[Federal Register Volume 76, Number 225 (Tuesday, November 22, 2011)]
[Notices]
[Pages 72161-72164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30164]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-916;C-570-917]
Laminated Woven Sacks From the People's Republic of China:
Negative Preliminary Determination of Circumvention of the Antidumping
and Countervailing Duty Orders
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
Preliminary Determination
The Department of Commerce (``the Department'') preliminarily
determines that the laminated woven sacks subject to this inquiry are
not circumventing the antidumping and countervailing duty orders on
laminated woven sacks from the People's Republic of China (``PRC''), as
provided in section 781(d) of the Tariff Act of 1930, as amended (``the
Act'').\1\
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\1\ See Notice of Antidumping Duty Order: Laminated Woven Sacks
From the People's Republic of China, 73 FR 45941 (August 7, 2008);
see also Laminated Woven Sacks From the People's Republic of China:
Countervailing Duty Order, 73 FR 45955 (August 7, 2008),
(collectively, ``Orders'').
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DATES: Effective Date: November 22, 2011.
FOR FURTHER INFORMATION CONTACT: Jamie Blair-Walker, Office 9, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, DC,
20230; telephone (202) 482-2615.
SUPPLEMENTARY INFORMATION:
Background
On January 26, 2011, pursuant to sections 781(c) and (d) of the
Act, and 19 CFR 351.225(i) and (j), Petitioners \2\ submitted requests
for the Department to initiate and conduct both a minor alterations
inquiry and a later-developed merchandise anti-circumvention inquiry to
determine whether laminated woven sacks printed with two colors in
register and with the use of a screening process are circumventing the
Orders.\3\ On March 25, 2011, Petitioners withdrew their request for
the Department to initiate a minor alterations anti-circumvention
inquiry pursuant to 781(c) of the Act and 19 CFR 351.225(i).\4\ On
April 28, 2011, the Department initiated a later-developed merchandise
anti-circumvention inquiry.\5\
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\2\ The Laminated Woven Sacks Committee and its individual
members, Coating Excellence International, LLC and Polytex Fibers
Corporation, (collectively, ``Petitioners'').
\3\ See Petitioners' Requests for Circumvention Inquiries dated
January 21, 2011 and February 4, 2011.
\4\ See Petitioners' Partial Withdrawal of Request For
Determination of Circumvention (Printed Ink Colors) dated March 25,
2011.
\5\ See Laminated Woven Sacks From the People's Republic of
China: Initiation of Anti-Circumvention Inquiry, 76 FR 23791 (April
28, 2011) (``Initiation Notice'').
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On May 3, July 18, and September 2, 2011, the Department issued
various questionnaires to interested parties. On July 15, 2011, the
Department held a meeting with Petitioners to discuss the anti-
circumvention inquiry.
Scope of the Orders
The merchandise covered by the orders is laminated woven sacks.
Laminated woven sacks are bags or sacks consisting of one or more plies
of fabric consisting of woven polypropylene strip and/or woven
polyethylene strip, regardless of the width of the strip; with or
without an extrusion coating of polypropylene and/or polyethylene on
one or both sides of the fabric; laminated by any method either to an
exterior ply of plastic film such as biaxially-oriented polypropylene
(``BOPP'') or to an exterior ply of paper that is suitable for high
quality print graphics; \6\ printed with three colors or more in
register; with or without lining; whether or not closed on one end;
whether or not in roll form (including sheets, lay-flat tubing, and
sleeves); with or without handles; with or without special closing
features; not exceeding one kilogram in weight. Laminated woven sacks
are typically used for retail packaging of consumer goods such as pet
foods and bird seed.
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\6\ ``Paper suitable for high quality print graphics,'' as used
herein, means paper having an ISO brightness of 82 or higher and a
Sheffield Smoothness of 250 or less. Coated free sheet is an example
of a paper suitable for high quality print graphics.
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Effective July 1, 2007, laminated woven sacks are classifiable
under Harmonized Tariff Schedule of the United States (``HTSUS'')
subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were
previously classifiable under HTSUS subheading 6305.33.0020. If entered
with plastic coating on both sides of the fabric consisting of woven
polypropylene strip and/or woven polyethylene strip, laminated woven
sacks may be classifiable under HTSUS subheadings 3923.21.0080,
3923.21.0095, and 3923.29.0000. If entered not closed on one end or in
roll form (including sheets, lay-flat tubing, and sleeves), laminated
woven sacks may be classifiable under other HTSUS subheadings including
3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500. If the
polypropylene strips and/or polyethylene strips making up the fabric
measure more than 5 millimeters in width, laminated woven sacks may be
classifiable under other HTSUS subheadings including 4601.99.0500,
4601.99.9000, and 4602.90.0000. Although HTSUS subheadings are provided
for convenience and customs purposes, the written description of the
scope of this order is dispositive.
