imported into the United States, as the production 
of HRS in the PRC accounts for 80 to 90 percent of the value of 
finished CRS.
    With respect to the value of the merchandise produced in the PRC, 
pursuant to section 781(b)(1)(D) of the Act, Domestic Producers relied 
on published sources, a simulated cost structure for producing CRS in 
Vietnam, and arguments in the ``minor or insignificant process'' 
portion of its anti-circumvention allegation to indicate that the value 
of the key material, HRS, produced in the PRC may be significant 
relative to the total value of the CRS exported to the United States. 
We find that this information adequately meets the requirements of this 
factor, as discussed above, for the purposes of initiating these anti-
circumvention inquiries.
    Finally, with respect to the additional factors listed under 
section 781(b)(3) of the Act, we find that Domestic Producers presented 
evidence indicating that shipments of CRS from Vietnam to the United 
States increased since the imposition of the Orders and that shipments 
of HRS from the PRC to Vietnam also increased since the Orders took 
effect, further supporting initiation of these anti-circumvention 
inquiries. Accordingly, we are initiating a formal anti-circumvention 
inquiry concerning the AD and CVD Orders on CRS from the PRC, pursuant 
to section 781(b) of the Act.
    In connection with these anti-circumvention inquiries, in order to 
determine, (1) the extent to which PRC-sourced HRS is further processed 
into CRS in Vietnam before shipment to the United States, (2) the 
extent to which a country-wide finding applicable to all exports might 
be warranted, as alleged by Domestic Producers, and (3) whether the 
process of turning PRC-sourced HRS into CRS is minor or insignificant, 
the Department intends to issue questionnaires to solicit information 
from interested parties. The Department intends to issue questionnaires 
to solicit information from the Vietnamese producers and exporters 
concerning their shipments of CRS to the United States and the origin 
of the imported HRS being processed into CRS. A company's failure to 
respond completely to the Department's requests for information may 
result in the application of partial or total facts available, pursuant 
to section 776(a) of the Act, which may include adverse inferences, 
pursuant to section 776(b) of the Act.
    While we believe sufficient factual information has been submitted 
by Domestic Producers supporting their request for inquiries, we do not 
find that the record supports the simultaneous issuance of a 
preliminary ruling. Such inquiries are by their nature typically 
complicated and can require information regarding production in both 
the country subject to the order and the third country completing the 
product. As noted above, the Department intends to request additional 
information regarding the statutory criteria to determine whether 
shipments of CRS from Vietnam are circumventing the AD and CVD orders 
on CRS from the PRC. Thus, with further development of the record 
required before a preliminary ruling can be issued, the Department does 
not find it appropriate to issue a preliminary ruling at this time.

Notification to Interested Parties

    In accordance with 19 CFR 351.225(e), the Department finds that the 
issue of whether a product is

[[Page 81062]]

included within the scope of an order cannot be determined based solely 
upon the application and the descriptions of the merchandise. 
Accordingly, the Department will notify by mail all parties on the 
Department's scope service list of the initiation of these anti-
circumvention inquiries. In addition, in accordance with 19 CFR 
351.225(f)(1)(i) and (ii), in this notice of initiation issued under 19 
CFR 351.225(e), we have included a description of the product that is 
the subject of these anti-circumvention inquiries (i.e., CRS that 
contains the characteristics as provided in the scope of the Orders) 
and an explanation of the reasons for the Department's decision to 
initiate an anti-circumvention inquiry, as provided above.
    In accordance with 19 CFR 351.225(l)(2), if the Department issues a 
preliminary affirmative determination, we will then instruct U.S. 
Customs and Border Protection to suspend liquidation and require a cash 
deposit of estimated antidumping and countervailing duties, at the 
applicable rate, for each unliquidated entry of the merchandise at 
issue, entered or withdrawn from warehouse for consumption on or after 
the date of initiation of the inquiry. The Department will establish a 
schedule for questionnaires and comments on the issues. In accordance 
with section 781(f) of the Act and 19 CFR 351.225(f)(5), the Department 
intends to issue its final determination within 300 days of the date of 
publication of this initiation.
    This notice is published in accordance with 19 CFR 351.225(f).

    Dated: November 4, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2016-27850 Filed 11-16-16; 8:45 am]
 BILLING CODE 3510-DS-P



                                                                              Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices                                                   81057

                                                    Ware Road (80 acres), at FM 1016                        DEPARTMENT OF COMMERCE                                material injury,2 the Department issued
                                                    between Bentsen Road and Shary Road                                                                           AD and CVD orders on imports of CRS
                                                    (695 acres), at 3801 West Military                      International Trade Administration                    from the PRC.3
                                                    Highway (50 acres), and at 6800 South                                                                           On September 22, 2016, pursuant to
                                                    Ware Road (40 acres) in McAllen; and,                   [A–570–029, C–570–030]                                section 781(b) of the Tariff Act of 1930,
                                                    Site 2 (8.5 acres)—McAllen Miller                                                                             as amended (the Act) and 19 CFR
                                                    International Airport Air Cargo Facility                Certain Cold-Rolled Steel Flat Products               351.225(h), Steel Dynamics, Inc. and
                                                    located south of Uvalde Street and East                 From the People’s Republic of China:                  California Steel Industries submitted a
                                                    of FM 1926 in McAllen.                                  Initiation of Anti-Circumvention                      request for the Department to initiate
                                                       The grantee’s proposed service area                  Inquiries on the Antidumping Duty and                 anti-circumvention inquiries to
                                                    under the ASF would be Hidalgo                          Countervailing Duty Orders                            determine whether producers of CRS in
                                                    County, Texas, as described in the                                                                            Vietnam are circumventing the Orders
                                                    application. If approved, the grantee                   AGENCY:  Enforcement and Compliance,                  by exporting to the United States CRS
                                                    would be able to serve sites throughout                 International Trade Administration,                   which is completed or assembled in
                                                    the service area based on companies’                    Department of Commerce.                               Vietnam using hot-rolled steel (HRS)
                                                    needs for FTZ designation. The                          SUMMARY: In response to requests from                 sourced from the PRC.4 On September
                                                    application indicates that the proposed                 ArcelorMittal USA LLC, Nucor                          27, 2016, ArcelorMittal USA LLC, Nucor
                                                    service area is within and adjacent to                  Corporation, United States Steel                      Corporation, United States Steel
                                                    the Hidalgo/Pharr Customs and Border                    Corporation, and AK Steel Corporation,                Corporation, and AK Steel Corporation
                                                    Protection port of entry.                               as well as Steel Dynamics, Inc. and                   also submitted a request for the
                                                       The applicant is requesting authority                California Steel Industries, (collectively,           Department to initiate anti-
                                                    to reorganize its existing zone to include              Domestic Producers), the Department of                circumvention inquiries and issue
                                                    all of the existing sites as ‘‘magnet’’                 Commerce (the Department) is initiating               preliminary determinations of
                                                    sites. The ASF allows for the possible                  anti-circumvention inquiries to                       circumvention to suspend liquidation of
                                                    exemption of one magnet site from the                   determine whether imports of certain                  imports of CRS from Vietnam.5 On
                                                    ‘‘sunset’’ time limits that generally                   cold-rolled steel flat products (CRS),                October 13, 2016, we received
                                                    apply to sites under the ASF, and the                   which are produced in the Socialist                   comments supporting the allegation
                                                    applicant proposes that Site 1 be so                    Republic of Vietnam (Vietnam) from                    from the United Steelworkers.6
                                                    exempted. No subzones/usage-driven                      hot-rolled steel produced in the People’s             Domestic Producers request that the
                                                    sites are being requested at this time.                 Republic of China (PRC), are                          Department treat CRS imports from
                                                    The application would have no impact                    circumventing the antidumping duty                    Vietnam as subject merchandise under
                                                    on FTZ 12’s previously authorized                       (AD) and countervailing duty (CVD)                    the scope of the Orders and impose cash
                                                    subzone.                                                orders on CRS from the PRC.                           deposit requirements on all imports of
                                                       In accordance with the FTZ Board’s                   DATES: Effective November 17, 2016.                   CRS from Vietnam.
                                                    regulations, Camille Evans of the FTZ                                                                            On October 17, 2016, we received
                                                    Staff is designated examiner to evaluate                FOR FURTHER INFORMATION CONTACT: John                 comments objecting to the allegation
                                                    and analyze the facts and information                   K. Drury or Victoria Cho, AD/CVD                      from Metallia U.S.A., LLC, Metallia, A
                                                    presented in the application and case                   Operations, Office VI, Enforcement and                Division of Hartree Partners, LP, Nippon
                                                    record and to report findings and                       Compliance, International Trade                       Steel and Sumiken Bussan Americas
                                                    recommendations to the FTZ Board.                       Administration, U.S. Department of                    Inc., Mitsui & Co. (U.S.A.), Inc., and
                                                       Public comment is invited from                       Commerce, 1401 Constitution Avenue                    Marubeni-Itochu Steel America Inc.
                                                    interested parties. Submissions shall be                NW., Washington, DC 20230; telephone:                 (MISA).7 Also on October 17, 2016, we
                                                    addressed to the FTZ Board’s Executive                  (202) 482–0195 or (202) 482–5075,
                                                    Secretary at the address below. The                     respectively.                                           2 See Cold-Rolled Steel Flat Products From China

