[Federal Register Volume 82, Number 131 (Tuesday, July 11, 2017)]
[Notices]
[Pages 31945-31947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14282]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-845]
Sugar From Mexico: Amendment to the Agreement Suspending the
Antidumping Duty Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATES: Effective June 30, 2017.
SUMMARY: The Department of Commerce (the Department) and a
representative of the signatory sugar producers/exporters accounting
for substantially all imports of sugar from Mexico have signed an
amendment to the Agreement Suspending the Antidumping Duty
Investigation on Sugar from Mexico (AD Suspension Agreement). The
amendment to the AD Suspension Agreement modified the definitions for
sugar from Mexico, revises the reference prices for the applicable
sugar from Mexico, and provides for enhanced monitoring and enforcement
mechanisms.
FOR FURTHER INFORMATION CONTACT: Sally Craig Gannon or David Cordell at
(202) 482-0162 or (202) 482-0408, respectively; Bilateral Agreements
Unit, Office of Policy, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Background
On April 17, 2014, the Department initiated an antidumping duty
investigation under section 732 of the Tariff Act of 1930, as amended
(the Act), to determine whether imports of sugar from Mexico are being,
or are likely to be, sold in the United States at less than fair value
(LTFV).\1\ On October 24, 2014, the Department preliminarily determined
that sugar from Mexico is being, or is likely to be, sold in the United
States at LTFV, as provided in section 733 of the Act, and postponed
the final determination in this investigation until no later than 135
days after the date of publication of the preliminary determination in
the Federal Register.\2\
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\1\ See Sugar from Mexico: Initiation of Antidumping Duty
Investigation, 79 FR 22795 (April 24, 2014).
\2\ See Sugar from Mexico: Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final Determination, 79 FR
65189 (November 3, 2014).
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The Department and a representative of the signatory producers/
exporters accounting for substantially all imports of sugar from Mexico
signed the AD Suspension Agreement on December 19, 2014.\3\
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\3\ See Sugar From Mexico: Suspension of Antidumping
Investigation, 79 FR 78039 (December 29, 2014) (AD Suspension
Agreement).
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On January 8, 2015, Imperial Sugar Company (Imperial) and AmCane
Sugar LLC (AmCane) each notified the Department that they had
petitioned the International Trade Commission (ITC) to conduct a review
of the AD Suspension Agreement under section 734(h) of the Act, to
determine whether the injurious effects of the imports of the subject
merchandise are eliminated completely by the AD Suspension Agreement.
On March 19, 2015, in a unanimous vote, the ITC found that the AD
Suspension Agreement eliminated completely the injurious effects of
imports of sugar from Mexico.\4\ As a result of the ITC's
determination, the AD Suspension Agreement remained in effect, and on
March 27, 2015, the Department, in accordance with section 734(h)(3) of
the Act, instructed U.S. Customs and Border Protection (CBP) to
terminate the suspension of liquidation of all entries of sugar from
Mexico and refund all cash deposits.
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\4\ See Sugar from Mexico; Determinations, 80 FR 16426 (March
27, 2015).
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Notwithstanding issuance of the AD Suspension Agreement, pursuant
to requests by domestic interested parties, the Department continued
its investigation and made an affirmative final determination of sales
at less than fair value.\5\ In its Final Determination, the Department
calculated weighted-average dumping margins of 40.48 percent for Fondo
de Empresas Expropiadas del Sector Azucarero (FEESA), 42.14 percent for
Ingenio Tala S.A. de C.V. and certain affiliated sugar mills of Grupo
Azucarero Mexico S.A. de C.V. (collectively, the GAM Group), and 40.74
percent for all other Mexican producers/exporters. The Department
stated, in its Final Determination, that it would ``not instruct CBP to
suspend liquidation or collect cash deposits calculated herein unless
the AD Suspension Agreement is terminated and the Department issues an
antidumping duty order,'' and, in that case, it would ``instruct CBP to
suspend liquidation and require a cash deposit equal to the weighted-
average amount by which normal value exceeds U.S. price,'' and adjusted
for export subsidies.\6\ The ITC subsequently made an affirmative
determination of material injury to an industry in the United States by
reason of imports of sugar from Mexico.\7\
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\5\ See Sugar From Mexico: Continuation of Antidumping and
Countervailing Duty Investigations, 80 FR 25278 (May 4, 2015); Sugar
From Mexico: Final Determination of Sales at Less Than Fair Value,
80 FR 57341 (September 23, 2015) (Final Determination).
\6\ Final Determination, 80 FR at 57342.
