[Federal Register Volume 76, Number 151 (Friday, August 5, 2011)]
[Notices]
[Pages 47551-47555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19921]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-894]
Certain Tissue Paper Products From the People's Republic of
China: Affirmative Final Determination of Circumvention of the
Antidumping Duty Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
Final Determination
We determine that certain tissue paper products (tissue paper)
produced by Max Fortune (Vietnam) Paper Products Company, Limited
(MFVN) \1\ and exported to the United States are made from jumbo rolls
and/or cut sheets of tissue paper produced in the People's Republic of
China (PRC), and are circumventing the antidumping duty order on tissue
paper from the PRC, as provided in section 781(b) of the Tariff Act of
1930, as amended (the Act).
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\1\ MFVN is a company located in Vietnam and is a wholly-owned
subsidiary of Max Fortune Industrial Co., Ltd. (MFHK) located in
Hong Kong. MFHK was the exporter of the tissue paper produced and
shipped by MFVN to the United States during the analysis period of
this inquiry. See Memorandum to the File from Case Analysts entitled
``Verification of the Questionnaire Response of Max Fortune
(Vietnam) Paper Products Co., Ltd. and Its Affiliates in the Anti-
circumvention Inquiry and 2009-2010 Antidumping Duty Administrative
Review of Certain Tissue Paper Products from the People's Republic
of China,'' dated March 31, 2011 (MFVN verification report), at
exhibits 6A through 6F.
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DATES: Effective Date: August 5, 2011.
FOR FURTHER INFORMATION CONTACT: Brian Smith or Gemal Brangman, AD/CVD
Operations, Office 2, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1766 or (202) 482-3773, respectively.
SUPPLEMENTARY INFORMATION:
Background
On April 6, 2011, the Department of Commerce (the Department)
published in the Federal Register its affirmative preliminary
determination that tissue paper produced by MFVN in Vietnam using
Chinese-origin jumbo rolls and/or
[[Page 47552]]
cut sheets and exported to the United States is circumventing the
antidumping duty order on certain tissue paper products from the PRC
(PRC Tissue Paper Order),\2\ as provided in section 781(b) of the Act.
See Certain Tissue Paper Products From the People's Republic of China:
Affirmative Preliminary Determination of Circumvention of the
Antidumping Duty Order, 76 FR 19043 (April 6, 2011) (Preliminary
Determination).
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\2\ See Notice of Amended Final Determination of Sales at Less
than Fair Value and Antidumping Duty Order: Certain Tissue Paper
Products from the People's Republic of China, 70 FR 16223 (March 30,
2005) (PRC Tissue Paper Order).
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On May 2, 2011, the International Trade Commission (ITC) notified
the Department that consultations pursuant to section 781(e)(2) of the
Act were not necessary.\3\
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\3\ See Letter from James R. Holbein, Acting Secretary to the
Commission, to Ronald K. Lorentzen, Deputy Assistant Secretary for
Import Administration, dated May 2, 2011.
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On May 20, 2011, MFVN submitted its case brief. The petitioner \4\
did not submit a case brief. On May 27, 2011, the petitioner submitted
its rebuttal brief.
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\4\ The petitioner is Seaman Paper Company of Massachusetts,
Inc.
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On May 31, 2011, MFVN withdrew its May 6, 2011, request for a
hearing. No other party in this review requested a hearing.
On July 8 and 13, 2011, the Department held meetings with counsels
for MFVN and the petitioner to discuss the issues raised in MFVN's case
brief.\5\
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\5\ See the Department's memoranda to the file entitled, ``Ex
Parte Meeting with Counsel for Max Fortune (Vietnam) Paper Products
Company, Limited,'' dated July 11, 2011, and ``Ex Parte Meeting with
the Petitioner's Counsel,'' dated July 14, 2011.
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On July 14, 2011, Michaels Stores, Inc. (Michaels) filed an entry
of appearance and subsequently requested, on July 15, 2011, a
postponement of the final determination in order to submit information
regarding its imports of tissue paper from Vietnam. On July 20, 2011,
the Department informed Michaels that it was unable to grant its
request because the deadlines for submitting new factual information
and case/rebuttal briefs in this inquiry had passed.
On July 22, 2011, Michaels submitted another letter which the
Department rejected on July 26, 2011, pursuant to 19 CFR 351.302(d),
because it contained unsolicited, untimely new argument.
