[Federal Register Volume 79, Number 145 (Tuesday, July 29, 2014)]
[Notices]
[Pages 44006-44008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-17492]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-520-803]


Polyethylene Terephthalate Film, Sheet, and Strip From the United 
Arab Emirates: Initiation of Anti-Circumvention Inquiry on Antidumping 
Duty Order

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from Polyplex USA LLC and Flex USA, 
Inc., (collectively Domestic Producers), the Department of Commerce 
(the Department) is initiating an anti-circumvention inquiry pursuant 
to section 781(b) of the Tariff Act of 1930, as amended (the Act), to 
determine whether certain imports of polyethylene terephthalate film, 
sheet, and strip (PET Film) are circumventing the antidumping duty (AD) 
order on PET Film from the United Arab Emirates (UAE).\1\
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    \1\ See Polyethylene Terephthalate Film, Sheet, and Strip From 
Brazil, the People's Republic of China and the United Arab Emirates: 
Antidumping Duty Orders and Amended Final Determination of Sales at 
Less Than Fair Value for the United Arab Emirates, 73 FR 66595 
(November 10, 2008) (Order).

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DATES: Effective Date: July 29, 2014.

FOR FURTHER INFORMATION CONTACT: Andrew Huston, AD/CVD Operations, 
Office VII, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
4261.

SUPPLEMENTARY INFORMATION:

Background

    On September 28, 2007, DuPont Teijin Films; Mitsubishi Polyester 
Film of America; SKC, Inc.; and Toray Plastics (America), Inc., 
(collectively Petitioners) filed a petition seeking the imposition of 
antidumping duties on imports of PET film from Brazil, the People's 
Republic of China (China), Thailand, and the UAE. Following the 
Department's affirmative finding of dumping and the U.S. International 
Trade Commission (ITC) finding of threat of injury, the Department 
issued AD orders on imports of the subject merchandise. In the first 
administrative review of the Order, Petitioners requested a review of 
JBF RAK LLC (JBF RAK), and JBF RAK also requested a review of itself. 
On December 23, 2009, the Department initiated an administrative review 
of JBF RAK.\2\ The company has also been reviewed in each subsequent 
administrative review. JBF RAK's current cash deposit rate is 1.41 
percent.\3\
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    \2\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 74 FR 
68229, 68232 (December 23, 2009).
    \3\ See Polyethylene Terephthalate Film, Sheet, and Strip from 
the United Arab Emirates: Final Results of Antidumping Duty 
Administrative Review; 2011-2012, 79 FR 24401 (April 30, 2014).
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    On May 27, 2014, pursuant to section 781(b) of the Act and section 
19 CFR 351.225(h), Domestic Producers submitted a request for the 
Department to initiate an anti-circumvention inquiry to determine 
whether JBF RAK is circumventing the Order on PET Film from the UAE by 
exporting to the United States products completed or assembled in its 
Bahrain facility, JBF Bahrain S.P.C. (JBF Bahrain), from inputs sourced 
from the subject countries India and the UAE.

Scope of the Order

    The products covered by the order are all gauges of raw, pre-
treated, or primed polyethylene terephthalate film, whether extruded or 
co-extruded. Excluded are metallized films and other finished films 
that have had at least one of their surfaces modified by the 
application of a performance-enhancing resinous or inorganic layer more 
than 0.00001 inches thick. Also excluded is roller transport cleaning 
film which has at least one of its surfaces modified by application of 
0.5 micrometers of SBR latex. Tracing and drafting film is also 
excluded. Polyethylene terephthalate film is classifiable under 
subheading 3920.62.00.90 of the Harmonized Tariff Schedule of the 
United States (HTSUS). While HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of the order is dispositive.

[[Page 44007]]

Merchandise Subject to the Anti-Circumvention Proceeding

    This anti-circumvention proceeding covers PET film exported or 
produced by JBF Bahrain. If, within sufficient time, the Department 
receives a supported allegation from an interested party regarding 
potential circumvention of the Order by other companies in Bahrain, we 
will consider conducting any additional inquiry concurrently with this 
inquiry.

Initiation of Anti-Circumvention Proceeding

    Section 781(b)(1) of the Act provides that the Department may find 
circumvention of an AD 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 will also evaluate whether: (1) The process of assembly or 
completion in the other foreign country is minor or insignificant; (2) 
the value of the merchandise produced in the foreign country to which 
the AD order applies is a significant portion of the total value of the 
merchandise exported to the United States; and (3) action is 
appropriate to prevent evasion of such an order or finding. As 
discussed below, Domestic Producers provided evidence with respect to 
these criteria.

