[Federal Register Volume 82, Number 234 (Thursday, December 7, 2017)]
[Notices]
[Pages 57709-57714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26398]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-900]


Diamond Sawblades and Parts Thereof From the People's Republic of 
China: Initiation of Anti-Circumvention Inquiry

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a request from Diamond Sawblades Manufacturers' 
Coalition (the petitioner), the Department of Commerce (the Department) 
is initiating an anti-circumvention inquiry to determine whether 
certain imports of diamond sawblades and parts thereof (diamond 
sawblades) comprised of cores and

[[Page 57710]]

segments produced in the People's Republic of China (PRC) and joined 
into finished diamond sawblades in, and exported from, Thailand are 
circumventing the antidumping duty order on diamond sawblades from the 
PRC.

DATES: Applicable December 7, 2017.

FOR FURTHER INFORMATION CONTACT: Yang Jin Chun, AD/CVD Operations 
Office I, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW., Washington, DC 20230; telephone: (202) 482-5760.

SUPPLEMENTARY INFORMATION: 

Background

    Effective January 23, 2009, the Department published the 
antidumping duty order on diamond sawblades from the PRC.\1\ On August 
9, 2017, the petitioner filed a request for a circumvention ruling, 
requesting that the Department issue a determination of circumvention 
and suspend liquidation of certain diamond sawblades exported from 
Thailand.\2\ Specifically, the petitioner requests a circumvention 
ruling for three companies, Diamond Tools Technology (Diamond Tools), 
Bosun Tools (Thailand) Co., Ltd. (Bosun), and Kingthai Diamond Tools 
(Kingthai).\3\ The petitioner requests that, in the alternative, and to 
the extent that the Department decides it to be more appropriate, the 
Department address circumvention issues in a changed circumstances 
review.\4\
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    \1\ See Diamond Sawblades and Parts Thereof from the People's 
Republic of China and the Republic of Korea: Antidumping Duty 
Orders, 74 FR 57145 (November 4, 2009).
    \2\ See the Letter from the petitioner, ``Diamond Sawblades and 
Parts Thereof from the People's Republic of China: Request for 
Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 
1930 or in the Alternative a Changed Circumstances Review Pursuant 
to Section 751(b) of the Act,'' dated August 9, 2017 (the 
petitioner's circumvention ruling request), as amended in 
``Supplemental Submission Regarding Request for Circumvention Ruling 
Pursuant to Section 781(b) of the Tariff Act of 1930 or in the 
Alternative a Changed Circumstances Review Pursuant to Section 
751(b) of the Act,'' dated September 14, 2017 (supplement to the 
petitioner's circumvention ruling request).
    \3\ See Supplement to the petitioner's circumvention ruling 
request at 10-12.
    \4\ See the petitioner's circumvention ruling request at 22.
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    On September 22, 2017, we received a letter from Bosun Tools Co., 
Ltd. (Bosun China) and its affiliate Bosun Tools (Thailand) Co., Ltd. 
(Bosun Thailand) (collectively Bosun), arguing that Bosun Thailand has 
not engaged in the alleged activity of joining cores and segments made 
in the PRC and exporting them to the United States. Bosun claims that 
the petitioner did not support its allegation with any evidence with 
respect to Bosun. Bosun explains that the petitioner did not cite to 
record evidence supporting its allegation of limited manufacturing 
operations at Bosun Thailand, although the affiliation between Bosun 
China and Bosun Thailand is on the public record in the last completed 
administrative review of the order.\5\
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    \5\ See Bosun's Response to DSMC's Request for Anti-
Circumvention Inquiry dated September 22, 2017.
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    On October 2, 2017, the Department issued a supplemental 
questionnaire to the petitioner requesting additional information.\6\ 
On October 16, 2017, the petitioner submitted its response to the 
Department's supplemental questionnaire.\7\ On October 26, 2017, 
Diamond Tools submitted its opposition to the petitioner's request for 
a circumvention ruling. In it, Diamond Tools denies that it 
circumvented the antidumping duty order on diamond sawblades from the 
PRC. Diamond Tools contends that the Department determined in the 
investigation that the country in which the cores and segments are 
joined is the country of origin.\8\ Diamond Tools argues that the U.S. 
Court of International Trade upheld the Department's decision with 
respect to the country of origin in the investigation.\9\
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    \6\ See the Department's supplemental questionnaire to the 
petitioner dated October 2, 2017.
    \7\ See the petitioner's supplemental response dated October 16, 
2017 (the petitioner's supplemental response).
    \8\ See Diamond Tools' letter, ``Diamond Sawblades & Parts 
Thereof from the People's Republic of China: Response to Request by 
Diamond Sawblades Manufacturers' Coalition for Anti-Circumvention 
Ruling'' dated October 26, 2017 at 3 (citing Final Determination of 
Sales at Less Than Fair Value and Final Partial Affirmative 
Determination of Critical Circumstances: Diamond Sawblades and Parts 
Thereof from the People's Republic of China, 71 FR 29303 (May 22, 
2006) (Final Determination--China), and accompanying Issues and 
Decision Memorandum (I&D Memo) at Comment 4).
    \9\ Id. at 4 (citing Advanced Tech. & Materials Co. v. United 
States, No. 09-00511, slip op. 11-122, 2011 Ct. Intl. Trade LEXIS 
136, *1 at *9-*15 (Ct. Int'l Trade Oct. 12, 2011)).
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Scope of the Order

