[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Notices]
[Pages 19757-19762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09214]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-967, C-570-968]


Aluminum Extrusions From the People's Republic of China: 
Initiation of Anti-Circumvention and Scope Inquiries on the Antidumping 
Duty and Countervailing Duty Orders

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a request from Air Master Awning LLC (Air 
Master), the Department of Commerce (Commerce) is initiating anti-
circumvention inquiries to determine whether imports of aluminum 
jalousie shutters that are processed in the Dominican Republic from 
window frame extrusions produced in the People's Republic of China 
(China), are circumventing the antidumping duty (AD) and countervailing 
duty (CVD) orders on aluminum extrusions from China. We are also self-
initiating scope inquiries to determine whether the aluminum jalousie 
shutters are subject to the AD and CVD orders.

DATES: Applicable May 6, 2019.

FOR FURTHER INFORMATION CONTACT: Fred Baker, AD/CVD Operations, Office 
VI, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, 
DC 20230; telephone: (202) 482-2924.

SUPPLEMENTARY INFORMATION:

Background

    Following Commerce's final affirmative determinations of dumping 
and countervailable subsidies,\1\ and the U.S. International Trade 
Commission (ITC)'s finding of material injury,\2\ Commerce issued AD 
and CVD orders on imports of aluminum extrusions from China, which were 
published in the Federal Register on May 26, 2011.\3\
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    \1\ See Aluminum Extrusions from the People's Republic of China: 
Final Determination of Sales at Less Than Fair Value, 76 FR 18524 
(April 4, 2011); and Aluminum Extrusions from the People's Republic 
of China: Final Affirmative Countervailing Duty Determination, 76 FR 
18521 (April 4, 2011).
    \2\ See Certain Aluminum Extrusions from China, 76 FR 29007 (May 
19, 2011).
    \3\ See Aluminum Extrusions from the People's Republic of China: 
Antidumping Duty Order, 76 FR 30650 (May 26, 2011); and Aluminum 
Extrusions from the People's Republic of China: Countervailing Duty 
Order, 76 FR 30653 (May 26, 2011) (collectively, the Orders).
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    On September 25, 2018, pursuant to section 781(b) of the Tariff Act 
of 1930, as amended (the Act) and 19 CFR 351.225(h), Air Master 
requested that Commerce initiate anti-circumvention inquiries on 
imports of aluminum jalousie shutters completed or assembled in the 
Dominican Republic using window frame extrusions sourced from China 
that are subject to the Orders.\4\ Air Master alleges that the 
completion/assembly of the aluminum jalousie shutters constitutes a 
``minor alteration,'' within the meaning of 781(c) of the Act.\5\ 
Further, pursuant to 19 CFR 351.225(f), Air Master requested that 
Commerce issue preliminary determinations of circumvention of the 
Orders concurrently with the initiation, to suspend liquidation of 
imports of aluminum jalousie shutters from the Dominican Republic.\6\ 
Air Master submitted supplements to its request in October and December 
2018.\7\ Separately, Commerce issued a supplemental questionnaire to 
Air Master on February 11, 2019,\8\ to which Air Master responded on 
February 19, 2019.\9\
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    \4\ See Air Master Letter, ``Aluminum Extrusions from the 
People's Republic of China, A-570-967 and C-570-968; Request for 
Circumvention Ruling Pursuant to Section 781(c) of the Tariff Act of 
1930,'' dated September 25, 2018 (Anti-Circumvention Ruling 
Request).
    \5\ Id. at 2. We note that Air Master's Anti-Circumvention 
Ruling Request alleges that the assembly of the aluminum jalousie 
shutters in the Dominican Republic represents a minor alteration 
within the meaning of section 781(c) of the Act. Because section 
781(b) of the Act relates to ``merchandise completed or assembled in 
other foreign countries,'' and section 781(c) of the Act relates to 
``minor alterations of merchandise,'' we are initiating anti-
circumvention inquiries under both 781(b) and (c) of the Act.
    \6\ Id. at 2 and 19.
    \7\ See Air Master Letter, ``Aluminum Extrusions from the 
People's Republic of China, A-570-967 and C-570-968; Request for 
Circumvention Ruling Pursuant to Section 781(c) of the Tariff Act of 
1930,'' dated October 1, 2018 (First Supplement to Anti-
Circumvention Ruling Request); and Air Master Letter, ``Aluminum 
Extrusions from the People's Republic of China, A-570-967 and C-570-
968; Request for Circumvention Ruling Pursuant to Section 781(c) of 
the Tariff of 1930; Submission of Supplemental Information,'' dated 
December 18, 2018.
    \8\ See Commerce Letter, ``Aluminum Extrusions from the People's 
Republic of China Anti-Circumvention Inquiry: Air Master Awning, 
LLP,'' dated February 11, 2019.
    \9\ See Air Master Letter, ``Aluminum Extrusions from the 
People's Republic of China, A-570-967 and C-570-968; 
Anticircumvention Inquiry; Response of Air Master Awning LLC to the 
Department's Request for Further Information,'' dated February 19, 
2019 (Second Anti-Circumvention Ruling Request).