A. Merchandise of the Same Class or Kind

    Domestic Producers claim that the merchandise exported to the 
United States by JBF Bahrain is the same class or kind as that covered 
by the Order in this proceeding.\4\ Domestic Producers contend that ITC 
data show that the merchandise from Bahrain enters the United States 
under the same tariff heading as subject merchandise, and that JBF 
Bahrain is the only producer of PET Film in Bahrain. Domestic Producers 
also presented evidence that JBF Bahrain is sourcing inputs from JBF 
RAK, and JBF RAK's parent company in India that are used in the 
production of subject merchandise.\5\
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    \4\ See Domestic Producers' ``Request for Anti-circumvention 
Inquiry'' (Request) May 27, 2014, at 5.
    \5\ Id., at 6.
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B. Completion of Merchandise in a Foreign Country

    Domestic Producers note that the Act requires that ``before 
importation into the United States, such imported merchandise is 
completed or assembled in another foreign country from merchandise 
which . . . is produced in the foreign country with respect to which 
such order or finding applies . . .'' \6\ Domestic Producers presented 
evidence that JBF sourced inputs from India and the UAE, which both 
have AD orders on PET Film.
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    \6\ See section 781(b)(1)(B) of the Act.
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C. Minor or Insignificant Process

    Under section 781(b)(2) of the Act, the Department is required to 
consider five factors to determine whether the process of assembly or 
completion is minor or insignificant. Domestic Producers allege that 
the production of resins, which JBF Bahrain sourced from affiliates in 
India and the UAE, comprises the majority of the value associated with 
the subject merchandise, and that the processing of PET resins into PET 
Film, completed by JBF Bahrain, adds relatively little value.
(1) Level of Investment
    Domestic Producers submitted documentation that JBF Bahrain has a 
functioning line that produces PET film, and two additional lines 
planned to start production of PET film in the ``near future,'' with 
each of these lines having an estimated production of 30,000 metric 
tons per year.\7\ Domestic Producers claim that the level of investment 
is minimal compared to the volume of film that can be produced.
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    \7\ See Request, at 7.
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(2) Level of Research and Development
    Domestic Producers are not aware of any research and development 
taking place in Bahrain, and note that production of PET film involves 
mature technologies and processes.\8\
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    \8\ Id., at 8.
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(3) Nature of Production Process
    According to Domestic Producers, the production process undertaken 
by JBF Bahrain involves the simple processing of resins sourced from 
its affiliates in India and the UAE.\9\
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    \9\ Id.
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(4) Extent of Production in Bahrain
    Domestic Producers argue that, when compared to the volume of film 
that can be produced, the investment in JBF Bahrain's processing 
operation is not significant.\10\
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    \10\ Id., at 9.
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(5) Value of Processing in Bahrain
    Domestic Producers assert that producing PET resin accounts for 
more than 70 percent of the value added of PET film.\11\ Domestic 
Producers estimate that that local content is unlikely to exceed 20 of 
the cost of merchandise.\12\ As JBF Bahrain sources its PET resin from 
affiliates in India and the UAE, the processing performed by JBF 
Bahrain represents a small portion of the value of finished PET film.
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    \11\ Id., at 9 and Exhibit 7.
    \12\ Id.
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D. Value of Merchandise Produced in India and the UAE

    As Domestic Producers argued previously, the value of processing, 
at issue in Bahrain, is a minor part of the cost, unlikely to exceed 20 
percent of cost.

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.''
(1) Pattern of Trade
    Domestic Producers note that at the time the petition was filed for 
the original investigation of PET Film from the UAE, Bahrain was not a 
source of U.S. PET Film imports.\13\ ITC data show that Bahrain first 
exported PET Film to the United States in December 2013, and that 
Bahrain has had exports of PET Film to the United States every month 
thereafter.\14\ During the same time period exports of PET film from 
the UAE declined.\15\ Domestic Producers further argue that there is no 
economic rationale for adding a new production facility in Bahrain, as 
there is no local market in Bahrain for the product, and the regional 
market is insignificant.\16\ To increase production, it would have been 
more efficient to add production lines to the JBF RAK facility in the 
UAE, rather than build a new facility in Bahrain.
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    \13\ Id., at 12.
    \14\ Id., at 12 and Exhibit 10.
    \15\ Id.
    \16\ Id., at 13.
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(2) Affiliation
    Domestic Producers note that JBF Bahrain, JBF India, and JBF RAK, 
are

