[Federal Register Volume 85, Number 14 (Wednesday, January 22, 2020)]
[Notices]
[Pages 3620-3623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00970]
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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: Applicable January 15, 2020.
SUMMARY: The Department of Commerce (Commerce) 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 Agreement). The amendment to the AD Agreement modifies 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 C. 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, Commerce 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, Commerce 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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Commerce and a representative of the signatory producers/exporters
accounting for substantially all imports of sugar from Mexico signed
the AD 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 Agreement).
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On January 8, 2015, Imperial Sugar Company (Imperial) and AmCane
Sugar LLC (AmCane) each notified Commerce that they had petitioned the
International Trade Commission (ITC) to conduct a review of the AD
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 Agreement. On March 24, 2015, in a
unanimous vote, the ITC found that the AD Agreement eliminated
completely the injurious effects of imports of sugar from Mexico.\4\ As
a result of the ITC's determination, the AD Agreement remained in
effect, and on March 27, 2015, Commerce, 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 Agreement, pursuant to requests
by domestic interested parties, Commerce continued its investigation
and made an affirmative final determination of sales at LTFV.\5\ In its
Final Determination, Commerce 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
[[Page 3621]]
40.74 percent for all other Mexican producers/exporters. Commerce
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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In June 2016, Commerce and representatives of the Mexican sugar
producers/exporters began consultations regarding the AD Agreement to
address concerns raised by the domestic industry and to ensure that the
AD Agreement continued to meet 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. The
consultations resulted in Commerce and a representative of the
signatory producers/exporters accounting for substantially all imports
of sugar from Mexico initialing a draft amendment to the AD Agreement
on June 14, 2017, and subsequently signing a finalized amendment on
June 30, 2017.\8\
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\8\ See Sugar From Mexico: Amendment to the Agreement Suspending
the Antidumping Duty Investigation, 82 FR 31945 (July 11, 2017)
(2017 AD Amendment).
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CSC Sugar LLC (CSC Sugar) challenged Commerce's determination to
amend the AD Agreement by contending that Commerce did not meet its
obligation to file a complete administrative record.\9\ Specifically,
CSC Sugar argued that Commerce failed to memorialize and include in the
record ex parte communications between Commerce officials and
interested parties (including the domestic sugar industry and
representatives of Mexico), as required by section 777(a)(3) of the
Act.\10\ The CIT agreed with CSC Sugar and ordered Commerce to
supplement the administrative record with any ex parte communications
regarding the 2017 AD Amendment.\11\
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\9\ See CSC Sugar LLC v. United States, Ct. No. 17-00215, Slip
Op. 19-132 (CIT October 18, 2019) (CSC Sugar II) at 4.
\10\ Id.
\11\ Id. (citing CSC Sugar LLC v. United States, 317 F. Supp. 3d
1322, 1326 (CIT 2018)).
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Ultimately, the CIT found that Commerce's failure to follow the
recordkeeping requirements of Section 777 of the Act cannot be
described as ``harmless.'' \12\ The CIT found that this recordkeeping
failure substantially prejudiced CSC Sugar.\13\ On that basis, the CIT
stated that the 2017 AD Amendment must be vacated.\14\ Consistent with
CIT's ruling in CSC Sugar II, on December 6, 2019, Commerce terminated
the 2017 AD Amendment prospectively--and accordingly, as of December 7,
2019, the unamended AD Agreement has been in force and effective, and
the 2017 AD Amendment has had no force or effect.\15\
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\12\ Id. at 11-12.
\13\ Id. at 12.
\14\ See Sugar From Mexico: Notice of Court Decision Regarding
Amendment to the Agreement Suspending the Antidumping Duty
Investigation, 84 FR 58129 (October 30, 2019).
\15\ See Sugar From Mexico: Notice of Termination of Amendment
to the Agreement Suspending the Antidumping Duty Investigation, 84
FR 67711, 67712 (December 11, 2019).
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On November 4, 2019, Commerce formally opened consultations to
renegotiate an amendment to the AD Agreement.\16\ On November 6, 2019,
Commerce released a proposed amendment to the AD Agreement and invited
parties to provide written comments on the proposed amendment by
November 12, 2019.\17\ On December 4, 2019, Commerce and a
representative of the signatory producers/exporters initialed a draft
amendment to the AD Agreement, and Commerce released corresponding
draft statutory memoranda.\18\ Interested parties were invited to
provide comments on the draft amendment and draft memoranda by December
16, 2019.
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\16\ See Letter to C[aacute]mara Nacional de Las Industrias
Azucarera y Alcoholera from P. Lee Smith, Deputy Assistant Secretary
for Policy & Negotiations, ``Consultations on Potential Amendment to
the Agreement Suspending the Antidumping Duty Investigation on Sugar
from Mexico'' (November 4, 2019).