                                                    closing period for their receipt is                                                                           and Japan; Determinations, 81 FR 45305 (July 13,
                                                                                                            SUPPLEMENTARY INFORMATION:                            2016)
                                                    January 17, 2017. Rebuttal comments in                                                                          3 See Certain Cold-Rolled Steel Flat Products
                                                    response to material submitted during                   Background
                                                                                                                                                                  From Japan and the People’s Republic of China:
                                                    the foregoing period may be submitted                      On July 28, 2015, AK Steel                         Antidumping Duty Orders, 81 FR 45956 (July 14,
                                                    during the subsequent 15-day period to                  Corporation, ArcelorMittal USA EEC,                   2016) (AD Order); see also Certain Cold-Rolled Steel
                                                    January 31, 2017.                                                                                             Flat Products From the People’s Republic of China:
                                                                                                            Nucor Corporation, Steel Dynamics,                    Countervailing Duty Order, 81 FR 45960 (July 14,
                                                       A copy of the application will be                    Inc., and the United States Steel                     2016) (CVD Order) (collectively, Orders).
                                                    available for public inspection at the                  Corporation (collectively, Petitioners)                 4 See Letter from Schagrin Associates to the
                                                    Office of the Executive Secretary,                      filed petitions seeking the imposition of             Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
                                                    Foreign-Trade Zones Board, Room                         antidumping and countervailing duties                 Flat Products from China: Request for
                                                    21013, U.S. Department of Commerce,                                                                           Circumvention Ruling,’’ dated September 22, 2016
                                                                                                            on imports of CRS from Brazil, the                    (Schagrin Request).
                                                    1401 Constitution Avenue NW.,                           People’s Republic of China, India,                      5 See Letter from Kelley Drye & Warren LLP to the
                                                    Washington, DC 20230–0002, and in the                   Japan, the Republic of Korea, the                     Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
                                                    ‘‘Reading Room’’ section of the FTZ                     Netherlands, Russia, and the United                   Flat Products From the People’s Republic of
                                                    Board’s Web site, which is accessible                                                                         China—Request for Circumvention Ruling Pursuant
                                                                                                            Kingdom. Following the Department’s                   to Section 781(b) of the Tariff Act of 1930,’’ dated
                                                    via www.trade.gov/ftz.                                  final affirmative determinations of                   September 27, 2016 (Kelley Drye Request).
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                       For further information, contact                     dumping and countervailable                             6 See Letter from United Steelworkers to the
                                                    Camille Evans at Camille.Evans@                         subsidies,1 and the U.S. International                Secretary of Commerce, ‘‘Certain Cold-Rolled Steel
                                                    trade.gov or (202) 482–2350.                            Trade Commission (ITC)’s finding of                   Flat Products from the People’s Republic of China,’’
                                                                                                                                                                  dated October 13, 2016.
                                                      Dated: November 10, 2016.                                                                                     7 See Letter from Morris, Manning & Martin, LLP
                                                    Elizabeth Whiteman,                                       1 See Certain Cold-Rolled Steel Flat Products       to the Secretary of Commerce, ‘‘Certain Cold-Rolled
                                                    Acting Executive Secretary.                             From the People’s Republic of China: Final            Steel Flat Products and Corrosion-Resistant Steel
                                                                                                            Affirmative Countervailing Duty Determination and     Products from the People’s Republic of China:
                                                    [FR Doc. 2016–27666 Filed 11–16–16; 8:45 am]            Final Partial Affirmative Critical Circumstances      Response to Request for Anti-Circumvention
                                                    BILLING CODE 3510–DS–P                                  Determination, FR 81 (May 24, 2016).                  Inquiry,’’ dated October 17, 2016.



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                                                    81058                     Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices

                                                    received comments objecting to the                      annealed, painted, varnished, or coated               • 0.30 percent of zirconium
                                                    allegation from Minmetals, Inc.                         with plastics or other nonmetallic                       Unless specifically excluded,
                                                    (Minmetals).8 On October 17, 2016, we                   substances. The products covered do                   products are included in this scope
                                                    also received comments objecting to the                 not include those that are clad, plated,              regardless of levels of boron and
                                                    allegation from POSCO-Vietnam Co.,                      or coated with metal. The products                    titanium.
                                                    Ltd. (POSCO Vietnam).9 On October 21,                   covered include coils that have a width                  For example, specifically included in
                                                    2016, we received comments objecting                    or other lateral measurement (‘‘width’’)              this scope are vacuum degassed, fully
                                                    to the allegation from China Steel                      of 12.7 mm or greater, regardless of form             stabilized (commonly referred to as
                                                    Sumikin Vietnam Joint Stock                             of coil (e.g., in successively                        interstitial-free (IF)) steels, high strength
                                                    Company.10 Also on October 26, 2016,                    superimposed layers, spirally                         low alloy (HSLA) steels, motor
                                                    we received comments objecting to the                   oscillating, etc.). The products covered              lamination steels, Advanced High
                                                    allegation from Summit Global Trading,                  also include products not in coils (e.g.,             Strength Steels (AHSS), and Ultra High
                                                    a Subsidiary of Sumitomo Corporation                    in straight lengths) of a thickness less              Strength Steels (UHSS). If steels are
                                                    of Americas (Sumitomo).11 On October                    than 4.75 mm and a width that is 12.7                 recognized as low carbon steels with
                                                    28, 2016, we received comments                          mm or greater and that measures at least              micro-alloying levels of elements such
                                                    objecting to the allegation from                        10 times the thickness. The products                  as titanium and/or niobium added to
                                                    thyssenkrupp Materials NA, Inc.                         covered also include products not in                  stabilize carbon and nitrogen elements.
                                                    (thyssenkrupp).12 On October 31, 2016,                  coils (e.g., in straight lengths) of a                HSLA steels are recognized as steels
                                                    we also received comments objecting to                  thickness of 4.75 mm or more and a                    with micro-alloying levels of elements
                                                    the allegation on behalf of Hoa Sen                     width exceeding 150 mm and measuring                  such as chromium, copper, niobium,
                                                    Group (HSG) 13 and Maruichi Sun Steel                   at least twice the thickness. The                     titanium, vanadium, and molybdenum.
                                                    Joint Stock Company (Maruichi).14 On                    products described above may be                       Motor lamination steels contain micro-
                                                    November 1, 2016, we received                           rectangular, square, circular, or other               alloying levels of elements such as
                                                    comments objecting to the allegation                    shape and include products of either                  silicon and aluminum. AHSS and UHSS
                                                    from behalf of from Vietnam                             rectangular or non-rectangular cross-                 are considered high tensile strength and
                                                    Competition Authority.15                                section where such cross-section is                   high elongation steels, although AHSS
                                                    Scope of the Orders                                     achieved subsequent to the rolling                    and UHSS are covered whether or not
                                                                                                            process, i.e., products which have been               they are high tensile strength or high
                                                       The products covered by the orders                   ‘‘worked after rolling’’ (e.g., products
                                                    are certain cold-rolled (cold-reduced),                                                                       elongation steels.
                                                                                                            which have been beveled or rounded at                    Subject merchandise includes cold-
                                                    flat-rolled steel products, whether or not
                                                                                                            the edges). For purposes of the width                 rolled steel that has been further
                                                       8 See Letter from Minmetals, Inc. to the Secretary
                                                                                                            and thickness requirements referenced                 processed in a third country, including
                                                    of Commerce, dated October 17, 2016.                    above:                                                but not limited to annealing, tempering,
                                                       9 See Letter from Arnold and Porter, LLP to the         (1) Where the nominal and actual                   painting, varnishing, trimming, cutting,
                                                    Secretary of Commerce, ‘‘Cold-Rolled Steel Flat         measurements vary, a product is within                punching, and/or slitting, or any other
                                                    Products from China: Response to Petitioners’           the scope if application of either the
                                                    Circumvention Allegation,’’ dated October 17, 2016                                                            processing that would not otherwise
                                                    (POSCO Vietnam Submission).                             nominal or actual measurement would                   remove the merchandise from the scope
                                                       10 See Letter from Mowry & Grimson, PLLC and         place it within the scope based on the                of the orders if performed in the country
                                                    Sidley Austin LLP to the Secretary of Commerce,         definitions set forth above, and                      of manufacture of the cold-rolled steel.
                                                    ‘‘Certain Corrosion-Resistant Steel Products from          (2) where the width and thickness
                                                    China—Response to Petitioners’ Circumvention
                                                                                                                                                                     All products that meet the written
                                                    Allegations,’’ dated October 20, 2016.
                                                                                                            vary for a specific product (e.g., the                physical description, and in which the
                                                       11 See Letter from Sandler, Travis, and Rosenberg,   thickness of certain products with non-               chemistry quantities do not exceed any
                                                    P.A. to the Secretary of Commerce, ‘‘Certain            rectangular cross-section, the width of               one of the noted element levels listed
                                                    Corrosion-Resistant Steel Products from the             certain products with nonrectangular
                                                    People’s Republic of China: Response to Request for
                                                                                                                                                                  above, are within the scope of the orders
                                                    Anti-Circumvention Inquiry,’’ dated October 26,
                                                                                                            shape, etc.), the measurement at its                  unless specifically excluded. The
                                                    2016.                                                   greatest width or thickness applies.                  following products are outside of and/
                                                       12 See Letter from Crowell and Moring, LLP to the       Steel products included in the scope               or specifically excluded from the scope
                                                    Secretary of Commerce, ‘‘Certain Corrosion-             of the orders are products in which: (1)              of the orders:
                                                    Resistant and Cold-Rolled Steel Products from the
                                                    People’s Republic of China: Comments Opposing
                                                                                                            Iron predominates, by weight, over each                  • Ball bearing steels; 16
                                                    Petitioners’ Circumvention Allegations,’’ dated         of the other contained elements; (2) the                 • Tool steels; 17
                                                    October 28, 2016.                                       carbon content is 2 percent or less, by
                                                       13 See Letter from Curtis, Mallet-Prevost, Colt &    weight; and (3) none of the elements                     16 Ball bearing steels are defined as steels which
                                                    Mosle, LLP to the Secretary of Commerce,                listed below exceeds the quantity, by                 contain, in addition to iron, each of the following
                                                    ‘‘Opposition to Request for Anti-Circumvention                                                                elements by weight in the amount specified: (i) Not
                                                    Inquiry Certain Corrosion-Resistant Steel Products
                                                                                                            weight, respectively indicated:
                                                                                                                                                                  less than 0.95 nor more than 1.13 percent of carbon;
                                                    and Cold-Rolled Steel Flat Products from the            • 2.50 percent of manganese, or                       (ii) not less than 0.22 nor more than 0.48 percent
                                                    People’s Republic of China,’’ dated October 31,         • 3.30 percent of silicon, or                         of manganese; (iii) none, or not more than 0.03
                                                    2016.
                                                       14 See Letter from Curtis, Mallet-Prevost, Colt &
                                                                                                            • 1.50 percent of copper, or                          percent of sulfur; (iv) none, or not more than 0.03
                                                                                                                                                                  percent of phosphorus; (v) not less than 0.18 nor
                                                    Mosle, LLP to the Secretary of Commerce,                • 1.50 percent of aluminum, or                        more than 0.37 percent of silicon; (vi) not less than
                                                    ‘‘Opposition to Request for Anti-Circumvention          • 1.25 percent of chromium, or                        1.25 nor more than 1.65 percent of chromium; (vii)
                                                    Inquiry Certain Corrosion-Resistant Steel Products      • 0.30 percent of cobalt, or                          none, or not more than 0.28 percent of nickel; (viii)
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    and Cold-Rolled Steel Flat Products from the            • 0.40 percent of lead, or                            none, or not more than 0.38 percent of copper; and
                                                    People’s Republic of China,’’ dated October 31,                                                               (ix) none, or not more than 0.09 percent of
                                                    2016.                                                   • 2.00 percent of nickel, or                          molybdenum.
                                                       15 See the Letter from the Vietnam Competition       • 0.30 percent of tungsten (also called                  17 Tool steels are defined as steels which contain

