[Federal Register Volume 76, Number 151 (Friday, August 5, 2011)]
[Notices]
[Pages 47551-47555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19921]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-894]


Certain Tissue Paper Products From the People's Republic of 
China: Affirmative Final Determination of Circumvention of the 
Antidumping Duty Order

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

Final Determination

    We determine that certain tissue paper products (tissue paper) 
produced by Max Fortune (Vietnam) Paper Products Company, Limited 
(MFVN) \1\ and exported to the United States are made from jumbo rolls 
and/or cut sheets of tissue paper produced in the People's Republic of 
China (PRC), and are circumventing the antidumping duty order on tissue 
paper from the PRC, as provided in section 781(b) of the Tariff Act of 
1930, as amended (the Act).
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    \1\ MFVN is a company located in Vietnam and is a wholly-owned 
subsidiary of Max Fortune Industrial Co., Ltd. (MFHK) located in 
Hong Kong. MFHK was the exporter of the tissue paper produced and 
shipped by MFVN to the United States during the analysis period of 
this inquiry. See Memorandum to the File from Case Analysts entitled 
``Verification of the Questionnaire Response of Max Fortune 
(Vietnam) Paper Products Co., Ltd. and Its Affiliates in the Anti-
circumvention Inquiry and 2009-2010 Antidumping Duty Administrative 
Review of Certain Tissue Paper Products from the People's Republic 
of China,'' dated March 31, 2011 (MFVN verification report), at 
exhibits 6A through 6F.

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DATES: Effective Date: August 5, 2011.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Gemal Brangman, AD/CVD 
Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1766 or (202) 482-3773, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 6, 2011, the Department of Commerce (the Department) 
published in the Federal Register its affirmative preliminary 
determination that tissue paper produced by MFVN in Vietnam using 
Chinese-origin jumbo rolls and/or

[[Page 47552]]

cut sheets and exported to the United States is circumventing the 
antidumping duty order on certain tissue paper products from the PRC 
(PRC Tissue Paper Order),\2\ as provided in section 781(b) of the Act. 
See Certain Tissue Paper Products From the People's Republic of China: 
Affirmative Preliminary Determination of Circumvention of the 
Antidumping Duty Order, 76 FR 19043 (April 6, 2011) (Preliminary 
Determination).
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    \2\ See Notice of Amended Final Determination of Sales at Less 
than Fair Value and Antidumping Duty Order: Certain Tissue Paper 
Products from the People's Republic of China, 70 FR 16223 (March 30, 
2005) (PRC Tissue Paper Order).
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    On May 2, 2011, the International Trade Commission (ITC) notified 
the Department that consultations pursuant to section 781(e)(2) of the 
Act were not necessary.\3\
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    \3\ See Letter from James R. Holbein, Acting Secretary to the 
Commission, to Ronald K. Lorentzen, Deputy Assistant Secretary for 
Import Administration, dated May 2, 2011.
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    On May 20, 2011, MFVN submitted its case brief. The petitioner \4\ 
did not submit a case brief. On May 27, 2011, the petitioner submitted 
its rebuttal brief.
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    \4\ The petitioner is Seaman Paper Company of Massachusetts, 
Inc.
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    On May 31, 2011, MFVN withdrew its May 6, 2011, request for a 
hearing. No other party in this review requested a hearing.
    On July 8 and 13, 2011, the Department held meetings with counsels 
for MFVN and the petitioner to discuss the issues raised in MFVN's case 
brief.\5\
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    \5\ See the Department's memoranda to the file entitled, ``Ex 
Parte Meeting with Counsel for Max Fortune (Vietnam) Paper Products 
Company, Limited,'' dated July 11, 2011, and ``Ex Parte Meeting with 
the Petitioner's Counsel,'' dated July 14, 2011.
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    On July 14, 2011, Michaels Stores, Inc. (Michaels) filed an entry 
of appearance and subsequently requested, on July 15, 2011, a 
postponement of the final determination in order to submit information 
regarding its imports of tissue paper from Vietnam. On July 20, 2011, 
the Department informed Michaels that it was unable to grant its 
request because the deadlines for submitting new factual information 
and case/rebuttal briefs in this inquiry had passed.
    On July 22, 2011, Michaels submitted another letter which the 
Department rejected on July 26, 2011, pursuant to 19 CFR 351.302(d), 
because it contained unsolicited, untimely new argument.

