[Federal Register Volume 79, Number 97 (Tuesday, May 20, 2014)]
[Notices]
[Pages 28891-28893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11693]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-916]
Laminated Woven Sacks From the People's Republic of China: Notice
of Court Decision Not in Harmony With Final Results and Amended Final
Results of the Antidumping Duty Administrative Review; 2009-2010
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: On December 13, 2013, the United States Court of Appeals for
Federal Circuit (CAFC), issued its decision in AMS Associates, Inc. v.
United States, 737 F.3d 1338 (CAFC 2013) (AMS II), affirming the Court
of International Trade's (CIT) decision in AMS Associates, Inc. v.
United States, 881 F. Supp. 2d 1374 (CIT 2012) (AMS I). In AMS I, the
CIT held that the Department of Commerce (the Department) exceeded its
authority under 19 CFR 351.225(l) by retroactively suspending
liquidation of entries of laminated woven sacks (LWS) produced in the
People's Republic of China (PRC) using fabric imported from third-
countries. Accordingly, the CIT remanded the case and ordered the
Department to issue instructions to U.S. Customs and Border Protection
(CBP) to lift the suspension of liquidation and liquidate the affected
entries without regard to duties. Consistent with the decision of the
CAFC in Timken,\1\ as clarified by Diamond Sawblades,\2\ the Department
is notifying the public that the final judgment in this case is not in
harmony with the Department's AR2 Final Results,\3\ that it will
liquidate the
[[Page 28892]]
entries at issue in AMS I and AMS II without regard to duties, and that
it is amending the effective date of its country of origin
determination regarding LWS produced in the PRC from imported fabric.
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\1\ See Timken Co. v. United States, 893 F.2d 337 (Fed. Cir.
1990) (``Timken'').
\2\ See Diamond Sawblades Mfrs. Coalition v. United States, 626
F.3d 1374 (Fed. Cir. 2010) (``Diamond Sawblades'').
\3\ See Laminated Woven Sacks From the People's Republic of
China: Final Results of Second Antidumping Duty Administrative
Review, 76 FR 21333 (April 15, 2011) (``AR2 Final Results'').
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DATES: Effective Date: March 24, 2014.
FOR FURTHER INFORMATION CONTACT: Irene Gorelik, Office V, Enforcement
and Compliance, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, DC,
20230; telephone: (202) 482-6905.
SUPPLEMENTARY INFORMATION:
Background
On August 7, 2008, the Department issued an antidumping duty order
on LWS from the PRC.\4\ The scope of the Order stated that:
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\4\ See Notice of Antidumping Duty Order: Laminated Woven Sacks
from the People's Republic of China, 73 FR 45941 (August 7, 2008)
(``Order'').
The merchandise covered by this investigation 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; 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
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consumer goods such as pet foods and bird seed.
First Administrative Review
In the first administrative review of the antidumping duty order on
LWS from the PRC, the Department preliminarily determined that the
country of origin of LWS produced in the PRC from imported woven fabric
is the PRC.\5\ As a result, the Department issued instructions
notifying CBP to continue suspending liquidation of all LWS from the
PRC, regardless of the country of origin of the woven fabric,
consistent with the suspension of liquidation instructions issued
following the Order.\6\
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\5\ See Laminated Woven Sacks from the People's Republic of
China: Preliminary Results of Antidumping Duty Administrative
Review, 75 FR 55568, 55569 (September 13, 2010).
\6\ See CBP Message No. 020431 (July 23, 2010); see also CBP
Message No. 8234202 (August 21, 2008) (ordering CBP to suspend
imports of LWS from the PRC that were entered or withdrawn from
warehouse for consumption on or after January 31, 2008).
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Following the preliminary results, the Department issued additional
instructions to CBP to mitigate inaccurate reporting of entries arising
from the technical restrictions of CBP's electronic filing system.
These instructions created a series of 10-digit case numbers to allow
LWS produced in the PRC from fabric originating in a third country to
be properly claimed as LWS subject to the Order upon entry into the
United States.\7\
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\7\ See CBP Message No. 0327303 (November 23, 2010); see also
CBP Message No. 0327306 (November 23, 2010).
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In its March 18, 2011 final results, the Department finalized its
country of origin determination and continued to find that the LWS
finishing process, which includes lamination and printing processes,
substantially transforms the inherent nature of the woven fabric input.
The Department also continued to find that, when such substantial
transformation takes place in the PRC, the country of origin for the
produced LWS is the PRC.\8\
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\8\ See Laminated Woven Sacks from the People's Republic of
China: Final Results of First Antidumping Order Administrative
Review, 76 FR 14906, 14906-07 (March 18, 2011) (``AR1 Final
Results'') and accompanying Issues and Decision Memorandum at
Comments 1b and 1d.
