[Federal Register Volume 83, Number 173 (Thursday, September 6, 2018)]
[Notices]
[Pages 45217-45220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19335]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-070]
Rubber Bands From the People's Republic of China: Preliminary
Affirmative Determination of Critical Circumstances, in Part, in the
Countervailing Duty Investigation, and Amendment to the Scope of the
Preliminary Determination in the Countervailing Duty Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) has preliminarily
determined that critical circumstances exist with respect to imports of
rubber bands from certain producers and exporters from the People's
Republic of China (China). Further, Commerce has amended the scope of
the countervailing duty (CVD) investigation on rubber bands from China.
DATES: Applicable September 6, 2018.
FOR FURTHER INFORMATION CONTACT: Kristen Johnson, AD/CVD Operations,
Office III, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone (202) 482-4793.
SUPPLEMENTARY INFORMATION:
Background
On January 30, 2018, Commerce received a CVD petition concerning
imports of rubber bands from China filed in proper form on behalf of
Alliance Rubber Co. (the petitioner).\1\ The investigation was
initiated on February 20, 2018,\2\ and the affirmative Preliminary
Determination was published on July 9, 2018.\3\
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\1\ See Letter from the petitioner, ``Petition for the
Imposition of Antidumping and Countervailing Duties: Rubber Bands
from Thailand, China, and Sri Lanka,'' dated January 30, 2018
(Petition).
\2\ See Rubber Bands from Thailand, the People's Republic of
China, and Sri Lanka: Initiation of Countervailing Duty
Investigations, 83 FR 8429 (February 27, 2018) (Initiation Notice),
and accompanying Initiation Checklist.
\3\ See Rubber Bands from the People's Republic of China:
Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Determination with Final Antidumping
Determination, 83 FR 31729 (July 9, 2018) (Preliminary
Determination), and accompanying Preliminary Decision Memorandum
(PDM).
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Commerce selected Graceful Imp. & Exp. Co., Ltd. (Graceful),
Moyoung Trading Co., Ltd. (Moyoung), and Ningbo Syloon Imp & Exp Co.,
Ltd. (Ningbo Syloon) (collectively, the mandatory respondents) as the
individually-examined respondents in
[[Page 45218]]
this investigation. Because neither the Government of China (GOC) nor
the three mandatory respondents responded to Commerce's CVD
questionnaire and, thus, are not cooperating in this investigation,
Commerce's preliminary determination was based on the application of
adverse facts available (AFA) in accordance with section 776(a) and (b)
of the Tariff Act of 1930, as amended (the Act).\4\
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\4\ See Preliminary Determination PDM at Use of Facts Otherwise
Available and Adverse Inferences.
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On June 11, 2018, the petitioner alleged that critical
circumstances exist with respect to imports of rubber bands from China,
pursuant to section 703(e)(1) of the Act and 19 CFR 351.206.\5\ On June
27, 2018, we notified the petitioner that additional information was
needed to support the allegation, in particular monthly import data and
an explanation for the proposed base period.\6\ On August 7, 2018, the
petitioner submitted an amended allegation of critical
circumstances.\7\
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\5\ See Letter from the petitioner, ``Rubber Bands from the
People's Republic of China: Critical Circumstances Allegation,''
dated June 11, 2018 (Critical Circumstances Allegation).
\6\ See Letter to the petitioner, ``Antidumping and
Countervailing Duty Investigations of Rubber Bands from the People's
Republic of China: Critical Circumstances Allegation,'' dated June
27, 2018.
\7\ See Letter from the petitioner, ``Rubber Bands from the
People's Republic of China: Critical Circumstances Allegation,
Supplement to Brief,'' dated August 7, 2018 (Amended Critical
Circumstances Allegation).
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In accordance with 19 CFR 351.206(c)(1), if the petitioner submits
an allegation of critical circumstances 30 days or more before the
scheduled date of the final determination,\8\ Commerce will make a
preliminary finding whether there is a reasonable basis to believe or
suspect that critical circumstances exist. Commerce will issue its
preliminary finding of critical circumstances within 30 days after the
petitioner submits the allegation.\9\
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\8\ The final determination for this CVD investigation is due no
later than November 13, 2018.
\9\ See 19 CFR 351.206(c)(2)(ii).
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Period of Investigation (POI)
The POI is January 1, 2017, through December 31, 2017.
Scope of the Investigation
The products covered by this investigation are rubber bands from
China. For a complete description of the scope of this investigation,
see the Appendix to this notice.