    The products covered by the order are all finished circular 
sawblades, whether slotted or not, with a working part that is 
comprised of a diamond segment or segments, and parts thereof, 
regardless of specification or size, except as specifically excluded 
below. Within the scope of the order are semi-finished diamond 
sawblades, including diamond sawblade cores and diamond sawblade 
segments. Diamond sawblade cores are circular steel plates, whether or 
not attached to non-steel plates, with slots. Diamond sawblade cores 
are manufactured principally, but not exclusively, from alloy steel. A 
diamond sawblade segment consists of a mixture of diamonds (whether 
natural or synthetic, and regardless of the quantity of diamonds) and 
metal powders (including, but not limited to, iron, cobalt, nickel, 
tungsten carbide) that are formed together into a solid shape (from 
generally, but not limited to, a heating and pressing process).
    Sawblades with diamonds directly attached to the core with a resin 
or electroplated bond, which thereby do not contain a diamond segment, 
are not included within the scope of the order. Diamond sawblades and/
or sawblade cores with a thickness of less than 0.025 inches, or with a 
thickness greater than 1.1 inches, are excluded from the scope of the 
order. Circular steel plates that have a cutting edge of non-diamond 
material, such as external teeth that protrude from the outer diameter 
of the plate, whether or not finished, are excluded from the scope of 
the order. Diamond sawblade cores with a Rockwell C hardness of less 
than 25 are excluded from the scope of the order. Diamond sawblades 
and/or diamond segment(s) with diamonds that predominantly have a mesh 
size number greater than 240 (such as 250 or 260) are excluded from the 
scope of the order.
    Merchandise subject to the order is typically imported under 
heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). When packaged together as a set for retail sale with an 
item that is separately classified under headings 8202 to 8205 of the 
HTSUS, diamond sawblades or parts thereof may be imported under heading 
8206.00.00.00 of the HTSUS. On October 11, 2011, the Department 
included the 6804.21.00.00 HTSUS classification number to the customs 
case reference file, pursuant to a request by CBP.\10\
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    \10\ See Diamond Sawblades and Parts Thereof from the Republic 
of Korea: Preliminary Results of Antidumping Duty Administrative 
Review, 76 FR 76128 (December 6, 2011).
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    The tariff classification is provided for convenience and customs 
purposes; however, the written description of the scope of the order is 
dispositive.

Merchandise Subject to the Anti-Circumvention Inquiry

    This anti-circumvention inquiry covers diamond sawblades exported 
from Thailand to the United States that are produced by Diamond Tools 
from cores and segments of PRC origin. If warranted, the Department 
may, based

[[Page 57711]]

on additional evidence it receives from interested parties regarding 
potential anti-circumvention of the PRC Sawblades Order by other Thai 
companies, consider conducting additional inquiries concurrently.
    The petitioner requests that the Department treat diamond sawblades 
assembled in Thailand with cores and segments from the PRC as subject 
merchandise under the scope of the antidumping duty order on diamond 
sawblades from the PRC.