Scope of the Antidumping Duty Order

    The tissue paper products subject to this order are cut-to-length 
sheets of tissue paper having a basis weight not exceeding 29 grams per 
square meter. Tissue paper products subject to this order may or may 
not be bleached, dye-colored, surface-colored, glazed, surface 
decorated or printed, sequined, crinkled, embossed, and/or die cut. The 
tissue paper subject to this order is in the form of cut-to-length 
sheets of tissue paper with a width equal to or greater than one-half 
(0.5) inch. Subject tissue paper may be flat or folded, and may be 
packaged by banding or wrapping with paper or film, by placing in 
plastic or film bags, and/or by placing in boxes for distribution and 
use by the ultimate consumer. Packages of tissue paper subject to this 
order may consist solely of tissue paper of one color and/or style, or 
may contain multiple colors and/or styles.
    The merchandise subject to this order does not have specific 
classification numbers assigned to them under the Harmonized Tariff 
Schedule of the United States (HTSUS). Subject merchandise may be under 
one or more of several different subheadings, including: 4802.30; 
4802.54; 4802.61; 4802.62; 4802.69; 4804.31.1000; 4804.31.2000; 
4804.31.4020; 4804.31.4040; 4804.31.6000; 4804.39; 4805.91.1090; 
4805.91.5000; 4805.91.7000; 4806.40; 4808.30; 4808.90; 4811.90; 
4823.90; 4820.50.00; 4802.90.00; 4805.91.90; 9505.90.40. The tariff 
classifications are provided for convenience and customs purposes; 
however, the written description of the scope of this order is 
dispositive.\6\
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    \6\ On January 30, 2007, at the direction of U.S. Customs and 
Border Protection (CBP), the Department added the following HTSUS 
classifications to the AD/CVD module for tissue paper: 4802.54.3100, 
4802.54.6100, and 4823.90.6700. Also on July 14, 2011, at the 
direction of CBP, the Department added the following HTSUS 
classification to the AD/CVD module for tissue paper: 4811.90.9080. 
However, we note that the six-digit classifications for these 
numbers were already listed in the scope.
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    Excluded from the scope of this order are the following tissue 
paper products: (1) Tissue paper products that are coated in wax, 
paraffin, or polymers, of a kind used in floral and food service 
applications; (2) tissue paper products that have been perforated, 
embossed, or die-cut to the shape of a toilet seat, i.e., disposable 
sanitary covers for toilet seats; (3) toilet or facial tissue stock, 
towel or napkin stock, paper of a kind used for household or sanitary 
purposes, cellulose wadding, and webs of cellulose fibers (HTSUS 
4803.00.20.00 and 4803.00.40.00).

Scope of the Circumvention Inquiry

    The products covered by this inquiry are tissue paper products, as 
described above in the ``Scope of the Antidumping Duty Order'' section, 
which are produced in Vietnam by MFVN from Chinese-origin jumbo rolls 
and/or cut sheets of tissue paper, and exported to the United States.

