[Federal Register Volume 85, Number 219 (Thursday, November 12, 2020)]
[Notices]
[Pages 71877-71879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24993]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-943, C-570-944]


Oil Country Tubular Goods From the People's Republic of China: 
Self-Initiation of Anti-Circumvention Inquiries on the Antidumping Duty 
and Countervailing Duty Orders

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

Summary

    The Department of Commerce (Commerce) is self-initiating country-
wide anti-circumvention inquiries to determine whether imports of 
welded oil country tubular goods (OCTG) completed in Brunei and the 
Philippines (collectively, third countries) using inputs manufactured 
in the People's Republic of China (China) are circumventing the 
antidumping duty (AD) and countervailing duty (CVD) orders on OCTG from 
China.

DATES: Applicable November 12, 2020.

FOR FURTHER INFORMATION CONTACT: Dana Mermelstein at (202) 482-1391, 
AD/CVD Operations, Office VI or Justin Enck at (202) 482-1614, 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 8, 2009, Evraz Rocky Mountain Steel, Maverick Tube 
Corporation, TMK IPSCO, United States Steel Corporation, V&M Star LP, 
V&M Tubular Corporation of America, Wheatland Tube Corp., and the 
United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, 
Allied Industrial and Service Workers International Union, AFL-CIO-CLC 
filed petitions seeking the imposition of antidumping and 
countervailing duties on imports of OCTG from China.\1\ Following 
Commerce's affirmative determinations of dumping and countervailable 
subsidies,\2\ and the U.S.

[[Page 71878]]

International Trade Commission's (ITC) finding of material injury,\3\ 
Commerce issued AD and CVD orders on imports of OCTG from China.\4\
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    \1\ See Oil Country Tubular Goods from the People's Republic of 
China: Initiation of Antidumping Duty Investigation, 74 FR 20671 
(May 5, 2009); Certain Oil Country Tubular Goods from the People's 
Republic of China: Initiation of Countervailing Duty Investigation, 
74 FR 20678 (May 5, 2009).
    \2\ See Certain Oil Country Tubular Goods from the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, Affirmative Final Determination of Critical Circumstances and 
Final Determination of Targeted Dumping, 75 FR 20335 (April 19, 
2010); and Certain Oil Country Tubular Goods from the People's 
Republic of China: Final Affirmative Countervailing Duty 
Determination, Final Negative Critical Circumstances Determination, 
74 FR 64045 (December 7, 2009).
    \3\ See Certain Oil Country Tubular Goods from the People's 
Republic of China; Determination, 75 FR 28058 (May 19, 2010) and 
Certain Oil Country Tubular Goods from the People's Republic of 
China, 75 FR 3248 (January 20, 2010); see also Certain Oil Country 
Tubular Goods from China, Inv. No. 731-TA-1159, USITC Pub. 4152 (May 
2010) (Final) and Certain Oil Country Tubular Goods from China, Inv. 
No. 701-TA-463, USITC Pub. 4124 (January 2010) (Final).
    \4\ See Certain Oil Country Tubular Goods from the People's 
Republic of China: Amended Final Determination of Sales at Less Than 
Fair Value and Antidumping Duty Order, 75 FR 28551 (May 21, 2010) 
(AD Order); Certain Oil Country Tubular Goods From the People's 
Republic of China: Amended Final Affirmative Countervailing Duty 
Determination and Countervailing Duty Order, 75 FR 3203 (January 20, 
2010) (CVD Order) (collectively, Orders).
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    Section 781(b)(1) of the Tariff Act of 1930, as amended (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 anti-circumvention inquiries, 
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 antidumping or countervailing duty 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.
    In determining whether or not the process of assembly or completion 
in a third country is minor or insignificant under section 781(b)(1)(C) 
of the Act, section 781(b)(2) of the Act directs Commerce to consider: 
(A) The level of investment in the foreign country, (B) the level of 
research and development in the foreign country, (C) the nature of the 
production process in the foreign country, (D) the extent of production 
facilities in the foreign country, and (E) whether or not the value of 
processing performed in the foreign country represents a small 
proportion of the value of the merchandise imported into the United 
States. However, no single factor, by itself, controls Commerce's 
determination of whether the process of assembly or completion in a 
third country is minor or insignificant.\5\ Accordingly, it is 
Commerce's practice to evaluate each of these five factors as they 
exist in the third country, depending on the totality of the 
circumstances of the particular anti-circumvention inquiry.\6\
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    \5\ See Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act (SAA), H.R. Doc. No. 103-316 (1994) at 
893.
    \6\ See Uncovered Innerspring Units from the People's Republic 
of China: Final Affirmative Determination of Circumvention of the 
Antidumping Duty Order, 83 FR 65626 (December 21, 2018), and 
accompanying Issues and Decision Memorandum at 4.
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    Furthermore, section 781(b)(3) of the Act sets forth additional 
factors to consider in determining whether to include merchandise 
assembled or completed in a third country within the scope of an AD 
and/or CVD order. Specifically, Commerce shall take into account such 
factors as: (A) The pattern of trade, including sourcing patterns; (B) 
whether the manufacturer or exporter of the merchandise is affiliated 
with the person who, in the third country, uses the merchandise to 
complete or assemble the merchandise which is subsequently imported 
into the United States; and (C) whether imports of the merchandise into 
the third country have increased after the initiation of the 
investigation that resulted in the issuance of such order or finding.

