[Federal Register Volume 75, Number 64 (Monday, April 5, 2010)]
[Notices]
[Pages 17127-17131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7662]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-894]


Certain Tissue Paper Products from the People's Republic of 
China: Notice of Initiation of Anti-circumvention Inquiry

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from Seaman Paper Company of 
Massachusetts, Inc. (the petitioner), the Department of Commerce (the 
Department) is initiating an anti-circumvention inquiry to determine 
whether certain imports of tissue paper from Vietnam are circumventing 
the antidumping duty order on certain tissue paper products (tissue 
paper) from the People's Republic of China (PRC). 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) (Tissue Paper Order).

EFFECTIVE DATE: April 5, 2010.

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 February 18, 2010, the petitioner submitted a letter requesting 
that the Department initiate and conduct an anti-circumvention inquiry, 
pursuant to section 781(b) of the Tariff Act of 1930, as amended (the 
Act), and 19 CFR 351.225(h), to determine whether imports of tissue 
paper from Vietnam which the petitioner alleges Max Fortune (Vietnam) 
Paper Products Company Limited (Max Fortune Vietnam) made from jumbo 
rolls and cut sheets of tissue paper produced in the PRC are 
circumventing the antidumping duty order on tissue paper from the PRC. 
Specifically, the petitioner alleges that Max Fortune Vietnam is 
importing into Vietnam PRC-produced jumbo rolls and cut sheets of 
tissue paper for completion or assembly into merchandise of the same 
class or kind as that covered by the antidumping duty order on tissue 
paper from the PRC prior to exporting that merchandise to the United 
States; and that such activity on the part of Max Fortune Vietnam 
constitutes circumvention of the PRC tissue paper order.
    On February 24, 2010, the Department requested that the petitioner 
provide additional information pertinent to its anti-circumvention 
inquiry request. See Letter to Seaman Paper Company of Massachusetts, 
Inc., dated February 24, 2010. The petitioner provided the requested 
information on March 1, 2010.
    On March 10, 2010, Department officials spoke with the foreign 
market researcher who provided certain information contained in the 
anti-circumvention inquiry request. See memorandum to the file 
entitled, ``Telephone Conversation with Foreign Market Researcher,'' 
dated March 17, 2010.
    On March 16, 2010, Max Fortune Vietnam responded to the 
petitioner's circumvention allegation. In its submission, Max Fortune 
Vietnam asserts, among other things, that it has never imported raw 
tissue paper from the PRC, and that its tissue paper production and 
processing operations in Vietnam are significant. Therefore, Max 
Fortune Vietnam requests that the Department reject the petitioner's 
request to initiate an anti-circumvention inquiry with respect to its 
operations.

Scope of the Order

    The tissue paper products subject to 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.
    Tissue paper products subject to this order do not have specific 
classification numbers assigned to them under the Harmonized Tariff 
Schedule of the United States (HTSUS) and appear to be imported under 
one or more of the several different ``basket'' categories, including 
but not necessarily limited to the following subheadings: HTSUS 
4802.30, HTSUS 4802.54, HTSUS 4802.61, HTSUS 4802.62, HTSUS 4802.69, 
HTSUS 4804.39, HTSUS 4806.40, HTSUS 4808.30, HTSUS 4808.90, HTSUS 
4811.90, HTSUS 4823.90, HTSUS 9505.90.40.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of the 
investigation is dispositive.
    Excluded from the scope of the 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; and (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).

Initiation of Anti-circumvention Proceeding

Applicable Statute

    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

[[Page 17128]]

country other than the country to which the order applies. In 
conducting anti-circumvention inquiries under section 781(b) of the 
Act, the Department relies upon 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 or finding. As 
discussed below, the petitioner presented evidence with respect to 
these criteria.