                                                    Authority to the Secretary of Commerce, ‘‘Certain            wolfram), or                                     the following combinations of elements in the
                                                    Corrosion-Resistant Steel Products from China;          • 0.80 percent of molybdenum, or                      quantity by weight respectively indicated: (i) More
                                                    Certain Cold-Rolled Steel Flat Products from                                                                  than 1.2 percent carbon and more than 10.5 percent
                                                    China—Opposition to Initiation of
                                                                                                            • 0.10 percent of niobium (also called                chromium; or (ii) not less than 0.3 percent carbon
                                                    Anticircumvention Proceedings,’’ dated November              columbium), or                                   and 1.25 percent or more but less than 10.5 percent
                                                    1, 2016.                                                • 0.30 percent of vanadium, or                        chromium; or (iii) not less than 0.85 percent carbon



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                                                                                Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices                                                    81059

                                                      • Silico-manganese steel; 18                              7211.23.1500, 7211.23.2000,                         minor or insignificant; (D) the value of
                                                      • Grain-oriented electrical steels                        7211.23.3000, 7211.23.4500,                         the merchandise produced in the
                                                    (GOES) as defined in the final                              7211.23.6030, 7211.23.6060,                         foreign country to which the AD or CVD
                                                    determination of the U.S. Department of                     7211.23.6075, 7211.23.6085,                         order applies is a significant portion of
                                                    Commerce in Grain-Oriented Electrical                       7211.29.2030, 7211.29.2090,                         the total value of the merchandise
                                                    Steel From Germany, Japan, and                              7211.29.4500, 7211.29.6030,                         exported to the United States; and (E)
                                                    Poland.19                                                   7211.29.6080, 7211.90.0000,                         the administering authority determines
                                                      • Non-Oriented Electrical Steels                          7212.40.1000, 7212.40.5000,                         that action is appropriate to prevent
                                                    (NOES), as defined in the antidumping                       7225.50.6000, 7225.50.8015,                         evasion of such order or finding. As
                                                    orders issued by the U.S. Department of                     7225.50.8085, 7225.99.0090,                         discussed below, Domestic Producers
                                                    Commerce in Non-Oriented Electrical                         7226.92.5000, 7226.92.7050, and                     provided evidence with respect to these
                                                    Steel From the People’s Republic of                         7226.92.8050.                                       criteria.
                                                    China, Germany, Japan, the Republic of                        The products subject to the orders
                                                    Korea, Sweden, and Taiwan.20                                may also enter under the following                  A. Merchandise of the Same Class or
                                                      The products subject to the orders are                    HTSUS numbers: 7210.90.9000,                        Kind
                                                    currently classified in the Harmonized                      7212.50.0000, 7215.10.0010,                           Domestic Producers claim that CRS
                                                    Tariff Schedule of the United States                        7215.10.0080, 7215.50.0016,                         exported to the United States is the
                                                    (HTSUS) under item numbers:                                 7215.50.0018, 7215.50.0020,                         same class or kind as that covered by
                                                    7209.15.0000, 7209.16.0030,                                 7215.50.0061, 7215.50.0063,                         the Orders in these inquiries.21
                                                    7209.16.0060, 7209.16.0070,                                 7215.50.0065, 7215.50.0090,                         Domestic Producers provided evidence
                                                    7209.16.0091, 7209.17.0030,                                 7215.90.5000, 7217.10.1000,                         to show that the merchandise from
                                                    7209.17.0060, 7209.17.0070,                                 7217.10.2000, 7217.10.3000,                         Vietnam enters the United States under
                                                    7209.17.0091, 7209.18.1530,                                 7217.10.7000, 7217.90.1000,                         the same tariff classification as subject
                                                    7209.18.1560, 7209.18.2510,                                 7217.90.5030, 7217.90.5060,                         merchandise.22
                                                    7209.18.2520, 7209.18.2580,                                 7217.90.5090, 7225.19.0000,
                                                    7209.18.6020, 7209.18.6090,                                                                                     B. Completion of Merchandise in a
                                                                                                                7226.19.1000, 7226.19.9000,
                                                    7209.25.0000, 7209.26.0000,                                                                                     Foreign Country
                                                                                                                7226.99.0180, 7228.50.5015,
                                                    7209.27.0000, 7209.28.0000,                                 7228.50.5040, 7228.50.5070,                            Domestic Producers note that section
                                                    7209.90.0000, 7210.70.3000,                                 7228.60.8000, and 7229.90.1000.                     781(b)(l)(B)(ii) of the Act requires that
                                                                                                                  The HTSUS subheadings above are                   ‘‘the Department must also determine
                                                    and 1 percent to 1.8 percent, inclusive, manganese;         provided for convenience and customs                whether, prior to importation into the
                                                    or (iv) 0.9 percent to 1.2 percent, inclusive,                                                                  United States, the merchandise in the
                                                    chromium and 0.9 percent to 1.4 percent, inclusive,
                                                                                                                purposes only. The written description
                                                    molybdenum; or (v) not less than 0.5 percent carbon         of the scope of the orders is dispositive.          third country is completed from
                                                    and not less than 3.5 percent molybdenum; or (vi)                                                               merchandise produced in the country
                                                    not less than 0.5 percent carbon and not less than          Merchandise Subject to the Anti-                    subject to the antidumping or
                                                    5.5 percent tungsten.                                       Circumvention Inquiries                             countervailing duty order.’’ 23 Domestic
                                                       18 Silico-manganese steel is defined as steels
                                                                                                                  These anti-circumvention inquiries                Producers presented evidence showing
                                                    containing by weight: (i) Not more than 0.7 percent
                                                    of carbon; (ii) 0.5 percent or more but not more than       cover CRS exported from Vietnam                     after the publication of the preliminary
                                                    1.9 percent of manganese, and (iii) 0.6 percent or          produced from HRS exported from the                 affirmative CVD determination in
                                                    more but not more than 2.3 percent of silicon.              PRC.                                                December 2015, how the imports of CRS
                                                       19 Grain-Oriented Electrical Steel From Germany,