Scope of the Anti-Circumvention Inquiry
The merchandise subject to the anti-circumvention inquiry is
laminated
[[Page 72162]]
woven sacks produced with two ink colors printed in register and a
screening process (``screening-process sacks''). Petitioners allege
that Chinese producers of screening-process sacks have adapted the
screening process to create graphics that appear to have three or more
distinct colors visible, although they are produced using only two inks
and a screen. Petitioners contend that such graphics would normally be
printed using three inks printed in register at three different print
stations, which would then make them subject merchandise. However, by
adapting the screening process, Petitioners state that Chinese
producers of screening-process sacks are able to produce similar
graphics while only using two inks, thus making merchandise that is out
of scope and not subject to antidumping and countervailing duties.
The screening process at issue, as described by interested parties,
only uses two ink colors printed in register at two different print
stations. However, the artwork, by use of a screen, allows for
different shades of a single color to appear on the bag. Thus, when
printed, the screening-process sacks appear to have been printed with
more than two colored inks because more than two distinct colors are
visible on the finished product. As an example of the screening-process
sacks, the Department placed on the record of both proceedings five
laminated woven sacks imported by Shapiro: Two individual Manna Pro
Horse Feed sacks, two individual Red Head Deer Corn sacks, and one
Manna Pro Calf-Manna sack.\7\
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\7\ See Memo to the File from Jamie Blair-Walker regarding Anti-
circumvention Inquiry of Laminated Woven Sacks from the People's
Republic of China on the subject of Meeting with Counsel for the
Laminated Woven Sacks Committee and its individual members, Coating
Excellence International, LLC and Polytex Fibers Corporation, dated
July 15, 2011.
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Negative Preliminary Determination of Circumvention
For the reasons described below, we preliminarily determine that
the screening-process sacks are not later-developed merchandise because
they were commercially available at the time of the initiation of the
less-than-fair-value (``LTFV'') investigation on laminated woven sacks
from the PRC. Therefore, we also preliminarily determine that the
screening-process sacks are not circumventing the Orders within the
meaning of section 781(d) of the Act.
Applicable Statute
Section 781(d)(1) of the Act provides that the Department may find
circumvention of an antidumping or countervailing duty order when
merchandise is developed after an investigation is initiated (``later-
developed merchandise''). In conducting later-developed merchandise
anti-circumvention inquiries, under section 781(d)(1) of the Act, the
Department first determines whether the merchandise under consideration
is ``later-developed.'' \8\ To do so, the Department examines whether
the merchandise at issue was commercially available at the time of the
initiation of the LTFV investigation.\9\ We define commercial
availability as ``present in the commercial market or fully developed,
i.e., tested and ready for commercial production, but not yet in the
commercial market.'' \10\ In other words, the Department normally
considers: (1) Whether it was possible, at all, to manufacture the
product in question; and (2) if the technology existed, whether the
product was available in the market.\11\
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\8\ See Later-Developed Merchandise Anticircumvention Inquiry of
the Antidumping Duty Order on Petroleum Wax Candles from the
People's Republic of China: Affirmative Final Determination of
Circumvention of the Antidumping Duty Order, 71 FR 59075 (October 6,
2006) (``Candles Anticircumvention Final'') and accompanying Issues
and Decision Memorandum at Comment 4; see also Erasable Programmable
Read Only Memories from Japan; Final Scope Ruling, 57 FR 11599
(April 6, 1992) (``EPROMs from Japan''); Electrolytic Manganese
Dioxide from Japan; Final Scope Ruling, 57 FR 395 (January 6,
1992)(``EMD from Japan''); Portable Electronic Typewriters from
Japan, 55 FR 47358 (November 13, 1990).
\9\ See Candles Anticircumvention Final, 71 FR at 59077 and
Comment 4, affirmed by Target Corp. v. United States, 626 F. Supp.
2d 1285 (CIT 2009), and Target Corp. v. United States, 609 F.3d
1352, 1358-1360 (Fed. Cir. 2010) (``Target Corp. III'') (holding
that Commerce's interpretation of later-developed as turning on
whether the merchandise was commercially available at the time of
the investigation is reasonable).
\10\ See Target Corp. III, 609 F.3d at 1358; see also Candles
Anti-circumvention Final at Comment 4.
\11\ See Anticircumvention Inquiry of the Antidumping Duty Order
on Petroleum Wax Candles from the People's Republic of China:
Affirmative Preliminary Determination of Circumvention of the
Antidumping Duty Order, 71 FR 32033, 32038 (June 2, 2006), unchanged
in Candles Anticircumvention Final; see also EPROMs from Japan, 57
FR at 11602-3 (examining whether the technology to develop the new
product existed at the time of the original investigation);
Television Receiving Sets, Monochrome and Color, from Japan: Final
Scope Ruling, 56 FR 66841 (December 26, 1991) (noting that LCD TV
technology did not exist at the time the original product
descriptions were developed).