Scope of the Antidumping Duty Order
The tissue paper products subject to this order are cut-to-length
sheets of tissue paper having a basis weight not exceeding 29 grams per
square meter. Tissue paper products subject to this order may or may
not be bleached, dye-colored, surface-colored, glazed, surface
decorated or printed, sequined, crinkled, embossed, and/or die cut. The
tissue paper subject to this order is in the form of cut-to-length
sheets of tissue paper with a width equal to or greater than one-half
(0.5) inch. Subject tissue paper may be flat or folded, and may be
packaged by banding or wrapping with paper or film, by placing in
plastic or film bags, and/or by placing in boxes for distribution and
use by the ultimate consumer. Packages of tissue paper subject to this
order may consist solely of tissue paper of one color and/or style, or
may contain multiple colors and/or styles.
The merchandise subject to this order does not have specific
classification numbers assigned to them under the Harmonized Tariff
Schedule of the United States (HTSUS). Subject merchandise may be under
one or more of several different subheadings, including: 4802.30;
4802.54; 4802.61; 4802.62; 4802.69; 4804.31.1000; 4804.31.2000;
4804.31.4020; 4804.31.4040; 4804.31.6000; 4804.39; 4805.91.1090;
4805.91.5000; 4805.91.7000; 4806.40; 4808.30; 4808.90; 4811.90;
4823.90; 4820.50.00; 4802.90.00; 4805.91.90; 9505.90.40. The tariff
classifications are provided for convenience and customs purposes;
however, the written description of the scope of this order is
dispositive.\6\
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\6\ On January 30, 2007, at the direction of U.S. Customs and
Border Protection (CBP), the Department added the following HTSUS
classifications to the AD/CVD module for tissue paper: 4802.54.3100,
4802.54.6100, and 4823.90.6700. Also on July 14, 2011, at the
direction of CBP, the Department added the following HTSUS
classification to the AD/CVD module for tissue paper: 4811.90.9080.
However, we note that the six-digit classifications for these
numbers were already listed in the scope.
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Excluded from the scope of this order are the following tissue
paper products: (1) Tissue paper products that are coated in wax,
paraffin, or polymers, of a kind used in floral and food service
applications; (2) tissue paper products that have been perforated,
embossed, or die-cut to the shape of a toilet seat, i.e., disposable
sanitary covers for toilet seats; (3) toilet or facial tissue stock,
towel or napkin stock, paper of a kind used for household or sanitary
purposes, cellulose wadding, and webs of cellulose fibers (HTSUS
4803.00.20.00 and 4803.00.40.00).
Scope of the Circumvention Inquiry
The products covered by this inquiry are tissue paper products, as
described above in the ``Scope of the Antidumping Duty Order'' section,
which are produced in Vietnam by MFVN from Chinese-origin jumbo rolls
and/or cut sheets of tissue paper, and exported to the United States.
Statutory Provisions Regarding Circumvention
Section 781(b) of the Act provides that the Department may find
circumvention of an antidumping 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 anti-circumvention inquiries under section 781(b)(1) of the
Act, the Department analyzes 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 subject to an
antidumping duty order; (B) before importation into the United States,
such imported merchandise is completed or assembled in another foreign
country from merchandise which is subject to the order or 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 (B) is
minor or insignificant; (D) the value of the merchandise produced in
the foreign country to which the antidumping 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.
Section 781(b)(2) of the Act provides the criteria for determining
whether the process of assembly or completion is minor or
insignificant. These criteria are: (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 the production facilities in the
foreign country; and (e) whether the value of the processing performed
in the foreign country represents a small proportion of the value of
the merchandise imported into the United States.
The Statement of Administrative Action (SAA) accompanying the
Uruguay Round Agreements Act, H. Doc. No. 103-316, at 893 (1994),
provides some guidance with respect to these criteria. It explains that
no single factor listed in section 781(b)(2) of the Act will be
controlling. Accordingly, it is the Department's practice to evaluate
each of the factors as they exist in the foreign country depending on
the particular facts present in the
[[Page 47553]]
circumvention inquiry. Therefore, the importance of any one of the
factors listed under section 781(b)(2) of the Act can vary from case to
case depending on the particular circumstances unique to each
circumvention inquiry.
Section 781(b)(3) of the Act further provides that, in determining
whether to include merchandise assembled or completed in a foreign
country in an antidumping duty order, the Department shall consider:
(A) The pattern of trade, including sourcing patterns; (B) whether the
manufacturer or exporter of the merchandise described in accordance
with section 781(b)(1)(B) of the Act is affiliated with the person who
uses the merchandise described in accordance with section 781(b)(1)(B)
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 described in accordance
with section 781(b)(1)(B) have increased after the initiation of the
investigation which resulted in the issuance of such order.