A. Merchandise of the Same Class or Kind

    The petitioner claims that the tissue paper from Vietnam, which it 
alleges Max Fortune Vietnam completes or assembles (i.e., by cutting to 
length if necessary, folding, and packaging) in Vietnam before 
exporting it to the United States, is produced from jumbo rolls and 
sheets of PRC-origin tissue paper obtained from Max Fortune Vietnam's 
affiliate in the PRC, Fuzhou Tian Jun Trading Co. Ltd., (Tian Jun), and 
other Chinese sources, and is physically identical to the subject 
merchandise cut-to-length tissue paper from the PRC. The petitioner 
states that its claim is supported by the fact that Max Fortune 
Industrial Limited (Max Fortune), which wholly owns Max Fortune Vietnam 
and exports the subject merchandise to the United States, has 
consistently stated in its questionnaire responses submitted to the 
Department in past and ongoing administrative reviews of the 
antidumping duty order on tissue paper from the PRC, that the tissue 
paper Max Fortune Vietnam exports to the United States is of the same 
class or kind of merchandise as that covered by the antidumping duty 
order. See February 18, 2010, anti-circumvention inquiry request at 
pages 11-12. Accordingly, pursuant to section 781(b)(1)(A)(i) of the 
Act, the petitioner claims that the tissue paper from Max Fortune 
Vietnam is of the same class or kind as the tissue paper produced in 
the PRC, which is subject to the antidumping duty order.

B. Completion of Merchandise in a Foreign Country

    The petitioner alleges that the tissue paper that is the subject of 
the anti-circumvention inquiry request is made from jumbo rolls and 
sheets of tissue paper produced in the PRC which are completed or 
assembled (i.e., cut-to-length (if starting from jumbo rolls), folded, 
and packaged) into finished tissue paper products in Vietnam for export 
to the United States. Based largely on information obtained from a 
foreign market researcher, the petitioner asserts that: 1) Max Fortune 
Vietnam has been importing significant amounts of tissue paper jumbo 
rolls and sheets since the company was established in 2004 (shortly 
after the original less-than-fair-value (LTFV) investigation segment of 
this proceeding was initiated) from Tian Jun and other Chinese sources; 
2) Max Fortune Vietnam has been exporting significant quantities of 
tissue paper products to the United States since 2005; and 3) Max 
Fortune's facility in Vietnam performs labor-intensive converting 
operations (i.e., cutting, folding and packing activities), rather than 
capital-intensive papermaking operations. See February 18, 2010, anti-
circumvention inquiry request at pages 12-21, and Exhibits 1, 13 and 
14; and the March 1, 2010, supplemental submission. Based on this 
information, the petitioner concludes that, pursuant to section 
781(b)(1)(B)(ii) of the Act, Max Fortune Vietnam's tissue paper 
products are completed or assembled in another foreign country 
(Vietnam) from merchandise (tissue paper sheets or jumbo rolls) which 
is produced in the foreign country (the PRC) that is subject to the 
antidumping duty order.

C. Minor or Insignificant Process

    The petitioner maintains that for the purpose of section 
781(b)(1)(C) of the Act, conversion of jumbo rolls and/or sheets of 
tissue paper produced in the PRC into cut-to-length tissue paper in 
Vietnam is a ``minor or insignificant process'' as defined by the Act. 
According to the petitioner, the record evidence in the PRC tissue 
paper proceeding demonstrates that converting jumbo rolls and sheets of 
tissue paper is a minor or insignificant process. The petitioner states 
that cutting, folding and packaging tissue paper are operations that 
merely impart the final sheet size and form in which the product is 
delivered to the ultimate customer. The petitioner also states that the 
most fundamental aspects of the merchandise, such as the basis weight, 
texture, quality, and other special characteristics that may be 
required if the paper is intended for printing, are established when 
the paper is produced. Furthermore, the petitioner claims that the 
types of minor assembly operations described above (and below) with 
respect to converting jumbo rolls and sheets of tissue paper is 
consistent with the information its foreign market researcher obtained 
with respect to the operations of Max Fortune Vietnam's facility in 
Vietnam. See February 18, 2010, anti-circumvention inquiry request at 
pages 22-26, and Exhibits 1 and 2.
    The petitioner states that converting jumbo rolls and pre-cut 
sheets of tissue paper involves two to three minor processes typically 
performed by hand in Vietnam: cutting the tissue to a specific size (if 
starting from jumbo rolls), folding it (by hand typically) and 
packaging it for export (by hand). The petitioner contends that, based 
on the information obtained from its foreign market researcher, Max 
Fortune Vietnam only performs labor-intensive converting operations in 
Vietnam (i.e., cutting, folding and packing activities), which are 
minor or insignificant processes in the overall production of tissue 
paper products, not capital-intensive papermaking operations. See 
February 18, 2010, anti-circumvention inquiry request at Exhibit 1.
    The petitioner argues that an analysis of the relevant statutory 
factors of section 781(b)(2) of the Act further supports its conclusion 
that the processing in Vietnam is ``minor or insignificant.'' These 
factors include: (1) the level of investment in the foreign country; 
(2) the level of research and development in the foreign country; (3) 
the nature of the production process in the foreign country; (4) the 
extent of production facilities in the foreign country; and (5) 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 petitioner argues that the processing in Vietnam is ``minor and 
insignificant'' as the term is defined in section 781(b)(2) of the Act 
when compared to the complex and capital-intensive processes involved 
in producing lightweight tissue paper from pulp, chemicals, and dyes. 
The petitioner's analysis of the statutory factors follows below.
(1) Level of Investment
    The petitioner claims that available information concerning Max 
Fortune Vietnam's operations indicates that the