Initiation of Anti-Circumvention Inquiry

    Section 781(b)(1) of The Tariff Act of 1930, as amended (the Act), 
provides that the Department may find circumvention of an antidumping 
or countervailing duty order if: (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 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 
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. As discussed below, the 
petitioner provided information available to them with respect to these 
criteria.\11\
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    \11\ See section 781(b)(1) of the Act.
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A. Merchandise of the Same Class or Kind

    The petitioner claims that, in accordance with section 
781(b)(1)(A)(i) of the Act, diamond sawblades exported from Thailand to 
the United States are identical to diamond sawblades exported from the 
PRC to the United Sates subject to the antidumping duty order. The 
petitioner contends that, because cores, segments, and diamond 
sawblades are all one class or kind of subject merchandise, a process 
that simply transforms one of these items to another should not serve 
as an avenue for PRC producers to evade the antidumping duty order.\12\
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    \12\ See the petitioner's circumvention ruling request at 13-14 
and Exhibit 9 for U.S. imports of diamond sawblades from the PRC and 
Thailand under the same HTSUS subheadings.
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B. Completion of Merchandise in a Third Country Before Importation Into 
the United States

    The petitioner contends that, in Thailand, cores made in the PRC 
are being joined to segments made in the PRC and undergo a minor 
welding operation and minor processing before they are imported into 
the United States.\13\ The petitioner claims that PRC producers with 
facilities in Thailand for which it requests an anti-circumvention 
inquiry are as follows: Bosun Tools Co., Ltd., Hebei Jikai Group, and 
Wuhan Wanbang Laser Diamond Tools Co., Ltd.\14\ The petitioner also 
notes that, pursuant to an investigation under the Enforce and Protect 
Act, CBP recently issued a Notice of Interim Measures finding a 
reasonable suspicion that Diamond Tools was evading the order.\15\
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    \13\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 10-12. See also the petitioner's supplemental response 
at 2-6 and Exhibits 5-6.
    \14\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 1, 4, and 5. See also supplement to the petitioner's 
circumvention ruling request at 10 for Wuhan Wanbang Laser Diamond 
Tools Co., Ltd.
    \15\ See the petitioner's circumvention ruling request at 9 and 
Exhibit 8 (where the petitioner cites to Memorandum from Troy P. 
Riley, Executive Director, Trade Remedy & Law Enf't Directorate, to 
Yan Li, Diamond Tools Tech., ``re: Notice of interim measures taken 
as to Diamond Tools Technology LLC concerning a reasonable suspicion 
as to evasion of the antidumping duty order on Diamond Sawblades 
from the People's Republic of China,'' dated June 27, 2017 (Notice 
of Interim Measures).
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C. Minor or Insignificant Process

    The petitioner explains that, in accordance with section 
781(b)(1)(C) of the Act, the Department considers whether the assembly 
or completion that occurs in the other foreign country is minor or 
insignificant. The petitioner states that, under section 781(b)(2)(A)-
(E) of the Act, the Department considers five factors to determine 
whether the process of assembly or completion is minor or 
insignificant. The petitioner alleges that, based on these factors, the 
completion of the merchandise in Thailand is minor and 
insignificant.\16\
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    \16\ See the petitioner's circumvention ruling request at 16.
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1. Level of Investment in Thailand
    The petitioner argues that there is little evidence of any 
significant level of investment in Thailand for production activities 
beyond joining cores and segments and laser welding.\17\ In other 
words, according to the petitioner, diamond sawblades production 
facilities in Thailand are not sophisticated enough to produce 
segments. The petitioner explains that the production of segments is a 
complex process that requires detailed expertise in metallurgy and 
technical experience in bonding of diamond powders and metal powders in 
the production process and the performance of diamond sawblades for 
particular applications. The petitioner claims that only highly skilled 
technicians can perform such production processes, while laser-welding 
is a highly-automated process that essentially only requires a person 
who can operate a keyboard.\18\ The petitioner claims further that 
other methods of joining cores and segments, e.g., silver soldering or 
sintering, are even less sophisticated than laser-welding.\19\
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    \17\ See the petitioner's circumvention ruling request at 16-18 
and Exhibits 8, 10, 11, and 12. See also the petitioner's 
supplemental response at 9-10 and Exhibits 5-6.
    \18\ See the petitioner's circumvention ruling request at 16-17.
    \19\ The Department considers that this portion of the 
petitioner's circumvention ruling request is relevant to the 
consideration contained in section 781(b)(2)(C) (``the nature of the 
production process in the foreign country'').
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    The petitioner distinguishes the level of capital investment 
between segment production and laser-welding. The petitioner explains 
that segment production requires significant capital investment for 
equipment such as weighing scales, mixing equipment, granulating 
equipment, cold pressing equipment, sintering presses, inspecting 
equipment, and radius grinding equipment. The petitioner claims that, 
in particular, the induction and resistance presses used in segment 
production represent a substantial capital investment. The petitioner 
contends that the capital investment required for joining cores and 
segments is essentially limited to a piece of laser-welding equipment.
    The petitioner distinguishes the level of costs between segment 
production and joining cores and segments. According to the petitioner, 
the production cost for finished diamond sawblades segments may 
represent approximately 70 percent of the cost of producing a finished 
diamond sawblade, whereas joining cores and segments typically accounts 
for a much smaller percentage of the cost of production, often as low 
as 0.5 percent of the cost of a finished diamond