                                                                                                                Initiation of Anti-Circumvention                    from Vietnam to the United States more
                                                    Japan, and Poland: Final Determinations of Sales at
                                                    Less Than Fair Value and Certain Final Affirmative          Inquiries                                           than tripled than the previous two years
                                                    Determination of Critical Circumstances, 79 FR                                                                  combined. Additionally, Domestic
                                                    42,501, 42,503 (Dep’t of Commerce, July 22, 2014).            Section 781(b)(1) of the Act provides             Producers provide evidence that no
                                                    This determination defines grain-oriented electrical        that the Department may find                        capacity currently exists in Vietnam to
                                                    steel as ‘‘a flat-rolled alloy steel product containing     circumvention of an AD or CVD order
                                                    by weight at least 0.6 percent but not more than 6                                                              produce HRS and, thus, they contend
                                                    percent of silicon, not more than 0.08 percent of           when merchandise of the same class or               any CRS manufactured in Vietnam must
                                                    carbon, not more than 1.0 percent of aluminum, and          kind subject to the order is completed              use imported HRS.24 Domestic
                                                    no other element in an amount that would give the           or assembled in a foreign country other             Producers also provide information
                                                    steel the characteristics of another alloy steel, in        than the country to which the order
                                                    coils or in straight lengths.’’                                                                                 reflecting that imports into the United
                                                       20 Non-Oriented Electrical Steel From the People’s       applies. In conducting an anti-                     States of CRS from the PRC significantly
                                                    Republic of China, Germany, Japan, the Republic of          circumvention inquiry, under section                decreased after the imposition of the
                                                    Korea, Sweden, and Taiwan: Antidumping Duty                 781(b)(1) of the Act, the Department                Orders, and imports into the United
                                                    Orders, 79 FR 71,741, 71,741–42 (Dep’t of                   relies on the following criteria: (A)
                                                    Commerce, Dec. 3, 2014). The orders define NOES                                                                 States of CRS from Vietnam, as well as
                                                    as ‘‘cold-rolled, flat-rolled, alloy steel products,
                                                                                                                Merchandise imported into the United                imports into Vietnam of Chinese HRS,
                                                    whether or not in coils, regardless of width, having        States is of the same class or kind as any          also increased significantly.25 Finally,
                                                    an actual thickness of 0.20 mm or more, in which            merchandise produced in a foreign                   Domestic Producers state that
                                                    the core loss is substantially equal in any direction       country that is the subject of an
                                                    of magnetization in the plane of the material. The                                                              Minmetals, a U.S. trading company,
                                                    term ‘substantially equal’ means that the cross grain
                                                                                                                antidumping or countervailing duty                  currently has arrangements to ship HRS
                                                    direction of core loss is no more than 1.5 times the        order or finding; (B) before importation            from the PRC to Vietnam and convert
                                                                                                                into the United States, such imported
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    straight grain direction (i.e., the rolling direction) of
                                                    core loss. NOES has a magnetic permeability that            merchandise is completed or assembled                  21 See Schagrin Request, at 8; Kelley Drye
                                                    does not exceed 1.65 Tesla when tested at a field
                                                    of 800 A/m (equivalent to 10 Oersteds) along (i.e.,
                                                                                                                in another foreign country from                     Request, at 8. See also sections 781(b)(1)(A)(i) and
                                                                                                                merchandise which is subject to the                 (iii) of the Act.
                                                    parallel to) the rolling direction of the sheet (i.e.,                                                             22 See Kelley Drye Request, at Attachment 1.
                                                    B800 value). NOES contains by weight more than              order or merchandise which is                          23 Id., at 8.
                                                    1.00 percent of silicon but less than 3.5 percent of        produced in the foreign country that is                24 See Schagrin Request, at 10; see also Kelley
                                                    silicon, not more than 0.08 percent of carbon, and
                                                    not more than 1.5 percent of aluminum. NOES has
                                                                                                                subject to the order; (C) the process of            Drye Request, at 8–9.
                                                    a surface oxide coating, to which an insulation             assembly or completion in the foreign                  25 See Schagrin Request, at 11–14; see also Kelley

                                                    coating may be applied.’’                                   country referred to in section (B) is               Drye Request, at 9–10.



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                                                    81060                     Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices

                                                    the HRS to CRS for export to the United                 other sources, rather than developing its              facilities that would allow for
                                                    States with the purpose of evading the                  own technology.31 As an example of the                 production of CRS to support the
                                                    Orders.26                                               importation of technology into Vietnam,                significant increase of imports into the
                                                                                                            Domestic Producers provided evidence                   United States from Vietnam.38
                                                    C. Minor or Insignificant Process
                                                                                                            that ‘‘Dong A, a Vietnamese steel
                                                       Domestic Producers maintain that the                                                                        (5) Value of Processing in Vietnam
                                                                                                            company, recently announced that it is
                                                    process for completing CRS from HRS is                  installing European and Japanese                          Domestic Producers assert that
                                                    minor or insignificant. Under section                   equipment in a new facility that                       producing HRS in the PRC accounts for
                                                    781(b)(2) of the Act, the Department                    includes a pickling line and a cold-                   a large percentage of the total value of
                                                    considers five factors to determine                     rolling mill.’’ 32                                     CRS that is produced in Vietnam using
                                                    whether the process of assembly or                                                                             HRS from the PRC. Using information
                                                    completion is minor or insignificant.                   (3) Nature of Production Process                       from the recent CRS investigation by the
                                                    Domestic Producers allege that the                         According to Domestic Producers, the                ITC, Domestic Producers state that the
                                                    production of HRS in the PRC, which is                  production process undertaken by                       price of HRS is consistently between 80
                                                    subsequently further processed into CRS                 Vietnamese producers of CRS is less                    percent and 90 percent of the value of
                                                    in Vietnam, comprises the majority of                   complex than steelmaking, and minimal                  CRS.39 Using another approach,
                                                    the value associated with the                           in nature.33 Citing to a report from the               focusing solely on the cost of
                                                    merchandise imported into the United                    ITC,34 Domestic Producers describe the                 production in Vietnam, Domestic
                                                    States, and that the processing of HRS                  process to produce HRS as consisting of                Producers estimate that the cost of
                                                    into CRS in Vietnam adds relatively                     three distinct states: Melting and                     manufacture for the CRS operations
                                                    little value.                                           refining, casting molten steel into semi-              value added in Vietnam is less than ten
                                                                                                            finished forms, and hot-rolling the semi-              percent.40 As noted above, Domestic
                                                    (1) Level of Investment
                                                                                                            finished forms into HRS.35 In contrast,                Producers argue that the vast majority of
                                                      Domestic Producers contend that the                   Domestic Producers provide                             the processing and value of CRS comes
                                                    level of investment necessary to                        information indicating that the                        from HRS. The value of processing CRS
                                                    construct a factory which can produce                   production of CRS from HRS involves                    in Vietnam is a minor part of the total
                                                    CRS from HRS in Vietnam is                              only cleaning and pickling, rolling,                   cost of manufacture, unlikely to exceed
                                                    insignificant. In support of its                        annealing, and tempering.36                            20 percent of the total value. Thus, the
                                                    contention, Domestic Producers                                                                                 value of the merchandise produced in
                                                    compare the investment necessary to                     (4) Extent of Production Facilities in                 China is estimated to be at least 80
                                                    install a re-rolling facility with the                  Vietnam                                                percent of the total value of the
                                                    investment necessary to produce HRS                       Domestic Producers provide                           merchandise shipped to the United
                                                    using a fully-integrated production                     information indicating that production                 States.41
                                                    process for melting iron and making                     facilities in Vietnam are more limited                 D. Additional Factors To Consider in
                                                    steel.27 Domestic Producers estimate                    compared to facilities in the PRC.37 As                Determining Whether Action Is
                                                    that the investment necessary to                        noted above, Domestic Producers                        Necessary
                                                    construct a re-rolling facility in Vietnam              maintain that Vietnam has no HRS
                                                    that uses HRS substrate to produce CRS                  capacity. Domestic Producers claim that                   Section 781(b)(3) of the Act directs
                                                    would be between $28 million at $70                     Vietnam has fewer than a dozen large                   the Department to consider additional
                                                    million.28 In contrast, Domestic                        producers of flat steel products.                      factors in determining whether to
                                                    Producers estimate that the investment                  Moreover, Domestic Producers indicate                  include merchandise assembled or
                                                    necessary to construct a fully integrated               that Vietnam has limited production                    completed in a foreign country within
                                                    steel production facility, including a                                                                         the scope of the order, such as: ‘‘(A) the
                                                    blast furnace and basic oxygen furnace,                   31 See Schagrin Request, at 17–18; see also Kelley   pattern of trade, including sourcing
                                                    in the PRC would be between $295                        Drye Request at 13.                                    patterns, (B) whether the manufacturer
                                                    million and $10.1 billion.29 Domestic                     32 See Kelley Drye Request at 13 and Attachment      or exporter of the merchandise . . . is
                                                    Producers also argue that using                         11.                                                    affiliated with the person who uses the
                                                                                                              33 See Schagrin Request, at 18; see also Kelley
                                                    investment levels in the PRC for a basic                                                                       merchandise. . . to assemble or
                                                                                                            Drye Request at 14.
                                                    steel making, including a blast furnace                   34 See Certain Hot-Rolled Steel Flat Products from
                                                                                                                                                                   complete in the foreign country the
                                                    and basic oxygen furnace, as opposed to                 Australia, Brazil, Japan, Korea, the Netherlands,      merchandise that is subsequently
                                                    an electric arc furnace, is appropriate as              Turkey, and The United Kingdom, Inv. Nos. 70t–         imported into the United States, and (C)
                                                    approximately 90 percent of the steel                   TA–545–547 and 73l–TA–1291–1297, USITC                 whether imports into the foreign
                                                                                                            Pub.4570 (October 2015) (Preliminary) at I–19.         country of the merchandise. . . have
                                                    production in the PRC comes from fully                  Domestic Producers attached the report as
                                                    integrated steel mills.30                               Attachment 12.
                                                                                                                                                                   increased after the initiation of the
                                                                                                              35 See Kelley Drye Request, at 14–16 and             investigation which resulted in the
                                                    (2) Level of Research and Development                   Attachment 12.                                         issuance of such order or finding.’’
                                                                                                              36 Id., at 17. Domestic Producers cite to Certain
                                                      Domestic Producers assert that the                                                                           (1) Pattern of Trade
                                                                                                            Hot-Rolled Steel Flat Products from Australia,
                                                    level of research and development in                    Brazil, Japan, Korea, the Netherlands, Turkey, and
                                                    Vietnam is either minimal or non-                                                                                Domestic Producers provide
                                                                                                            The United Kingdom, Inv. Nos. 70t–TA–545–547
                                                    existent. Domestic Producers state that                 and 73l–TA–1291–1297, USITC Pub. 4570
                                                                                                                                                                   information reflecting that at the time
                                                    Vietnam is importing technology from                    (Oct.2015) (Preliminary) at I–21 in support of their   the petitions were filed for the original
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                            description of the CRS production process.             investigations of CRS from the PRC,
                                                      26 See Schagrin Request, at 15 and Exhibit 10.
                                                                                                              37 See Schagrin Request, at 18. Domestic
                                                                                                                                                                   Vietnam was not a source of U.S.
                                                      27 See
                                                                                                            Producers cite to report on the state of the steel     imports of CRS in 2014. Domestic
                                                             Schagrin Request, at 16–17; see also Kelley    industry in Vietnam in support of their statements.
                                                    Drye Request, at 11–13.                                 See Nozomu Kawabata, ‘‘The Vietnamese Iron and
                                                      28 See Schagrin Request, at 17; see also Kelley                                                                38 See Kelley Drye Request, at 17–18.
                                                                                                            Steel Industry in Transition to a Market Economy—
                                                    Drye Request, at 12.                                    Attainments and Challenges,’’ at 14, 20, & 35 (May,      39 See Schagrin Request, at 18–19.
                                                      29 See Schagrin Request, at 16; see also Kelley                                                                40 See Kelley Drye Request, at 18–19 and
                                                                                                            2016) (Tohoku Economics Research Group, Tohoku
                                                    Drye Request, at 12 and Attachment 9.                   University, Discussion Paper No. 349) (Kawabata        Attachment 14.
                                                      30 See Kelley Drye Request, at 12.                    Report), attached as Exhibit 4 to the Request.           41 See Kelley Drye Request, at 19.




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                                                                              Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices                                           81061