Statutory Provisions Regarding Circumvention

    Section 781(b) of the Act provides that the Department may find 
circumvention of an antidumping duty order when merchandise of the same 
class or kind subject to the order is completed or assembled in a 
foreign country other than the country to which the order applies. In 
conducting anti-circumvention inquiries under section 781(b)(1) of the 
Act, the Department analyzes the following criteria: (A) Merchandise 
imported into the United States is of the same class or kind as any 
merchandise produced in a foreign country that is subject to an 
antidumping duty order; (B) before importation into the United States, 
such imported merchandise is completed or assembled in another foreign 
country from merchandise which is subject to the order or produced in 
the foreign country that is subject to the order; (C) the process of 
assembly or completion in the foreign country referred to in (B) is 
minor or insignificant; (D) the value of the merchandise produced in 
the foreign country to which the antidumping duty order applies is a 
significant portion of the total value of the merchandise exported to 
the United States; and (E) the administering authority determines that 
action is appropriate to prevent evasion of such order.
    Section 781(b)(2) of the Act provides the criteria for determining 
whether the process of assembly or completion is minor or 
insignificant. These criteria are: (a) The level of investment in the 
foreign country; (b) the level of research and development in the 
foreign country; (c) the nature of the production process in the 
foreign country; (d) the extent of the production facilities in the 
foreign country; and (e) whether the value of the processing performed 
in the foreign country represents a small proportion of the value of 
the merchandise imported into the United States.
    The Statement of Administrative Action (SAA) accompanying the 
Uruguay Round Agreements Act, H. Doc. No. 103-316, at 893 (1994), 
provides some guidance with respect to these criteria. It explains that 
no single factor listed in section 781(b)(2) of the Act will be 
controlling. Accordingly, it is the Department's practice to evaluate 
each of the factors as they exist in the foreign country depending on 
the particular facts present in the

[[Page 47553]]

circumvention inquiry. Therefore, the importance of any one of the 
factors listed under section 781(b)(2) of the Act can vary from case to 
case depending on the particular circumstances unique to each 
circumvention inquiry.
    Section 781(b)(3) of the Act further provides that, in determining 
whether to include merchandise assembled or completed in a foreign 
country in an antidumping duty order, the Department shall consider: 
(A) The pattern of trade, including sourcing patterns; (B) whether the 
manufacturer or exporter of the merchandise described in accordance 
with section 781(b)(1)(B) of the Act is affiliated with the person who 
uses the merchandise described in accordance with section 781(b)(1)(B) 
to assemble or complete in the foreign country the merchandise that is 
subsequently imported into the United States; and (C) whether imports 
into the foreign country of the merchandise described in accordance 
with section 781(b)(1)(B) have increased after the initiation of the 
investigation which resulted in the issuance of such order.

