[Federal Register Volume 87, Number 112 (Friday, June 10, 2022)]
[Notices]
[Pages 35499-35501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12579]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-106; C-570-107]


Wooden Cabinets and Vanities and Components Thereof From the 
People's Republic of China: Initiation of Circumvention Inquiries on 
the Antidumping and Countervailing Duty Orders

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

SUMMARY: In response to a request from the American Kitchen Cabinet 
Alliance, (AKCA), a petitioner, the U.S. Department of Commerce 
(Commerce) is initiating two country-wide circumvention inquiries to 
determine whether: (1) U.S. imports from Vietnam of wooden cabinets and 
vanities and components thereof (wooden cabinets and vanities) from the 
People's Republic of China (China), which are further processed in the 
Socialist Republic of Vietnam (Vietnam) and include Vietnamese 
components, are circumventing the antidumping duty (AD) and 
countervailing duty (CVD) orders on wooden cabinets and vanities from 
China; and (2) U.S. imports from Malaysia of wooden cabinets and 
vanities and components thereof (wooden cabinets and vanities) from 
China, which are further processed in Malaysia and include Malaysian 
components, are circumventing the AD and CVD orders on wooden cabinets 
and vanities from China.

DATES: Applicable June 10, 2022.

FOR FURTHER INFORMATION CONTACT: Michael Romani or Richard Roberts, AD/
CVD Operations, Office I, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-0198 or (202) 
482-3464, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On April 22, 2022, pursuant to section 781(b) of the Tariff Act of 
1930, as amended (the Act) and 19 CFR 351.226(c), AKCA filed 
circumvention inquiry requests alleging that wooden cabinets and 
vanities from China, which are further processed in Vietnam or 
Malaysia, and which include Vietnamese or Malaysian components, 
respectively, are circumventing the Orders \1\ and, accordingly, should 
be included within the scope of the Orders.\2\ On May 13, 2022, 
Commerce asked AKCA to clarify the coverage of the products subject to 
the circumvention inquiry requests, and AKCA responded on May 17, 
2022.\3\
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    \1\ See Wooden Cabinets and Vanities and Components Thereof from 
the People's Republic of China: Antidumping Duty Order, 85 FR 22126 
(April 21, 2020); and Wooden Cabinets and Vanities and Components 
Thereof from the People's Republic of China: Countervailing Duty 
Order, 85 FR 22134 (April 21, 2020) (collectively, Orders).
    \2\ See AKCA's Letters, ``Wooden Cabinets and Vanities and 
Components Thereof from the People's Republic of China--Scope Ruling 
Application and Request for Circumvention Inquiry Concerning Imports 
of Wooden Cabinets and Vanities and Components Thereof from 
Malaysia,'' dated April 22, 2022 (Malaysia Circumvention Request); 
and ``Wooden Cabinets and Vanities and Components Thereof from the 
People's Republic of China--Scope Ruling Application and Request for 
Circumvention Inquiry Concerning Imports of Wooden Cabinets and 
Vanities and Components Thereof from Vietnam,'' dated April 22, 2022 
(Vietnam Circumvention Request).
    \3\ See Commerce's Letters, ``Wooden Cabinets and Vanities and 
Components Thereof from the People's Republic of China--Scope Ruling 
Application and Request for Circumvention Inquiry Concerning Imports 
of Wooden Cabinets and Vanities and Components Thereof from 
Malaysia: Questionnaire,'' dated May 13, 2022; and ``Wooden Cabinets 
and Vanities and Components Thereof from the People's Republic of 
China--Scope Ruling Application and Request for Circumvention 
Inquiry Concerning Imports of Wooden Cabinets and Vanities and 
Components Thereof from Vietnam: Questionnaire,'' dated May 13, 
2022; see also AKCA's Letter, ``Wooden Cabinets and Vanities and 
Components Thereof from the People's Republic of China--Response to 
Request for Additional Information,'' dated May 17, 2022 
(Supplemental Questionnaire Response).
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    From May 16 through 19, 2022, we received comments from certain 
exporters (collectively, DH Exporters) and America Home Furnishings 
Alliance (AHFA) concerning AKCA's request.\4\ On May 19, 2022, we 
extended the deadline to initiate these circumvention inquiries by 15 
days, in accordance with 19 CFR 351.226(d)(1).\5\
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    \4\ See DH Exporters' Letters, ``Wooden Cabinets and Vanities 
and Components Thereof from the People's Republic of China: Comments 
to Petitioner's Request for Scope/Anti-Circumvention Inquiry,'' 
dated May 16 and 17, 2022. The DH Exporters are Home Styler 
Furniture Sdn. Bhd.; Honsoar Jaycorp Cabinetry Sdn. Bhd.; Ly 
Furniture Sdn. Bhd.; and Artz Master Sdn. Bhd. (all for Malaysia); 
and Sanyang Vietnam Furniture Co., Ltd, Goldenland Vietnam Furniture 
Company LTD; Blue Valley Wood Co., Ltd; Xin Hong Company Limited; 
Advanced Cabinets Supply Viet Nam Company Limited; Eagle Wood (Viet 
Nam) Company Limited; Hong Sheng (Viet Nam) Industrial Company 
Limited; Fusion Vina Company Limited; Monogram Home Viet Nam Company 
Limited; Star Un Co., Ltd; GIAI MY P&B CO., LTD; Wissen Wood Vietnam 
Co. Ltd, VY KIET Company Co., Ltd; and Song Ngan Industrial Wood 
Company Limited (all for Vietnam); see also AHFA's Letter 
``Antidumping and Countervailing Duty Orders on Wooden Cabinets and 
Vanities from the People's Republic of China: Pre-initiation 
Comments,'' dated May 19, 2022 (AHFA Letter).
    \5\ See Memorandum, ``Wooden Cabinets and Vanities: Extension of 
Time to Determine Whether to Initiate Anti-Circumvention Inquiry,'' 
dated May 19, 2022.
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Scope of the Orders