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[[Page 19758]]

    On October 19, 2018, the Puerto Rico Agencies Co., Inc., submitted 
comments on the proposed anti-circumvention inquiries.\10\ On April 18, 
2019, the Aluminum Extrusions Fair Trade Committee (the petitioner) 
submitted a letter in support of Air Master's request for anti-
circumvention inquiries.\11\
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    \10\ See Letter, ``Re: Aluminum Windows from the Dominican 
Republic/Air Master Awing (sic) LLC,'' placed on the record by 
Commerce in a Memorandum dated April 25, 2019.
    \11\ See Petitioner's Letter, ``Aluminum Extrusions from the 
People's Republic of China: Letter in Support of Air Master Awning 
LLC's Request for an Anti-Circumvention Inquiry,'' dated April 18, 
2019.
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    Commerce exercised its discretion to toll all deadlines affected by 
the partial federal government closure from December 22, 2018, through 
the resumption of operations on January 29, 2019.\12\ If the new 
deadline falls on a non-business day, in accordance with Commerce's 
practice, the deadline will become the next business day. Between 
November 9, 2018, and April 26, 2019, Commerce extended the initiation 
deadline for Air Master's request.\13\ The revised deadline is now May 
2, 2019.
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    \12\ See Memorandum to the Record from Gary Taverman, Deputy 
Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance, ``Deadlines 
Affected by the Partial Shutdown of the Federal Government,'' dated 
January 28, 2019. All deadlines in these segments of the proceedings 
have been extended by 40 days.
    \13\ See Memorandum, ``Aluminum Extrusions from the People's 
Republic of China--Extension of Time to Determine Whether to 
Initiate Anti-Circumvention Inquiry,'' dated November 9, 2018; 
Memorandum, ``Aluminum Extrusions from the People's Republic of 
China--Extension of Time to Determine Whether to Initiate Anti-
Circumvention Inquiry,'' dated December 20, 2018; Memorandum, 
``Aluminum Extrusions from the People's Republic of China--Extension 
of Time to Determine Whether to Initiate Anti-Circumvention 
Inquiry,'' dated April 5, 2019; Memorandum, ``Aluminum Extrusions 
from the People's Republic of China--Extension of Time to Determine 
Whether to Initiate Anti-Circumvention Inquiry,'' dated April 12, 
2019; and Memorandum, ``Aluminum Extrusions from the People's 
Republic of China--Extension of Time to Determine Whether to 
Initiate Anti-Circumvention Inquiry,'' dated April 23, 2019, and 
Memorandum, ``Aluminum Extrusions from the People's Republic of 
China--Extension of Time to Determine Whether to Initiate Anti-
Circumvention Inquiry,'' dated April 26, 2019.
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Scope of the Orders