Scope of the Orders

    The products covered by the Orders are certain hollow steel 
products of circular cross-section, including oil well casing and 
tubing, of iron (other than cast iron) or steel (both carbon and 
alloy), whether seamless or welded, regardless of end finish. For a 
full description of the scope of these orders, see the ``Scope of the 
Orders,'' in the Appendix to this notice.

Merchandise Subject to the Anti-Circumvention Inquiries

    These anti-circumvention inquiries cover welded OCTG completed in 
the third countries using inputs manufactured in China and subsequently 
exported from the third countries to the United States.

Initiation of Anti-Circumvention Inquiries

    Through its regular monitoring of trade data, Commerce has gathered 
information indicating that hot-rolled steel sheet and strip from China 
may be exported to Brunei and the Philippines for minor processing, and 
then exported to the United States as welded OCTG, in circumvention of 
the Orders. Based on this information, we determine, pursuant to 
section 781(b) of the Act and 19 CFR 351.225(b) and (h), that self-
initiation of anti-circumvention inquiries is warranted to determine 
whether certain imports of welded OCTG, completed in Brunei and the 
Philippines using inputs manufactured in China, are circumventing the 
Orders. For a full discussion of the basis for our decision to initiate 
these anti-circumvention inquiries, see the Anti-Circumvention 
Initiation Memo.\7\
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    \7\ See Memorandum, ``Oil Country Tubular Goods from the 
People's Republic of China: Initiation of Anti-Circumvention 
Inquiries on the Antidumping Duty and Countervailing Duty Orders'' 
(Anti-Circumvention Initiation Memo). This memo is a public document 
that is dated concurrently with, and hereby adopted by, this notice 
and on file electronically via ACCESS.
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    As explained in the Anti-Circumvention Initiation Memo, the 
available information warrants initiating these anti-circumvention 
inquiries on a country-wide basis. Commerce has taken this approach in 
prior anti-circumvention inquiries, where the facts warranted.\8\
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    \8\ See, e.g., Stainless Steel Sheet and Strip From the People's 
Republic of China: Initiation of Anti-Circumvention and Scope 
Inquiries on the Antidumping Duty and Countervailing Duty Orders, 85 
FR 29401, 29402 (May 15, 2020); see also Certain Corrosion-Resistant 
Steel Products from the Republic of Korea and Taiwan: Initiation of 
Anti-Circumvention Inquiries on the Antidumping Duty and 
Countervailing Duty Orders, 83 FR 37785 (August 2, 2018); Carbon 
Steel Butt-Weld Pipe Fittings from the People's Republic of China: 
Initiation of Anti-Circumvention Inquiry on the Antidumping Duty 
Order, 82 FR 40556, 40560 (August 25, 2017) (stating at initiation 
that Commerce would evaluate the extent to which a country-wide 
finding applicable to all exports might be warranted); Certain 
Corrosion-Resistant Steel Products from the People's Republic of 
China: Initiation of Anti-Circumvention Inquiries on the Antidumping 
Duty and Countervailing Duty Orders, 81 FR 79454, 79458 (November 
14, 2016) (stating at initiation that Commerce would evaluate the 
extent to which a country-wide finding applicable to all exports 
might be warranted).
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    Consistent with the approach in the prior anti-circumvention 
inquiries that were initiated on a country-wide basis, Commerce intends 
to issue questionnaires to solicit information from producers and 
exporters in each of the third countries concerning their shipments of 
OCTG to the United States and the origin of any imported inputs being 
processed into OCTG. A

