SUPPLEMENTARY INFORMATION:

Background

On March 3, 2026, pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.226, the requestor filed a circumvention inquiry request alleging that U.S. imports of spray-foam systems from Canada containing a blend of Chinese-origin esters are circumventing the Orders.^[1] On the same date, the requestor also filed a circumvention inquiry request alleging that U.S. imports of spray-foam systems from China containing a blend of Chinese-origin esters are circumventing the Orders pursuant to section 781(c) of the Act.^[2]

On March 26 and May 5, 2026, Commerce issued supplemental questionnaires to the requestor regarding the Canada Circumvention ( printed page 46395) Request.^[3] On April 1 and May 22, 2026, the requestor timely filed responses to Commerce's supplemental questionnaires.^[4]

On June 11, and 29, 2026, Commerce extended the deadline to initiate a circumvention inquiry, pursuant to 19 CFR 351.226(d)(1) and 19 CFR 351.302(b), until July 16, 2026.^[5]

Scope of the Orders

The merchandise covered by the scope of the Orders is esters from China. For a complete description of the scope of the Orders, see the Circumvention Initiation Checklist.^[6]

Merchandise Subject to the Circumvention Inquiry

The merchandise subject to this inquiry is the esters containing side ( i.e. the “B” side component) of spray-foam systems completed or assembled in Canada with Chinese-origin esters. Commerce is concurrently self-initiating a scope inquiry pursuant to 19 CFR 351.225(b) and 19 CFR 351.226(d)(2)(i) to determine whether certain components ( i.e. the “B” side) of spray-foam systems are within the scope of the Orders.^[7]

Statutory and Regulatory Requirements to Initiate a Circumvention Inquiry

Section 351.226(d)(1)(iii) of Commerce's regulations states that if Commerce determines that a request for a circumvention inquiry satisfies the requirements of 19 CFR 351.226(c), then Commerce “will accept the request and initiate a circumvention inquiry.” Section 351.226(c)(1) of Commerce's regulations, in turn, requires that each circumvention inquiry request allege “that the elements necessary for a circumvention determination under section 781 of the Act exist” and be “accompanied by information reasonably available to the interested party supporting these allegations.” The requestor alleges circumvention pursuant to section 781(b) of the Act ( i.e., merchandise completed or assembled in other foreign countries).^[8]

Section 781(b)(1) of the Act provides that Commerce may find circumvention of an 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 a circumvention inquiry, under section 781(b)(1) of the Act, Commerce relies on the following criteria: (A) merchandise imported into the United States is of the same class or kind as any merchandise produced in a foreign country that is the subject of an AD or CVD order or finding; (B) before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which is subject to the order or merchandise which is produced in the foreign country that is subject to the order; (C) the process of assembly or completion in the foreign country referred to in section (B) is minor or insignificant; (D) the value of the merchandise produced in the foreign country to which the AD or CVD order applies is a significant portion of the total value of the merchandise exported to the United States; and (E) the administering authority determines that action is appropriate to prevent evasion of such order or finding.

In determining whether or not the process of assembly or completion in the foreign country is minor or insignificant under section 781(b)(1)(C) of the Act, section 781(b)(2) of the Act directs Commerce to consider: (A) the level of investment in the foreign country; (B) the level of research and development in the foreign country; (C) the nature of the production process in the foreign country; (D) the extent of production facilities in the foreign country; and (E) whether or not the value of processing performed in the foreign country represents a small proportion of the value of the merchandise imported into the United States. However, no single factor, by itself, controls Commerce's determination of whether the process of assembly or completion in the foreign country is minor or insignificant.^[9] Accordingly, it is Commerce's practice to evaluate each of these five factors as they exist in the foreign country, and to reach an affirmative or negative circumvention determination based on the totality of the circumstances of the particular circumvention inquiry.^[10]

Section 781(b)(3) of the Act sets forth additional factors to consider in determining whether to include merchandise assembled or completed in a foreign country within the scope of an AD and/or CVD order. Specifically, Commerce shall take into account such factors as: (A) the pattern of trade, including sourcing patterns; (B) whether the manufacturer or exporter of the merchandise is affiliated with the person who, in the foreign country, uses the merchandise to complete or assemble the merchandise which is subsequently imported into the United States; and (C) whether imports of the merchandise into the foreign country have increased after the initiation of the investigation that resulted in the issuance of such order or finding.

