[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