[[Page 57712]]

sawblade.\20\ The petitioner also asserts that laser welding requires a 
relatively small capital investment because the only piece of machinery 
needed to join cores and segments through laser welding is a laser 
welder itself.\21\
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    \20\ See the petitioner's circumvention ruling request at 17. 
The Department considers that this portion of the petitioner's 
circumvention ruling request is relevant to the consideration 
contained in section 781(b)(1)(D) (``the value of the merchandise 
produced in the foreign country to which the antidumping order 
applies is a significant portion of the total value of the 
merchandise exported to the United States'').
    \21\ See the petitioner's supplemental response at 9-10 and 
Exhibits 5.
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    The petitioner argues that, for these reasons, the joining 
operations require very minimal investment.\22\
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    \22\ See the petitioner's circumvention ruling request at 16-18. 
See also the petitioner's supplemental response at 9-10 and Exhibits 
5-6.
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2. Level of Research and Development
    The petitioner argues that, because laser-welding is a highly-
automated process and other methods of joining cores and segments are 
less sophisticated than laser-welding, entities joining the PRC cores 
and segments in Thailand do not, and do not need to, invest in research 
and development in Thailand.\23\
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    \23\ See the petitioner's circumvention ruling request at 18. 
See also the petitioner's supplemental response at 10-12 and 
Exhibits 5-6.
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3. Nature of Production Process
    The petitioner states that there is very minimal additional 
processing done in Thailand to diamond sawblades produced in the PRC 
and exported to Thailand and later re-exported to the United States. 
The petitioner reiterates that joining cores and segments is a highly 
automated process and, compared to segment production, welding of cores 
and segments is a minimal step in the overall production process.\24\ 
As mentioned above, the petitioner explains that the production of 
segments is a complex process that requires detailed expertise in 
metallurgy and technical experience in bonding of diamond powders and 
metal powders in the production process and the performance of diamond 
sawblades for particular applications. The petitioner claims that only 
highly skilled technicians can perform such production processes, while 
laser-welding is a highly-automated process that essentially only 
requires a person who can operate a keyboard.\25\ The petitioner claims 
further that other methods of joining cores and segments, e.g., silver 
soldering or sintering, are even less sophisticated than laser-welding.
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    \24\ See the petitioner's circumvention ruling request at 18. 
See also the petitioner's supplemental response at 12-14 and 
Exhibits 5, 6, 11, and 12.
    \25\ See the petitioner's circumvention ruling request at 16-17.
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4. Extent of Production Facilities in Thailand
    The petitioner explains that, before the imposition of the 
antidumping duty order on diamond sawblades from the PRC in 2009, 
Thailand had very minimal exports of diamond sawblades to the United 
States. The petitioner contends that little, if any, of the increase of 
exports of diamond sawblades from Thailand--from $1.8 million in 2006 
to $5.8 million in 2012 to $11.4 million in 2013 to $41.7 million in 
2016--is due to an increase in production facilities in Thailand.\26\ 
The petitioner explains that evidence indicates very limited investment 
in building facilities in Thailand for production of diamond 
sawblades.\27\
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    \26\ See the petitioner's circumvention ruling request at 19 and 
Exhibit 9. See also the petitioner's supplemental response at 14-16 
and Exhibit 7.
    \27\ See the petitioner's circumvention ruling request at 19. 
See also the petitioner's supplemental response at 14-16 and Exhibit 
9.
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5. Value of Processing in Thailand
    The petitioner reiterates that the joining of cores and segments 
constitutes a small portion of the cost and represents the smallest 
portion of the production costs of diamond sawblades imported into the 
United States. The petitioner provides information indicating that 
cores and segments produced in the PRC represent the vast majority of 
the value of the products exported to the United States.\28\
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    \28\ See the petitioner's circumvention ruling request at 19-20. 
See also the petitioner's supplemental response at 16-17 and 
Exhibits 5-6.
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D. Value of Merchandise Produced in the PRC Is a Significant Portion of 
the Total Value of the Merchandise Exported to the United States