Analysis

Based on our analysis of requestor's circumvention request, Commerce determines that the requestor has satisfied the criteria under 19 CFR 351.226(c) to warrant the initiation of a circumvention inquiry of the Orders. Thus, pursuant to 19 CFR 351.226(d)(1)(iii), we are initiating the requested circumvention inquiry. For a full discussion of the basis for our decision to initiate the circumvention inquiry, see the Circumvention Initiation Checklist.^[11] As explained in the Circumvention Initiation Checklist, the information provided by the requestor warrants initiating this circumvention inquiry on a country-wide basis. Commerce has taken this approach in prior circumvention inquiries, where the facts warranted initiation on a country-wide basis.^[12]

( printed page 46396)

Consistent with the approach in the prior circumvention inquiries that were initiated on a country-wide basis, Commerce intends to issue a questionnaire to solicit information from producers and exporters in Canada concerning their production of spray-foam systems and their shipments thereof to the United States, should the concurrent scope inquiry determine that the certain spray-foam system components are within the scope of the Orders.^[13]

Respondent Selection

Commerce intends to base respondent selection on quantity and value (Q&V) questionnaire responses that Commerce intends to issue to each potential respondent for which there is complete address information on the record. Additionally, Commerce intends to place the Q&V questionnaire on the record at a later date. Comments regarding the Q&V data and respondent selection should be submitted within seven days after placement of the Q&V data on the record of the inquiry. Parties wishing to submit rebuttal comments should submit those comments within five days after the deadline for the initial comments.

Commerce intends to establish a schedule for questionnaire responses after respondent selection. A company's failure to completely respond to Commerce's requests for information may result in the application of partial or total facts available, pursuant to section 776(a) of the Act, which may include adverse inferences, pursuant to section 776(b) of the Act.

Filing Requirements

All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.^[14] An electronically filed document must be received successfully in its entirety by the applicable deadline. Each submission must be placed on the record of the segment of the proceeding for the AD Order (A-570-168), ACCESS anticircumvention inquiry segment “Spray Foam Systems from Canada.”

Suspension of Liquidation

Pursuant to 19 CFR 351.226(l)(1), when Commerce initiates a circumvention inquiry under 19 CFR 351.226(d), Commerce will notify U.S. Customs and Border Protection (CBP) of the initiation and direct CBP to continue the suspension of liquidation of entries of products covered by the circumvention inquiry that were already covered by the suspension of liquidation under the AD and/or CVD orders, and to apply the cash deposit rate that would be applicable if the product was determined to be covered by the scope of the AD and/or CVD orders.

Accordingly, Commerce will notify CBP of the initiation of this circumvention inquiry and direct CBP to continue to suspend (unliquidated) entries of the products covered by the circumvention inquiry that were already covered by the suspension of liquidation. In addition, Commerce will direct CBP to apply the cash deposit rate that would be applicable if the products were determined to be circumventing the Orders.

In the event that Commerce issues affirmative preliminary or final circumvention determinations that the products from Canada are circumventing the Orders, Commerce will instruct CBP to continue the suspension of liquidation of previously suspended entries and to apply the applicable cash deposit rate. Commerce will also instruct CBP to begin the suspension of liquidation and application of cash deposits for any unliquidated entries not yet suspended, entered, or withdrawn from warehouse, for consumption, on or after the date of publication of the notice of initiation of the circumvention inquiries pursuant to paragraphs (l)(2)(ii) and (l)(3)(ii).

In addition, pursuant to paragraphs (l)(2)(iii)(A) and (l)(3)(iii)(A), Commerce may instruct CBP to begin the suspension of liquidation and application of cash deposits for any unliquidated entries not yet suspended, entered, or withdrawn from warehouse, for consumption, prior to the date of initiation of the circumvention inquiry.^[15] These rules will not affect CBP's authority to take any additional action with respect to the suspension of liquidation or related measures for these entries, as stated in 19 CFR 351.226(l)(5).

Notification to Interested Parties

In accordance with 19 CFR 351.226(b) and section 781(b) of the Act, Commerce determines that the requestor's request for a circumvention inquiry satisfies the requirements of 19 CFR 351.226(c). Accordingly, Commerce is notifying all interested parties of the initiation of this circumvention inquiry to determine whether imports of spray-foam systems containing a blend of esters completed or assembled in Canada using components manufactured in China are circumventing the Orders. In addition, we have included a description of the products that are the subject of this inquiry, and an explanation of the reasons for Commerce's decision to initiate this inquiry as provided above and in the accompanying Circumvention Initiation Checklist.^[16]

In accordance with 19 CFR 351.226(e)(1), Commerce intends to issue its preliminary circumvention determination within 150 days from the date of publication of the notice of initiation of a circumvention inquiry in the Federal Register . Furthermore, in accordance with section 781(f) of the Act and 19 CFR 351.226(e)(2), unless the circumvention inquiry is rescinded, in whole or in part, or extended, Commerce intends to issue its final determination within 300 days from the date of publication of the notice of initiation of the circumvention inquiry in the Federal Register .

This notice is published in accordance with section 781(b) of the Act and 19 CFR 351.226(d)(1)(iii).

91 FR 46394