82 FR 40556 - Carbon Steel Butt-Weld Pipe Fittings From the People's Republic of China: Initiation of Anti-Circumvention Inquiry on the Antidumping Duty Order
DEPARTMENT OF COMMERCE
International Trade Administration Federal Register Volume 82, Issue 164 (August 25, 2017)
International Trade Administration
Federal Register Volume 82, Issue 164 (August 25, 2017)
| Page Range | 40556-40560 | |
| FR Document | 2017-18046 |
[Federal Register Volume 82, Number 164 (Friday, August 25, 2017)] [Notices] [Pages 40556-40560] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-18046] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-570-814] Carbon Steel Butt-Weld Pipe Fittings From the People's Republic of China: Initiation of Anti-Circumvention Inquiry on the Antidumping Duty Order AGENCY: Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY: In response to requests from Tube Forgings of America, Inc. (TFA), Mills Iron Works, Inc. (Mills), and Hackney Ladish, Inc. (Hackney), (collectively, the petitioners), the U.S. Department of Commerce (the Department) is initiating an anti-circumvention inquiry. In this inquiry, the Department will determine whether certain imports of carbon steel butt-weld pipe fittings (butt-weld pipe fittings) into the United States, exported from Malaysia, which were completed in Malaysia using finished or unfinished butt-weld pipe fittings sourced from the People's Republic of China (PRC), are circumventing the antidumping duty order on butt-weld pipe fittings from the PRC. DATES: Applicable August 25, 2017. FOR FURTHER INFORMATION CONTACT: Julia Hancock at (202) 482-1394, AD/ CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230. SUPPLEMENTARY INFORMATION: On July 6, 1992, the Department issued the Order on imports of butt-weld pipe fittings from the PRC.\1\ Additionally, on March 31, 1994, the Department issued the affirmative final determination finding that imports into the United States of pipe fittings that were finished in Thailand from unfinished pipe fittings produced in the PRC constituted circumvention of the Order within the meaning of section 781(b) of the Tariff Act of 1930, as amended (the Act).\2\ The Department applied this finding of circumvention to all imports of butt-weld pipe fittings from Thailand, regardless of manufacturer/producer, unless accompanied by a certification stating that such pipe fittings have not been produced from unfinished PRC pipe fittings.\3\ --------------------------------------------------------------------------- \1\ See Antidumping Duty Order and Amendment to the Final Determination of Sales at Less Than Fair Value; Certain Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China, 57 FR 29702 (July 6, 1992) (Order). \2\ See Certain Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China; Affirmative Final Determination of Circumvention of Antidumping Duty Order, 59 FR 15155 (March 31, 1994) (Final Determination of Circumvention 1994). \3\ Id., at 15158, 15159. --------------------------------------------------------------------------- On May 22, 2017, the petitioners, pursuant to section 781(b) of the Act and 19 CFR 351.225(h), submitted a properly filed request for the Department to initiate an anti-circumvention inquiry to determine whether certain imports of butt-weld pipe fittings which were completed in Malaysia using finished or unfinished butt-weld pipe fittings sourced from the PRC are circumventing the Order.\4\ Specifically, the petitioners allege that certain imports of butt-weld pipe fittings sourced from unfinished or finished butt-weld pipe fittings from the PRC have undergone minor finishing processes, or were simply marked with ``Malaysia'' as the country of origin, in Malaysia, before export to the United States. The petitioners request that the Department treat all butt-weld pipe fittings imported from Malaysia, regardless of producer or exporter, as subject merchandise under the scope of the Order and impose cash deposit requirements for estimated antidumping duties on all imports of butt-weld pipe fittings from Malaysia.\5\ In the alternative to an anti-circumvention inquiry, the petitioners requested that we initiate and issue a preliminary scope ruling that certain imports of butt-weld pipe fittings which were completed in Malaysia using finished or unfinished butt-weld pipe fittings sourced from the PRC are covered by the scope of the Order, pursuant to 19 CFR 351.225(k).\6\ --------------------------------------------------------------------------- \4\ See Letter from the petitioners to the Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China; Request for Circumvention Ruling to Section 781(b) of the Tariff Act of 1930,'' dated May 22, 2017 (the petitioners' Request). \5\ See the petitioners' Request at 26-30. \6\ Id., at 28-9. --------------------------------------------------------------------------- On May 26, 2017, we received comments objecting to the allegations made by the petitioners from Pantech Steel Industries SDN Ph.D. (Pantech).\7\ Also, on June 14, 2017, we received comments objecting to the allegations made by the petitioners from Solidbend Fittings & Flanges Sdn. Bhd. (Solidbend).\8\ On June 22, 2017, we received rebuttal comments from the petitioners regarding Solidbend's comments.\9\ Additionally, on July 21, 2017, we received comments objecting to the allegations made by the petitioners from Arah Dagang Sdn Bhd (Arah Dagang).\10\ --------------------------------------------------------------------------- \7\ See Letter from Pantech to the Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China: Response to Request for Anti-Circumvention Inquiry,'' dated May 26, 2017). \8\ See Letter from Solidbend, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China Anti-Circumvention Inquiry (Third-Country Assembly Malaysia),'' dated June 14, 2017. \9\ See Letter from the petitioners to the Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China; Anti-Circumvention Inquiry (Third Country Assembly, Malaysia); Petitioners' Response to Objections of Solidbend Fittings & Flanges,'' dated June 22, 2017 (the petitioners'' Objection Comments). \10\ See Letter from Arah Dagang to the Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from China: Response to Request for Anti-Circumvention Inquiry,'' dated July 21, 2017. --------------------------------------------------------------------------- On August 8, 2017, we requested a list of all known producers and exporters of butt-weld pipe fittings in Malaysia from the petitioners, and on August 10, 2017, the petitioners submitted their response.