\7\ See Sugar From Mexico, 80 FR 70833 (November 16, 2015)
(Final ITC Determination).
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Since June 2016, the Department and representatives of the Mexican
sugar producers/exporters have held consultations regarding the AD
Suspension Agreement to address concerns raised by the domestic
industry and ensure that the AD Suspension Agreement meets all of the
statutory requirements for a suspension agreement, e.g., that
suspension of the investigation is in the public interest, including
the availability of supplies of sugar in the U.S. market, and that
effective monitoring is practicable. On June 14, 2017, the Department
and a representative for Mexican sugar producers/exporters initialed a
draft amendment to the AD Suspension Agreement. We invited interested
parties to provide written comments by June 21, 2017, and rebuttal
comments by June 26, 2017.\8\ On June 17, 2017, the Department released
draft memoranda explaining how the draft amended AD Suspension
Agreement meets the requirements of section 734(c) of the Act and
invited interested parties to provide written comments by no later than
the close of business on June 23, 2017, with rebuttal comments due no
later than the close of business on June 26, 2017.\9\
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\8\ See Memorandum entitled ``Agreement Suspending the
Antidumping Duty Investigation on Sugar from Mexico,'' dated June
14, 2017 and Memorandum entitled ``Placing Press Release on the
Record of the Proceeding,'' dated June 30, 2017.
\9\ See Memorandum from P. Lee Smith, Deputy Assistant Secretary
for Policy and Negotiations, to Ronald K. Lorentzen, Acting
Assistant Secretary for Enforcement and Compliance, entitled ``Draft
Amendment to the Agreement Suspending the Antidumping Duty
Investigation on Sugar from Mexico: U.S. Import Coverage, Existence
of Extraordinary Circumstances, Public Interest, and Effective
Monitoring Assessments,'' dated June 16, 2017; see also Memorandum
from P. Lee Smith, Deputy Assistant Secretary for Policy and
Negotiations, to Ronald K. Lorentzen, Acting Assistant Secretary for
Enforcement and Compliance, entitled ``Draft Amendment to the
Agreement Suspending the Antidumping Duty Investigation on Sugar
from Mexico: The Prevention of Price Suppression or Undercutting of
Price Levels by the Draft Amendment,'' dated June 16, 2017.
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[[Page 31946]]
Scope of Agreement
See Section I, Product Coverage, of the AD Suspension Agreement.
Analysis of Comments Received
We received comments on the draft amendment from the International
Sugar Trade Coalition, the Australian Sugar Industry Alliance, CSC
Sugar LLC (CSC), the Corn Refiners Association, the Organic Trade
Association, Archer Daniels Midland Company, the American Sugar
Coalition, Imperial Sugar Company, the Government of Canada, the Sugar
Users Association (SUA), and the Governments of Barbados, Belize,
Dominican Republic, Guyana, and Jamaica. We received rebuttal comments
on the draft amendment from C[aacute]mara Nacional de Las Industrias
Azucarera y Alcoholera (Mexican Sugar Chamber), the American Sugar
Coalition, and Zucarmex, S.A. de C.V. and Zucrum Foods LLC. CSC also
filed unsolicited rebuttal comments to the American Sugar Coalition's
rebuttal comments. We received comments on the draft statutory
memoranda from SUA. In reaching a final amendment to the AD Agreement,
the Department has taken into account all comments and rebuttal
comments submitted on the record of the suspension agreement proceeding
and has made changes, where warranted, to the June 14, 2017 draft AD
amendment based upon those comments. The Department expects to place
its written analysis of the changes made and response to comments on
the record of the suspension agreement proceeding no later than July
14, 2017.