Scope Comments
In accordance with the preamble to Commerce's regulations,\10\ the
Initiation Notice set aside a period of time for parties to raise
issues regarding product coverage (i.e., scope).\11\ Certain interested
parties provided comments on the scope of the investigation as it
appeared in the Initiation Notice.\12\ For a summary of the product
coverage comments and rebuttal responses submitted to the record of
this CVD investigation, and accompanying discussion and analysis of all
comments timely received, see the Preliminary Scope Decision
Memorandum.\13\ We are preliminarily modifying the scope language as it
appeared in the Initiation Notice and Preliminary Determination. See
the revised scope in the Appendix to this notice.
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\10\ See Antidumping Duties; Countervailing Duties, Final Rule,
62 FR 27296, 27323 (May 19, 1997).
\11\ See Initiation Notice, 83 FR at 8430.
\12\ See Letter from Greenbrier International, Inc. and Conair
Corporation, ``Rubber Bands from, Thailand, China, and Sri Lanka:
Scope Comments,'' dated March 12, 2018; Letter from Jafferjee
Brothers Exports (Pvt) Ltd., ``Rubber Bands from Thailand: Scope
Comments,'' dated March 12, 2018; and Letter from the petitioner,
``Petition for the Imposition of Antidumping and Countervailing
Duties on Rubber Bands from Thailand and China--Rebuttal Scope
Comments,'' dated March 22, 2018.
\13\ See Memorandum, ``Rubber Bands from Thailand and the
People's Republic of China: Scope Comments Decision Memorandum for
the Preliminary Determination,'' dated concurrently with this notice
(Preliminary Scope Decision Memorandum).
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Allegation of Critical Circumstances
The petitioner alleges a massive increase of imports of rubber
bands from China and provided monthly import data, sourced from the
U.S. International Trade Commission's (ITC) Tariff and Trade DataWeb
(DataWeb) for the period January 2017 through April 2018.\14\ The
petitioner states that a comparison of total imports (by value) \15\
for the period February 2017 through April 2017, to the period February
2018 through April 2018, shows that imports of rubber bands from China
increased by 17.22 percent,\16\ which is considered ``massive'' under
19 CFR 351.206(h)(2).
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\14\ See Amended Critical Circumstances Allegation at Exhibit 1.
\15\ For ``U.S. imports for consumption,'' DataWeb reports only
US$ value data for the harmonized tariff schedule number
4016.99.3510.
\16\ See Amended Critical Circumstances Allegation at 3.
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The petitioner also alleges that there is a reasonable basis to
believe that there are subsidies in this investigation which are
inconsistent with the Subsidies and Countervailing Measures Agreement
(SCM Agreement).\17\
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\17\ See Critical Circumstances Allegation at 3-5.
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Critical Circumstances Analysis
Section 703(e)(1) of the Act provides that Commerce will
preliminarily determine that critical circumstances exist if there is a
reasonable basis to believe or suspect that: (A) The alleged
countervailable subsidy is inconsistent with the SCM Agreement,\18\ and
(B) there have been massive imports of the subject merchandise over a
relatively short period.
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\18\ Commerce limits its critical circumstances findings to
those subsidies contingent upon export performance or use of
domestic over imported goods (i.e., those prohibited under Article 3
of the SCM Agreement). See e.g., Final Affirmative Countervailing
Duty Determination and Final Negative Critical Circumstances
Determination: Carbon and Certain Alloy Steel Wire from Germany, 67
FR 55808, 55809-10 (August 30, 2002).
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In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section 703(e)(1)(B) of the
Act and 19 CFR 351.206(h) and (i), Commerce normally compares the
import volumes of the subject merchandise for at least three months
immediately preceding the filing of the petition (i.e., the base
period) to a comparable period of at least three months following the
filing of the petition (i.e., the comparison period). The regulations
also provide, however, that if Commerce finds that importers, or
exporters or producers, had reason to believe, at some time prior to
the beginning of the proceeding, that a proceeding was likely, Commerce
may consider a period of not less than three months from the earlier
time.\19\ Imports must increase by at least 15 percent during the
comparison period to be considered massive.\20\
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\19\ See 19 CFR 351.206(i).
\20\ See 19 CFR 351.206(h)(2).
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Application of Facts Available for the Mandatory Respondents
Sections 776(a)(1) and (2) of the Act provide that Commerce shall,
subject to section 782(d) of the Act, apply ``facts otherwise
available'' if necessary information is not on the record or an
interested party or any other person: (A) Withholds information that
has been requested; (B) fails to provide information within the
deadlines established, or in the form and manner requested by Commerce,
subject to subsections (c)(1) and (e) of section 782 of the Act; (C)
significantly impedes a proceeding; or (D) provides information that
cannot be verified as provided by section 782(i) of the Act. Because
the mandatory respondents decided to not participate in this
investigation, we have made this preliminary determination with respect
to critical circumstances on the basis of facts
[[Page 45219]]
otherwise available, pursuant to section 776(a)(2)(A), (B), and (C) of
the Act.
