[Federal Register Volume 79, Number 97 (Tuesday, May 20, 2014)]
[Notices]
[Pages 28891-28893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11693]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-916]


Laminated Woven Sacks From the People's Republic of China: Notice 
of Court Decision Not in Harmony With Final Results and Amended Final 
Results of the Antidumping Duty Administrative Review; 2009-2010

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.
SUMMARY: On December 13, 2013, the United States Court of Appeals for 
Federal Circuit (CAFC), issued its decision in AMS Associates, Inc. v. 
United States, 737 F.3d 1338 (CAFC 2013) (AMS II), affirming the Court 
of International Trade's (CIT) decision in AMS Associates, Inc. v. 
United States, 881 F. Supp. 2d 1374 (CIT 2012) (AMS I). In AMS I, the 
CIT held that the Department of Commerce (the Department) exceeded its 
authority under 19 CFR 351.225(l) by retroactively suspending 
liquidation of entries of laminated woven sacks (LWS) produced in the 
People's Republic of China (PRC) using fabric imported from third-
countries. Accordingly, the CIT remanded the case and ordered the 
Department to issue instructions to U.S. Customs and Border Protection 
(CBP) to lift the suspension of liquidation and liquidate the affected 
entries without regard to duties. Consistent with the decision of the 
CAFC in Timken,\1\ as clarified by Diamond Sawblades,\2\ the Department 
is notifying the public that the final judgment in this case is not in 
harmony with the Department's AR2 Final Results,\3\ that it will 
liquidate the

[[Page 28892]]

entries at issue in AMS I and AMS II without regard to duties, and that 
it is amending the effective date of its country of origin 
determination regarding LWS produced in the PRC from imported fabric.
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    \1\ See Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 
1990) (``Timken'').
    \2\ See Diamond Sawblades Mfrs. Coalition v. United States, 626 
F.3d 1374 (Fed. Cir. 2010) (``Diamond Sawblades'').
    \3\ See Laminated Woven Sacks From the People's Republic of 
China: Final Results of Second Antidumping Duty Administrative 
Review, 76 FR 21333 (April 15, 2011) (``AR2 Final Results'').

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DATES: Effective Date: March 24, 2014.

FOR FURTHER INFORMATION CONTACT: Irene Gorelik, Office V, Enforcement 
and Compliance, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC, 
20230; telephone: (202) 482-6905.

SUPPLEMENTARY INFORMATION: 

Background

    On August 7, 2008, the Department issued an antidumping duty order 
on LWS from the PRC.\4\ The scope of the Order stated that:
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    \4\ See Notice of Antidumping Duty Order: Laminated Woven Sacks 
from the People's Republic of China, 73 FR 45941 (August 7, 2008) 
(``Order'').

    The merchandise covered by this investigation is laminated woven 
sacks. Laminated woven sacks are bags or sacks consisting of one or 
more plies of fabric consisting of woven polypropylene strip and/or 
woven polyethylene strip, regardless of the width of the strip; with 
or without an extrusion coating of polypropylene and/or polyethylene 
on one or both sides of the fabric; laminated by any method either 
to an exterior ply of plastic film such as biaxially-oriented 
polypropylene (``BOPP'') or to an exterior ply of paper that is 
suitable for high quality print graphics; printed with three colors 
or more in register; with or without lining; whether or not closed 
on one end; whether or not in roll form (including sheets, lay-flat 
tubing, and sleeves); with or without handles; with or without 
special closing features; not exceeding one kilogram in weight. 
Laminated woven sacks are typically used for retail packaging of 
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consumer goods such as pet foods and bird seed.

First Administrative Review

    In the first administrative review of the antidumping duty order on 
LWS from the PRC, the Department preliminarily determined that the 
country of origin of LWS produced in the PRC from imported woven fabric 
is the PRC.\5\ As a result, the Department issued instructions 
notifying CBP to continue suspending liquidation of all LWS from the 
PRC, regardless of the country of origin of the woven fabric, 
consistent with the suspension of liquidation instructions issued 
following the Order.\6\
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    \5\ See Laminated Woven Sacks from the People's Republic of 
China: Preliminary Results of Antidumping Duty Administrative 
Review, 75 FR 55568, 55569 (September 13, 2010).
    \6\ See CBP Message No. 020431 (July 23, 2010); see also CBP 
Message No. 8234202 (August 21, 2008) (ordering CBP to suspend 
imports of LWS from the PRC that were entered or withdrawn from 
warehouse for consumption on or after January 31, 2008).
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    Following the preliminary results, the Department issued additional 
instructions to CBP to mitigate inaccurate reporting of entries arising 
from the technical restrictions of CBP's electronic filing system. 
These instructions created a series of 10-digit case numbers to allow 
LWS produced in the PRC from fabric originating in a third country to 
be properly claimed as LWS subject to the Order upon entry into the 
United States.\7\
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    \7\ See CBP Message No. 0327303 (November 23, 2010); see also 
CBP Message No. 0327306 (November 23, 2010).
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    In its March 18, 2011 final results, the Department finalized its 
country of origin determination and continued to find that the LWS 
finishing process, which includes lamination and printing processes, 
substantially transforms the inherent nature of the woven fabric input. 
The Department also continued to find that, when such substantial 
transformation takes place in the PRC, the country of origin for the 
produced LWS is the PRC.\8\
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    \8\ See Laminated Woven Sacks from the People's Republic of 
China: Final Results of First Antidumping Order Administrative 
Review, 76 FR 14906, 14906-07 (March 18, 2011) (``AR1 Final 
Results'') and accompanying Issues and Decision Memorandum at 
Comments 1b and 1d.
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Second Administrative Review