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If the Department determines that such merchandise was not
commercially available at the time of the initiation of the LTFV
investigation, and is thus later-developed, the Department will
consider whether the later-developed merchandise is covered by the
order by evaluating whether the general physical characteristics of the
merchandise under consideration are the same as subject merchandise
covered by the order,\12\ whether the expectations of the ultimate
purchasers of the merchandise under consideration are no different than
the expectations of the ultimate purchasers of subject merchandise,\13\
whether the ultimate use of the subject merchandise and the merchandise
under consideration are the same,\14\ whether the channels of trade of
both products are the same,\15\ and whether there are any differences
in the advertisement and display of both products.\16\ The Department,
after taking into account any advice provided by the United States
International Trade Commission (``ITC''), under section 781(e) of the
Act, may include such imported merchandise within the scope of an order
at any time an order is in effect.
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\12\ See section 781(d)(1)(A) of the Act.
\13\ See section 781(d)(1)(B) of the Act.
\14\ See section 781(d)(1)(C) of the Act.
\15\ See section 781(d)(1)(D) of the Act.
\16\ See section 781(d)(1)(E) of the Act.
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Commercial Availability Analysis
In determining the commercial availability of the screening-process
sacks at issue in this inquiry, the Department first examined whether
it was possible to produce the merchandise. The Department then
examined if there was evidence of the screening-process sacks being
commercially available in the market prior to the initiation of the
LTFV investigation.
As noted by the ITC, the developing nature of the industry at the
time of the LTFV investigation could have had tempered the demand for
screening-process sacks.\17\ Therefore, the Department examined whether
the technology needed to produce screening-process sacks existed prior
to the LTFV investigation as part of these preliminary results. Based
on the record evidence, the Department finds that the technology for
producing screening-process sacks was available prior to the LTFV
investigation. From 2005-2007, all interested parties providing
information and comments for this record purchased the technology to
use a screening process in production of laminated woven sacks,
although the number of inks that were printed on the laminated woven
sacks varied for different products (i.e., included the use of only two
inks as well as the use of
[[Page 72163]]
three or more).\18\ Furthermore, all parties agree that the screening
technology used on laminated woven sacks was not new at the time of the
initiation of the LTFV investigation.\19\
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\17\ See Laminated Woven Sacks from China, Investigation Nos.
701-TA-450 and 731-TA-1122 (Preliminary), ITC Publication 3942
(August 2007) (``ITC Preliminary Determination'') at 31.
\18\ See Commercial Packaging's Supplemental Questionnaire
Response dated September 16, 2011 at 2; see also Response of the
Laminated Woven Sacks Committee to the Department's Questionnaire of
September 2, 2011 dated September 16, 2011 at 4; see also Shapiro's
Supplemental Questionnaire Response dated September 16, 2011 at 2.
\19\ See Commercial Packaging's Supplemental Questionnaire
Response dated September 16, 2011 at 3; see also Petitioners'
Questionnaire Response dated May 18, 2011 at 12; see also Shapiro's
Supplemental Questionnaire Response dated September 16, 2011 at 2.
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With regard to whether the screening-process sacks were available
in the market at the time of the LTFV investigation, in response to the
initiation of this anti-circumvention inquiry, Shapiro submitted
evidence of at least one sale destined for the United States of the
screening-process sacks. Specifically, Shapiro provided an invoice,
packing list, bill-of-lading, purchase order, and approved screen
artwork associated with the 2005 sale of the Manna Pro Horse Feed
Sack.\20\ The purchase order references the use of reverse printing
with two inks: Red PMS 186 and Blue PMS 072.\21\ The corresponding
artwork, signed and approved for production on February 15, 2005, in
conjunction with the related paperwork discussed above demonstrates the
use of a screen in production.\22\ Shapiro's supplier's use of the
screening process in combination with two inks in production of
laminated woven sacks beginning in 2005 was also confirmed in an
affidavit from the Assistant Vice-President of Purchasing at Manna Pro,
the customer that coordinates the design of, and buys, the Manna Pro
Horse Feed Sack from Shapiro.\23\ Shapiro also stated that it sold
147,842.50 lbs. of the Manna Pro Horse Feed Sack prior to the date of
initiation of the LTFV investigation.\24\ Although Shapiro states that
it permanently changed the design of the art work to accommodate the
use of only two inks and a screening process with respect to the
specific sacks on this record after the publication of the preliminary
determination in the LTFV investigation, Shapiro demonstrated that it
used two inks and a screening process for some of the designs at least
occasionally prior to the initiation of the LTFV investigation.\25\
Finally, as demonstrated by an affidavit supplied by Commercial
Packaging, the screening process has been used to produce graphics on
laminated woven sacks prior to the LTFV investigation.\26\ Therefore,
the above information on the record demonstrates that sacks produced
with a screening process and two inks were commercially available prior
to the LTFV investigation.