\11\ Additionally, on August 14, [[Page 40557]] 2017, and August 18, 2017, we received additional comments from Solidbend and Pantech, respectively, opposing the initiation of an anti-circumvention inquiry based on the petitioners' circumvention allegation.12 13 --------------------------------------------------------------------------- \11\ See Letter from Paul Walker, Program Manager, to Tube Forgings of America, Mills Iron Works, Inc., and Hackney Ladish, Inc, ``Request for Producers and Exporters from Malaysia: Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China,'' dated August 8, 2017; and Letter from the petitioners to Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from The People's Republic of China; A-570-814; Anticircumvention Inquiry (Third Country Assembly, Malaysia); Petitioners' Response to the Department's August 8, 2017 Letter,'' dated August 10, 2017. \12\ See Letter from Solidbend, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China Anti-Circumvention Inquiry (Third-Country Assembly Malaysia),'' dated August 14, 2017; and Letter from Pantech to the Secretary of Commerce, ``Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China: Response to Petitioners' August 10, 2017, Letter Identify,'' dated August 16, 2017. \13\ After consideration of the comments filed by interested parties in opposition to the initiation of the petitioners' circumvention allegation, the Department will address the arguments and factual information presented in the comments during the course of this anti-circumvention inquiry. --------------------------------------------------------------------------- Scope of the Order The merchandise covered by the order consists of certain carbon steel butt-weld pipe fittings, having an inside diameter of less than 14 inches, imported in either finished or unfinished form. These formed or forged pipe fittings are used to join sections in piping systems where conditions require permanent, welded connections, as distinguished from fittings based on other fastening methods (e.g., threaded, grooved, or bolted fittings).\14\ Carbon steel butt-weld pipe fittings are currently classified under subheading 7307.93.30 of the HTSUS. The HTSUS subheading is provided for convenience and customs purposes. The written product description remains dispositive. --------------------------------------------------------------------------- \14\ See Order. --------------------------------------------------------------------------- Determination To Not Initiate a Scope Proceeding As noted above, the petitioners have requested the Department initiate either a scope proceeding to clarify whether the scope of the Order on butt-weld pipe fittings includes the merchandise in question pursuant to 19 CFR 351.225(k) or an anti-circumvention proceeding pursuant to section 781(b) of the Act and 19 CFR 351.225(h). In the instant case, although the petitioners have provided substantial record evidence which may support the initiation of either type of inquiry, the Department has concluded that the issues raised by the parties are better addressed in the context of an anti-circumvention proceeding pursuant to section 781(b) of the Act and 19 CFR 351.225(h).\15\ As a result of this determination, the Department will not initiate a scope proceeding pursuant to 19 CFR 351.225(k) at this time. --------------------------------------------------------------------------- \15\ As such, the remainder of this notice will focus on the statutory criteria for the initiation of an anti-circumvention inquiry, as defined in section 781(b) of the Act. See also the Analysis section of this notice, below, for the full discussion of the Department's determination to initiate an anti-circumvention inquiry pursuant to section 781(b) of the Act and 19 CFR 351.225(h). --------------------------------------------------------------------------- Merchandise Subject to the Anti-Circumvention Inquiry This anti-circumvention inquiry covers imports of butt-weld pipe fittings sourced from unfinished or finished butt-weld pipe fittings from the PRC that have undergone minor finishing processes, or were simply marked with ``Malaysia'' as the country of origin, in Malaysia, before export to the United States. Initiation of Anti-Circumvention Inquiry Section 781(b)(1) of the Act provides that the Department may find circumvention of an antidumping or countervailing duty 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 will rely on the following criteria: (A) The 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 antidumping or countervailing duty order applies is a significant portion of the total value of the merchandise exported to the United States; and (E) the administering authority determines that action is appropriate to prevent evasion of such order or finding. As discussed below, the petitioners provided evidence with respect to these criteria. A. Merchandise of the Same Class or Kind The petitioners state that the butt-weld pipe fittings exported to the United States from Malaysia are the same class or kind as the butt- weld pipe fittings covered by the Order.\16\ The petitioners assert that merchandise subject to the Order is comprised of butt-weld pipe fittings ``{i{time} mported in either finished or unfinished form.'' \17\ According to the petitioners, the language of the scope establishes that, once the fitting has been formed, either in finished or unfinished form, regardless of any finishing process occurring in Malaysia, such merchandise is subject to the Order.\18\ Additionally, the petitioners also provided affidavits, as well as an email from a Malaysian manufacturer, Globefit Manufacturing (Globefit), indicating that Malaysian exporters and producers are exporting merchandise identical to that which is subject to the Order.