[Federal Register Volume 87, Number 207 (Thursday, October 27, 2022)]
[Notices]
[Pages 65033-65035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23440]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-129, C-570-130]


Certain Walk-Behind Lawn Mowers and Parts Thereof From the 
People's Republic of China: Initiation of a Circumvention Inquiry on 
the Antidumping and Countervailing Duty Orders

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

SUMMARY: In response to a request from MTD Products, Inc (MTD), and its 
parent company, Stanley Black & Decker, Inc. (SBD) (collectively, the 
domestic interested parties), the U.S. Department of Commerce 
(Commerce) is initiating a circumvention inquiry to determine whether 
certain lawn mowers assembled or completed in the United States by 
attaching Chinese cutting deck shells (attached to at least one 
significant non-engine component) to internal combustion engines, are 
circumventing the antidumping duty (AD) and countervailing duty (CVD) 
orders on certain walk-behind lawn mowers and parts thereof (lawn 
mowers) from the People's Republic of China (China).

DATES: Applicable October 27, 2022.

FOR FURTHER INFORMATION CONTACT: Yang Jin Chun or Natasia Harrison, 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) 482-5760 or (202) 
482-1240, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 12, 2022, MTD requested the initiation of a circumvention 
inquiry pursuant to section 781(a) of the Tariff Act of 1930, as 
amended (the Act), to determine whether certain lawn mowers assembled 
or completed by Daye North America, Inc. by joining, in the United 
States, a cutting deck shell (attached to at least one significant non-
engine component) made in China to an internal combustion engine are 
circumventing the Orders.\1\ However, Commerce rejected MTD's 
circumvention inquiry request because we found that MTD had not 
adequately alleged the elements necessary for a circumvention 
determination under section 781(a) of the Act.\2\ On July 5, 2022, 
pursuant to section 781(a) of the Act and 19 CFR 351.226, MTD filed an 
amended circumvention inquiry request alleging that the Orders were 
being circumvented by merchandise completed or assembled in the United 
States.\3\ On August 18, 2022, Commerce rejected MTD's amended request 
based on certain deficiencies identified in the amended circumvention 
inquiry request, and issued a deficiency questionnaire to MTD.\4\
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    \1\ See Certain Walk-Behind Lawn Mowers and Parts Thereof from 
the People's Republic of China and the Socialist Republic of 
Vietnam: Antidumping Duty Orders, 86 FR 36703 (July 13, 2021); and 
Certain Walk-Behind Lawn Mowers and Parts Thereof from the People's 
Republic of China: Countervailing Duty Order and Amended Final 
Affirmative Countervailing Duty Determination, 86 FR 36702 (July 13, 
2021) (collectively, Orders).
    \2\ See Commerce's Letter, ``Certain Walk-Behind Lawn Mowers and 
Parts Thereof from the People's Republic of China: Declining to 
Initiate a Circumvention Inquiry,'' dated May 26, 2022.
    \3\ See Commerce's Letter, ``Certain Walk-Behind Lawn Mowers and 
Parts Thereof from the People's Republic of China: Declining to 
Initiate a Circumvention Inquiry and Deficiency Questionnaire,'' 
dated August 18, 2022.
    \4\ Id.
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    On September 7, 2022, pursuant to section 781(a) of the Act and 19 
CFR 351.226, the domestic interested parties filed a third 
circumvention inquiry request alleging that the Orders are being 
circumvented by merchandise completed or assembled in the United 
States.\5\ The domestic interested parties also provided information in 
response to Commerce's August 18, 2022 Deficiency Questionnaire.\6\ On 
September 21, 2022, Ningbo Daye Garden Machinery Co., Ltd. (Ningbo 
Daye), Ningbo Lingyue Intelligent Equipment Co., Ltd., and Daye North 
America, Inc. (Daye North America) (collectively, Daye), filed comments 
in opposition to the domestic interested parties' request.\7\ On 
October 6, 2022,