Section 776(b) of the Act provides that Commerce may use an adverse
inference in selecting from among the facts otherwise available when a
party fails to cooperate by not acting to the best of its ability to
comply with a request for information. Further, section 776(b)(2) of
the Act states that an adverse inference may include reliance on
information derived from the petition, the final determination from the
investigation, a previous administrative review, or other information
placed on the record. Because Graceful, Moyoung, and Ningbo Syloon did
not cooperate to the best of their ability in this investigation, in
selecting from the facts available, we find that an adverse inference
is warranted, pursuant to section 776(b) of the Act, with respect to
critical circumstances. As such, we are making an adverse inference
that Graceful, Moyoung, and Ningbo Syloon each benefited from
countervailable subsidies under the ``Export Assistance Grants''
program. As determined in Commerce's Initiation Checklist, the ``Export
Assistance Grants'' program, alleged in the Petition and supported by
information reasonably available to the petitioner, appears to be
export contingent and thus inconsistent with the SCM Agreement.\21\
Also, based on AFA, we preliminarily determine that Graceful, Moyoung,
and Ningbo Syloon had massive imports of subject merchandise over a
relatively short period. Thus, we preliminarily determine that critical
circumstances exist regarding imports of rubber bands shipped by
Graceful, Moyoung, and Ningbo Syloon, pursuant to sections 703(e)(1)
and 776(a) and (b) of the Act and 19 CFR 351.206.
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\21\ See Initiation Checklist at 23.
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All Other Companies
Consistent with prior determinations, we have not imputed the
adverse inference of massive imports that we applied to the mandatory
respondents to the non-individually examined companies receiving the
all-others rate.\22\ Rather, we examined data for total imports of
subject merchandise during the comparison period relative to a base
period to determine whether or not imports were massive with respect to
these companies.
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\22\ See e.g., Countervailing Duty Investigation of Certain
Cold-Rolled Steel Flat Products from the People's Republic of China:
Preliminary Affirmative Determination, Preliminary Partial
Affirmative Critical Circumstances Determination, and Alignment of
Final Determination with Final Antidumping Duty Determination, 80 FR
79558 (December 22, 2015), and accompanying PDM at 17-20, unchanged
in Certain Cold-Rolled Steel Flat Products from the People's
Republic of China: Final Affirmative Countervailing Duty
Determination and Final Partial Affirmative Critical Circumstances
Determination, 81 FR 32729 (May 24, 2016).
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The petitioner stated that it is not aware of any seasonal or
consumption trends.\23\ The petitioner did not provide, pursuant to 19
CFR 351.206(i), any argument or evidence that importers, exporters, or
producers had reason to believe, at some point prior to the filing of
the Petition that a proceeding was likely.\24\ Therefore, to determine
whether or not there has been a massive surge of imports with respect
to all other exporters or producers, we used a comparison period
starting with February 2018, because the Petition was filed on January
30, 2018,\25\ and ending with the most recent month for which we have
import data on the record (i.e., June 2018).
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\23\ See Critical Circumstances Allegation at 6.
\24\ Id. and Amended Critical Circumstances Allegation.
\25\ When a petition is filed in the second half of the month,
Commerce's practice is to consider the month in which the petition
was filed as part of the base period. Based on the date of filing of
the Petition, i.e., January 30, 2018, which is in the second half of
the month, February 2018 begins the comparison period. See e.g.,
Certain Carbon and Alloy Steel Wire Rod from the Russian Federation
and the United Arab Emirates: Affirmative Preliminary Determinations
of Sales at Less Than Fair Value, and Affirmative Preliminary
Determination of Critical Circumstances for Imports of Certain
Carbon and Alloy Steel Wire Rod from the Russian Federation, 82 FR
42794 (September 12, 2017), and accompanying PDM at 13.
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We obtained U.S. import value data from DataWeb for each month from
January 2017 through June 2018.\26\ It is Commerce's practice to base
its critical circumstances analysis on all available data, using base
and comparison periods of no less than three months. Therefore, we
selected a five-month base period of September 2017 through January
2018, to compare to the comparison period of February 2018 through June
2018, to determine whether or not imports of subject merchandise were
massive over a relatively short period. Our analysis of the data, which
indicate a 9.1 percent decrease in imports of rubber bands from China,
leads us to conclude that there was not a massive increase in imports,
as defined by 19 CFR 351.206(h)(2).\27\ Therefore, we preliminarily
determine that critical circumstances do not exist with respect to all
other exporters or producers.
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\26\ See Memorandum, ``Countervailing Duty Investigation of
Rubber Bands from the People's Republic of China: Import Data for
Preliminarily Determination of Critical Circumstances,'' dated
concurrently with this notice.