                                                    Producers provide information                           Domestic Producers provided sufficient                Producers presented evidence
                                                    reflecting imports of CRS from Vietnam                  information in their requests regarding               indicating that shipments of CRS from
                                                    to the United States through July 2015                  the class or kind of merchandise to                   Vietnam to the United States increased
                                                    were low.42 However, subsequent to the                  support the initiation of these anti-                 since the imposition of the Orders and
                                                    preliminary injury determination by the                 circumvention inquiries.                              that shipments of HRS from the PRC to
                                                    ITC, the final quarter of 2015 saw                         With regard to completion or                       Vietnam also increased since the Orders
                                                    increased imports of CRS from Vietnam                   assembly of merchandise in a foreign                  took effect, further supporting initiation
                                                    to the United States.43 Domestic                        country, pursuant to section 781(b)(1)(B)             of these anti-circumvention inquiries.
                                                    Producers provide information                           of the Act, Domestic Producers also                   Accordingly, we are initiating a formal
                                                    demonstrating that after the                            presented information to the                          anti-circumvention inquiry concerning
                                                    Department’s preliminary affirmative                    Department indicating that the CRS                    the AD and CVD Orders on CRS from
                                                    CVD determination for CRS from the                      exported from Vietnam to the United                   the PRC, pursuant to section 781(b) of
                                                    PRC in December 2015, imports of CRS                    States is produced in Vietnam using                   the Act.
                                                    from Vietnam into the United States                     HRS from the PRC.48 We find that the                     In connection with these anti-
                                                    surged dramatically.44 Domestic                         information presented by Domestic                     circumvention inquiries, in order to
                                                    Producers further provide evidence that                 Producers regarding this criterion                    determine, (1) the extent to which PRC-
                                                    imports of CRS from the PRC to the                      supports its request to initiate these                sourced HRS is further processed into
                                                    United States decreased substantially                   anti-circumvention inquiries.                         CRS in Vietnam before shipment to the
                                                    over the same time period.45 No other                      The Department finds that Domestic                 United States, (2) the extent to which a
                                                    factual information on the record                       Producers sufficiently addressed the                  country-wide finding applicable to all
                                                    contradicts this claim.                                 factors described in section 781(b)(1)(C)             exports might be warranted, as alleged
                                                                                                            and 781(b)(2) of the Act regarding                    by Domestic Producers, and (3) whether
                                                    (2) Affiliation                                         whether the process of assembly or                    the process of turning PRC-sourced HRS
                                                      Domestic Producers have not                           completion of CRS in Vietnam is minor                 into CRS is minor or insignificant, the
                                                    provided any allegation of affiliation                  or insignificant. In particular,                      Department intends to issue
                                                    between producers of HRS in the PRC                     information in Domestic Producers’                    questionnaires to solicit information
                                                    and producers of CRS in Vietnam.                        submission indicates that: (1) The level              from interested parties. The Department
                                                                                                            of investment in re-rolling facilities is             intends to issue questionnaires to solicit
                                                    (3) Increase of HRS Shipments From the                                                                        information from the Vietnamese
                                                                                                            minimal when compared with the level
                                                    PRC to Vietnam After Initiations of the                                                                       producers and exporters concerning
                                                                                                            of investment for basic steel making
                                                    AD and CVD Investigations of CRS From                                                                         their shipments of CRS to the United
                                                                                                            facilities; (2) there is little or no research
                                                    the PRC                                                                                                       States and the origin of the imported
                                                                                                            and development taking place in
                                                       Domestic Producers presented                         Vietnam; (3) the CRS production                       HRS being processed into CRS. A
                                                    evidence indicating that imports of HRS                 processes involve the simple processing               company’s failure to respond
                                                    from the PRC to Vietnam have increased                  of HRS from a country subject to the                  completely to the Department’s requests
                                                    since the initiation of the investigations              Orders; (4) the CRS production facilities             for information may result in the
                                                    of CRS from the PRC.46 No other factual                 in Vietnam are more limited compared                  application of partial or total facts
                                                    information on the record contradicts                   to facilities in the PRC; and (5) the value           available, pursuant to section 776(a) of
                                                    this claim.                                             of the processing performed in Vietnam                the Act, which may include adverse
                                                                                                            is a small proportion of the value of the             inferences, pursuant to section 776(b) of
                                                    Analysis of the Allegations                                                                                   the Act.
                                                                                                            CRS imported into the United States, as
                                                       Based on our analysis of Domestic                    the production of HRS in the PRC                         While we believe sufficient factual
                                                    Producers anti-circumvention                            accounts for 80 to 90 percent of the                  information has been submitted by
                                                    allegations and the information                         value of finished CRS.                                Domestic Producers supporting their
                                                    provided therein, the Department                           With respect to the value of the                   request for inquiries, we do not find that
                                                    determines that anti-circumvention                      merchandise produced in the PRC,                      the record supports the simultaneous
                                                    inquiries of the AD and CVD orders on                   pursuant to section 781(b)(1)(D) of the               issuance of a preliminary ruling. Such
                                                    CRS from the PRC are warranted.                         Act, Domestic Producers relied on                     inquiries are by their nature typically
                                                       With regard to whether the                           published sources, a simulated cost                   complicated and can require
                                                    merchandise from Vietnam is of the                      structure for producing CRS in Vietnam,               information regarding production in
                                                    same class or kind as the merchandise                   and arguments in the ‘‘minor or                       both the country subject to the order
                                                    produced in the PRC, Domestic                           insignificant process’’ portion of its anti-          and the third country completing the
                                                    Producers presented information to the                  circumvention allegation to indicate                  product. As noted above, the
                                                    Department indicating that, pursuant to                 that the value of the key material, HRS,              Department intends to request
                                                    section 781(b)(1)(A) of the Act, the                    produced in the PRC may be significant                additional information regarding the
                                                    merchandise being produced in and/or                    relative to the total value of the CRS                statutory criteria to determine whether
                                                    exported from Vietnam is of the same                    exported to the United States. We find                shipments of CRS from Vietnam are
                                                    class or kind as CRS produced in the                    that this information adequately meets                circumventing the AD and CVD orders
                                                    PRC, which is subject to the Orders.47                  the requirements of this factor, as                   on CRS from the PRC. Thus, with
                                                    Consequently, the Department finds that                 discussed above, for the purposes of                  further development of the record
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                            initiating these anti-circumvention                   required before a preliminary ruling can
                                                      42 See Kelley Drye Request, at 19–20 and
                                                                                                            inquiries.                                            be issued, the Department does not find
                                                    Attachment 1.                                                                                                 it appropriate to issue a preliminary
                                                      43 Id., at 20                                            Finally, with respect to the additional
                                                      44 Id.                                                factors listed under section 781(b)(3) of             ruling at this time.
                                                      45 Id., at 5–6.                                       the Act, we find that Domestic                        Notification to Interested Parties
                                                      46 See Schagrin Request, at 11–14; see also Kelley

                                                    Drye Request, at 21 and Attachment 3.                     48 See Schagrin Request, at 6 and 11–18 and           In accordance with 19 CFR
                                                      47 See Schagrin Request, at 9; see also Kelly Dry     Exhibits 1–2, 4–5, 7 and 13; see also Kelly Dry       351.225(e), the Department finds that
                                                    Request, at 8 and Attachment 1.                         Request, at 8–11 and Attachments 1–5.                 the issue of whether a product is


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                                                    81062                     Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices

                                                    included within the scope of an order                   countervailing duty (‘‘CVD’’) orders on               meeting ASTM A–554 or comparable
                                                    cannot be determined based solely upon                  welded stainless pressure pipe                        domestic or foreign specifications; (2)
                                                    the application and the descriptions of                 (‘‘WSPP’’) from India.                                boiler, heat exchanger, superheater,
                                                    the merchandise. Accordingly, the                       DATES: Effective November 17, 2016.                   refining furnace, feedwater heater, and
                                                    Department will notify by mail all                      FOR FURTHER INFORMATION CONTACT: Alex                 condenser tubing, meeting ASTM A–
                                                    parties on the Department’s scope                       Rosen at (202) 482–7814 or Mandy                      249, ASTM A–688 or comparable
                                                    service list of the initiation of these anti-           Mallot at (202) 482–6430, AD/CVD                      domestic or foreign specifications; and
                                                    circumvention inquiries. In addition, in                Operations, Office III, Enforcement and               (3) specialized tubing, meeting ASTM
                                                    accordance with 19 CFR 351.225(f)(1)(i)                 Compliance, U.S. Department of                        A–269, ASTM A–270 or comparable
                                                    and (ii), in this notice of initiation                  Commerce, 1401 Constitution Avenue                    domestic or foreign specifications.
                                                    issued under 19 CFR 351.225(e), we                                                                              The subject imports are normally
                                                                                                            NW., Washington, DC 20230.
                                                    have included a description of the                                                                            classified in subheadings 7306.40.5005,
                                                                                                            SUPPLEMENTARY INFORMATION:                            7306.40.5040, 7306.40.5062,
                                                    product that is the subject of these anti-
                                                    circumvention inquiries (i.e., CRS that                 Background                                            7306.40.5064, and 7306.40.5085 of the
                                                    contains the characteristics as provided                                                                      Harmonized Tariff Schedule of the
                                                                                                               In accordance with sections 705(d)                 United States (‘‘HTSUS’’). They may
                                                    in the scope of the Orders) and an                      and 735(d) of the Tariff Act of 1930, as
                                                    explanation of the reasons for the                                                                            also enter under HTSUS subheadings
                                                                                                            amended (‘‘Act’’), on September 29,                   7306.40.1010, 7306.40.1015,
                                                    Department’s decision to initiate an                    2016, the Department published its
                                                    anti-circumvention inquiry, as provided                                                                       7306.40.5042, 7306.40.5044,
                                                                                                            affirmative final determination of sales              7306.40.5080, and 7306.40.5090. The
                                                    above.                                                  at less than fair value (‘‘LTFV’’) and its
                                                       In accordance with 19 CFR                                                                                  HTSUS subheadings are provided for
                                                                                                            affirmative final determination that                  convenience and customs purposes
                                                    351.225(l)(2), if the Department issues a               countervailable subsidies are being
                                                    preliminary affirmative determination,                                                                        only; the written description of the
                                                                                                            provided to producers and exporters of                scope of these orders is dispositive.
                                                    we will then instruct U.S. Customs and                  WSPP from India.1 On November 9,
                                                    Border Protection to suspend                            2016, the ITC notified the Department of              Antidumping Duty Order
                                                    liquidation and require a cash deposit of               its final affirmative determination that                 In accordance with sections
                                                    estimated antidumping and                               an industry in the United States is                   735(b)(1)(A)(i) and 735(d) of the Act, the
                                                    countervailing duties, at the applicable                materially injured by reason of LTFV                  ITC has notified the Department of its
                                                    rate, for each unliquidated entry of the                imports and subsidized imports of                     final determination that an industry in
                                                    merchandise at issue, entered or                        WSPP from India, within the meaning of                the United States is materially injured
                                                    withdrawn from warehouse for                            sections 735(b)(1)(A)(i) and                          by reason of imports of WSPP that are
                                                    consumption on or after the date of                     705(b)(1)(A)(i) of the Act.2                          subsidized by the government of India
                                                    initiation of the inquiry. The
                                                                                                            Scope of the Orders                                   and sold in the United States at LTFV.
                                                    Department will establish a schedule for                                                                      Therefore, in accordance with section
                                                    questionnaires and comments on the                        The merchandise covered by these                    735(c)(2) of the Act, we are publishing
                                                    issues. In accordance with section 781(f)               orders is circular welded austenitic                  this antidumping duty order. Because
                                                    of the Act and 19 CFR 351.225(f)(5), the                stainless pressure pipe not greater than              the ITC determined that imports of
                                                    Department intends to issue its final                   14 inches in outside diameter. For                    WSPP from India are materially injuring
                                                    determination within 300 days of the                    purposes of this scope, references to size            a U.S. industry, unliquidated entries of
                                                    date of publication of this initiation.                 are in nominal inches and include all                 such merchandise from India, entered or
                                                       This notice is published in                          products within tolerances allowed by                 withdrawn from warehouse for
                                                    accordance with 19 CFR 351.225(f).                      pipe specifications. This merchandise                 consumption, are subject to the
                                                      Dated: November 4, 2016.                              includes, but is not limited to, the                  assessment of antidumping duties.
                                                    Paul Piquado,                                           American Society for Testing and                         In accordance with section 736(a)(1)
                                                    Assistant Secretary for Enforcement and                 Materials (‘‘ASTM’’) A–312 or ASTM                    of the Act, the Department will direct
                                                    Compliance.                                             A–778 specifications, or comparable                   U.S. Customs and Border Protection
                                                    [FR Doc. 2016–27850 Filed 11–16–16; 8:45 am]            domestic or foreign specifications.                   (‘‘CBP’’) to assess, upon further
                                                    BILLING CODE 3510–DS–P
                                                                                                            ASTM A–358 products are only                          instruction by the Department,
                                                                                                            included when they are produced to                    antidumping duties equal to the amount
                                                                                                            meet ASTM A–312 or ASTM A–778                         by which the normal value of the
                                                    DEPARTMENT OF COMMERCE                                  specifications, or comparable domestic                merchandise exceeds the export price
                                                                                                            or foreign specifications.                            (or constructed export price) of the
                                                    International Trade Administration                        Excluded from the scope are: (1)                    merchandise, for all relevant entries of
                                                                                                            Welded stainless mechanical tubing,                   WSPP from India. Antidumping duties
                                                    [A–533–867, C–533–868]
                                                                                                                                                                  will be assessed on unliquidated entries
                                                    Welded Stainless Pressure Pipe From
                                                                                                              1 See Welded Stainless Pressure Pipe from India:    of WSPP from India entered, or
                                                                                                            Final Determination of Sales at Less Than Fair        withdrawn from warehouse, for
                                                    India: Antidumping Duty and                             Value, 81 FR 66921 (September 29, 2016) (‘‘AD
                                                    Countervailing Duty Orders                              Final Determination’’). See also Countervailing
                                                                                                                                                                  consumption on or after May 10, 2016,
                                                                                                            Duty Investigation of Welded Stainless Pressure       the date of publication of the AD
                                                    AGENCY:    Enforcement and Compliance,                  Pipe from India: Final Affirmative Determination,     Preliminary Determination,3 but will
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    International Trade Administration,                     81 FR 66925 (September 29, 2016) (‘‘CVD Final         not include entries occurring after the
                                                    Department of Commerce.                                 Determination’’).
                                                                                                              2 See Letter to Christian Marsh, Deputy Assistant
                                                                                                                                                                  expiration of the provisional measures
                                                    SUMMARY: Based on affirmative final                     Secretary, from Irving Williamson, Chairman of the    period and before publication of the
                                                    determinations by the Department of                     U.S. International Trade Commission, regarding
                                                    Commerce (‘‘Department’’) and the                       antidumping and countervailing duty investigations      3 See Welded Stainless Pressure Pipe from India:

                                                                                                            concerning imports of welded stainless pressure       Affirmative Preliminary Determination of Sales at
                                                    International Trade Commission                          pipe from India (Investigation Nos 701–TA–548 and     Less Than Fair Value and Postponement of Final
                                                    (‘‘ITC’’), the Department is issuing                    731–TA–1298), dated November 9, 2016 (‘‘ITC           Determination, 81 FR 28824 (May 10, 2016) (‘‘AD
                                                    antidumping duty (‘‘AD’’) and                           Letter’’).                                            Preliminary Determination’’).



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Document Created: 2016-11-17 03:00:38
Document Modified: 2016-11-17 03:00:38
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
DatesEffective November 17, 2016.
ContactJohn K. Drury or Victoria Cho, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0195 or (202) 482-5075, respectively.
FR Citation81 FR 81057 

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