    The products covered by these Orders are wooden cabinets and 
vanities that are for permanent installation (including floor mounted, 
wall mounted, ceiling hung or by attachment of plumbing), and wooden 
components thereof. A full description of the scope of the Orders is 
provided in the Circumvention Initiation Memorandum.\6\
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    \6\ See Memorandum, ``Wooden Cabinets and Vanities and 
Components Thereof from the People's Republic of China: Initiation 
of Circumvention Inquiries on the Antidumping Duty and 
Countervailing Duty Orders,'' dated concurrently with, and hereby 
adopted by, this notice (Circumvention Initiation Memorandum).
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Merchandise Subject to the Circumvention Inquiries

    (1) One circumvention inquiry covers wooden cabinets and vanities 
from China, which are further processed in

[[Page 35500]]

Vietnam and include Vietnamese components, and which are subsequently 
exported from Vietnam to the United States.
    (2) The second circumvention inquiry covers wooden cabinets and 
vanities from China, which are further processed in Malaysia and 
include Malaysian components, and which are subsequently exported from 
Malaysia to the United States.

Initiation of Circumvention Inquiries

    Section 351.226(d) of Commerce's regulations states that if 
Commerce determines that a request for a circumvention inquiry 
satisfies the requirements of 19 CFR 351.226(c), then Commerce ``will 
accept the request and initiate a circumvention inquiry.'' Section 
351.226(c)(1) of Commerce's regulations, in turn, requires that each 
circumvention inquiry request allege ``that the elements necessary for 
a circumvention determination under section 781 of the Act exist'' and 
be ``accompanied by information reasonably available to the interested 
party supporting these allegations.'' AKCA alleged circumvention 
pursuant to section 781(b) of the Act (merchandise completed or 
assembled in other foreign countries).
    Section 351.226(m)(2) of Commerce's regulations states, for 
companion AD and CVD duty proceedings, that ``the Secretary will 
initiate and conduct a single inquiry with respect to the product at 
issue for both orders only on the record of the antidumping 
proceeding.'' Further, once ``the Secretary issues a final 
circumvention determination on the record of the antidumping duty 
proceeding, the Secretary will include a copy of that determination on 
the record of the countervailing duty proceeding.'' Accordingly, once 
Commerce concludes these circumvention inquiries, Commerce intends to 
place its final circumvention determinations on the record of the 
companion CVD proceeding.
    Section 781(b)(1) of the Act provides that Commerce may find 
circumvention of an 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 a 
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; (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 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.
    In determining whether the process of assembly or completion in a 
foreign 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 
foreign country is minor or insignificant.\7\ Accordingly, it is 
Commerce's practice to evaluate each of these five factors as they 
exist in the foreign country, depending on the totality of the 
circumstances of the particular circumvention inquiry.\8\
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    \7\ See Statement of Administrative Action Accompanying the 
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994), 
at 893.
    \8\ 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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    In addition, section 781(b)(3) of the Act sets forth additional 
factors to consider in determining whether to include merchandise 
assembled or completed in a foreign country within the scope of an AD 
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 that was 
shipped to the foreign country is affiliated with the person who, in 
the foreign 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 foreign country have 
increased after the initiation of the investigation that resulted in 