    The merchandise covered by the Orders is aluminum extrusions which 
are shapes and forms, produced by an extrusion process, made from 
aluminum alloys having metallic elements corresponding to the alloy 
series designations published by The Aluminum Association commencing 
with the numbers 1, 3, and 6 (or proprietary equivalents or other 
certifying body equivalents). Specifically, the subject merchandise 
made from aluminum alloy with an Aluminum Association series 
designation commencing with the number 1 contains not less than 99 
percent aluminum by weight. The subject merchandise made from aluminum 
alloy with an Aluminum Association series designation commencing with 
the number 3 contains manganese as the major alloying element, with 
manganese accounting for not more than 3.0 percent of total materials 
by weight. The subject merchandise is made from an aluminum alloy with 
an Aluminum Association series designation commencing with the number 6 
contains magnesium and silicon as the major alloying elements, with 
magnesium accounting for at least 0.1 percent but not more than 2.0 
percent of total materials by weight, and silicon accounting for at 
least 0.1 percent but not more than 3.0 percent of total materials by 
weight. The subject aluminum extrusions are properly identified by a 
four-digit alloy series without either a decimal point or leading 
letter. Illustrative examples from among the approximately 160 
registered alloys that may characterize the subject merchandise are as 
follows: 1350, 3003, and 6060.
    Aluminum extrusions are produced and imported in a wide variety of 
shapes and forms, including, but not limited to, hollow profiles, other 
solid profiles, pipes, tubes, bars, and rods. Aluminum extrusions that 
are drawn subsequent to extrusion (drawn aluminum) are also included in 
the scope.
    Aluminum extrusions are produced and imported with a variety of 
finishes (both coatings and surface treatments), and types of 
fabrication. The types of coatings and treatments applied to subject 
aluminum extrusions include, but are not limited to, extrusions that 
are mill finished (i.e., without any coating or further finishing), 
brushed, buffed, polished, anodized (including brightdip anodized), 
liquid painted, or powder coated. Aluminum extrusions may also be 
fabricated, i.e., prepared for assembly. Such operations would include, 
but are not limited to, extrusions that are cut-to-length, machined, 
drilled, punched, notched, bent, stretched, knurled, swedged, mitered, 
chamfered, threaded, and spun. The subject merchandise includes 
aluminum extrusions that are finished (coated, painted, etc.), 
fabricated, or any combination thereof.
    Subject aluminum extrusions may be described at the time of 
importation as parts for final finished products that are assembled 
after importation, including, but not limited to, window frames, door 
frames, solar panels, curtain walls, or furniture. Such parts that 
otherwise meet the definition of aluminum extrusions are included in 
the scope. The scope includes the aluminum extrusion components that 
are attached (e.g., by welding or fasteners) to form subassemblies, 
i.e., partially assembled merchandise unless imported as part of the 
finished goods ``kit'' defined further below. The scope does not 
include the non-aluminum extrusion components of subassemblies or 
subject kits.
    Subject extrusions may be identified with reference to their end 
use, such as fence posts, electrical conduits, door thresholds, carpet 
trim, or heat sinks (that do not meet the finished heat sink 
exclusionary language below). Such goods are subject merchandise if 
they otherwise meet the scope definition, regardless of whether they 
are ready for use at the time of importation.
    The following aluminum extrusion products are excluded: Aluminum 
extrusions made from aluminum alloy with an Aluminum Association series 
designations commencing with the number 2 and containing in excess of 
1.5 percent copper by weight; aluminum extrusions made from aluminum 
alloy with an Aluminum Association series designation commencing with 
the number 5 and containing in excess of 1.0 percent magnesium by 
weight; and aluminum extrusions made from aluminum alloy with an 
Aluminum Association series designation commencing with the number 7 
and containing in excess of 2.0 percent zinc by weight.
    The scope also excludes finished merchandise containing aluminum 
extrusions as parts that are fully and permanently assembled and 
completed at the time of entry, such as finished windows with glass, 
doors with glass or vinyl, picture frames with glass pane and backing 
material, and solar panels. The scope also excludes finished goods 
containing aluminum extrusions that are entered unassembled in a 
``finished goods kit.'' A finished goods kit is understood to mean a 
packaged combination of parts that contains, at the time of 
importation, all of the necessary parts to fully assemble a final 
finished good and requires no further finishing or fabrication, such as 
cutting or punching, and is assembled ``as is'' into a finished 
product. An imported product will not be considered a ``finished goods 
kit'' and therefore excluded from the scope of the Orders merely by 
including fasteners such as

[[Page 19759]]