\17\ See Letter to All Interested Parties from P. Lee Smith,
Deputy Assistant Secretary for Policy & Negotiations, ``Release of
Draft Amendment to the Agreement Suspending the Countervailing Duty
Investigation on Sugar from Mexico'' (November 6, 2019).
\18\ See Letter to All Interested Parties from Sally C. Gannon,
Director for Bilateral Agreements, ``Draft Amendment to the
Agreement Suspending the Antidumping Duty Investigation on Sugar
from Mexico and Draft Statutory Memoranda'' (December 4, 2019).
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Scope of Agreement
See Section I, Product Coverage, of the AD Agreement.
Analysis of Comments Received
We received comments on the draft amendment and draft statutory
memoranda from CSC Sugar; the petitioners, American Sugar Coalition and
its members; \19\ Imperial Sugar Company; C[aacute]mara Nacional de Las
Industrias Azucarera y Alcoholera (C[aacute]mara); the Sugar Users
Association (SUA); the International Sugar Trade Coalition, Inc.; and
the Corn Refiners Association. In reaching a final amendment to the AD
Agreement, Commerce has taken into account all comments submitted on
the record of the suspension agreement proceeding and has made changes,
where warranted, to the December 4, 2019 draft AD amendment based upon
those comments.
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\19\ 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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Amendment to AD Agreement
Commerce consulted with the Mexican sugar producers/exporters and
domestic interested parties and has considered the comments submitted
by interested parties with respect to the draft amendment to the AD
Agreement. On January 15, 2020, after consideration of the interested
party comments received, Commerce and a representative of sugar
producers/exporters accounting for substantially all imports of sugar
from Mexico, signed a finalized amendment to the AD Agreement. The 2020
Amendment, as integrated with the AD Agreement (the amended AD
Agreement), allows for exports of Mexican sugar to the United States in
accordance with the collective terms therein.
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 Agreement. We have also
determined that the amended AD 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 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
Agreement
[[Page 3622]]
meets the criteria of section 734(c) and (d) of the Act.
The terms and conditions of the amended AD Agreement, signed on
January 15, 2020, are set forth in the 2020 Amendment to the AD
Agreement, which is attached in Annex 1 to this notice.
Administrative Protective Order Access
The administrative protective order (APO) Commerce granted in the
suspension agreement segment of this proceeding remains in place and
effective for the amended AD Agreement. All new parties requesting
access to business proprietary information submitted during the
administration of the amended AD Agreement, under the APO currently in
effect, must submit an APO application in accordance with the
Commerce's regulations currently in effect.\20\
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\20\ 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: January 15, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
Annex 1: Amendment to the 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 signatory producers and
exporters of Sugar from Mexico (individually, Signatory;
collectively, Signatories) and the United States Department of
Commerce (Commerce) 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.
Commerce 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
Commerce and the Signatories signed the Agreement. Additionally, the
``Effective Date of the Amendment'' means the date on which Commerce
and the Signatories sign the Amendment.
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 Agreement Suspending
the Countervailing Duty Investigation on Sugar from Mexico (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:
``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.O,
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 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:
Commerce 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 Commerce 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 Commerce
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 Commerce 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
Commerce with all sales and other related information Commerce
requests.
Further, Signatories and Intermediary Customers must retain
evidence in their files to document that these contractual
obligations were implemented. Commerce retains its authority to
request the Signatory and/or Intermediary Customer to provide such
documentation, and Commerce may verify such documentation. Where a
Signatory does not have access to the documentation but has
obligated the Intermediary Customer to provide it to Commerce,
Commerce 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 Commerce within 30 days of entry. Such
[[Page 3623]]
polarity test reports must be filed on the official records of
Commerce 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
Commerce and the Signatories, including the CBP requirement that the
polarity level of an entry will be the average of the samples from
that entry.
Commerce 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. Where Commerce finds that exporters and importers of record
of Other Sugar are not complying with Section VII.C.6, Commerce may
consider this a Violation under Section VIII.D of the Agreement.
b. If Commerce 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, Commerce can at any time
terminate the Agreement under Section X.B. Apart from termination,
Commerce 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, Commerce has the authority to request
sales information, and to verify such information, which
demonstrates compliance with the Reference Prices and terms of the
Agreement.
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Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance, U.S. Department
of Commerce
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Date
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:
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Juan Cortina Gallardo,
President of the Board, C[aacute]mara Nacional de Las Industrias
Azucarera y Alcoholera (Mexican Sugar Chamber)
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Date
[FR Doc. 2020-00970 Filed 1-21-20; 8:45 am]
BILLING CODE 3510-DS-P