the issuance of such order.
    Based on our analysis of AKCA's circumvention requests, Commerce 
determines that AKCA has satisfied the criteria under 19 CFR 351.226(c) 
to warrant the initiation of circumvention inquiries of the Orders. For 
a full discussion of the basis for our decision to initiate these 
circumvention inquiries, see the Circumvention Initiation Memorandum. A 
list of topics discussed in the Circumvention Initiation Memorandum is 
included as the appendix to this notice. As explained in the 
Circumvention Initiation Memorandum, the information provided by 
domestic interested parties warrants initiating these circumvention 
inquiries on a country-wide basis. Commerce has taken this approach in 
prior circumvention inquiries, where the facts warranted initiation on 
a country-wide basis.\9\
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    \9\ See, e.g., 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); and 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 circumvention inquiries 
that were initiated on a country-wide basis, Commerce intends to issue 
two questionnaires (one for Vietnam, and one for Malaysia) to solicit 
information from producers and exporters in Vietnam and Malaysia, 
respectively, concerning their shipments to the United States and the 
origin of any imported wooden cabinets and vanities-components being 
further processed into wooden cabinets and vanities. 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.

Suspension of Liquidation

    Pursuant to 19 CFR 351.226(l)(1), Commerce will notify U.S. Customs 
and

[[Page 35501]]

Border Protection (CBP) of the initiation of these circumvention 
inquiries and direct CBP to continue the suspension of liquidation of 
entries of products subject to the circumvention inquiries that were 
already subject to the suspension of liquidation under the Orders and 
to apply the cash deposit rate that would be applicable if the products 
were determined to be covered by the scope of the Orders. Should 
Commerce issue preliminary or final circumvention determinations, 
Commerce will follow the suspension of liquidation rules under 19 CFR 
351.226(l)(2)-(4).

Notification to Interested Parties

    In accordance with 19 CFR 351.226(d) and section 781(b) of the Act, 
Commerce determines that the AKCA's requests for these circumvention 
inquiries satisfies the requirements of 19 CFR 351.226(c). Accordingly, 
Commerce is notifying all interested parties of the initiation of these 
two circumvention inquiries to determine whether: (1) U.S. imports from 
Vietnam of wooden cabinets and vanities from China, which are further 
processed in Vietnam and include Vietnamese components, are 
circumventing the Orders; and (2) U.S. imports from Malaysia of wooden 
cabinets and vanities from China, which are further processed in 
Malaysia and include Malaysian components, are circumventing the 
Orders. In addition, we included a description of the products that are 
the subject of these inquiries, and an explanation of the reasons for 
Commerce's decision to initiate these inquiries as provided above and 
in the accompanying Circumvention Initiation Memorandum. In accordance 
with 19 CFR 351.226(e)(1), Commerce intends to issue its preliminary 
determination no later than 150 days from the date of publication of 
the notice of initiation of these circumvention inquiries in the 
Federal Register.
    This notice is published in accordance with section 781(b) of the 
Act and 19 CFR 351.226(d)(1)(ii).

    Dated: June 6, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix

List of Topics Discussed in the Circumvention Initiation Memorandum

I. Summary
II. Background
III. Scope of the Orders
IV. Merchandise Subject to the Circumvention Inquiries
V. Statutory and Regulatory Framework for Circumvention Inquiries
VI. Statutory Analysis for the Circumvention Inquiries
VII. Whether Process of Assembly or Completion is Minor or 
Insignificant
VIII. Additional Factors To Consider in Determining Whether 
Circumvention Inquiries Are Warranted
IX. Comments on the Initiation of the Circumvention Inquiries
X. Country-Wide Circumvention Inquiries
XI. Recommendation

[FR Doc. 2022-12579 Filed 6-9-22; 8:45 am]
BILLING CODE 3510-DS-P