    The petitioner explains that the value of the segments and cores 
produced in China represent the vast majority of the value of the 
products exported to the United States.\29\ Further, the petitioner 
states that the cost breakdown of a typical finished diamond sawblade 
shows that manufacture of the segments and the core comprise the bulk 
of its value.\30\
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    \29\ See the petitioner's circumvention ruling request at 20.
    \30\ See the petitioner's supplemental response at 7.
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E. Additional Factors To Consider in Determining Whether Action Is 
Necessary

    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 into the United States, and (C) whether imports 
into the foreign country of the merchandise . . . have increased after 
the initiation of the investigation which resulted in the issuance of 
such order or finding.'' The petitioner claims an increase of the 
imports of diamond sawblades from Thailand from $0.4 million in 2005, 
before the investigation, to $4 million at the time of the imposition 
of the antidumping duty order in 2009 to $40.5 million in 2015 and 
$41.7 million in 2016 represents a noticeable shift in patterns of 
trade since the Department issued the antidumping duty order. Moreover, 
the petitioner provided import statistics showing a significant 
increase in U.S. imports of diamond sawblades from Thailand between 
2005 and 2015 and in particular, massive increases in imports between 
2010-2015.\31\
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    \31\ See the petitioner's circumvention ruling request at 
Exhibit 9.
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    The petitioner argues that there is evidence of affiliation between 
PRC producers and their Thai counterparts that are engaged in 
circumvention of the antidumping duty order. For example, the 
petitioner claims that Wuhan Wanbang Laser Diamond Tools Co., Ltd., has 
established an affiliate in Thailand, i.e., Diamond Tools Technology 
(Thailand), for which CBP determined that there is a reasonable 
suspicion that Diamond Tools has entered merchandise into the United 
States through evasion.\32\ The petitioner explains that PRC producers 
of diamond sawblades, e.g., Bosun Tools Co., Ltd. have opened 
facilities in Thailand.\33\
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    \32\ See the petitioner's circumvention ruling request at 21-22.
    \33\ See the petitioner's circumvention ruling request at 
Exhibit 8 and supplement to the petitioner's circumvention ruling 
request at 10 for Wuhan Wanbang Laser Diamond Tools Co., Ltd., and 
Diamond Tools Technology (Thailand) as an example.
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Analysis of the Allegation

    Based on our analysis of the petitioner's anti-circumvention 
allegation and the information provided therein, we find that an anti-
circumvention inquiry of the antidumping duty order on diamond

[[Page 57713]]