screws, bolts, etc. in the packaging with an aluminum extrusion 
product.
    The scope also excludes aluminum alloy sheet or plates produced by 
other than the extrusion process, such as aluminum products produced by 
a method of casting. Cast aluminum products are properly identified by 
four digits with a decimal point between the third and fourth digit. A 
letter may also precede the four digits. The following Aluminum 
Association designations are representative of aluminum alloys for 
casting: 208.0, 295.0, 308.0, 355.0, C355.0, 356.0, A356.0, A357.0, 
360.0, 366.0, 380.0, A380.0, 413.0, 443.0, 514.0, 518.1, and 712.0. The 
scope also excludes pure, unwrought aluminum in any form.
    The scope also excludes collapsible tubular containers composed of 
metallic elements corresponding to alloy code 1080A as designated by 
the Aluminum Association where the tubular container (excluding the 
nozzle) meets each of the following dimensional characteristics: (1) 
Length of 37 millimeters (``mm'') or 62 mm, (2) outer diameter of 11.0 
mm or 12.7 mm, and (3) wall thickness not exceeding 0.13 mm.
    Also excluded from the scope of the Orders are finished heat sinks. 
Finished heat sinks are fabricated heat sinks made from aluminum 
extrusions the design and production of which are organized around 
meeting certain specified thermal performance requirements and which 
have been fully, albeit not necessarily individually, tested to comply 
with such requirements.
    Imports of the subject merchandise are provided for under the 
following categories of the Harmonized Tariff Schedule of the United 
States (HTSUS): 8541.90.00.00, 8708.10.30.50, 8708.99.68.90, 
6603.90.8100, 7616.99.51, 8479.89.94, 8481.90.9060, 8481.90.9085, 
9031.90.9195, 8424.90.9080, 9405.99.4020, 9031.90.90.95, 7616.10.90.90, 
7609.00.00, 7610.10.00, 7610.90.00, 7615.10.30, 7615.10.71, 7615.10.91, 
7615.19.10, 7615.19.30, 7615.19.50, 7615.19.70, 7615.19.90, 7615.20.00, 
7616.99.10, 7616.99.50, 8479.89.98, 8479.90.94, 8513.90.20, 9403.10.00, 
9403.20.00, 7604.21.00.00, 7604.29.10.00, 7604.29.30.10, 7604.29.30.50, 
7604.29.50.30, 7604.29.50.60, 7608.20.00.30, 7608.20.00.90, 
8302.10.30.00, 8302.10.60.30, 8302.10.60.60, 8302.10.60.90, 
8302.20.00.00, 8302.30.30.10, 8302.30.30.60, 8302.41.30.00, 
8302.41.60.15, 8302.41.60.45, 8302.41.60.50, 8302.41.60.80, 
8302.42.30.10, 8302.42.30.15, 8302.42.30.65, 8302.49.60.35, 
8302.49.60.45, 8302.49.60.55, 8302.49.60.85, 8302.50.00.00, 
8302.60.90.00, 8305.10.00.50, 8306.30.00.00, 8414.59.60.90, 
8415.90.80.45, 8418.99.80.05, 8418.99.80.50, 8418.99.80.60, 
8419.90.10.00, 8422.90.06.40, 8473.30.20.00, 8473.30.51.00, 
8479.90.85.00, 8486.90.00.00, 8487.90.00.80, 8503.00.95.20, 
8508.70.00.00, 8515.90.20.00, 8516.90.50.00, 8516.90.80.50, 
8517.70.00.00, 8529.90.73.00, 8529.90.97.60, 8536.90.80.85, 
8538.10.00.00, 8543.90.88.80, 8708.29.50.60, 8708.80.65.90, 
8803.30.00.60, 9013.90.50.00, 9013.90.90.00, 9401.90.50.81, 
9403.90.10.40, 9403.90.10.50, 9403.90.10.85, 9403.90.25.40, 
9403.90.25.80, 9403.90.40.05, 9403.90.40.10, 9403.90.40.60, 
9403.90.50.05, 9403.90.50.10, 9403.90.50.80, 9403.90.60.05, 
9403.90.60.10, 9403.90.60.80, 9403.90.70.05, 9403.90.70.10, 
9403.90.70.80, 9403.90.80.10, 9403.90.80.15, 9403.90.80.20, 
9403.90.80.41, 9403.90.80.51, 9403.90.80.61, 9506.11.40.80, 
9506.51.40.00, 9506.51.60.00, 9506.59.40.40, 9506.70.20.90, 
9506.91.00.10, 9506.91.00.20, 9506.91.00.30, 9506.99.05.10, 
9506.99.05.20, 9506.99.05.30, 9506.99.15.00, 9506.99.20.00, 
9506.99.25.80, 9506.99.28.00, 9506.99.55.00, 9506.99.60.80, 
9507.30.20.00, 9507.30.40.00, 9507.30.60.00, 9507.90.60.00, and 
9603.90.80.50.
    The subject merchandise entered as parts of other aluminum products 
may be classifiable under the following additional Chapter 76 
subheadings: 7610.10, 7610.90, 7615.19, 7615.20, and 7616.99, as well 
as under other HTSUS chapters. In addition, fin evaporator coils may be 
classifiable under HTSUS numbers: 8418.99.80.50 and 8418.99.80.60. 
While HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of the Orders is 
dispositive.

Merchandise Subject to the Anti-Circumvention and Scope Inquiries

    These anti-circumvention and scope inquiries cover aluminum 
jalousie shutters exported from the Dominican Republic that are 
manufactured from window frame extrusions produced in China. Commerce 
intends to consider whether these inquiries should apply to all exports 
of extruded aluminum products from the Dominican Republic that meet the 
description of the Orders.

Allegations Supporting Initiation of Anti-Circumvention Proceedings: 
Merchandise Completed or Assembled in Other Foreign Countries

    Section 781(b)(1) of the Act provides that Commerce may find 
circumvention of an AD or CVD 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 an anti-circumvention inquiry, under section 781(b)(1) of 
the Act, Commerce relies on the following criteria: (A) Merchandise 
imported into the United States is of the same class or kind as any 
merchandise produced in a foreign country that is the subject of an AD 
or CVD order or finding; (B) before importation into the United States, 
such imported merchandise is completed or assembled in another foreign 
country from merchandise which is subject to the order or merchandise 
which is produced in the foreign country that is subject to the order; 
(C) the process of assembly or completion in the foreign country 
referred to in section (B) is minor or insignificant; (D) the value of 
the merchandise produced in the foreign country to which the AD or CVD 
order applies is a significant portion of the total value of the 
merchandise exported to the United States; and (E) the administering 
authority determines that action is appropriate to prevent evasion of 
such order or finding. As discussed below, Air Master provided evidence 
with respect to these criteria.