[[Page 17129]]

level of investment is minor or insignificant. According to the 
petitioner, Max Fortune Vietnam's production model (i.e., importing 
jumbo rolls and cut-to-length sheets from Tian Jun and other companies 
in China, cutting to length if necessary and using manual labor to 
hand-fold and package the tissue paper before export to the United 
States) requires at most paper cutting machines, table chairs and 
lights, and the investment associated with this equipment is not 
significant. The petitioner states that its claim is supported by data 
obtained from its foreign market researcher. See February 18, 2010, 
anti-circumvention inquiry request at pages 27-28, and Exhibit 1. 
Accordingly, the petitioner concludes that the level of investment in 
Max Fortune Vietnam's processing facility is low.
(2) Level of Research and Development
    The petitioner maintains that the evidence reasonably available 
indicates that no research and development (R&D) is taking place in 
Vietnam. The petitioner states that because Max Fortune Vietnam is 
wholly-owned by Max Fortune, it is reasonable to presume that any R&D 
efforts would originate with Max Fortune's affiliated tissue paper 
supplier in the PRC. Furthermore, the petitioner states that tissue 
paper production involves mature technologies and processes, and any 
technical developments are refinements rather than new technologies. 
Converting operations also reflect mature technologies, according to 
the petitioner, and the Vietnamese converting operations involve hand-
folding and packaging, which are inherently mature processes. See 
February 18, 2010, anti-circumvention inquiry request at pages 29 and 
30, and Exhibit 1.
(3) Nature of the Production Process in Vietnam
    The petitioner states that its research indicates that Max Fortune 
Vietnam's operations in Vietnam are limited to PRC-origin jumbo rolls 
and sheets being cut to size (if necessary), and folded and packed by 
hand prior to export. As such, they involve unskilled manual labor in 
contrast to skilled labor required for papermaking. While cutting jumbo 
rolls into sheets of tissue paper may involve some skill and machinery, 
according to the petitioner, the nature of this activity is not 
complex. Therefore, the petitioner contends that Max Fortune Vietnam's 
``production process'' is minor or insignificant. See February 18, 
2010, anti-circumvention inquiry request at page 30-32.
(4) Extent of Production Facilities in Vietnam
    The petitioner asserts, based on information obtained from its 
foreign market researcher, that Max Fortune Vietnam's facility is 
relying on significant amounts of PRC tissue paper in its operations. 
According to the petitioner, Max Fortune Vietnam has imported 
converting equipment from Tian Jun and employs unskilled labor to 
convert the tissue paper it imports from the PRC. Therefore, the 
petitioner concludes that Max Fortune Vietnam's production facility in 
Vietnam is minimal. See February 18, 2010, anti-circumvention inquiry 
request at pages 32-33, and Exhibit 1A; and the March 1, 2010 
supplemental submission at pages 10-11, and Exhibit Supp-6.
(5) Value of Processing in Vietnam Compared to Value of Tissue Paper 
Imported Into United States
    The petitioner states that it does not have access to information 
concerning the value of the jumbo rolls and sheets of tissue paper 
exported from the PRC to Max Fortune Vietnam, or the value associated 
with Max Fortune Vietnam's converting operations performed in Vietnam; 
however, it contends that data (i.e., Max Fortune Vietnam's parent 
company's factors of production and usage rates) from the record of the 
2007-2008 administrative review of the antidumping duty order on tissue 
paper from the PRC support a determination that the value of processing 
performed in Vietnam represents a small portion of the value of the 
merchandise imported into the United States. See February 18, 2010, 
anti-circumvention inquiry request at pages 34-35, and Exhibit 16.
    In addition, the petitioner contends that data from the record of a 
prior anti-circumvention inquiry regarding tissue paper exports from 
Vietnam support a determination that the value of processing performed 
in Vietnam represents a small portion of the value of the merchandise 
imported into the United States. Specifically, in the prior anti-
circumvention inquiry, the Department determined that the same type of 
conversion processes were minor or insignificant for purposes of the 
statute, and that inclusion of the resulting tissue paper in the order 
was appropriate to avoid circumvention of the order. 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 (April 22, 
2008) (which was upheld 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)). In fact, the petitioner notes that in the prior anti-
circumvention inquiry, the activities performed by the Vietnamese 
entity at issue included more involved forms of processing (such as 
dip-dying), which would add greater amounts of value than merely 
converting jumbo rolls and sheets. In contrast, the petitioner contends 
that Max Fortune Vietnam is only converting the imported jumbo rolls 
and sheets without performing additional processing (such as dip-
dying). See February 18, 2010, anti-circumvention inquiry request at 
page 35.