    On September 29, 2010, the Department initiated the second 
administrative review of LWS from the PRC.\9\ Because parties only 
requested a review of Zibo Aifudi Plastic Packaging Co. Ltd. (Zibo 
Aifudi), we initiated the review with Zibo Aifudi as the sole mandatory 
respondent. Thereafter, Zibo Aifudi notified the Department of its 
intent to withdraw from the review and refused to participate in the 
review. Thus, in the preliminary results, we determined that, because 
Zibo Aifudi failed to respond to the Department's antidumping duty 
questionnaires and withdrew its participation from the review, it was 
not eligible for a separate rate and should treated as part of the PRC-
wide entity, to which we subsequently assigned an adverse facts 
available rate.\10\
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    \9\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 75 FR 
60076 (September 29, 2010).
    \10\ See Laminated Woven Sacks From the People's Republic of 
China: Preliminary Results of the Second Administrative Review, 75 
FR 81218 (December 27, 2010).
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    AMS Associates, Inc., (d/b/a Shapiro Packaging) (AMS), the U.S. 
importer of LWS exported by Zibo Aifudi, entered an appearance in the 
second administrative review and filed its case brief, contending that 
the Department's country of origin determination in the first 
administrative review was procedurally erroneous and that the 
Department had no statutory or regulatory basis to issue suspension 
instructions to CBP in the context of an annual administrative review. 
However, AMS did not challenge the Department's (1) country of origin 
determination on LWS produced in the PRC from imported fabric, (2) 
preliminary determination of Zibo Aifudi's ineligibility for a separate 
rate, (3) application of adverse facts available to the PRC-wide 
entity, or (4) the adverse facts available rate applied to the PRC-wide 
entity. In the AR2 Final Results, the Department continued to find that 
the application of adverse facts available was warranted for the PRC-
wide entity and that it followed the correct procedures in making the 
country of origin determination in the prior review.\11\
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    \11\ See AR2 Final Results, 76 FR at 21334, and accompanying 
Issues and Decision Memorandum at Comment 1.
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Court Rulings

    Subsequently, AMS challenged the Department's AR2 Final Results, 
arguing that the Department did not act in accordance with its own 
regulations by conducting a scope analysis during the course of the 
first administrative review and exceeded its authority by issuing 
instructions to CBP to suspend LWS produced in the PRC from imported 
fabric.\12\ On December 18, 2012, the CIT held that the Department 
exceeded its authority by suspending liquidation of all entries of LWS 
produced in the PRC from imported fabric, which AMS reported as non-
subject merchandise based solely on the country of origin of the fabric 
input.\13\ The CIT remanded the case and ordered the Department to 
issue instructions to CBP to lift the suspension and liquidate the 
affected entries (LWS produced in the PRC from imported fabric) without 
regard to duties.\14\
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    \12\ See AMS I, 881 F. Supp. 2d at 1378-79.
    \13\ See id., at 1382-83.
    \14\ See id., at 1383.
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    On December 21, 2012, the United States moved to stay execution of 
the judgment pending appeal. On January 11, 2013, the CIT granted the 
United States' motion and ordered that execution of the judgment, 
including liquidation of the entries at issue, be stayed through the 
conclusion of any appeal.
    On appeal, the CAFC affirmed the CIT's judgment, holding that the 
Department (1) erred in failing to

[[Page 28893]]

conduct a formal scope inquiry in this case because the scope of the 
original antidumping order was unclear, and (2) exceeded its authority 
under 19 CFR 351.225(l)(2) by ordering the suspension of liquidation 
retroactive to the beginning of the period of review when the order did 
not clearly cover LWS manufactured in the PRC from imported 
fabrics.\15\
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    \15\ See AMS II, 737 F.3d at 1344.
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Timken Notice

    In its decision in Timken, 893 F.2d at 341, as clarified by Diamond 
Sawblades, the CAFC held that, pursuant to section 516A(e) of the Act, 
the Department must publish a notice of a court decision that is not 
``in harmony'' with a Department determination and must suspend 
liquidation of entries pending a ``conclusive'' court decision. The 
CAFC's December 13, 2013, judgment in AMS II constitutes a final 
decision of that court that is not in harmony with the AR2 Final 
Results. This notice is published in fulfillment of the publication 
requirements of Timken. Accordingly, as instructed, the Department will 
lift the suspension of liquidation of the entries at issue.

Amended Final Results

    Because there is now a final court decision, we are amending the 
AR2 Final Results to reflect the results of the litigation. The revised 
effective date of the Department's country of origin determination is 
now the publication date of the final results of the first 
administrative review, March 18, 2011.\16\ Accordingly, the Department 
will instruct CBP to liquidate entries of LWS produced in the PRC from 
imported fabric that were entered, or withdrawn from warehouse, for 
consumption, before March 18, 2011 without regard to duties.\17\ The 
Department will release the draft instructions to interested parties 
prior to transmission of these instructions to CBP.
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    \16\ See AR1 Final Results, 76 FR at 14906.
    \17\ See AMS II, 737 F.3d at 1344 (affirming a remand to lift 
the liquidation suspension for the entries which were the subject of 
the AMS litigation).
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    This notice is issued and published in accordance with sections 
516A(e), 751(a)(1), and 777(i)(1) of the Act.

    Dated: May 14, 2014.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2014-11693 Filed 5-19-14; 8:45 am]
BILLING CODE 3510-DS-P