A. Merchandise of the Same Class or Kind

    Air Master claims that aluminum jalousie shutters exported to the 
United States are of the same class or kind as that covered by the 
Orders and substantiated its claim with evidence showing that the 
merchandise from the Dominican Republic enters the United States under 
the same tariff classification as subject merchandise.\14\
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    \14\ See Anti-Circumvention Ruling Request at 7 and 18.
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B. Completion of Merchandise in a Foreign Country

    Section 781(b)(l)(B)(ii) of the Act requires that Commerce must 
determine whether, ``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 an order or finding applies.'' Air Master 
presented evidence from United Nations Commodity Trade

[[Page 19760]]

Statistics Database (UN COMTRADE) showing substantial imports of 
Chinese doors, windows, and frames into the Dominican Republic 
following imposition of the Orders in 2011.\15\ Air Master also 
provided evidence from the ITC's Trade Dataweb showing that imports 
into Puerto Rico of aluminum windows and frames from China 
significantly decreased after the imposition of the Orders,\16\ and 
that imports into Puerto Rico of aluminum windows and frames from the 
Dominican Republic decreased significantly after imposition of the 
Orders. However, imports increased again beginning in March 2018, when 
Air Master alleges the circumvention began.\17\
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    \15\ Id. at 18. Air Master notes that because UN COMTRADE data 
does not report imports at the 10-digit statistical subheading 
level, it is not possible to obtain data specific to aluminum 
windows and frames.
    \16\ Id. at 6.
    \17\ Id. at 18.
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C. Minor or Insignificant Process

    Air Master maintains that the process for manufacturing aluminum 
jalousie shutters from window frame extrusions represents a minor 
alteration.\18\ Under section 781(b)(2) of the Act, Commerce considers 
five factors in determining whether the process of assembly or 
completion in the foreign country is minor or insignificant: (1) The 
level of investment in the foreign country in which the merchandise is 
completed or assembled; (2) the level of research and development in 
the foreign country in which the merchandise is completed or assemble; 
(3) the nature of the production process in the foreign country in 
which the merchandise is completed or assembled; (4) the extent of 
production facilities in the foreign country in which the merchandise 
is completed or assembled, and (5) whether the value of the processing 
performed in the foreign country in which the merchandise is completed 
or assembled represents a small proportion of the value of the 
merchandise imported into the United States.
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    \18\ Id. at 2.
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(1) Level of Investment
    Air Master contends that the level of investment necessary to 
support the assembly operations of Dominican companies that can produce 
aluminum jalousie shutters from window frame extrusions in the 
Dominican Republic is insignificant.\19\ In support of its contention, 
Air Master compares the investment necessary to perform the finishing 
operations in the Dominican Republic with the investment necessary to 
produce window frame extrusions.\20\ Air Master's analysis included the 
building and all equipment.\21\ According to Air Master, even the 
smallest extruder in China would require an initial investment at least 
2,000 times greater than the investment required to perform the 
finishing operations in the Dominican Republic.\22\ Air Master 
concludes, therefore, that in comparison to the investment necessary to 
extrude aluminum in China, the cost of the finishing operations in the 
Dominican Republic is insignificant.\23\
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    \19\ Id. at 12.
    \20\ Id. at 12-14.
    \21\ Id.
    \22\ Id. at 14.
    \23\ Id.
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(2) Level of Research and Development
    Air Master asserts that there is no research or development for 
aluminum jalousie shutters taking place in the Dominican Republic, as 
aluminum jalousie shutters are not a technologically advanced or 
sophisticated product.\24\ According to Air Master, there has been no 
significant technological advancement in the product itself or in its 
production for years.\25\
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    \24\ Id. at 16.
    \25\ Id.
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(3) Nature of Production Process
    According to Air Master, the finishing operations performed in the 
Dominican Republic consist of merely cutting to length and screwing 
together Chinese window frame extrusions.\26\ This process, Air Master 
argues, constitutes approximately 15 percent of the value of an 
aluminum jalousie shutter,\27\ and is, thus, only a minor alteration of 
the merchandise.\28\
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    \26\ Id. at 9.
    \27\ Id. at 15.
    \28\ Id. at 9.
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(4) Extent of Production Facilities in the Dominican Republic Air 
Master asserts that the production facilities for aluminum jalousie 
shutters in the Dominican Republic are limited to the operations that 
assemble Chinese window frame extrusions into aluminum jalousie 
shutters that are then exported to Puerto Rico.\29\ Air Master also 
states that there are only three such production facilities in the 
Dominican Republic. \30\
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    \29\ Id. at 17.
    \30\ Id.; see also First Supplement to Anti-Circumvention Ruling 
Request at 2.
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(5) Value of Processing in the Dominican Republic
    Air Master asserts that producing window frame extrusions in China 
accounts for a large percentage of the total value of aluminum jalousie 
shutters that are produced in the Dominican Republic using window frame 
extrusions from China.\31\ Using its own costs as a reference, Air 
Master estimates that the aluminum window frame extrusions account for 
at least 85 percent of the cost of the aluminum jalousie shutter 
assembled in the Dominican Republic.\32\
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    \31\ See Anti-Circumvention Ruling Request at 15.
    \32\ Id.
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D. Additional Factors To Consider in Determining Whether Action Is 
Necessary