D. Value of Merchandise Produced in PRC

    For the reasons stated in section C.5. above and for the purpose of 
section 781(b)(1)(D) of the Act, the petitioner contends that the value 
of the processing performed by Max Fortune Vietnam is a minor portion 
of the value of the completed merchandise. According to the petitioner, 
in this case, that analysis necessarily implies that the value of the 
PRC-origin jumbo rolls and cut-to-length sheets used by Max Fortune 
Vietnam is a significant portion of the total value of the merchandise 
exported to the United States, because there are no other operations or 
components to take into account. In addition, the petitioner states 
that the factors of production data reported in the 2007-2008 
administrative review of tissue paper from the PRC by Max Fortune 
Vietnam's parent company demonstrates that the value of the converting 
portion of the tissue paper production process is only a small 
proportion of the value of the merchandise exported to the United 
States. See February 18, 2010, anti-circumvention inquiry request at 
page 36, and Exhibit 16.

E. Factors To Consider in Determining Whether Action Is Necessary

    The petitioner states that, pursuant to sections 781(b)(1)(E) and 
(b)(3), additional factors must be considered in the Department's 
decision to issue a finding of circumvention regarding imports of 
tissue paper from Vietnam. These factors are discussed below.

Pattern of Trade

    The petitioner states that section 781(b)(3)(A) of the Act directs 
the Department to take into account patterns of trade when making a 
decision in an anti-circumvention case. According to the petitioner, at 
the time

[[Page 17130]]

the PRC tissue paper petition was filed in February 2004, the only 
source of imports of tissue paper products was the PRC. Based on 
publicly available ship manifest (PIERS) data and foreign market 
research, the petitioner contends that a few months after the petition 
was filed, Max Fortune established Max Fortune Vietnam with the 
intention of using it to fold and pack PRC-origin tissue paper to be 
exported to the United States; and in 2005, Max Fortune Vietnam began 
commercial shipments. Subsequently, the petitioner asserts, Vietnam 
rapidly emerged as a source of substantial U.S. imports of tissue 
paper. See February 18, 2010, anti-circumvention inquiry request at 
pages 37- 40, and Exhibits 3 and 13B.