Amendment to AD Suspension Agreement
The Department consulted with the Mexican sugar producers/exporters
and the petitioners \10\ and has considered the comments submitted by
interested parties with respect to the draft amendment to the AD
Suspension Agreement. On June 30, 2017, after consideration of the
interested party comments received, Wilbur L. Ross, Jr., Secretary of
Commerce, U.S. Department of Commerce and Juan Cortina Gallardo, for
Mexican Sugar Industry, a representative of sugar producers/exporters
accounting for substantially all imports of sugar from Mexico, signed a
finalized amendment to the AD Suspension Agreement. The amendment, as
integrated with the AD Suspension Agreement, allows for exports of
Mexican sugar to the United States in accordance with the collective
terms therein.
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\10\ The petitioners are the American Sugar Coalition and its
individual members: American Sugar Cane League, American Sugar
Refining, Inc., American Sugarbeet Growers Association, Florida
Sugar Cane League, Rio Grande Valley Sugar Growers, Inc., Sugar Cane
Growers Cooperative of Florida, and United States Beet Sugar
Association.
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In accordance with section 734(c) of the Act, we have determined
that extraordinary circumstances, as defined by section 734(c)(2)(A) of
the Act, exist with respect to the amended AD Suspension Agreement. We
have also determined that the amended AD Suspension Agreement will
eliminate completely the injurious effect of exports to the United
States of the subject merchandise and prevent the suppression or
undercutting of price levels of domestic sugar by imports of that
merchandise from Mexico, as required by section 734(c)(1) of the Act.
We have also determined that the amended AD Suspension Agreement is in
the public interest and can be monitored effectively, as required under
section 734(d) of the Act.
For the reasons outlined above, we find that the amended AD
Suspension Agreement meets the criteria of section 734(c) and (d) of
the Act.
The terms and conditions of the amendment to this AD Suspension
Agreement, signed on June 30, 2017, are set forth in the Amendment to
the AD Suspension Agreement, which is attached in Annex 1 to this
notice.
Administrative Protective Order Access
The administrative protective order (APO) the Department granted in
the suspension agreement segment of this proceeding remains in place
and effective for the amended AD Suspension Agreement. All new parties
requesting access to business proprietary information submitted during
the administration of the amended AD Suspension Agreement, under the
APO currently in effect, must submit an APO application in accordance
with the Department's regulations currently in effect.\11\
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\11\ See section 777(c)(1) of the Act; 19 CFR 351.103, 351.304,
351.305, and 351.306.
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We are issuing and publishing this notice in accordance with
section 734(f)(1)(A) of the Act and 19 CFR 351.208(g)(2).
Dated: June 30, 2017.
Gary Taverman,
Deputy Assistant Secretary for Antidumping and Countervailing Duty
Operations.
Annex 1: Amendment to Agreement Suspending the Antidumping Duty
Investigation on Sugar From Mexico
The Agreement Suspending the Antidumping Duty Investigation on
Sugar from Mexico (Agreement) signed by the United States Department
of Commerce (the Department) and the signatory producers and
exporters of Sugar from Mexico (the Signatories) on December 19,
2014, is amended, as set forth below (Amendment).
If a provision of the Agreement conflicts with a provision of
this Amendment, the provision of the Amendment shall supersede the
provision of the Agreement to the extent of the conflict. All other
provisions of the Agreement and their applicability continue with
full force.
The Department and the Signatories hereby agree as follows:
Section II (``Definitions'') is amended as follows:
Section II.C is replaced with:
``Effective Date of the Agreement'' means the date on which the
Department and the Signatories signed the Agreement. Additionally,
the ``Effective Date of the Amendment'' means the date on which the
Department issues its next calculation pursuant to Section V.B of
the Agreement Suspending the Countervailing Duty Investigation on
Sugar from Mexico (CVD Agreement) and, as such, means that the
Amendment applies to all contracts for Sugar from Mexico for the for
the October 1, 2017 through September 30, 2018 Export Limit Period
(as defined in the CVD Agreement), and to all contracts for Sugar
from Mexico (regardless of Export Limit Period) exported from Mexico
on or after October 1, 2017.