    Section 781(b)(3) of the Act directs Commerce 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.''
    Regarding patterns of trade, Air Master contends that publicly 
available import data from UN COMTRADE document that imports of Chinese 
aluminum doors, windows, and frames into the Dominican Republic have 
increased significantly in recent years.\33\ It also states that the 
ITC Trade Dataweb shows that there has been a surge in imports of 
aluminum windows and frames from the Dominican Republic into Puerto 
Rico starting in March 2018.\34\ Air Master did not provide evidence 
that Chinese exporters of window frame extrusions are affiliated with 
the Dominican finishers.
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    \33\ Id. at 18.
    \34\ Id. at 18-19.
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Allegations Supporting Initiation of Anti-Circumvention Proceedings: 
Minor Alterations of Merchandise

    Section 781(c)(1) of the Act provides that Commerce may find 
circumvention of an AD or CVD order when products which are of the 
class or kind of merchandise subject to an AD or CVD order have been 
``altered in form or appearance in minor respects . . . whether or not 
included in the same tariff classification.'' Section 781(c)(2) of the 
Act provides an exception that ``{p{time} aragraph 1 shall not apply 
with

[[Page 19761]]

respect to altered merchandise if the administering authority 
determines that it would be unnecessary to consider the altered 
merchandise within the scope of the {AD or CVD{time}  order{.{time} ''
    Although the statute is silent as to what factors to consider in 
determining whether alterations are properly considered ``minor,'' the 
legislative history of this provision indicates that there are certain 
factors which should be considered before reaching an anti-
circumvention determination. In conducting an anti-circumvention 
inquiry under section 781(c) of the Act, Commerce has generally relied 
upon ``such criteria as the overall physical characteristics of the 
merchandise, the expectations of the ultimate users, the use of the 
merchandise, the channels of marketing and the cost of any modification 
relative to the total value of the imported product.'' \35\ Commerce 
will examine these factors in evaluating an allegation of minor 
alteration under section 781(c) of the Act and 19 CFR 351.225(i). 
Still, because each case is highly dependent on the facts on the 
record, each must be analyzed in light of the specific facts. Moreover, 
although not specified in the statute, Commerce has also considered 
additional factors as part of its anti-circumvention analysis.\36\
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    \35\ See S. Rep. No.71, 100th Cong., 1st Sess. 100 (1987) (``In 
applying this provision, the Commerce Department should apply 
practical measurements regarding minor alterations, so that 
circumvention can be dealt with effectively, even where such 
alterations to an article technically transform it into a 
differently designated article'').
    \36\ See, e.g., Brass Sheet and Strip from West Germany; 
Negative Preliminary Determination of Circumvention of Antidumping 
Duty Order, 55 FR 32655 (August 10, 1990), unchanged in Brass Sheet 
and Strip from Germany; Negative Final Determination of 
Circumvention of Antidumping Duty Order, 56 FR 65884 (December 19, 
1991); see also Small Diameter Graphite Electrodes from the People's 
Republic of China: Initiation of Anticircumvention Inquiry, 77 FR 
37873, 37876 (June 25, 2012).
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A. Overall Physical Characteristics

    Air Master contends that the window frame extrusions are shipped in 
profiles that dedicate them for use only as frames and other components 
of a window.\37\ Furthermore, Air Master alleges that when exported 
from China, the window frame extrusions are already powder coated in 
the color of the jalousie shutter.\38\ Thus, Air Master argues, the 
dedicated profile of the window frame extrusion, the powder-coated 
finish, and the basic assembly steps performed to assemble a jalousie 
shutter, establish that the window frame extrusions already have the 
essential characteristics of a jalousie shutter.\39\
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    \37\ See Anti-Circumvention Ruling Request at 9-10.
    \38\ Id. at 10.
    \39\ Id.
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    Moreover, Air Master notes that, because window frame extrusions 
and jalousie shutters are both classified under the same HTS subheading 
(i.e., 7610.10.00.10), the assembly into a jalousie shutter does not 
transform the window frame extrusion into a different article for 
Customs purposes.\40\
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    \40\ Id.
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B. Expectations of the Ultimate Users

    Air Master argues that, as explained above, window frame extrusions 
have only one purpose: to be assembled into aluminum jalousie 
shutters.\41\ Thus, Air Master states, the ultimate customers have the 
same expectations for window frame extrusions as they have for aluminum 
jalousie shutters.\42\
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    \41\ Id.
    \42\ Id. at 10-11.
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C. Channels of Marketing