Affiliation

    The petitioner states that section 781(b)(3)(B) of the Act directs 
the Department to take into account 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 that is 
subsequently imported into the United States when making a decision in 
an anti-circumvention case. The petitioner points out that Max Fortune 
has stated on the records of past segments of the PRC tissue paper 
proceeding that it is affiliated with Max Fortune Vietnam. The 
petitioner also points out that information obtained from its foreign 
market researcher indicates that Tian Jun is affiliated with Max 
Fortune, that Tian Jun has exported tissue paper from the PRC to Max 
Fortune Vietnam, and that all of Max Fortune Vietnam's sourcing and 
sales decisions are made by Max Fortune. See February 18, 2010, anti-
circumvention inquiry request at Exhibit 1. The petitioner argues that 
the affiliation between Max Fortune Vietnam, Tian Jun and Max Fortune, 
and the timing of Max Fortune Vietnam's establishment and export 
shipments, coupled with Max Fortune Vietnam's complete lack of 
independent decision-making, makes it clear that Max Fortune controls 
all aspects of Max Fortune Vietnam's operations. See February 18, 2010, 
anti-circumvention request at page 41.

Subsequent Import Volume

    The petitioner states that section 781(b)(3)(C) of the Act directs 
the Department to take into account whether imports of the merchandise 
into the foreign country have increased after the initiation of the 
investigation, which resulted in the issuance of the order, when making 
a decision in an anti-circumvention case. According to the petitioner, 
given that Vietnam was not a source of tissue paper products at the 
time the LTFV investigation of tissue paper from the PRC was initiated, 
it is reasonable to infer that jumbo rolls and cut-to-length sheets of 
tissue paper were not being shipped to Vietnam for completion or 
assembly into finished tissue paper products because Chinese producers 
and exporters had no restrictions on their imports into the United 
States. In addition, the petitioner notes that Max Fortune Vietnam did 
not exist at the time the original investigation was initiated. 
Therefore, before that time, Max Fortune Vietnam could not have 
imported tissue paper jumbo rolls and sheets from the PRC. However, 
since its creation in September 2004, Max Fortune Vietnam has directly 
imported significant quantities of jumbo rolls and cut-to-length sheets 
of tissue paper from the PRC. See February 18, 2010, anti-circumvention 
inquiry request at page 42 and Exhibit 13C.
    Furthermore, the petitioner points out that while the data from 
foreign market research indicate that Max Fortune Vietnam's direct 
imports of tissue paper declined after 2007, this does not mean that 
Max Fortune Vietnam has ceased sourcing PRC jumbo rolls and sheets and 
converting them, because the data do not capture shipments of PRC 
tissue paper that were imported into Vietnam by third parties. 
Additionally, the petitioner points out that the reduction in trade 
volume in 2008 and 2009 must be viewed in the context of the overall 
reduction of global trade caused by recent economic events. The 
petitioner maintains that as the U.S. economy improves and in the event 
Max Fortune's ability to ship from the PRC is further impaired by 
increases to its dumping margin, Max Fortune will most certainly return 
to shipping large volumes of its tissue paper to Max Fortune Vietnam 
for completion or assembly into finished tissue paper products and 
subsequent export to the United States. See February 18, 2010, anti-
circumvention inquiry request at pages 42 and 43.

Analysis

    Based on our analysis of the petitioner's February 18, 2010, anti-
circumvention inquiry request, the Department determines that a formal 
anti-circumvention inquiry is warranted. In accordance with 19 CFR 
351.225(e), if 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 request and the descriptions of the merchandise, the 
Department will notify by mail all parties on the Department's scope 
service list of the initiation of a scope inquiry, including an anti-
circumvention inquiry. In addition, in accordance with 19 CFR 
351.225(f)(1), a notice of the initiation of an anti-circumvention 
inquiry issued under 19 CFR 351.225(e) will include a description of 
the product that is the subject of the anti-circumvention inquiry -- in 
this case, cut-to-length tissue paper that has the characteristics 
identified in the scope of the order, as provided above -- and an 
explanation of the reasons for the Department's decision to initiate an 
anti-circumvention inquiry, as provided below.
    With regard to whether the merchandise from Vietnam is of the same 
class or kind as the merchandise produced in the PRC, the petitioner 
has presented information indicating that the merchandise being 
imported from Vietnam is of the same class or kind as the tissue paper 
produced in the PRC, which is subject to the antidumping duty order. 
The merchandise from Vietnam shares physical characteristics with the 
merchandise covered by the antidumping duty order.
    With regard to completion of merchandise in a foreign country, the 
petitioner has also presented information that the tissue paper 
exported from Vietnam is tissue paper of PRC origin which is further 
processed in Vietnam.
    With regard to whether the conversion of PRC jumbo rolls and/or 
sheets of tissue paper into cut-to-length tissue paper from Vietnam is 
a ``minor or insignificant process,'' the petitioner addressed the 
relevant statutory factors used to determine whether the processing of 
jumbo rolls and sheets of tissue paper is minor or insignificant with 
the best information available to it at the time of its anti-
circumvention inquiry request. The petitioner relied on information 
obtained primarily from its foreign market researcher for this purpose. 
See February 18, 2010, anti-circumvention inquiry request at Exhibit 1.
    Having established through direct contact the reliability of the 
data presented by the foreign market researcher in Exhibit 1, we find 
that the information presented by the petitioner supports its request 
to initiate an anti-circumvention inquiry. In particular, the 
petitioner provided evidence for each of the criteria enumerated in the 
statute, including the following: (1) the nature of Max Fortune 
Vietnam's operations (i.e., limited to converting operations) suggest 
little investment has been made in Max Fortune Vietnam; (2) because Max 
Fortune has a fully integrated