sawblades from the PRC is warranted with respect to Diamond Tools. If 
warranted, the Department may, based on additional evidence it receives 
from interested parties regarding potential anti-circumvention of the 
PRC Sawblades Order by other Thai companies, consider conducting 
additional inquiries concurrently.
    With regard to whether the merchandise from Thailand is of the same 
class or kind as the merchandise produced in the PRC, the petitioner 
presented information to the Department indicating that, in accordance 
with section 781(b)(1)(A) of the Act, the merchandise being produced in 
and/or exported from Thailand is of the same class or kind as diamond 
sawblades produced in the PRC, which is subject to the antidumping duty 
order.\34\ Consequently, we find that the petitioner provided 
sufficient information in its request regarding the class or kind of 
merchandise to support the initiation of this anti-circumvention 
inquiry.
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    \34\ See the petitioner's circumvention ruling request at 13-14 
and Exhibit 9.
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    With regard to completion or assembly of merchandise in a foreign 
country, in accordance with section 781(b)(1)(B) of the Act, the 
petitioner also presented to us two affidavits and the CBP Notice of 
Interim Measures indicating that diamond sawblades exported from 
Thailand to the United States by Diamond Tools are produced in Thailand 
using cores and segments produced and exported from the PRC.\35\ We 
find that the information presented by the petitioner regarding this 
criterion supports its request to initiate this anti-circumvention 
inquiry with respect to Diamond Tools.
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    \35\ See the petitioner's circumvention ruling request at 14-15 
and Exhibits 9-12. See also the petitioner's supplemental response 
at 2-6 and Exhibits 5, 6, and 9.
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    The Department finds that the petitioner sufficiently addressed the 
factors described in section 781(b)(1)(C) and (2) of the Act regarding 
whether the process of assembly or completion of finished diamond 
sawblades in Thailand is minor or insignificant with respect to Diamond 
Tools. In particular, the petitioner provided information indicating 
that: (1) The level of investment in the production facilities is 
minimal when compared with the level of investment for the facilities 
used in the production of segments; (2) there is little or no research 
and development taking place in Thailand; (3) the joining process 
involves the highly automated laser-welding, or other simpler joining 
methods, of cores and segments produced in the PRC and subject to the 
antidumping duty order; (4) the production facilities in Thailand are 
more limited than facilities in the PRC; and (5) the value of the 
processing performed in Thailand is a small proportion of the value of 
the diamond sawblades imported into the United States. In addition, 
according to the petitioner, in an ongoing investigation under the 
Enforce and Protect Act, CBP has issued an interim measure stating that 
there is a reasonable suspicion that Diamond Tools has entered subject 
merchandise into the United States through evasion of the antidumping 
duty order on diamond sawblades from the PRC.\36\
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    \36\ See the petitioner's circumvention ruling request at 9 and 
Exhibit 8. See also the petitioner's supplemental response at 5-6 
and Exhibit 9.
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    With respect to the value of the merchandise produced in the PRC, 
pursuant to section 781(b)(1)(D) of the Act, the petitioner provided 
information indicating that the value of cores and segments produced in 
the PRC represents the vast majority of the value of the products 
exported to the United States.\37\ We find that the evidence presented 
by the petitioner address the requirements of this factor, as discussed 
above, for the purposes of initiating this anti-circumvention 
inquiry.\38\
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    \37\ See the petitioner's circumvention ruling request at 20. 
See also the petitioner's supplemental response at 16-17 and 
Exhibits 5-6.
    \38\ See, e.g., the petitioner's supplemental response at 
Exhibits 5-6 and 9.
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    In the final determinations of the antidumping duty investigations 
of diamond sawblades from the PRC and the Republic of Korea (Korea), we 
determined that the country in which cores and segments are joined is 
the country of origin of the finished diamond sawblades based on our 
factual findings that ``the attachment process imparts the essential 
quality of the diamond sawblade, coupled with the substantial capital 
investment and technical expertise that is required for the attachment 
process.'' \39\ In making these factual findings, we relied on specific 
information provided by respondents in the investigations.\40\ The CIT 
upheld our decisions with respect to the country of origin.\41\ 
However, we do not have sufficient information on the record indicating 
whether substantial investments have been made to the Thai companies in 
question for the joining process in Thailand. Also, we do not have 
sufficient information on the record about the technical expertise 
required for the joining process in Thailand.\42\ Moreover, our 
findings in the Final Determinations were made in the context of a 
country-of-origin determination, whereas we are considering the 
petitioner's request under the anti-circumvention provisions of the 
statute contained in section 781(b) of the Act. Therefore, we do not 
find the Final Determinations foreclose initiation of an anti-
circumvention inquiry.
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    \39\ See Final Determination--China and accompanying I&D Memo at 
Comment 4, and Notice of Final Determination of Sales at Less Than 
Fair Value and Final Determination of Critical Circumstances: 
Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 
FR 29310 (May 22, 2006) (Final Determination--Korea), and 
accompanying I&D Memo at Comment 3 (collectively, Final 
Determinations).
    \40\ Id.
    \41\ See Advanced Tech. & Materials Co. v. United States, No. 
09-00511, slip op. 11-122, at 7-10 (Ct. Int'l Trade Oct. 12, 2011) 
(upholding Final Determinations--China), and Diamond Sawblades 
Manufacturers Coalition v. United States, 06-00248, slip op. 13-130, 
at 23-25 (Ct. Intl Trade Oct. 24, 2013) (upholding Final 
Determinations--Korea).
    \42\ See Clearon Corp. v. United States, No. 13-00073, slip op. 
14-88, at 33, 2014 WL 3643332, at *14 (Ct. Int'l Trade July 24, 
2014) (``Although Commerce can and does take into consideration its 
policies and methodologies as expressed in different administrative 
case precedent when making its determination, it cannot take the 
factual information underlying those decisions into consideration 
unless those facts are properly on the record of the proceeding 
before it.'').
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    Finally, with respect to the additional factors listed under 
section 781(b)(3) of the Act, we find that the petitioner presented 
evidence indicating that shipments of finished diamond sawblades from 
Thailand to the United States increased since the imposition of the 
antidumping duty order, further supporting initiation of these anti-
circumvention inquiries.\43\ Accordingly, in accordance with section 
781(b) of the Act, we are initiating a formal anti-circumvention 
inquiry concerning the antidumping duty order on diamond sawblades from 
the PRC with respect to Diamond Tools.
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    \43\ See the petitioner's circumvention ruling request at 
Exhibit 9.
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    In connection with this anti-circumvention inquiry, in order to 
determine, among other things: (1) The extent to which PRC-sourced 
cores and segments are further processed into finished diamond 
sawblades in Thailand before the finished diamond sawblades are 
exported to the United States; and (2) whether the process of turning 
PRC-sourced cores and segments into finished diamond sawblades is minor 
or insignificant, the Department intends to issue questionnaires to 
solicit information from Diamond Tools related to these factors. The 
Department also intends to issue questionnaires to solicit information 
from Diamond Tools concerning its shipments of finished diamond 
sawblades to the United States

