[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