[[Page 17131]]

production facility in the PRC and is affiliated with Max Fortune 
Vietnam, it is reasonable to infer that R&D takes place in the PRC; (3) 
the cutting, folding and packaging activities (i.e., the converting 
process) performed by Max Fortune Vietnam do not alter the fundamental 
characteristics of the tissue paper, and therefore, reflect a 
production process which is minor or insignificant; (4) Max Fortune 
Vietnam's labor-intensive converting operations suggest a significantly 
lower level of investment in production assets than that required by 
the capital-intensive nature of the papermaking process; and 5) Max 
Fortune Vietnam's limited operations suggest that converting tissue 
paper adds little value to the merchandise imported into the United 
States.
    With respect to the value of the merchandise produced in the PRC, 
the petitioner relied on the information and arguments in the ``minor 
or insignificant process'' portion of its anti-circumvention request to 
indicate that the value of the PRC jumbo rolls and sheets of tissue 
paper is significant relative to the total value of finished 
merchandise exported to the United States. We find that this 
information adequately meets the requirements of this factor, as 
discussed above.
    Finally, the petitioner argued that the Department should also 
consider the pattern of trade, affiliation, and subsequent import 
volume as factors in determining whether to initiate the anti-
circumvention inquiry. The import information submitted by the 
petitioner indicates that Vietnamese imports of tissue paper from the 
PRC and U.S. imports of tissue paper from Vietnam rose significantly 
after the initiation of the investigation and the establishment of Max 
Fortune Vietnam. In addition, the petitioner provides information 
suggesting that Max Fortune Vietnam's affiliation with a known producer 
of the subject merchandise in the PRC, the timing of Max Fortune 
Vietnam's establishment, and the nature of Max Fortune Vietnam's 
operations reflect an intention to shift completion of merchandise 
subject to the PRC tissue paper order from the PRC to Vietnam.
    Accordingly, we are initiating a formal anti-circumvention inquiry 
concerning the antidumping duty order on certain tissue paper products 
from the PRC, pursuant to section 781(b) of the Act. In accordance with 
19 CFR 351.225(l)(2), if the Department issues a preliminary 
affirmative determination, we will then instruct U.S. Customs and 
Border Protection to suspend liquidation and require a cash deposit of 
estimated 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 is focusing its analysis of the significance of the 
production process in Vietnam on the single company identified by the 
petitioner, namely Max Fortune Vietnam, in its February 18, 2010, anti-
circumvention inquiry request and about which sufficient information to 
initiate an anti-circumvention inquiry has been provided. If the 
Department receives a formal request from an interested party regarding 
potential circumvention by other Vietnamese companies involved in 
processing PRC jumbo rolls and/or sheets for export to the United 
States within sufficient time, we will consider conducting the 
inquiries concurrently.
    The Department will, following consultation with interested 
parties, establish a schedule for questionnaires and comments on the 
issues. The Department intends to issue its final determination within 
300 days of the date of publication of this initiation consistent with 
the language of section 781(f) of the Act.
    This notice is published in accordance with 19 CFR 351.225(f).

    Dated: March 29, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-7662 Filed 4-2-10; 8:45 am]
BILLING CODE 3510-DS-S