\19\ Since the merchandise being imported into the United States from Malaysia is physically identical to the subject merchandise from the PRC, pursuant to section 781(b)(1)(A) of the Act, the petitioners state that the butt-weld pipe fittings are of the same class or kind of merchandise as the butt-weld pipe fittings subject to the Order. --------------------------------------------------------------------------- \16\ See the petitioners' Request at 9-10. \17\ Id., at 9. \18\ Id., at 10; Order. \19\ Id., at 10 and Attachments 1 and 2. --------------------------------------------------------------------------- B. Completion of Merchandise in a Foreign Country Section 781(b)(1)(B)(ii) of the Act requires the Department to determine whether, ``before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which is produced in the foreign country with respect to which such order or finding applies.'' The petitioners presented evidence demonstrating how butt-weld pipe fittings are completed in Malaysia through finishing or simply marking with ``Malaysia'' as the country-of-origin, from finished or unfinished butt-weld pipe fittings manufactured and imported from the PRC.\20\ Additionally, the petitioners provided evidence that there is very little production of butt-weld pipe fittings in Malaysia and that most Malaysian producers have converted their manufacturing operations to trading warehouses focusing on exports to the United States by sourcing butt-weld pipe fittings from the PRC, Taiwan, and South Korea.\21\ The petitioners submitted evidence that the capacity to produce butt-weld pipe fittings significantly decreased and, thus, the few remaining Malaysian manufacturers must use imported finished or unfinished butt- weld pipe [[Page 40558]] fittings from the PRC, which then undergo only minor finishing or are simply stamped with ``Malaysia'' as the country-of-origin.\22\ As support, the petitioners provided an affidavit and email documenting that a Malaysian manufacturer, Globefit, had arrangements to purchase unfinished fittings with a PRC butt-weld pipe fitting manufacturer and finish the fittings, which would be stamped with ``Malaysia'' as the country-of-origin along with a certificate, for export to the United States with the purpose of evading the Order.\23\ --------------------------------------------------------------------------- \20\ Id., at 11, 12, and 15 and Attachments 1 and 2. \21\ Id. \22\ Id. \23\ Id. --------------------------------------------------------------------------- C. Minor or Insignificant Process Under section 781(b)(2) of the Act, the Department is required to consider five factors to determine whether the process of assembly or completion is minor or insignificant. The petitioners allege that the production of butt-weld pipe fittings in the PRC, which subsequently undergoes only minor finishing processes, or are simply marked with ``Malaysia'' as the country-of-origin, comprises most the value associated with the merchandise imported from Malaysia into the United States, and that the processing occurring in Malaysia adds relatively little to the overall value of the finished butt-weld pipe fittings.\24\ --------------------------------------------------------------------------- \24\ Id., at 17. --------------------------------------------------------------------------- (1) Level of Investment The petitioners do not have access to the actual level of investment for manufacturing butt-weld pipe fittings in Malaysia.\25\ Accordingly, the petitioners provided an affidavit indicating that Malaysian manufacturers of butt-weld pipe fittings have switched their operations from manufacturing to import/export trading and, thus, the level of investment to manufacture butt-weld pipe fittings in Malaysia declined and is minimal.\26\ In support of their argument that the level of investment in Malaysia is minimal, the petitioners provided an affidavit from TFA asserting that the cost in equipment to cut, heat, and form seamless pipe into rough fittings is substantially higher than the cost in equipment necessary to only perform the finishing steps for the finished butt-weld pipe fittings, which comprises approximately less than twenty percent of the total cost.\27\ Moreover, the petitioners submitted evidence that the level of investment to merely stamp the butt-weld pipe fittings with ``Malaysia'' as the country-of- origin accounts for relatively little of the total cost of equipment needed to complete the full integrated production of a finished butt- weld pipe fitting.\28\ While the investment costs of a U.S. producer are not identical to those of a PRC or Malaysian producer, the petitioners argue, based on their own experience, that the investment costs of equipment for each production step would be the same relative to the total equipment cost regardless of the location of the producer.\29\ --------------------------------------------------------------------------- \25\ Id. \26\ Id., at 17 and Attachment 2. \27\ Id., at 18 and Attachment 3. \28\ Id. \29\ Id. --------------------------------------------------------------------------- (2) Level of Research and Development The petitioners assert that butt-weld pipe fittings are a technologically mature product and that there has been no significant advancement in the product or its production for decades.\30\ As such, the level of research and development to produce butt-weld pipe fittings is minimal to non-existent.\31\ --------------------------------------------------------------------------- \30\ Id., at 19 (citing to Carbon Steel Butt-Weld Pipe Fittings from Brazil, China, Japan, Taiwan, and Thailand, Inv. Nos. 731-TA- 308-310 and 520-521, USITC Pub. 4628 (August 2016) (Fourth Sunset Review) at I-3). \31\ Id. --------------------------------------------------------------------------- (3) Nature of Production Process in Malaysia According to the petitioners, the additional processing undertaken by Malaysian producers of butt-weld pipe fittings is minimal.\32\ Regardless of whether butt-weld pipe fittings exported from the PRC to Malaysia are in finished or unfinished forms, the production steps performed are minor, according to the petitioners.\33\ Conversely, the manufacturing process to produce butt-weld pipe fittings in the PRC from the beginning of the production process is much more complex. Specifically, the manufacturing process for butt-weld pipe fittings consists of three production phases: (1) The seamless carbon steel pipe is transformed into a rough shape of an elbow, tee, etc., through a cold- or hot-forming process that produces the rough pipe fitting; (2) then, the rough pipe fitting goes through a reforming or sizing process to ensure that the fitting will match the pipe to which it is to be welded; and (3) the final stage that produces the finished butt-weld pipe fitting includes shot blasting or cleaning, machine beveling of the fitting, boring and tapering its interior, grinding, die stamping, and painting.