Summary of Analysis of Statutory Provisions
We considered all of the comments submitted by the interested
parties and find, pursuant to section 781(b) of the Act, that exports
to the United States of tissue paper produced by MFVN using Chinese-
origin jumbo rolls and/or cut sheets are circumventing the PRC Tissue
Paper Order.
As we explained in the Preliminary Determination, based on the list
of products MFVN provided in its questionnaire response, we find that
the merchandise subject to this inquiry meets the written description
of the products subject to the PRC Tissue Paper Order and is,
therefore, of the same class or kind of merchandise as that subject to
the PRC Tissue Paper Order, pursuant to section 781(b)(1)(A) of the
Act. In addressing the other statutory criteria under sections
781(b)(1), (2), and (3) of the Act, we relied on facts available where
the respondent failed to provide necessary, verifiable information.
In its questionnaire response, MFVN admitted that it was possible
that it manufactured some tissue paper in Vietnam from PRC-origin jumbo
rolls before and during 2007. MFVN also stated that its records before
2008 were incomplete and unreliable.\7\ However, MFVN asserted that it
could conclusively demonstrate that as of January 1, 2008, it did not
convert any PRC-origin jumbo rolls and/or cut sheets of tissue paper in
Vietnam into its own tissue paper products.\8\ At verification, MFVN
failed to provide the requested production and accounting records to
show when it ceased using Chinese-origin jumbo rolls and/or cut sheets
in its production of tissue paper products for export to the United
States.\9\ Accordingly, we conclude that MFVN impeded the conduct of
this anti-circumvention inquiry by withholding the necessary verifiable
information requested by the Department under section 776(a)(2) of the
Act.
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\7\ See June 28, 2010, response to the Department's April 23,
2010, anti-circumvention questionnaire (June 28 Response) at pages 3
and 12.
\8\ See id.
\9\ See MFVN verification report at pages 2 and 40.
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Furthermore, we conclude that MFVN failed to act to the best of its
ability in providing this necessary information pursuant to section
776(b) of the Act. MFVN was expected to maintain the requested
production and accounting records in the normal course of business and
was required to maintain them under Vietnamese accounting law,\10\ but
did not do so.\11\ Despite its claims, MFVN could not conclusively
demonstrate that as of January 1, 2008, it did not convert any Chinese-
origin jumbo rolls into tissue paper sold in the United States.\12\
Moreover, although it claimed that it could accurately account for its
inventory as of January 1, 2008,\13\ the Department discovered at
verification that MFVN withdrew Chinese-origin jumbo rolls from
inventory in March 2010, but could not account for the ultimate
destination or usage of those jumbo rolls in its books and records.\14\
Therefore, the Department determined, as adverse facts available (AFA),
that MFVN used Chinese-origin jumbo rolls and/or cut-sheets of tissue
paper in its production of tissue paper for export to the United States
from January 1, 2005, to December 31, 2007, and that MFVN continued to
use such merchandise from inventory during that period to produce
tissue paper for export on or after January 1, 2008. See Comments 1 and
3 of the Issues and Decision Memorandum (Decision Memo) accompanying
this notice for further discussion of the application of AFA for
purposes of the final determination in this inquiry.
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\10\ For companies doing business in Vietnam, Vietnamese
regulations require companies such as MFVN to retain such records
for up to 10 years. See Memorandum to the File dated March 31, 2011
which contains the following document, ``Decree No. 129/2004/ND-CP
of May 31, 2004 Detailing and Guiding the Implementation of a Number
of Articles of the Accounting Law, Applicable to Business
Activities,'' issued by the Government of the Socialist Republic of
Vietnam on May 31, 2004.
\11\ See MFVN verification report at page 2.
\12\ See id. at pages 2 and 35-36.
\13\ See June 28 Response at pages 4 and 12.
\14\ See MFVN verification report at pages 2 and 40.