    Air Master contends that, prior to issuance of the Orders, window 
frame extrusions imported from China were sold in Puerto Rico through 
an aluminum extrusions broker, but that the issuance of the Orders put 
an end to that direct channel of sales and marketing.\43\ Air Master 
further states that, at present, the same broker imports and sells 
aluminum jalousie shutters in Puerto Rico that are assembled in the 
Dominican Republic from Chinese-origin window frame extrusions.\44\ In 
this way, Air Master argues, the customs broker has developed a scheme 
to circumvent the Orders by diverting window frame extrusions to the 
Dominican Republic, where they undergo a minor alteration before re-
exportation to Puerto Rico.\45\ With respect to the Puerto Rico channel 
of marketing, Air Master contends that the channels for marketing 
window frame extrusions and aluminum jalousie shutters are 
identical.\46\
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    \43\ Id. at 11.
    \44\ Id.
    \45\ Id.
    \46\ Id.
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D. Cost of Modification

    Air Master contends that the cost of assembling window frame 
extrusions into aluminum jalousie shutters is low relative to the cost 
to produce a jalousie shutter, and must be viewed relative to: (1) The 
cost of the investment required to support the assembly operations of 
Dominican companies relative to the investment required to produce a 
window frame extrusion; and (2) the direct cost of assembling a 
jalousie shutter relative to the total cost of a jalousie shutter.\47\
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    \47\ Id. at 12.
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    With respect to the relative cost of initial investment, Air Master 
compares the investment necessary to perform the finishing operations 
in the Dominican Republic with the investment necessary to produce 
window frame extrusions.\48\ Air Master's analysis includes the 
building and all equipment.\49\ According to Air Master, even the 
smallest extruder in China would require an initial investment at least 
2,000 times greater than the investment required to perform the 
finishing operations in the Dominican Republic.\50\ Air Master 
concludes, therefore, that, in comparison to the investment necessary 
to extrude aluminum in China, the cost of the finishing operations in 
the Dominican Republic is insignificant.\51\
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    \48\ Id. at 12-14.
    \49\ Id.
    \50\ Id. at 14.
    \51\ Id.
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    With respect to the direct cost of assembly of a jalousie shutter 
compared to the direct cost to produce a window frame extrusion, Air 
Master asserts that producing window frame extrusions in China accounts 
for a large percentage of the total value of aluminum jalousie shutters 
that are produced in the Dominican Republic using window frame 
extrusions from China.\52\ Using its own costs as a reference, Air 
Master estimates that the aluminum window frame extrusions account for 
at least 85 percent of the cost of the aluminum jalousie shutter 
assembled in the Dominican Republic.\53\
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    \52\ Id. at 15.
    \53\ Id.
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E. Additional Factors To Consider in Determining Whether Action Is 
Necessary

    Air Master argues that, in addition to the factors above, Commerce 
may also consider several of the factors set forth in 781(b) of the Act 
with respect to determining whether merchandise completed or assembled 
in third countries is circumventing the AD and CVD Orders. According to 
Air Master, several of these factors mirror those in a ``minor 
alteration'' analysis brought under 781(c) of the Act, while others do 
not, but, nonetheless, support a conclusion that assembling aluminum 
jalousie shutters in the Dominican Republic is merely a minor 
alteration of Chinese window frame extrusions.\54\
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    \54\ Id. at 16.
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(1) Level of Research and Development
    Air Master asserts that there is no research or development for 
aluminum

[[Page 19762]]

jalousie shutters taking place in the Dominican Republic, as aluminum 
jalousie shutters are not a technologically advanced or sophisticated 
product.\55\ According to Air Master, there has been no significant 
technological advancement in the product itself, or in its production, 
for years.\56\
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    \55\ Id.
    \56\ Id.
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(2) Aluminum Facilities in the Dominican Republic Manufacture Only for 
Export Markets
    Air Master asserts that the production facilities for aluminum 
jalousie shutters in the Dominican Republic are limited to the 
operations that assemble Chinese window frame extrusions into aluminum 
jalousie shutters that are then exported to Puerto Rico.\57\ Air Master 
also states that there are only three such production facilities in the 
Dominican Republic. \58\
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    \57\ Id. at 17.
    \58\ Id.; see also First Supplement to Anti-Circumvention Ruling 
Request at 2.
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(3) Pattern of Trade
    Air Master contends that publicly available import data from UN 
COMTRADE document that imports of Chinese aluminum doors, windows, and 
frames into the Dominican Republic have increased significantly in 
recent years.\59\ Air Master also states that the ITC Trade Dataweb 
shows that there has been a surge in imports of aluminum windows and 
frames from the Dominican Republic into Puerto Rico starting in March 
2018.\60\
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    \59\ See Anti-Circumvention Ruling Request at 18.
    \60\ Id. at 18-19.
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Analysis of the Allegations