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\20\ See Shapiro's Comments on Initiation dated May 19, 2011 at
Exhibit 1.
\21\ See Id.
\22\ See Id. and at Exhibit 2.
\23\ See Id. at Exhibit 3.
\24\ See Id. at 2.
\25\ See Shapiro's Supplemental Questionnaire Response dated
July 28, 2011 at 1.
\26\ See Commercial Packaging's Comments on Petitioners'
Submission Dated May 17, 2011 dated June 2, 2011 at 9 and Exhibit 2.
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Finally, parties provided affidavits on the record stating that
using only two inks and a screening process reduces the cost of
production.\27\ Although Petitioners contend that, despite the use of
only two print stands and fewer inks, the development of the artwork
and the time needed to readjust the machinery could possibly increase
the production costs of screening-process sacks versus subject
merchandise, the Department finds that if the customer seeks a simpler
graphic, the use of only two inks and a screening process is a viable
option to produce a less complex and possibly more affordable
image.\28\
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\27\ See Shapiro's Comments on Initiation dated May 19, 2011 at
Exhibit 3.
\28\ See Commercial Packaging's Comments on Petitioners'
Submission Dated May 17, 2011 dated June 2, 2011 at Exhibit 2.
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As demonstrated above, the screening technology existed prior to
the LTFV investigation and had been applied to laminated woven sacks
since 2005 (including with the use of only two inks). Thus, the
Department finds that it was possible to produce screening-process
sacks prior to the LTFV investigation and concludes that the screening-
process sacks were commercially available, i.e., tested and ready for
commercial production prior to the LTFV investigation.
Summary of Analysis
After analyzing the above factors, the Department has made a
preliminary determination that the screening-process sacks are not
later-developed merchandise.\29\ The agreement of all parties that the
technology was available prior to the initiation of the LTFV
investigation coupled with the fact that Shapiro demonstrated the sale
of screening-process sacks to the United States has led to the
Department's preliminary determination that the screening-process sacks
were commercially available prior to the initiation of the LTFV
investigation and are therefore not later-developed merchandise.
Furthermore, because the Department has preliminarily determined that
the screening-process sacks are not later-developed merchandise, the
Department does not need to consider the criteria in section 781(d) of
the Act to determine if the screening-process sacks are subject
merchandise.\30\ Therefore, we preliminarily determine that, because
the sacks are not later-developed merchandise, they do not circumvent
the Orders.
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\29\ See Candles Anticircumvention Final, 71 FR at 59075 at
Comment 4; see also EPROMs from Japan; EMD from Japan; Portable
Electronic Typewriters from Japan, 55 FR 47358 (November 13, 1990).
\30\ See Electroytic Manganese Dioxide from Japan; Preliminary
Scope Ruling, 56 FR 56977 (Nov 7, 1991) (``if a product is developed
before an antidumping case is initiated, the later-developed product
provision is clearly inapplicable'') unchanged in final EMD from
Japan.
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Public Comment
Interested parties may submit case briefs and/or written comments
no later than 30 days after the date of publication of these
preliminary results of review.\31\ Rebuttal briefs and rebuttals to
written comments, limited to issues raised in such briefs or comments
may be filed no later than five days after the deadline for filing case
briefs.\32\ Parties who submit case briefs or rebuttal briefs in this
proceeding are requested to submit with each argument: (1) A statement
of the issue; (2) a brief summary of the argument; and (3) a table of
authorities.\33\ Case briefs and rebuttal briefs must be submitted on
both proceedings.
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\31\ See 19 CFR 351.309(c)(1)(ii).
\32\ See 19 CFR 351.309(d).
\33\ See 19 CFR 351.309(c) and (d).
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Interested parties, who wish to request a hearing, or to
participate if one is requested, must submit a written request to the
Assistant Secretary for Import Administration within 30 days after the
date of publication of this notice, pursuant to 19 CFR 351.310.
Requests should contain the party's name, address, and telephone
number, the number of participants, and a list of the issues to be
discussed. At the hearing, each party may make an affirmative
presentation only on issues raised in that party's case brief and may
make rebuttal presentations only on arguments included in that party's
rebuttal brief. If a hearing is requested, we will notify those parties
that requested a hearing of a hearing date and time.
Final Determination
The final determination with respect to this anti-circumvention
inquiry will be issued no later than February 16, 2012, including the
results of the
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Department's analysis of any written comments. This preliminary
negative circumvention determination is published in accordance with
section 781(d) of the Act and 19 CFR 351.225.
Dated: November 15, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-30164 Filed 11-21-11; 8:45 am]
BILLING CODE 3510-DS-P