\27\ Id.
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We will make a final determination concerning critical
circumstances for rubber bands from China when we make our final
determination in this investigation, which is currently scheduled to be
signed no later than November 13, 2018.
Public Comment
Interested parties may submit case briefs or other written comments
with regard to this preliminary affirmative critical circumstances
determination and the preliminary scope decision. Such submissions must
be submitted to the Assistant Secretary for Enforcement and Compliance
via ACCESS \28\ no later than 30 days after the date on which this
notice is published in the Federal Register.\29\ Rebuttal briefs,
limited to issues raised in case briefs, may be submitted no later than
five days after the deadline date for case briefs.\30\ Pursuant to 19
CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or
rebuttal briefs in this investigation are encouraged to submit with
each argument: (1) A statement of the issue; (2) a brief summary of the
argument; and (3) a table of authorities.\31\
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\28\ ACCESS is Enforcement and Compliance's Antidumping and
Countervailing Duty Centralized Electronic Service System. It is
available to registered users at http://access.trade.gov, and in the
Central Records Unit, Room B8024 of the main Commerce building.
\29\ See 19 CFR 351.309(c)(1)(i); see also 19 CFR 351.303 (for
general filing requirements).
\30\ See 19 CFR 351.309(d)(1).
\31\ See 19 CFR 351.309(c)(2) and (d)(2).
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Electronically filed documents must be received successfully in
their entirety by 5:00 p.m. Eastern Time,\32\ on the due dates
established above.
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\32\ See 19 CFR 351.303(b)(1).
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Suspension of Liquidation
In accordance with section 703(e)(2)(A) of the Act, we are
directing U.S. Customs and Border Protection (CBP) to suspend
liquidation, with regard to Graceful, Moyoung, and Ningbo Syloon, of
any unliquidated entries of subject merchandise from the China entered,
or withdrawn from warehouse for consumption, on or after April 10,
2018, which is 90 days prior to the date of publication of the
Preliminary Determination in the Federal Register. For such entries,
CBP shall require a cash deposit equal to the estimated preliminary
subsidy rates established for Graceful, Moyoung, and Ningbo Syloon in
the Preliminary Determination. This suspension of liquidation will
remain in effect until further notice. Further, as a result of the
changes to the scope of the investigation in the Preliminary Scope
Decision Memorandum, we are amending the scope of the investigation as
published in the Preliminary Determination. We
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will send appropriate instructions to CBP to reflect these changes to
the scope of the investigation.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of this preliminary determination of critical circumstances.
This determination is issued and published pursuant to sections
703(f) and 777(i)(1) of the Act.
Dated: August 29, 2018.
Christian Marsh,
Deputy Assistant Secretary for Enforcement and Compliance.
Appendix
Amended Scope of the Investigation
The products subject to this investigation are bands made of
vulcanized rubber, with a flat length, as actually measured end-to-
end by the band lying flat, no less than \1/2\ inch and no greater
than 10 inches; with a width, which measures the dimension
perpendicular to the length, actually of at least 3/64 inch and no
greater than 2 inches; and a wall thickness actually from 0.020 inch
to 0.125 inch. Vulcanized rubber has been chemically processed into
a more durable material by the addition of sulfur or other
equivalent curatives or accelerators. Subject products are included
regardless of color or inclusion of printed material on the rubber
band's surface, including but not limited to, rubber bands with
printing on them, such as a product name, advertising, or slogan,
and printed material (e.g., a tag) fastened to the rubber band by an
adhesive or another temporary type of connection. The scope includes
vulcanized rubber bands which are contained or otherwise exist in
various forms and packages, such as, without limitation, vulcanized
rubber bands included within a desk accessory set or other type of
set or package, and vulcanized rubber band balls. The scope excludes
products that consist of an elastomer loop and durable tag all-in-
one, and bands that are being used at the time of import to fasten
an imported product.
Excluded from the scope of this investigation are vulcanized
rubber bands of various sizes with arrow shaped rubber protrusions
from the outer diameter that exceeds at the anchor point a wall
thickness of 0.125 inches and where the protrusion is used to loop
around, secure and lock in place.
Excluded from the scope of this investigation are yarn/fabric-
covered vulcanized rubber hair bands, regardless of size.
Merchandise covered by this investigation is currently
classified in the Harmonized Tariff Schedule of the United States
(HTSUS) under subheading 4016.99.3510. Merchandise covered by the
scope may also enter under HTSUS subheading 4016.99.6050. While the
HTSUS subheadings are provided for convenience and customs purposes,
the written description of the scope of the investigation is
dispositive.
[FR Doc. 2018-19335 Filed 9-5-18; 8:45 am]
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