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In determining that MFVN used Chinese-origin jumbo rolls and/or
cut-sheets of tissue paper in its production of tissue paper for export
to the United States from January 1, 2005, to December 31, 2007, as
AFA, we relied on information provided by the petitioner in its
February 19, 2010, request for initiation of this anti-circumvention
inquiry (February 19 submission), which showed that during the 2005-
2007 period, MFVN imported a significant quantity of jumbo rolls from
the PRC. MFVN did not provide any information on the record that
contradicted the petitioner's information and, in fact, MFVN admitted
in its questionnaire responses that ``it is possible that MFVN might
have made {tissue paper{time} in Vietnam from jumbo rolls from the PRC
during this time period.''\15\ Further, Vietnamese Customs data
provided to Department officials at verification covered entries during
2008 and afterward, and does not contradict the petitioner's pre-2008
data or MFVN's admission.\16\ Moreover, MFVN did not provide pre-2008
Vietnamese Customs data at verification and there is no information on
the record that contradicts the petitioner's pre-2008 data. Therefore,
we consider this information to be corroborated to the extent
practicable pursuant to section 776(c) of the Act.
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\15\ See MFVN's June 28 Response at pages 4 and 12.
\16\ See MFVN verification report at pages 3, 23-24, and 32-33.
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Based on the above analysis, relying on AFA, we determine, pursuant
to section 781(b)(1)(B) of the Act that MFVN completed tissue paper in
Vietnam using jumbo rolls and/or cut sheets produced in the PRC. With
respect to section 781(b)(1)(C) of the Act, we determine that the
process of converting the jumbo rolls and/or cut sheets of tissue paper
into finished tissue paper products in Vietnam is minor or
insignificant, after taking into consideration all of the factors
listed in section 781(b)(2) of the Act. See Comment 2 of the Decision
Memo for further discussion. With respect to section 781(1)(D) of the
Act, we determine that the value of the jumbo rolls and/or cut sheets
of tissue paper MFVN used in its production is a significant portion of
the value of the merchandise exported to the United States. See Comment
2 of the Decision Memo for further discussion.
[[Page 47554]]
We note that we relied on secondary information in addressing
section 781(b)(1)(C) of the Act. Specifically, because MFVN did not
provide the Department with sufficient information to reach a
conclusion based solely on its own data under this provision, we
relied, in part, on information contained in the petitioner's February
19 submission to conclude that the tissue paper completion process in
Vietnam is minor or insignificant.\17\ MFVN did not provide any
information on the record of this inquiry to contradict this
information, and there is no other information on the record that
contradicts this information. Moreover, the results of a prior
circumvention inquiry of the PRC Tissue Paper Order corroborates the
Department's conclusion as AFA that the processing in Vietnam is minor
or insignificant, as the same conclusion was reached by the Department
in that prior inquiry which also involved allegations of Chinese-origin
jumbo rolls being converted to cut-to-length tissue paper in Vietnam.
See Certain Tissue Paper Products from the People's Republic of China:
Affirmative Preliminary Determination of Circumvention of the
Antidumping Duty Order and Extension of Final Determination, 73 FR
21580, 21582-21587 (April 22, 2008) (Quijiang Prelim) (unchanged in
Certain Tissue Paper Products From the People's Republic of China:
Affirmative Final Determination of Circumvention of the Antidumping
Duty Order, 73 FR 57591 (October 3, 2008) (Quijiang Final)).
Furthermore, the Department is unaware of any available independent
sources it could use to corroborate this information. Accordingly, we
consider the petitioner's information relied upon by the Department as
AFA to reach a finding under section 781(b)(1)(C) of the Act
corroborated to the extent practicable under section 776(c) of the Act.
See Comment 3 of the Decision Memo for further discussion of the
Department's corroboration of secondary information used as AFA as part
of its analysis under section 781(b)(1)(C) of the Act.
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\17\ See the petitioner's February 19 submission at pages 34-35
and Exhibit 16.
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Similarly, we relied on secondary information in addressing section
781(b)(1)(D) of the Act. Because MFVN did not provide the Department
with sufficient information to determine whether the value of the jumbo
rolls and/or cut sheets is a significant portion of the value of MFVN's
finished tissue paper products exported to the United States, we relied
on the data in the petitioner's February 19 submission\18\ as AFA, to
make this determination. MFVN did not provide any information on the
record of this inquiry to contradict this information, and there is no
other information on the record to contradict it. Additionally, as in
the case of our determination with respect to the Vietnamese
processing, pursuant to section 776(c) of the Act, we corroborated to
the extent practicable the petitioner's data based on our findings in
the above-referenced prior anti-circumvention inquiry of the PRC Tissue
Paper Order. See Quijiang Prelim, 73 FR at 21582-21587 (unchanged in
Quijiang Final). Furthermore, the Department is unaware of any
available independent sources it could use to corroborate this
information. Accordingly, we consider the petitioner's information
relied upon by the Department as AFA to reach a finding under section
781(b)(1)(D) of the Act corroborated to the extent practicable under
section 776(c) of the Act. See Comment 3 of the Decision Memo for
further discussion.