Section II.F is replaced with:
``Other Sugar'' means
a. Sugar at a polarity of less than 99.2, as produced and
measured on a dry basis;
b. Where such Sugar is Additional U.S. Needs Sugar, as defined
in Section II.O, Sugar at a polarity of less than 99.5, as produced
and measured on a dry basis; and,
c. In the event that Section V.B.4.d of the CVD Agreement is
exercised, Sugar at a polarity specified by USDA that is below 99.5,
as produced and measured on a dry basis.
Such Other Sugar must be exported to the United States loaded in
bulk and freely flowing (i.e., not in a container, tote, bag or
otherwise packaged) into the hold(s) of an ocean-going vessel. To be
considered as Other Sugar, if Sugar leaves the Mexican mill in a
container, tote, bag or other package (i.e., is not freely flowing),
it must be emptied from the container, tote, bag or other package
into the hold of the ocean-going vessel for exportation. All other
exports of Sugar from Mexico that are not transported in bulk and
freely flowing in the hold(s) of an ocean-going vessel will be
considered to be Refined Sugar for purposes of the Reference Prices,
regardless of the polarity of that Sugar.
Section II.H is replaced with:
[[Page 31947]]
``Refined Sugar'' means
a. Sugar at a polarity of 99.2 and above, as produced and
measured on a dry basis;
b. Sugar considered to be Refined Sugar under Section II.F;
c. Where such Sugar is Additional U.S. Needs Sugar as defined in
Section II.U, Sugar at a polarity of 99.5 and above, as produced and
measured on a dry basis; and
d. In the event that Section V.B.4.d of the CVD Agreement is
exercised, Sugar at a polarity specified by USDA that is 99.5 or
above, as produced and measured on a dry basis.
New Section II.N is added as follows:
``Intermediary Customer'' means trader, processor, or other
reseller located outside of the United States who sells Sugar to an
unaffiliated customer in the United States.
New Section II.O is added as follows:
``Additional U.S. Needs Sugar'' means the quantity of Sugar
allowed to be exported, over and above the Export Limit calculated
under Section V.B.3 of the amended CVD Agreement, to fill a need
identified by USDA in the U.S. market for a particular type and
quantity of Sugar, and offered to Mexico pursuant to Section V.B.4.c
of the amended CVD Agreement.
Section VII (``Monitoring of the Agreement'') is amended as
follows:
Section VII.B (``Compliance Monitoring'') is amended as follows:
Section VII.B.4--an additional sentence as follows is added to
the end of paragraph 4:
The Department may verify polarity testing practices at any
Mexican mill and request supporting documentation for polarity test
results.
Section VII.C (``Shipping and Other Arrangements'') is amended
as follows:
Section VII.C.4 is replaced with the following, with the
sentence in italics being added to the language:
4. Not later than 30 days after the end of each quarter, each
Signatory will submit a written statement to the Department
certifying that all sales during the most recently completed quarter
were at net prices, after rebates, discounts, or other adjustments,
at or above the Reference Prices in effect and were not part of or
related to any act or practice which would have the effect of hiding
the real price of the Sugar being sold. Further, each Signatory will
certify in this same statement that all sales made during the
relevant quarter were not part of or related to any bundling
arrangement, discounts/free goods/financing package, swap or other
exchange where such arrangement is designed to circumvent the basis
of the Agreement. As part of the certification, each Signatory will
submit a listing of the total quantity of Other Sugar and Refined
Sugar that was exported during each quarter.
Each Signatory that did not export Sugar to the United States
during any given quarter will submit a written statement to the
Department certifying that it made no sales to the United States
during the most recently completed quarter. Each Signatory agrees to
permit full verification of its certification as the Department
deems necessary. Failure to provide a quarterly certification may be
considered a violation of the Agreement.
Section VII.C.5 is added as follows:
5. For each sale made by a Signatory to an Intermediary
Customer, the Signatory shall incorporate into its sales contract
with the Intermediary Customer the obligation that such customers
will abide by the terms of the Agreement, including selling the
Sugar from Mexico to the first downstream unaffiliated U.S. customer
in accordance with the terms of the Agreement. Further, for each
sale made by a Signatory to an Intermediary Customer, the Signatory
shall incorporate into its sales contract with the Intermediary
Customer a provision requiring the Intermediary Customer to provide
the Department with all sales and other related information the
Department requests.