\34\ In contrast, the processing of unfinished forms into a finished butt-weld pipe fitting, which is performed in Malaysia, only involves the third-step of the production process for butt-weld pipe fittings.\35\ As a consequence, because the production process is so minimal in Malaysia and unfinished fittings are of the same class or kind of merchandise as the finished butt-weld pipe fittings, the petitioners maintain that the finished butt-weld pipe fittings produced in Malaysia from finished or unfinished butt-weld pipe fittings exported from the PRC are subject to the Order. --------------------------------------------------------------------------- \32\ Id., at 19. \33\ Id. \34\ Id., at 16 (citing to Fourth Sunset Review at I-3 and I-6). \35\ Id., at 19 and Attachment 2. --------------------------------------------------------------------------- (4) Extent of Production in Malaysia The petitioners argue that production facilities in Malaysia are more limited compared to facilities in the PRC.\36\ This is because Malaysian manufacturers primarily have shifted their business model from manufacturing to trading and, thus, the production capacity in Malaysia is significantly smaller than it may have been in prior years, as identified in the petitioners' submitted affidavit.\37\ Moreover, the petitioners cite information indicating that the production facilities in Malaysia for butt-weld pipe fittings are limited to finishing operations, and, in some instances, limited to only stamping butt-weld pipe fittings with a ``Malaysia'' country-of-origin mark.\38\ --------------------------------------------------------------------------- \36\ Id. at 20. \37\ Id., at 20 and Attachment 2. \38\ Id. --------------------------------------------------------------------------- (5) Value of Processing in Malaysia The petitioners assert that the production of butt-weld pipe fittings in the PRC accounts for a large percentage of the total value of the finished butt-weld pipe fittings that are produced in Malaysia.\39\ Using information provided in an affidavit from TFA, the petitioners posit that the price of unfinished or finished butt-weld pipe fittings is between approximately 80 percent to 100 percent of the price of finished butt-weld pipe fittings.\40\ Thus, the value-added in Malaysia by either just finishing the unfinished butt-weld pipe fittings or merely adding the ``Malaysia'' country-of-origin marking ranges from an estimated 15 percent to a considerably lesser value added. Thus, the petitioners maintain that the completion activities in Malaysia add very little to the finished butt-weld pipe fittings exported to the United States from butt-weld pipe fittings sourced from the PRC.\41\ This conclusion is comparable to the little amount of value added by finishing operations [[Page 40559]] performed in Thailand on butt-weld pipe fittings sourced from the PRC in the Final Determination of Circumvention 1994.\42\ --------------------------------------------------------------------------- \39\ Id., at 21 and Attachment 3. \40\ Id. \41\ Id. \42\ Id. --------------------------------------------------------------------------- D. Value of Merchandise Produced in the PRC The petitioners argue that the evidence, as noted above, in their anti-circumvention request clearly supports their position that the value of unfinished and finished butt-weld pipe fittings produced in the PRC, and then finished or marked with a Malaysian country-origin mark, represents a significant portion of the total value of the merchandise exported to the United States, as measured by a percentage of the total cost of manufacture.\43\ --------------------------------------------------------------------------- \43\ Id., at 22. --------------------------------------------------------------------------- E. Additional Factors To Consider in Determining Whether Inquiry in Warranted 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 in the United States, and (C) whether imports into the foreign country of the merchandise . . . have increased after initiation of the investigation which resulted in the issuance of such order or finding.'' (1) Pattern of Trade The petitioners state that the record evidence demonstrates that, since the imposition of the Order, a pattern of trade illustrates circumvention between the levels of imports for butt-weld pipe fittings between the PRC, Malaysia, and the United States.\44\ Publicly- available import data show that PRC-origin imports of butt-weld pipe fittings into Malaysia increased significantly in recent years, and a steady increase in exports from Malaysia to the United States since the imposition of the Order.\45\ Also, between 2010 and 2015, publicly- available import data show a marked increase of PRC-origin butt-weld pipe fittings into Malaysia coincides with a decline in volume of exports from the PRC to the United States.\46\ Additionally, the petitioners submit that the record evidence shows that, while butt-weld pipe fittings exported from the PRC to the United States declined between 2010 and 2015, butt-weld pipe fittings exported from Malaysia to the United States increased steadily at the same time.\47\ No other factual information on the record contradicts this claim. --------------------------------------------------------------------------- \44\ Id. at 23. \45\ Id., at 23 and Attachment 4. The petitioners stated that all imports of butt-weld pipe fittings from the PRC into Malaysia, the PRC into the United States, and Malaysia into the United States declined in 2016, but this was due to the substantial decline in oil prices globally and this decline is not an indication that circumvention of the Order through Malaysia ceased, which is further supported by the Fourth Sunset Review. Id., at 24-25 at footnote 59; Carbon Steel Butt-Weld Pipe Fittings from Brazil, China, Japan, Taiwan, and Thailand, Inv. Nos. 731-TA-308-310 and 520-21, USITC Pub. 4628 (August 2016) (Fourth Sunset Review) at 6 and I-6. \46\ See the petitioners' Request at 24-25 and Attachment 4. \47\ Id. --------------------------------------------------------------------------- (2) Affiliation The petitioners provided no information regarding the affiliation between PRC producers of unfinished and finished butt-weld pipe fittings, and Malaysian producers of butt-weld pipe fittings that undergo only minor finishing processes, or are simply marked with ``Malaysia'' as the country-of-origin. (3) Subsequent Import Volume The petitioners presented evidence indicating that shipments of butt-weld pipe fittings from the PRC to Malaysia steadily increased since imposition of the Order, whereas shipments of butt-weld pipe fittings from the PRC to the United States steadily declined.