[[Page 65034]]

we extended the deadline to initiate this circumvention inquiry by 14 
days, to October 21, 2022, in accordance with 19 CFR 351.226(d)(1).\8\
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    \5\ See Domestic Interested Parties' Letter, ``Certain Walk-
Behind Lawn Mowers and Parts Thereof from the People's Republic of 
China; Amended Request for an Anticircumvention Inquiry Pursuant to 
19 U.S.C. 1677j(a),'' dated September 7, 2022, at part 2.
    \6\ See Domestic Interested Parties' Letter, ``Certain Walk-
Behind Lawn Mowers and Parts Thereof from the People's Republic of 
China; Amended Request for an Anticircumvention Inquiry Pursuant to 
19 U.S.C. 1677j(a),'' dated September 7, 2022 (Deficiency 
Questionnaire Response), at part 1.
    \7\ See Daye's Letter, ``Certain Walk-Behind Lawn Mowers and 
Parts Thereof from the People's Republic of China; Anti-
Circumvention Inquiry: Daye's Comments in Opposition to Initiation 
and Request to Reject MTD's Third Request for an Anti-Circumvention 
Inquiry,'' dated September 21, 2022.
    \8\ See Memorandum, ``Extension of Time to Determine Whether to 
Initiate Circumvention Inquiry,'' dated October 6, 2022.
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Scope of the Orders

    The products covered by these Orders are lawn mowers from China. A 
full description of the scope of the Orders is provided in the 
Circumvention Initiation Memorandum.\9\
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    \9\ See Memorandum, ``Certain Walk-Behind Lawn Mowers and Parts 
Thereof from the People's Republic of China: Initiation of a 
Circumvention Inquiry 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 Inquiry

    The merchandise subject to this circumvention inquiry are lawn 
mower sub-assemblies imported from China and comprised of a cutting 
deck shell attached to at least one other significant non-engine 
component, such as, but not limited to, a handle, wheels, grass catcher 
bag, or an electronic starter.\10\ These sub-assemblies are assembled 
or completed in the United States by attaching internal combustion 
engines to produce rotary walk-behind lawn mowers of the type that 
would be subject to the Orders.\11\ The cutting deck shell is the 
portion of the lawn mower--typically of aluminum or steel--that houses 
and protects a user from a rotating blade. Cutting deck shells are 
typically entered under Harmonized Tariff Schedule of the United States 
(HTSUS) subheading 8433.11 or 8433.90.
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    \10\ The domestic interested parties describe a ``significant'' 
component as ``a component that is attached to the cutting deck 
shell at the time it is imported into the United States, and which 
is material to the operation of the mower into which it is to be 
completed in the United States.'' See Deficiency Questionnaire 
Response at 7. According to the domestic interested parties, 
``generic items that are not specifically designed for use on lawn 
mowers, such as screws, nuts, bolts, cotter pins, shear pins, or 
clips'' are not significant. Id. While we have initiated on the 
product description as proposed by the domestic interested parties, 
we have concerns about the administrability of the current language. 
As such, we intend to consider this issue further during the 
inquiry.
    \11\ The domestic interested parties ask that the inquiry cover 
only lawn mowers ``of the type that would be subject to the Orders 
on Certain Walk-Behind Lawn Mowers and Parts Thereof from the 
People's Republic of China.'' The Orders, in turn, include lawn 
mowers ``regardless of the origin of its engine, unless such lawn 
mowers contain an engine that is covered by the scope of the 
antidumping and countervailing duty orders on certain vertical shaft 
engines between 99cc and up to 225cc, and parts thereof (small 
vertical engines) from China.'' See Circumvention Initiation 
Memorandum at 2-3. Therefore, this inquiry does not include lawn 
mowers assembled or completed in the United States using small 
vertical engines from China that are covered by the scope of the 
antidumping and countervailing duty orders on certain vertical shaft 
engines between 99cc and up to 225 cc, and parts thereof.
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Initiation of Circumvention Inquiry