[[Page 44008]]

indisputably affiliated, as shown by the JBF Group Web site.\17\ 
Domestic Producers further argue that it is ``clear that JBF Bahrain is 
merely taking PET resins produced by its affiliates and performing the 
same operations using these resins that the affiliate was doing in the 
UAE.'' \18\
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    \17\ Id., at 13 and Exhibit 2.
    \18\ Id., at 13.
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(3) Increase of Subject Imports From UAE to Bahrain After Investigation 
Initiation
    While unable to access comprehensive import data of the PET Film 
inputs, bright and silica resin chips, into Bahrain for the period 
between initiation of the investigation until the present, Domestic 
Producers believe there were no such imports entered previously, as 
there were no production facilities producing PET film in Bahrain at 
this time.\19\ Domestic Producers presented evidence of shipments of 
silica resin chips from JBF India to JBF Bahrain which coincide with 
the start-up of the JBF Bahrain PET Film plant, and that JBF Bahrain is 
sourcing PET resin from JBF RAK.\20\
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    \19\ Id., at 14, Exhibit 3.
    \20\ Id., at 14, Exhibit 4.
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Analysis of the Request

    Based on our analysis of Petitioner's anti-circumvention inquiry 
request, the Department determines that Domestic Producers satisfied 
the criteria under section 781(b)(1) of the Act to warrant an 
initiation of an anti-circumvention inquiry. 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 an anti-
circumvention inquiry. In addition, in accordance with 19 CFR 
351.225(f)(1)(i) and (ii), a notice of the initiation of an anti-
circumvention inquiry issued under 19 CFR 351.225(e) includes a 
description of the product that is the subject of the anti-
circumvention inquiry, PET Film that contains the characteristics as 
provided in the scope of the Order, 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 the Bahrain is of the 
same class or kind as the merchandise produced in the UAE, Domestic 
Producers presented information to the Department indicating that, 
pursuant to section 781(b)(1)(A) of the Act, the merchandise being 
produced in and/or exported from Bahrain by JBF Bahrain may be of the 
same class or kind as PET Film produced in the UAE, which is subject to 
the Order.\21\ Consequently, the Department finds that Domestic 
Producers provided sufficient information in its request regarding the 
class or kind of merchandise to support the initiation of an anti-
circumvention inquiry.
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    \21\ Id., at 5 and Exhibit 10.
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    With regard to completion or assembly of merchandise in a foreign 
country, pursuant to section 781(b)(1)(B) of the Act, Domestic 
Producers also presented information to the Department indicating that 
the PET Film exported from Bahrain to the United States are produced by 
JBF Bahrain in Bahrain using key components from the UAE that account 
for a significant portion of the total costs related to the production 
of PET Film. We find that the information presented by Domestic 
Producers regarding this criterion supports its request to initiate an 
anti-circumvention inquiry.
    The Department finds that Domestic Producers sufficiently addressed 
the factors described in section 781(b)(1)(C) and 781(b)(2) of the Act 
regarding whether the assembly or completion of PET Film in Bahrain is 
minor or insignificant. In particular, Domestic Producers' submission 
asserts that: (1) The level of investment is minimal when compared with 
the volume of film that can be produced; (2) there is no evidence of 
research and development taking place in Bahrain; (3) the production 
processes undertaken by JBF Bahrain involve the simple processing of 
resins in countries subject to the Order; (4) the investment in JBF 
Bahrain's processing operations is not significant in the context of 
production capacity; and (5) the value of the processing performed in 
Bahrain is minimal, as the production of PET resin outside Bahrain 
accounts for over 70 percent of the value of finished PET Film.\22\
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    \22\ See discussion of these five factors above.
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    With respect to the value of the merchandise produced in the UAE, 
pursuant to section 781(b)(1)(D) of the Act, Domestic Producers relied 
on published sources, a simulated cost structure for producing PET Film 
in Bahrain, and arguments in the ``minor or insignificant process'' 
portion of its anti-circumvention request to indicate that the value of 
the key components produced in the UAE may be significant relative to 
the total value of the PET Film exported to the United States.\23\ We 
find that this information adequately meets the requirements of this 
factor, as discussed above, for the purposes of initiating an anti-
circumvention inquiry.
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    \23\ See ``Request'' at 7, 9 and Exhibit 7.
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    Finally, with respect to the additional factors listed under 
section 781(b)(3) of the Act, we find that Domestic Producers presented 
evidence indicating that imports of PET Film from Bahrain to the U.S. 
increased since the imposition of the Order and that imports of bright 
resin chips from the UAE to Bahrain also increased since the Order took 
effect, further supporting initiation of this anti-circumvention 
inquiry.\24\
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    \24\ Id., at 12 and Exhibit 10.
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    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 on the merchandise. 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 19 CFR 351.225(f).

    Dated: July 18, 2014.
Christian Marsh,
Deputy Assistant Secretary for Antidumping and Countervailing Duty 
Operations.
[FR Doc. 2014-17492 Filed 7-28-14; 8:45 am]
BILLING CODE 3510-DS-P