[[Page 57714]]

and the origin of the imported cores and segments being joined into 
finished diamond sawblades. Failure to respond completely to the 
Department'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.
    Based on these allegations, we are initiating an anti-circumvention 
inquiry concerning the antidumping duty order on diamond sawblades from 
the PRC, pursuant to section 781(b) of the Act and 19 CFR 351.225(h), 
with respect to such merchandise from Thailand as described above. 
Because we are initiating this anti-circumvention inquiry, we are not 
initiating a changed circumstances review.
    While we believe sufficient factual information has been submitted 
by the petitioner to support the initiation of an anti-circumvention 
inquiry, we do not find that the record supports the simultaneous 
issuance of a preliminary ruling. An anti-circumvention inquiry is 
typically complicated by its nature and can require information 
regarding production in both the country subject to the order and the 
third country in which the production of finished merchandise is 
completed. As we explained above, the Department intends to request 
additional information regarding the statutory criteria to determine 
whether shipments of finished diamond sawblades from Thailand are 
circumventing the antidumping duty order on diamond sawblades from the 
PRC. Thus, with further development of the record required before a 
preliminary ruling can be issued, the Department does not find it 
appropriate to issue a preliminary ruling at this time.

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 an 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 this anti-circumvention inquiry. In addition, 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 have included a 
description of the product that is the subject of this anti-
circumvention inquiry (i.e., diamond sawblades finished in Thailand by 
the joining of cores and segments from the PRC) and an explanation of 
the reasons for the Department's decision to initiate an anti-
circumvention inquiry, as provided above. In accordance with 19 CFR 
351.225(l)(2), if the Department issues a preliminary affirmative 
determination, we will then instruct CBP to suspend liquidation and 
require a cash deposit of estimated antidumping duties at the 
applicable rate 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 on the issues. 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 
initiation.
    This notice is published in accordance with section 781(b) of the 
Act and 19 CFR 351.225(h).

    Dated: December 1, 2017.
Gary Taverman,
Deputy Assistant Secretaryfor Antidumping and Countervailing Duty 
Operations, performing the non[hyphen]exclusive functions and duties of 
the Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2017-26398 Filed 12-6-17; 8:45 am]
 BILLING CODE 3510-DS-P