Further, Signatories and Intermediary Customers must retain
evidence in their files to document that these contractual
obligations were implemented. The Department retains its authority
to request the Signatory and/or Intermediary Customer to provide
such documentation, and the Department may verify such
documentation. Where a Signatory does not have access to the
documentation but has obligated the Intermediary Customer to provide
it to the Department, the Department will request the Intermediary
Customer to provide the documentation. Failure by a Signatory and/or
Intermediary Customer to provide requested documentation may be
considered a violation under Section VIII of the Agreement.
Section VII.C.6 is added as follows:
6. Other Sugar may enter the Customs territory of the United
States if the following conditions are met:
Exporters of Other Sugar are required to ensure, through
inclusion of obligations in their sales contracts or otherwise, that
importers of record of such Other Sugar agree to ensure that Other
Sugar is tested for polarity by a laboratory approved by U.S.
Customs and Border Protection (CBP) upon entry into the United
States, with samples drawn in accordance with CBP standards, and
that the importers of record agree to report the polarity test
results for each entry to the Department within 30 days of entry.
Such polarity test reports must be filed on the official records of
the Department for both this Agreement and the CVD Agreement. For
clarity, sampling will be done in accordance with CBP standards
(e.g., CBP Directive No. 3820-001B), or its successor directive as
agreed by the Department and the Signatories, including the CBP
requirement that the polarity level of an entry will be the average
of the samples from that entry.
The Department will request that CBP inform the importing public
of the requirements for importation of Other Sugar set forth in this
sub-section.
Section VII.C.7 is added as follows:
7. Penalties for Non-Compliance with Section VII.C.6.a:
a. Where the Department finds that exporters and importers of
record of Other Sugar are not complying with Section VII.C.6.a, the
Department may consider this a violation under Section VIII.D of the
Agreement.
b. If the Department finds that issues with meeting the polarity
requirements of the Agreement as required by Sections II.F, II.H,
VII.C.6 and Appendix I continue to arise, the Department can at any
time terminate the Agreement under Section X.B. Apart from
termination, the Department may take additional steps to ensure
compliance with the terms of this Agreement, including action under
Section VIII.B.4 of the CVD Agreement.
Section VIII (``Violations of the Agreement'') is amended as
follows:
Section VIII.D is amended by adding new paragraphs 3 and 4, and
moving paragraph 3 to paragraph 5:
D.3 Failure by Signatories and Intermediary Customers to provide the
required documentation specified in Section VII.C.5.
D.4 Failure by Signatories and importers of record to comply with
the requirements under Section VII.C.6.
Appendix I is amended as follows:
At Appendix I, the following will be changed:
The FOB plant Reference Price for Refined Sugar is $0.2800 per
pound commercial value (whether freely flowing or in totes weighing
one (1) MT or greater as the sugar leaves the mill), as produced and
measured on a dry basis.
The FOB plant Reference Price for Other Sugar is $0.2300 per
pound commercial value (whether freely flowing or in totes weighing
one (1) MT or greater as the sugar leaves the mill), as produced and
measured on a dry basis.
In addition, the following clause will be added to Appendix I
when referencing the Reference Prices.
Mexican Signatory producers/exporters must ensure that the
delivered sales price for all Sugar from Mexico exported to the
United States must include all expenses, e.g., transportation, de-
bagging, warehousing, handling, and packaging charges, in excess of
the FOB plant Reference Price. As specified in Sections VII.B.1 and
VII.B.2 of the Agreement, the Department has the authority to
request sales information, and to verify such information, which
demonstrates compliance with the Reference Prices and terms of the
Agreement.
Signed in Washington, DC, on June 30, 2017.
For the U.S. Department of Commerce:
Wilbur L. Ross, Jr.,
Secretary of Commerce, U.S. Department of Commerce
The following party hereby certifies that the members of the
Mexican sugar industry agree to abide by all terms of the Amendment
to the Agreement:
Juan Cortina Gallardo
For Mexican Sugar Industry.
[FR Doc. 2017-14282 Filed 7-10-17; 8:45 am]
BILLING CODE 3510-DS-P