\48\ No other factual information contradicts this claim. --------------------------------------------------------------------------- \48\ Id., at 25-6 and Attachment 4. --------------------------------------------------------------------------- Analysis of the Allegation Based on our analysis of the petitioners' anti-circumvention inquiry allegation, the Department determines that the petitioners have satisfied the criteria under section 781(b)(1) of the Act to warrant the initiation of an anti-circumvention inquiry of the Order on butt- weld pipe fittings from the PRC. With regard to whether the merchandise from Malaysia is of the same class or kind as the merchandise produced in the PRC, the petitioners 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 Malaysia may be of the same class or kind as butt-weld pipe fittings produced in the PRC, which is subject to the Order.\49\ Consequently, the Department finds that the petitioners provided sufficient information in their request regarding the class or kind of merchandise to support the initiation of this anti-circumvention inquiry. --------------------------------------------------------------------------- \49\ Id. at 9-10. --------------------------------------------------------------------------- With regard to completion or assembly of merchandise in a foreign country, pursuant to section 781(b)(1)(B) of the Act, the petitioners also presented information to the Department indicating that the butt- weld pipe fittings exported from Malaysia to the United States are produced in Malaysia using butt-weld pipe fittings from the PRC, which account for a significant portion of the total costs related to the production of butt-weld pipe fittings.\50\ We find that the information presented by the petitioners regarding this criterion supports their request to initiate this anti-circumvention inquiry. --------------------------------------------------------------------------- \50\ Id., at 21-2 and Attachment 3. --------------------------------------------------------------------------- The Department finds that the petitioners sufficiently addressed the factors described in section 781(b)(1)(C) and 781(b)(2) of the Act regarding whether the assembly or completion of butt-weld pipe fittings in Malaysia is minor or insignificant. In particular, the petitioners' submission asserts that: (1) The level of investment of butt-weld pipe fittings is minimal in Malaysia; (2) research and development is not taking place in Malaysia; (3) the production process involves only finishing or simply stamping with a Malaysian country-of-origin mark on butt-weld pipe fittings from a country subject to the Order; (4) the production facilities in Malaysia are more limited compared to facilities in the PRC; and (5) the value of the processing performed in Malaysia is minimal, as the production of butt-weld pipe fittings in the PRC accounts for approximately 80 percent to 100 percent of the value of finished butt-weld pipe fittings.\51\ --------------------------------------------------------------------------- \51\ See discussion of these five factors above. --------------------------------------------------------------------------- With respect to the value of the merchandise produced in the PRC, pursuant to section 78l(b)(l)(D) of the Act, the petitioners relied on one of their member's information and arguments in the ``minor or insignificant process'' portion of their anti-circumvention allegation to indicate that the value of the unfinished or finished butt-weld pipe fittings, produced in the PRC, may be significant relative to the total value of the finished butt-weld pipe fittings exported from Malaysia to the United States.\52\ We find that this information adequately meets the requirements of this factor, as discussed above, for the purposes of [[Page 40560]] initiating this anticircumvention inquiry. --------------------------------------------------------------------------- \52\ See the petitioners' Request at 10-23 and Attachments 1, 2, and 3. --------------------------------------------------------------------------- With respect to the additional factors listed under section 781(b)(3) of the Act, we find that the petitioners presented evidence indicating that shipments of butt-weld pipe fittings from Malaysia to the United States increased since the imposition of the Order and that shipments of butt-weld pipe fittings from the PRC to Malaysia also increased since the Order took effect, further supporting initiation of this anti-circumvention inquiry.\53\ --------------------------------------------------------------------------- \53\ See the petitioners' Request at 23-5 and Attachment 4. --------------------------------------------------------------------------- Accordingly, we are initiating a formal anti-circumvention inquiry concerning the Order on butt-weld pipe fittings from the PRC, pursuant to section 781(b) of the Act. In connection with this anti-circumvention inquiry, in order to determine: (1) The extent to which PRC-sourced unfinished or finished butt-weld pipe fittings is further processed into butt-weld pipe fittings in Malaysia 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 the petitioners; and (3) whether the process of turning PRC-sourced unfinished or finished butt-weld pipe fittings into finished butt-weld pipe fittings processed in Malaysia is minor or insignificant, the Department will issue questionnaires to Malaysian producers and exporters of butt-weld pipe fittings to the United States. The Department will issue questionnaires to solicit information from the Malaysian producers and exporters concerning their shipments of butt-weld pipe fittings to the United States and the origin of the imported unfinished or finished butt-weld pipe fittings being processed into butt-weld pipe fittings. Companies failing to respond completely and timely to the Department's questionnaire may be deemed uncooperative and an adverse inference may be applied in determining whether such companies are circumventing the Order. See section 776 of the Act. Finally, while we believe sufficient factual information has been submitted by the petitioners supporting their request for an