Summary of Analysis of Statutory Provisions

    We considered all of the comments submitted by the interested 
parties and find, pursuant to section 781(b) of the Act, that exports 
to the United States of tissue paper produced by MFVN using Chinese-
origin jumbo rolls and/or cut sheets are circumventing the PRC Tissue 
Paper Order.
    As we explained in the Preliminary Determination, based on the list 
of products MFVN provided in its questionnaire response, we find that 
the merchandise subject to this inquiry meets the written description 
of the products subject to the PRC Tissue Paper Order and is, 
therefore, of the same class or kind of merchandise as that subject to 
the PRC Tissue Paper Order, pursuant to section 781(b)(1)(A) of the 
Act. In addressing the other statutory criteria under sections 
781(b)(1), (2), and (3) of the Act, we relied on facts available where 
the respondent failed to provide necessary, verifiable information.
    In its questionnaire response, MFVN admitted that it was possible 
that it manufactured some tissue paper in Vietnam from PRC-origin jumbo 
rolls before and during 2007. MFVN also stated that its records before 
2008 were incomplete and unreliable.\7\ However, MFVN asserted that it 
could conclusively demonstrate that as of January 1, 2008, it did not 
convert any PRC-origin jumbo rolls and/or cut sheets of tissue paper in 
Vietnam into its own tissue paper products.\8\ At verification, MFVN 
failed to provide the requested production and accounting records to 
show when it ceased using Chinese-origin jumbo rolls and/or cut sheets 
in its production of tissue paper products for export to the United 
States.\9\ Accordingly, we conclude that MFVN impeded the conduct of 
this anti-circumvention inquiry by withholding the necessary verifiable 
information requested by the Department under section 776(a)(2) of the 
Act.
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    \7\ See June 28, 2010, response to the Department's April 23, 
2010, anti-circumvention questionnaire (June 28 Response) at pages 3 
and 12.
    \8\ See id.
    \9\ See MFVN verification report at pages 2 and 40.
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    Furthermore, we conclude that MFVN failed to act to the best of its 
ability in providing this necessary information pursuant to section 
776(b) of the Act. MFVN was expected to maintain the requested 
production and accounting records in the normal course of business and 
was required to maintain them under Vietnamese accounting law,\10\ but 
did not do so.\11\ Despite its claims, MFVN could not conclusively 
demonstrate that as of January 1, 2008, it did not convert any Chinese-
origin jumbo rolls into tissue paper sold in the United States.\12\ 
Moreover, although it claimed that it could accurately account for its 
inventory as of January 1, 2008,\13\ the Department discovered at 
verification that MFVN withdrew Chinese-origin jumbo rolls from 
inventory in March 2010, but could not account for the ultimate 
destination or usage of those jumbo rolls in its books and records.\14\ 
Therefore, the Department determined, as adverse facts available (AFA), 
that MFVN used Chinese-origin jumbo rolls and/or cut-sheets of tissue 
paper in its production of tissue paper for export to the United States 
from January 1, 2005, to December 31, 2007, and that MFVN continued to 
use such merchandise from inventory during that period to produce 
tissue paper for export on or after January 1, 2008. See Comments 1 and 
3 of the Issues and Decision Memorandum (Decision Memo) accompanying 
this notice for further discussion of the application of AFA for 
purposes of the final determination in this inquiry.
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    \10\ For companies doing business in Vietnam, Vietnamese 
regulations require companies such as MFVN to retain such records 
for up to 10 years. See Memorandum to the File dated March 31, 2011 
which contains the following document, ``Decree No. 129/2004/ND-CP 
of May 31, 2004 Detailing and Guiding the Implementation of a Number 
of Articles of the Accounting Law, Applicable to Business 
Activities,'' issued by the Government of the Socialist Republic of 
Vietnam on May 31, 2004.
    \11\ See MFVN verification report at page 2.
    \12\ See id. at pages 2 and 35-36.
    \13\ See June 28 Response at pages 4 and 12.
    \14\ See MFVN verification report at pages 2 and 40.
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    In determining that MFVN used Chinese-origin jumbo rolls and/or 
cut-sheets of tissue paper in its production of tissue paper for export 
to the United States from January 1, 2005, to December 31, 2007, as 
AFA, we relied on information provided by the petitioner in its 
February 19, 2010, request for initiation of this anti-circumvention 
inquiry (February 19 submission), which showed that during the 2005-
2007 period, MFVN imported a significant quantity of jumbo rolls from 
the PRC. MFVN did not provide any information on the record that 
contradicted the petitioner's information and, in fact, MFVN admitted 
in its questionnaire responses that ``it is possible that MFVN might 
have made {tissue paper{time}  in Vietnam from jumbo rolls from the PRC 
during this time period.''\15\ Further, Vietnamese Customs data 
provided to Department officials at verification covered entries during 
2008 and afterward, and does not contradict the petitioner's pre-2008 
data or MFVN's admission.\16\ Moreover, MFVN did not provide pre-2008 
Vietnamese Customs data at verification and there is no information on 
the record that contradicts the petitioner's pre-2008 data. Therefore, 
we consider this information to be corroborated to the extent 
practicable pursuant to section 776(c) of the Act.
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    \15\ See MFVN's June 28 Response at pages 4 and 12.
    \16\ See MFVN verification report at pages 3, 23-24, and 32-33.
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    Based on the above analysis, relying on AFA, we determine, pursuant 
to section 781(b)(1)(B) of the Act that MFVN completed tissue paper in 
Vietnam using jumbo rolls and/or cut sheets produced in the PRC. With 
respect to section 781(b)(1)(C) of the Act, we determine that the 
process of converting the jumbo rolls and/or cut sheets of tissue paper 
into finished tissue paper products in Vietnam is minor or 
insignificant, after taking into consideration all of the factors 
listed in section 781(b)(2) of the Act. See Comment 2 of the Decision 
Memo for further discussion. With respect to section 781(1)(D) of the 
Act, we determine that the value of the jumbo rolls and/or cut sheets 
of tissue paper MFVN used in its production is a significant portion of 
the value of the merchandise exported to the United States. See Comment 
2 of the Decision Memo for further discussion.