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\18\ See the petitioner's February 19 submission at pages 34-36.
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As a result of the above analysis, we affirm our preliminary
determination that action by the Department is warranted in this case
to prevent evasion of the PRC Tissue Paper Order, pursuant to section
781(b)(1)(E) of the Act.
Furthermore, based on the additional factors we must consider under
section 781(b)(3) of the Act, we find that MFVN's pattern of trade,
affiliations, and level of importation of Chinese-origin tissue paper
jumbo rolls/sheets support an affirmative finding of circumvention. See
Comment 2 of the Decision Memo for the Department's complete final
analysis of the criteria under section 781(b) of the Act.
Based on our overall analysis of the statutory provisions regarding
circumvention via completion or assembly in a foreign country, we
conclude, pursuant to section 781(b) of the Act, that exports to the
United States of tissue paper products produced from Chinese-origin
jumbo rolls and/or cut sheets which are further processed in Vietnam by
MFVN are circumventing the PRC Tissue Paper Order.
All issues raised by the interested parties to which we have
responded are listed in the Appendix to this notice and addressed in
the Decision Memo, which is hereby adopted by this notice. Parties can
find a complete discussion of the issues raised in this inquiry and the
corresponding recommendation in this public memorandum, which is on
file in the Central Records Unit (CRU) of the main Department of
Commerce building. In addition, a complete version of the Decision Memo
can be accessed directly on the Internet at http://ia.ita.doc.gov/. The
paper copy and electronic copy of the Decision Memo are identical in
content.
Continuation of Suspension of Liquidation
In accordance with sections 735(c) and 781(b) of the Act and 19 CFR
225(i)(3), we will direct CBP to suspend liquidation and require cash
deposits of estimated duties, at the rate applicable to the exporter,
on all unliquidated entries of tissue paper produced by MFVN that were
entered, or withdrawn from warehouse, for consumption on or after March
29, 2010, the date of initiation of the circumvention inquiry.\19\
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\19\ In the Preliminary Determination, at 76 FR 19048, we stated
that we would direct CBP to suspend liquidation and to require a
cash deposit of estimated duties, at the PRC-wide rate of 112.64
percent, on all unliquidated entries of tissue paper produced by
MFVN ``and/or exported by MFVN'' that was entered, or withdrawn from
warehouse, for consumption on or after March 29, 2010, the date of
initiation of the circumvention inquiry. However, in this inquiry,
the Department is concerned only with merchandise produced by MFVN,
irrespective of the exporter. Therefore, we have clarified our
instructions for purposes of this final determination. See Comment 5
of the Decision Memo for further discussion.
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Should the Department conduct an administrative review in the
future, and determine in the context of that review that MFVN has not
produced for export tissue paper using Chinese-origin jumbo rolls and/
or cut sheets, the Department will consider initiating a changed
circumstances review pursuant to section 751(b) of the Act to determine
if the continued suspension of all tissue paper produced by MFVN is
warranted.
Notice to Parties
This notice serves as the only reminder to parties subject to the
administrative protective order (APO) of their responsibility
concerning the return or destruction of proprietary information
disclosed under APO in accordance with section 351.305 of the
Department's regulations. Timely written notification of the return or
destruction of APO materials or conversion to judicial protective order
is hereby requested. Failure to comply with the regulations and terms
of an APO is a violation which is subject to sanction.
This final affirmative circumvention determination is published in
accordance with section 781(b) of the Act and 19 CFR 351.225.
[[Page 47555]]
Dated: August 1, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
Appendix I
Discussion of the Issues
Comment 1: Whether the Application of Fact Available (FA)/Adverse
Facts Available (AFA) Is Lawful.
Comment 2: Whether the Department's Circumvention Analysis Properly
Addressed the Statutory Criteria.
Comment 3: Whether the Department's Use of FA/AFA Is Uncorroborated,
Unreasonable and Punitive.
Comment 4: Whether the Remedy Imposed Is Lawful.
Comment 5: Whether the Assignment of the PRC-Wide Rate as AFA Is
Appropriate.
[FR Doc. 2011-19921 Filed 8-4-11; 8:45 am]
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