    Based on our analysis of the information provided by Air Master, 
Commerce finds that there exists a sufficient basis to initiate anti-
circumvention inquiries, pursuant to sections 781(b) and (c) of the 
Act. Commerce will determine whether the merchandise subject to the 
inquiries (identified in the ``Merchandise Subject to the Anti-
Circumvention Inquiries and Scope Inquiries'' section, above) involves 
merchandise either completed or assembled in other foreign countries 
which can be considered subject to the Orders, and/or represents a 
minor alteration to subject merchandise in such minor respects that it 
should be subject to the Orders.
    Commerce intends to issue questionnaires to solicit information 
from Dominican producers and exporters identified by Air Master 
concerning their shipments of aluminum jalousie shutters to the United 
States and the origin of the imported window frame extrusions being 
processed into aluminum jalousie shutters.\61\ A company's failure to 
respond completely to Commerce's requests for information may result in 
the application of partial or total facts available, pursuant to 
section 776(a) of the Act, which may include adverse inferences, 
pursuant to section 776(b) of the Act.
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    \61\ Id. at 4; see also First Supplement to Anti-Circumvention 
Ruling Request at 2.
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    While we find that sufficient factual information has been 
submitted by Air Master supporting its request for inquiries, we do not 
find that the record supports the simultaneous issuance of a 
preliminary ruling. Such inquiries are, by their nature, typically 
complicated and can require information regarding production in both 
the country subject to the order and the third country completing the 
product. As noted above, Commerce intends to request additional 
information regarding the statutory criteria to determine whether 
shipments of aluminum jalousie shutters from the Dominican Republic are 
circumventing the Orders. Thus, with further development of the record 
required before a preliminary ruling can be issued, Commerce does not 
find it appropriate to issue a preliminary ruling at this time.

Initiation of Scope Inquiries

    The scope of the Orders states that the scope ``{e{time} xcludes 
finished merchandise containing aluminum extrusions as parts that are 
fully and permanently assembled and completed at the time of entry, 
such as finished windows with glass, doors with glass or vinyl, picture 
frames with glass pane and backing material, and solar panels.''
    Air Master states that both the window frame extrusions exported 
from China and the aluminum jalousie shutters exported from the 
Dominican Republic are not finished merchandise, and are subject to the 
Orders.\62\ However, because the scope of the Orders provides that 
certain types of windows are not subject to the Orders, we find it 
appropriate to self-initiate scope inquiries, in accordance with 19 CFR 
351.225(b), to determine whether the aluminum jalousie shutters at 
issue constitute subject merchandise.
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    \62\ See Anti-Circumvention Ruling Request at 5-6; see also Air 
Master Second Anti-Circumvention Ruling Request at 2 and 5.
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Notification to Interested Parties

    In accordance with 19 CFR 351.225(e), Commerce 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, Commerce will notify by mail all parties 
on Commerce's scope service list of the initiation of these 
proceedings.
    In addition, in accordance with 19 CFR 351.225(f)(1)(i) and (ii), 
in this notice of initiation issued under 19 CFR 351.225(e), we have 
included a description of the product that is the subject of these 
proceedings (i.e., aluminum extrusions) and an explanation of the 
reasons for Commerce's decision to initiate these inquiries, as 
provided above.
    Furthermore, in accordance with 19 CFR 351.225(l)(2), if Commerce 
issues preliminary affirmative determinations, we will then instruct 
U.S. Customs and Border Protection to suspend liquidation and require a 
cash deposit of estimated antidumping and countervailing duties, at the 
applicable rate, for each unliquidated entry of the merchandise at 
issue, entered or withdrawn from warehouse for consumption on or after 
the date of initiation of the inquiries.
    Moreover, in the event we issue preliminary affirmative 
determinations of circumvention, pursuant to section 781(b) of the act 
(Merchandise Completed or Assembled in Other Foreign Countries), we 
intend to notify the ITC, in accordance with section 781(b)(1) of the 
Act and 19 CFR 351.225(f)(7)(i)(B), if applicable.
    Commerce will, following consultation with interested parties, 
establish a schedule for questionnaires and comments on the issues. In 
accordance with 19 CFR 351.225(f)(5), Commerce intends to issue its 
final scope ruling within 120 days of this initiation. In accordance 
with section 781(f) of the Act and 19 CFR 351.225(f)(5), Commerce 
intends to issue its final anti-circumvention determinations within 300 
days of the date of publication of this initiation.
    This notice is published in accordance with sections 781(b) and (c) 
of the Act and 19 CFR 351.225(h) and (i).

    Dated: April 30, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2019-09214 Filed 5-3-19; 8:45 am]
 BILLING CODE 3510-DS-P