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Second Administrative Review
On September 29, 2010, the Department initiated the second
administrative review of LWS from the PRC.\9\ Because parties only
requested a review of Zibo Aifudi Plastic Packaging Co. Ltd. (Zibo
Aifudi), we initiated the review with Zibo Aifudi as the sole mandatory
respondent. Thereafter, Zibo Aifudi notified the Department of its
intent to withdraw from the review and refused to participate in the
review. Thus, in the preliminary results, we determined that, because
Zibo Aifudi failed to respond to the Department's antidumping duty
questionnaires and withdrew its participation from the review, it was
not eligible for a separate rate and should treated as part of the PRC-
wide entity, to which we subsequently assigned an adverse facts
available rate.\10\
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\9\ See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Requests for Revocation in Part, 75 FR
60076 (September 29, 2010).
\10\ See Laminated Woven Sacks From the People's Republic of
China: Preliminary Results of the Second Administrative Review, 75
FR 81218 (December 27, 2010).
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AMS Associates, Inc., (d/b/a Shapiro Packaging) (AMS), the U.S.
importer of LWS exported by Zibo Aifudi, entered an appearance in the
second administrative review and filed its case brief, contending that
the Department's country of origin determination in the first
administrative review was procedurally erroneous and that the
Department had no statutory or regulatory basis to issue suspension
instructions to CBP in the context of an annual administrative review.
However, AMS did not challenge the Department's (1) country of origin
determination on LWS produced in the PRC from imported fabric, (2)
preliminary determination of Zibo Aifudi's ineligibility for a separate
rate, (3) application of adverse facts available to the PRC-wide
entity, or (4) the adverse facts available rate applied to the PRC-wide
entity. In the AR2 Final Results, the Department continued to find that
the application of adverse facts available was warranted for the PRC-
wide entity and that it followed the correct procedures in making the
country of origin determination in the prior review.\11\
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\11\ See AR2 Final Results, 76 FR at 21334, and accompanying
Issues and Decision Memorandum at Comment 1.
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Court Rulings
Subsequently, AMS challenged the Department's AR2 Final Results,
arguing that the Department did not act in accordance with its own
regulations by conducting a scope analysis during the course of the
first administrative review and exceeded its authority by issuing
instructions to CBP to suspend LWS produced in the PRC from imported
fabric.\12\ On December 18, 2012, the CIT held that the Department
exceeded its authority by suspending liquidation of all entries of LWS
produced in the PRC from imported fabric, which AMS reported as non-
subject merchandise based solely on the country of origin of the fabric
input.\13\ The CIT remanded the case and ordered the Department to
issue instructions to CBP to lift the suspension and liquidate the
affected entries (LWS produced in the PRC from imported fabric) without
regard to duties.\14\
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\12\ See AMS I, 881 F. Supp. 2d at 1378-79.
\13\ See id., at 1382-83.
\14\ See id., at 1383.
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On December 21, 2012, the United States moved to stay execution of
the judgment pending appeal. On January 11, 2013, the CIT granted the
United States' motion and ordered that execution of the judgment,
including liquidation of the entries at issue, be stayed through the
conclusion of any appeal.
On appeal, the CAFC affirmed the CIT's judgment, holding that the
Department (1) erred in failing to
[[Page 28893]]
conduct a formal scope inquiry in this case because the scope of the
original antidumping order was unclear, and (2) exceeded its authority
under 19 CFR 351.225(l)(2) by ordering the suspension of liquidation
retroactive to the beginning of the period of review when the order did
not clearly cover LWS manufactured in the PRC from imported
fabrics.\15\
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\15\ See AMS II, 737 F.3d at 1344.
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Timken Notice
In its decision in Timken, 893 F.2d at 341, as clarified by Diamond
Sawblades, the CAFC held that, pursuant to section 516A(e) of the Act,
the Department must publish a notice of a court decision that is not
``in harmony'' with a Department determination and must suspend
liquidation of entries pending a ``conclusive'' court decision. The
CAFC's December 13, 2013, judgment in AMS II constitutes a final
decision of that court that is not in harmony with the AR2 Final
Results. This notice is published in fulfillment of the publication
requirements of Timken. Accordingly, as instructed, the Department will
lift the suspension of liquidation of the entries at issue.
Amended Final Results
Because there is now a final court decision, we are amending the
AR2 Final Results to reflect the results of the litigation. The revised
effective date of the Department's country of origin determination is
now the publication date of the final results of the first
administrative review, March 18, 2011.\16\ Accordingly, the Department
will instruct CBP to liquidate entries of LWS produced in the PRC from
imported fabric that were entered, or withdrawn from warehouse, for
consumption, before March 18, 2011 without regard to duties.\17\ The
Department will release the draft instructions to interested parties
prior to transmission of these instructions to CBP.
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\16\ See AR1 Final Results, 76 FR at 14906.
\17\ See AMS II, 737 F.3d at 1344 (affirming a remand to lift
the liquidation suspension for the entries which were the subject of
the AMS litigation).
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This notice is issued and published in accordance with sections
516A(e), 751(a)(1), and 777(i)(1) of the Act.
Dated: May 14, 2014.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2014-11693 Filed 5-19-14; 8:45 am]
BILLING CODE 3510-DS-P