[[Page 47554]]

    We note that we relied on secondary information in addressing 
section 781(b)(1)(C) of the Act. Specifically, because MFVN did not 
provide the Department with sufficient information to reach a 
conclusion based solely on its own data under this provision, we 
relied, in part, on information contained in the petitioner's February 
19 submission to conclude that the tissue paper completion process in 
Vietnam is minor or insignificant.\17\ MFVN did not provide any 
information on the record of this inquiry to contradict this 
information, and there is no other information on the record that 
contradicts this information. Moreover, the results of a prior 
circumvention inquiry of the PRC Tissue Paper Order corroborates the 
Department's conclusion as AFA that the processing in Vietnam is minor 
or insignificant, as the same conclusion was reached by the Department 
in that prior inquiry which also involved allegations of Chinese-origin 
jumbo rolls being converted to cut-to-length tissue paper in Vietnam. 
See Certain Tissue Paper Products from the People's Republic of China: 
Affirmative Preliminary Determination of Circumvention of the 
Antidumping Duty Order and Extension of Final Determination, 73 FR 
21580, 21582-21587 (April 22, 2008) (Quijiang Prelim) (unchanged in 
Certain Tissue Paper Products From the People's Republic of China: 
Affirmative Final Determination of Circumvention of the Antidumping 
Duty Order, 73 FR 57591 (October 3, 2008) (Quijiang Final)). 
Furthermore, the Department is unaware of any available independent 
sources it could use to corroborate this information. Accordingly, we 
consider the petitioner's information relied upon by the Department as 
AFA to reach a finding under section 781(b)(1)(C) of the Act 
corroborated to the extent practicable under section 776(c) of the Act. 
See Comment 3 of the Decision Memo for further discussion of the 
Department's corroboration of secondary information used as AFA as part 
of its analysis under section 781(b)(1)(C) of the Act.
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    \17\ See the petitioner's February 19 submission at pages 34-35 
and Exhibit 16.
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    Similarly, we relied on secondary information in addressing section 
781(b)(1)(D) of the Act. Because MFVN did not provide the Department 
with sufficient information to determine whether the value of the jumbo 
rolls and/or cut sheets is a significant portion of the value of MFVN's 
finished tissue paper products exported to the United States, we relied 
on the data in the petitioner's February 19 submission\18\ as AFA, to 
make this determination. MFVN did not provide any information on the 
record of this inquiry to contradict this information, and there is no 
other information on the record to contradict it. Additionally, as in 
the case of our determination with respect to the Vietnamese 
processing, pursuant to section 776(c) of the Act, we corroborated to 
the extent practicable the petitioner's data based on our findings in 
the above-referenced prior anti-circumvention inquiry of the PRC Tissue 
Paper Order. See Quijiang Prelim, 73 FR at 21582-21587 (unchanged in 
Quijiang Final). Furthermore, the Department is unaware of any 
available independent sources it could use to corroborate this 
information. Accordingly, we consider the petitioner's information 
relied upon by the Department as AFA to reach a finding under section 
781(b)(1)(D) of the Act corroborated to the extent practicable under 
section 776(c) of the Act. See Comment 3 of the Decision Memo for 
further discussion.
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    \18\ See the petitioner's February 19 submission at pages 34-36.
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    As a result of the above analysis, we affirm our preliminary 
determination that action by the Department is warranted in this case 
to prevent evasion of the PRC Tissue Paper Order, pursuant to section 
781(b)(1)(E) of the Act.
    Furthermore, based on the additional factors we must consider under 
section 781(b)(3) of the Act, we find that MFVN's pattern of trade, 
affiliations, and level of importation of Chinese-origin tissue paper 
jumbo rolls/sheets support an affirmative finding of circumvention. See 
Comment 2 of the Decision Memo for the Department's complete final 
analysis of the criteria under section 781(b) of the Act.
    Based on our overall analysis of the statutory provisions regarding 
circumvention via completion or assembly in a foreign country, we 
conclude, pursuant to section 781(b) of the Act, that exports to the 
United States of tissue paper products produced from Chinese-origin 
jumbo rolls and/or cut sheets which are further processed in Vietnam by 
MFVN are circumventing the PRC Tissue Paper Order.
    All issues raised by the interested parties to which we have 
responded are listed in the Appendix to this notice and addressed in 
the Decision Memo, which is hereby adopted by this notice. Parties can 
find a complete discussion of the issues raised in this inquiry and the 
corresponding recommendation in this public memorandum, which is on 
file in the Central Records Unit (CRU) of the main Department of 
Commerce building. In addition, a complete version of the Decision Memo 
can be accessed directly on the Internet at http://ia.ita.doc.gov/. The 
paper copy and electronic copy of the Decision Memo are identical in 
content.