inquiry, we do not find that the record supports the simultaneous issuance of a preliminary ruling. Such inquiries are by their nature complicated and require additional 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 butt-weld pipe fittings from Malaysia are circumventing the Order on butt-weld pipe fittings from the PRC. Thus, further development of the record is required before a preliminary ruling can be issued. Notification to Interested Parties In accordance with 19 CFR 351.225(e), the Department finds that the issue of whether a product is included within the scope of any 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 anti-circumvention inquiries. Additionally, 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 included a description of the product that is the subject of this anti-circumvention inquiry (i.e., butt-weld pipe fittings that contain the characteristics as provided in the scope of the Order), and an explanation of the reasons for the Department's decision to initiate this anti-circumvention inquiry, as provided above. In accordance with 19 CFR 351.225(1)(2), if the Department issues an affirmative preliminary determination, we will then instruct U.S. Customs and Border Protection to suspend liquidation and require cash deposits of estimated antidumping duties, at the applicable rates, 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 for this inquiry. 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 notice. This notice is published in accordance with 19 CFR 351.225(f). Dated: August 21, 2017. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. [FR Doc. 2017-18046 Filed 8-24-17; 8:45 am] BILLING CODE 3510-DS-P
![40556 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices
shall remain in effect until further Malaysia using finished or unfinished States. The petitioners request that the
notice. butt-weld pipe fittings sourced from the Department treat all butt-weld pipe
People’s Republic of China (PRC), are fittings imported from Malaysia,
Administrative Protective Order
circumventing the antidumping duty regardless of producer or exporter, as
This notice also serves as a reminder order on butt-weld pipe fittings from the subject merchandise under the scope of
to parties subject to administrative PRC. the Order and impose cash deposit
protective orders (APO) of their DATES: Applicable August 25, 2017. requirements for estimated antidumping
responsibility concerning the return or FOR FURTHER INFORMATION CONTACT: Julia duties on all imports of butt-weld pipe
destruction of proprietary information Hancock at (202) 482–1394, AD/CVD fittings from Malaysia.5 In the
disclosed under APO in accordance Operations, Enforcement and alternative to an anti-circumvention
with 19 CFR 351.305(a)(3), which Compliance, U.S. Department of inquiry, the petitioners requested that
continues to govern business Commerce, 1401 Constitution Avenue we initiate and issue a preliminary
proprietary information in this segment NW., Washington, DC 20230. scope ruling that certain imports of butt-
of the proceeding. Timely written SUPPLEMENTARY INFORMATION: On July 6, weld pipe fittings which were
notification of the return/destruction of 1992, the Department issued the Order completed in Malaysia using finished or
APO materials, or conversion to judicial on imports of butt-weld pipe fittings unfinished butt-weld pipe fittings
protective order, is hereby requested. from the PRC.1 Additionally, on March sourced from the PRC are covered by the
Failure to comply with the regulations 31, 1994, the Department issued the scope of the Order, pursuant to 19 CFR
and the terms of an APO is a affirmative final determination finding 351.225(k).6
sanctionable violation. that imports into the United States of On May 26, 2017, we received
Disclosure pipe fittings that were finished in comments objecting to the allegations
Thailand from unfinished pipe fittings made by the petitioners from Pantech
We will disclose the calculations Steel Industries SDN Ph.D. (Pantech).7
performed for these amended final produced in the PRC constituted
circumvention of the Order within the Also, on June 14, 2017, we received
results to interested parties within five comments objecting to the allegations
business days of the date of the meaning of section 781(b) of the Tariff
Act of 1930, as amended (the Act).2 The made by the petitioners from Solidbend
publication of this notice in accordance Fittings & Flanges Sdn. Bhd.
with 19 CFR 351.224(b). Department applied this finding of
circumvention to all imports of butt- (Solidbend).8 On June 22, 2017, we
We are issuing and publishing these received rebuttal comments from the
results in accordance with sections weld pipe fittings from Thailand,
regardless of manufacturer/producer, petitioners regarding Solidbend’s
751(h) and 777(i)(1) of the Act, and 19 comments.9 Additionally, on July 21,
CFR 351.224(e). unless accompanied by a certification
stating that such pipe fittings have not 2017, we received comments objecting
Dated: August 21, 2017. been produced from unfinished PRC to the allegations made by the
Gary Taverman, pipe fittings.3 petitioners from Arah Dagang Sdn Bhd
Deputy Assistant Secretary for Antidumping On May 22, 2017, the petitioners, (Arah Dagang).10
and Countervailing Duty Operations, pursuant to section 781(b) of the Act On August 8, 2017, we requested a list
performing the non-exclusive functions and and 19 CFR 351.225(h), submitted a of all known producers and exporters of
duties of the Assistant Secretary for properly filed request for the butt-weld pipe fittings in Malaysia from
Enforcement and Compliance. the petitioners, and on August 10, 2017,
Department to initiate an anti-
[FR Doc. 2017–18045 Filed 8–24–17; 8:45 am]
circumvention inquiry to determine the petitioners submitted their
BILLING CODE 3510–DS–P whether certain imports of butt-weld response.11 Additionally, on August 14,
pipe fittings which were completed in
5 See the petitioners’ Request at 26–30.
Malaysia using finished or unfinished
DEPARTMENT OF COMMERCE butt-weld pipe fittings sourced from the
6 Id., at 28–9.
7 See Letter from Pantech to the Secretary of
International Trade Administration PRC are circumventing the Order.4 Commerce, ‘‘Carbon Steel Butt-Weld Pipe Fittings
Specifically, the petitioners allege that from the People’s Republic of China: Response to
[A–570–814] certain imports of butt-weld pipe Request for Anti-Circumvention Inquiry,’’ dated
May 26, 2017).