[[Page 71879]]

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.

Notification to Interested Parties

    In accordance with 19 CFR 351.225(b), Commerce determines that 
available information warrants initiating these anti-circumvention 
inquiries to determine whether certain imports of welded OCTG, 
completed in Brunei and the Philippines using inputs manufactured in 
China, are circumventing the Orders. Accordingly, Commerce hereby 
notifies all parties on Commerce's scope service list of the initiation 
of these anti-circumvention inquiries. 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(b), we have included a description of the product 
that is the subject of these anti-circumvention inquiries (i.e., OCTG 
completed in the third countries using inputs manufactured in China), 
and an explanation of the reasons for Commerce's decision to initiate 
these anti-circumvention inquiries, as provided above. Commerce will 
establish a schedule for questionnaires and comments on the issues in 
these inquiries.
    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. Commerce intends to issue its 
final determinations within 300 days of the date of publication of this 
initiation, in accordance with section 781(f) of the Act and 19 CFR 
351.225(f)(5).
    This notice is published in accordance with section 781(b) of the 
Act and 19 CFR 351.225(f).

    Dated: November 3, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.

Appendix--Scope of the Orders

    The scope of these Orders consists of certain OCTG, which are 
hollow steel products of circular cross-section, including oil well 
casing and tubing, of iron (other than cast iron) or steel (both 
carbon and alloy), whether seamless or welded, regardless of end 
finish (e.g., whether or not plain end, threaded, or threaded and 
coupled) whether or not conforming to American Petroleum Institute 
(API) or non-API specifications, whether finished (including limited 
service OCTG products) or unfinished (including green tubes and 
limited service OCTG products), whether or not thread protectors are 
attached. The scope of the Orders also covers OCTG coupling stock. 
Excluded from the scope of the Orders are casing or tubing 
containing 10.5 percent or more by weight of chromium; drill pipe; 
unattached couplings; and unattached thread protectors.
    The merchandise covered by the Orders is currently classified in 
the Harmonized Tariff Schedule of the United States (HTSUS) under 
item numbers: 7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 
7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 
7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 
7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 7304.29.31.10, 
7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 7304.29.31.50, 
7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 7304.29.41.20, 
7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 7304.29.41.60, 
7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 
7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 7304.29.61.30, 
7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 7305.20.20.00, 
7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.29.10.30, 
7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 7306.29.41.00, 
7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 7306.29.81.50.
    The OCTG coupling stock covered by the Orders may also enter 
under the following HTSUS item numbers: 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 
7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 
7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 
7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 
7304.59.80.25, 7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 
7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 
7304.59.80.65, 7304.59.80.70, and 7304.59.80.80.
    The HTSUS subheadings are provided for convenience and customs 
purposes only; the written description of the scope of the Orders is 
dispositive.

[FR Doc. 2020-24993 Filed 11-10-20; 8:45 am]
BILLING CODE 3510-DS-P