Continuation of Suspension of Liquidation

    In accordance with sections 735(c) and 781(b) of the Act and 19 CFR 
225(i)(3), we will direct CBP to suspend liquidation and require cash 
deposits of estimated duties, at the rate applicable to the exporter, 
on all unliquidated entries of tissue paper produced by MFVN that were 
entered, or withdrawn from warehouse, for consumption on or after March 
29, 2010, the date of initiation of the circumvention inquiry.\19\
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    \19\ In the Preliminary Determination, at 76 FR 19048, we stated 
that we would direct CBP to suspend liquidation and to require a 
cash deposit of estimated duties, at the PRC-wide rate of 112.64 
percent, on all unliquidated entries of tissue paper produced by 
MFVN ``and/or exported by MFVN'' that was entered, or withdrawn from 
warehouse, for consumption on or after March 29, 2010, the date of 
initiation of the circumvention inquiry. However, in this inquiry, 
the Department is concerned only with merchandise produced by MFVN, 
irrespective of the exporter. Therefore, we have clarified our 
instructions for purposes of this final determination. See Comment 5 
of the Decision Memo for further discussion.
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    Should the Department conduct an administrative review in the 
future, and determine in the context of that review that MFVN has not 
produced for export tissue paper using Chinese-origin jumbo rolls and/
or cut sheets, the Department will consider initiating a changed 
circumstances review pursuant to section 751(b) of the Act to determine 
if the continued suspension of all tissue paper produced by MFVN is 
warranted.

Notice to Parties

    This notice serves as the only reminder to parties subject to the 
administrative protective order (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with section 351.305 of the 
Department's regulations. Timely written notification of the return or 
destruction of APO materials or conversion to judicial protective order 
is hereby requested. Failure to comply with the regulations and terms 
of an APO is a violation which is subject to sanction.
    This final affirmative circumvention determination is published in 
accordance with section 781(b) of the Act and 19 CFR 351.225.


[[Page 47555]]


    Dated: August 1, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Appendix I

Discussion of the Issues

Comment 1: Whether the Application of Fact Available (FA)/Adverse 
Facts Available (AFA) Is Lawful.
Comment 2: Whether the Department's Circumvention Analysis Properly 
Addressed the Statutory Criteria.
Comment 3: Whether the Department's Use of FA/AFA Is Uncorroborated, 
Unreasonable and Punitive.
Comment 4: Whether the Remedy Imposed Is Lawful.
Comment 5: Whether the Assignment of the PRC-Wide Rate as AFA Is 
Appropriate.

[FR Doc. 2011-19921 Filed 8-4-11; 8:45 am]
BILLING CODE 3510-DS-P