fittings sourced from unfinished or
Carbon Steel Butt-Weld Pipe Fittings finished butt-weld pipe fittings from the
8 See Letter from Solidbend, ‘‘Carbon Steel Butt-
From the People’s Republic of China: Weld Pipe Fittings from the People’s Republic of
PRC have undergone minor finishing China Anti-Circumvention Inquiry (Third-Country
Initiation of Anti-Circumvention Inquiry processes, or were simply marked with Assembly Malaysia),’’ dated June 14, 2017.
on the Antidumping Duty Order ‘‘Malaysia’’ as the country of origin, in 9 See Letter from the petitioners to the Secretary
of Commerce, ‘‘Carbon Steel Butt-Weld Pipe
AGENCY: Enforcement and Compliance, Malaysia, before export to the United Fittings from the People’s Republic of China; Anti-
International Trade Administration, Circumvention Inquiry (Third Country Assembly,
1 See Antidumping Duty Order and Amendment
Department of Commerce. Malaysia); Petitioners’ Response to Objections of
SUMMARY: In response to requests from to the Final Determination of Sales at Less Than Solidbend Fittings & Flanges,’’ dated June 22, 2017
Fair Value; Certain Carbon Steel Butt-Weld Pipe (the petitioners’’ Objection Comments).
Tube Forgings of America, Inc. (TFA), Fittings from the People’s Republic of China, 57 FR 10 See Letter from Arah Dagang to the Secretary
Mills Iron Works, Inc. (Mills), and 29702 (July 6, 1992) (Order). of Commerce, ‘‘Carbon Steel Butt-Weld Pipe
Hackney Ladish, Inc. (Hackney), 2 See Certain Carbon Steel Butt-Weld Pipe Fittings
Fittings from China: Response to Request for Anti-
(collectively, the petitioners), the U.S. from the People’s Republic of China; Affirmative Circumvention Inquiry,’’ dated July 21, 2017.
Final Determination of Circumvention of 11 See Letter from Paul Walker, Program Manager,
Department of Commerce (the
sradovich on DSK3GMQ082PROD with NOTICES
Antidumping Duty Order, 59 FR 15155 (March 31, to Tube Forgings of America, Mills Iron Works, Inc.,
Department) is initiating an anti- 1994) (Final Determination of Circumvention 1994). and Hackney Ladish, Inc, ‘‘Request for Producers
circumvention inquiry. In this inquiry, 3 Id., at 15158, 15159.
and Exporters from Malaysia: Carbon Steel Butt-
the Department will determine whether 4 See Letter from the petitioners to the Secretary Weld Pipe Fittings from the People’s Republic of
certain imports of carbon steel butt-weld of Commerce, ‘‘Carbon Steel Butt-Weld Pipe China,’’ dated August 8, 2017; and Letter from the
Fittings from the People’s Republic of China; petitioners to Secretary of Commerce, ‘‘Carbon Steel
pipe fittings (butt-weld pipe fittings) Request for Circumvention Ruling to Section 781(b) Butt-Weld Pipe Fittings from The People’s Republic
into the United States, exported from of the Tariff Act of 1930,’’ dated May 22, 2017 (the of China; A–570–814; Anticircumvention Inquiry
Malaysia, which were completed in petitioners’ Request). (Third Country Assembly, Malaysia); Petitioners’
VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 E:\FR\FM\25AUN1.SGM 25AUN1](https://thefederalregister.org/doc/82_FR_40720/page/1.svg)
![40560 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices
initiating this anticircumvention the Department intends to request DEPARTMENT OF COMMERCE
inquiry. additional information regarding the
With respect to the additional factors statutory criteria to determine whether International Trade Administration
listed under section 781(b)(3) of the Act, shipments of butt-weld pipe fittings [A–570–979]
we find that the petitioners presented from Malaysia are circumventing the
evidence indicating that shipments of Order on butt-weld pipe fittings from Crystalline Silicon Photovoltaic Cells,
butt-weld pipe fittings from Malaysia to the PRC. Thus, further development of Whether or Not Assembled Into
the United States increased since the the record is required before a Modules, from the People’s Republic
imposition of the Order and that preliminary ruling can be issued. of China: Amended Final Results of
shipments of butt-weld pipe fittings Antidumping Duty Administrative
from the PRC to Malaysia also increased Notification to Interested Parties Review; 2014–2015
since the Order took effect, further
supporting initiation of this anti- In accordance with 19 CFR AGENCY: Enforcement and Compliance,
circumvention inquiry.53 351.225(e), the Department finds that International Trade Administration,
Accordingly, we are initiating a the issue of whether a product is Department of Commerce.