    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.'' \12\ Each 
circumvention inquiry request must 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.'' \13\ The domestic 
interested parties allege circumvention pursuant to section 781(a) of 
the Act, which pertains to merchandise completed or assembled in the 
United States.
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    \12\ See 19 CFR 351.226(d)(1)(ii).
    \13\ See 19 CFR 351.226(c)(1).
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    For companion AD and CVD proceedings, ``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.'' \14\ 
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.'' \15\ Accordingly, once Commerce 
concludes this circumvention inquiry, Commerce intends to place its 
final circumvention determination on the record of the companion CVD 
proceeding.
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    \14\ See 19 CFR 351.226(m)(2).
    \15\ Id.
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    Section 781(a)(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 the United States 
from parts or components produced in the country subject to the order. 
In conducting a circumvention inquiry, under section 781(a)(1) of the 
Act, Commerce relies on the following criteria: (A) merchandise sold in 
the United States is of the same class or kind as any merchandise that 
is the subject of an AD or CVD order; (B) such merchandise sold in the 
United States is completed or assembled in the United States from parts 
or components produced in the foreign country with respect to which 
such order applies; (C) the process of assembly or completion in the 
United States is minor or insignificant; and (D) the value of the parts 
or components referred to in subparagraph (B) is a significant portion 
of the total value of the merchandise. As discussed below, the domestic 
interested parties provided evidence with respect to these criteria.
    However, no single factor, by itself, controls Commerce's 
determination of whether the process of assembly or completion in the 
United States is minor or insignificant.\16\ Accordingly, it is 
Commerce's practice to evaluate each of these five factors as they 
exist in the United States, and to reach an affirmative or negative 
circumvention determination based on the totality of the circumstances 
of the particular circumvention inquiry.\17\
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    \16\ See Statement of Administrative Action Accompanying the 
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994), 
at 893.
    \17\ See Hydrofluorocarbon Blends from the People's Republic of 
China: Final Negative Scope Ruling on Gujarat Fluorochemicals Ltd.'s 
R-410A Blend; Affirmative Final Determination of Circumvention of 
the Antidumping Duty Order by Indian Blends Containing CCC 
Components, 85 FR 61930 (October 1, 2020), and accompanying Issues 
and Decision Memorandum, at 20 (specifying same in the context of a 
section 781(b) inquiry).
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    In addition, section 781(a)(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 parts or components is 
affiliated with the person who assembles or completes the merchandise 
sold in the United States from the parts or components produced in the 
foreign country to which the order applies; and (C) whether imports 
into the United States of the parts or components produced in such 
foreign country have increased after the initiation of the 
investigation that resulted in the issuance of such order.
    Based on our analysis of the domestic interested parties' 
circumvention request, Commerce determines that the domestic interested 
parties have satisfied the criteria under 19 CFR 351.226(c) to warrant 
the initiation of a circumvention inquiry of the Orders. For a full 
discussion of the basis for our decision to initiate this circumvention 
inquiry, 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

[[Page 65035]]

Initiation Memorandum, the information provided by the domestic 
interested parties warrants initiating this circumvention inquiry on a 
country-wide basis. Commerce has taken this approach in prior 
circumvention inquiries, where the facts warranted initiation on a 
country-wide basis.\18\
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    \18\ 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 
questionnaires to solicit information from producers and exporters in 
China concerning shipments of Chinese cutting deck shells (attached to 
at least one significant non-engine component) to the United States to 
be attached to internal combustion engines and assembled or completed 
into lawn mowers in the United States. 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 Border Protection (CBP) of the initiation of this circumvention 
inquiry and direct CBP to continue the suspension of liquidation of 
entries of products subject to the circumvention inquiry 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 determination, 
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(a) of the Act, 
Commerce determines that the MTD's request for this circumvention 
inquiry satisfies the requirements of 19 CFR 351.226(c). Accordingly, 
Commerce is notifying all interested parties of the initiation of this 
circumvention inquiry to determine whether certain lawn mowers 
assembled in the United States with Chinese cutting deck shells 
(attached to at least one significant non-engine component) and 
internal combustion engines, are circumventing the Orders. In addition, 
we included a description of the product that is the subject of this 
inquiry, and an explanation of the reasons for Commerce's decision to 
initiate this inquiry 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 this circumvention inquiry in the Federal Register.
    This notice is published in accordance with section 781(a) of the 
Act and 19 CFR 351.226(d)(1)(ii).

    Dated: October 21, 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 Inquiry
V. Statutory and Regulatory Framework for Circumvention Inquiries
VI. Statutory Analysis for a Circumvention Inquiry
VII. Whether Process of Assembly or Completion is Minor or 
Insignificant
VIII. Additional Factors to Consider in Determining Whether a 
Circumvention Inquiry is Warranted
IX. Comments on the Initiation of the Circumvention Inquiry
X. Country-Wide Circumvention Inquiry
XI. Recommendation

[FR Doc. 2022-23440 Filed 10-26-22; 8:45 am]
BILLING CODE 3510-DS-P