formal anti-circumvention inquiry included within the scope of any order SUMMARY: The Department of Commerce
concerning the Order on butt-weld pipe cannot be determined based solely upon (the Department) is amending its final
fittings from the PRC, pursuant to the application and the descriptions of results of the third administrative
section 781(b) of the Act. the merchandise. Accordingly, the review of the antidumping duty (AD)
In connection with this anti- Department will notify by mail all order on crystalline silicon photovoltaic
circumvention inquiry, in order to parties on the Department’s scope cells, whether or not assembled into
determine: (1) The extent to which PRC- service list of the initiation of anti- modules (solar cells), from the People’s
sourced unfinished or finished butt- circumvention inquiries. Additionally, Republic of China (PRC). The period of
weld pipe fittings is further processed in accordance with 19 CFR review (POR) is December 1, 2014,
into butt-weld pipe fittings in Malaysia 351.225(f)(1)(i) and (ii), in this notice of through November 30, 2015. The
before shipment to the United States; (2) initiation issued under 19 CFR amended final weighted-average
the extent to which a country-wide 351.225(e), we included a description of dumping margins are listed below in the
finding applicable to all exports might section entitled, ‘‘Amended Final
the product that is the subject of this
be warranted, as alleged by the Results.’’
anti-circumvention inquiry (i.e., butt-
petitioners; and (3) whether the process DATES: Applicable August 25, 2017.
weld pipe fittings that contain the
of turning PRC-sourced unfinished or
finished butt-weld pipe fittings into characteristics as provided in the scope FOR FURTHER INFORMATION CONTACT:
finished butt-weld pipe fittings of the Order), and an explanation of the Krisha Hill, AD/CVD Operations, Office
processed in Malaysia is minor or reasons for the Department’s decision to IV, Enforcement & Compliance,
insignificant, the Department will issue initiate this anti-circumvention inquiry, International Trade Administration,
questionnaires to Malaysian producers as provided above. Department of Commerce, 1401
and exporters of butt-weld pipe fittings In accordance with 19 CFR Constitution Avenue NW, Washington,
to the United States. The Department DC 20230; telephone: (202) 482–4037.
351.225(1)(2), if the Department issues
will issue questionnaires to solicit an affirmative preliminary SUPPLEMENTARY INFORMATION:
information from the Malaysian determination, we will then instruct Background
producers and exporters concerning U.S. Customs and Border Protection to
their shipments of butt-weld pipe On June 27, 2017, the Department
suspend liquidation and require cash published the final results of the 2014–
fittings to the United States and the deposits of estimated antidumping
origin of the imported unfinished or 2015 administrative review of the AD
duties, at the applicable rates, for each order on solar cells from the PRC in the
finished butt-weld pipe fittings being unliquidated entry of the merchandise
processed into butt-weld pipe fittings. Federal Register.1 In addition, on June
at issue, entered or withdrawn from 27, 2017, the Department disclosed to
Companies failing to respond warehouse for consumption on or after
completely and timely to the interested parties its calculations for the
the date of initiation of the inquiry. The final results.2 On June 30, 2017, the
Department’s questionnaire may be Department will establish a schedule for
deemed uncooperative and an adverse Department received a timely filed
questionnaires and comments for this ministerial error allegation from
inference may be applied in inquiry. In accordance with section
determining whether such companies SolarWorld Americas, Inc. (the
781(f) of the Act and 19 CFR petitioner) regarding the Department’s
are circumventing the Order. See
351.225(f)(5), the Department intends to calculation of the dumping margin for
section 776 of the Act.
Finally, while we believe sufficient issue its final determination within 300 Trina,3 one of the mandatory
factual information has been submitted days of the date of publication of this
by the petitioners supporting their notice. 1 See Crystalline Silicon Photovoltaic Cells,
Whether or Not Assembled Into Modules, from the
request for an inquiry, we do not find This notice is published in People’s Republic of China: Final Results of
that the record supports the accordance with 19 CFR 351.225(f). Antidumping Duty Administrative Review and
simultaneous issuance of a preliminary Final Determination of No Shipments; 2014–2015,
Dated: August 21, 2017. 82 FR 29033 (June 27, 2017) (Final Results) and
ruling. Such inquiries are by their accompanying Issues and Decision Memorandum
Gary Taverman,
sradovich on DSK3GMQ082PROD with NOTICES
nature complicated and require (IDM).
additional information regarding Deputy Assistant Secretary for Antidumping 2 See Department Letter, re: Antidumping Duty
production in both the country subject and Countervailing Duty Operations, Administrative Review of Crystalline Silicon
to the order and the third-country performing the non-exclusive functions and Photovoltaic Cells, Whether or Not Assembled Into
duties of the Assistant Secretary for Modules, from the People’s Republic of China:
completing the product. As noted above, Ministerial Error Comments,’’ dated June 29, 2017.
Enforcement and Compliance.
3 The Department treated the following six
53 See the petitioners’ Request at 23–5 and [FR Doc. 2017–18046 Filed 8–24–17; 8:45 am]
companies as a single entity: Changzhou Trina
Attachment 4. BILLING CODE 3510–DS–P Solar Energy Co., Ltd./Trina Solar (Changzhou)
VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 E:\FR\FM\25AUN1.SGM 25AUN1](https://thefederalregister.org/doc/82_FR_40720/page/5.svg)
Document Created: 2018-10-24 12:41:03
Document Modified: 2018-10-24 12:41:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Dates | Applicable August 25, 2017. | |
| Contact | Julia Hancock at (202) 482-1394, AD/ CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230. | |
| FR Citation | 82 FR 40556 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR