[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Notices]
[Pages 78047-78048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27692]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-112, C-570-113]


Certain Collated Steel Staples From the People's Republic of 
China: Initiation of Circumvention Inquiries on the Antidumping Duty 
and Countervailing Duty Orders

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

SUMMARY: In response to a request from KYOCERA SENCO Industrial Tools, 
Inc. (Senco), the Department of Commerce (Commerce) is initiating 
country-wide circumvention inquiries to determine whether imports of 
certain collated steel staples (collated staples), which are completed 
in Thailand or Vietnam using parts and components from the People's 
Republic of China (China), are circumventing the antidumping duty (AD) 
and countervailing duty (CVD) orders on collated staples from China.

DATES: Applicable December 21, 2022.

FOR FURTHER INFORMATION CONTACT: Brian Smith (Thailand) or Shane Subler 
(Vietnam), Office VIII, AD/CVD Operations, Enforcement and Compliance, 
International Trade Administration, U.S. Department of Commerce, 1401 
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1766 
and (202) 482-2000, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 15, 2022, pursuant to section 781(b) of the Tariff Act 
of 1930, as amended (the Act), and 19 CFR 351.226(c), Senco filed a 
circumvention inquiry request alleging that collated staples completed 
in Thailand or Vietnam using parts and components manufactured in China 
are circumventing the orders \1\ and, accordingly, should be included 
within the scope of the orders.\2\
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    \1\ See Certain Collated Steel Staples from the People's 
Republic of China: Antidumping Duty Order, 85 FR 43815 (July 20, 
2020); and Certain Collated Steel Staples from the People's Republic 
of China: Countervailing Duty Order, 85 FR 43813 (July 20, 2020) 
(collectively, Orders).
    \2\ See Senco's Letters, ``Request for Anticircumvention Inquiry 
Pursuant to Section 781(b) of the Tariff Act of 1930, as Amended,'' 
dated November 15, 2022 (Vietnam Circumvention Inquiry Request); and 
``Request for Anticircumvention Inquiry Pursuant to Section 781(b) 
of the Tariff Act of 1930, as Amended,'' dated November 15, 2022 
(Thailand Circumvention Inquiry Request).
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Scope of the Orders

    The merchandise covered by these Orders is certain collated steel 
staples. Merchandise covered by these Orders is currently classifiable 
under subheading 8305.20.0000 of the Harmonized Tariff Schedule of the 
United States (HTSUS). While the HTSUS subheading and ASTM 
specification are provided for convenience and for customs purposes, 
the written description of the subject merchandise is dispositive. See 
the Initiation Memorandum for further discussion.\3\
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    \3\ See Memorandum, ``Certain Collated Steel Staples from the 
People's Republic of China: Initiation of Circumvention Inquiries on 
Antidumping and Countervailing Duty Orders,'' dated concurrently 
with, and hereby adopted by, this notice (Initiation Memorandum).
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Merchandise Subject to the Circumvention Inquiries

    The circumvention inquiries cover collated staples that have been 
completed in Thailand or Vietnam, using parts and components from 
China, that are then subsequently exported from Thailand or Vietnam 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 
request for a circumvention inquiry 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.'' Senco alleged 
circumvention pursuant to section 781(b) of the Act (merchandise 
completed or assembled in other foreign countries).
    According to section 781(b)(1) of the Act, after taking into 
account any advice provided by the U.S. International Trade Commission 
(ITC) under section 781(e) of the Act, Commerce may find merchandise 
imported into the United States to be covered by the scope of an order 
if: (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 order or finding or a 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 finding

[[Page 78048]]

or is produced in the foreign country with respect to which such order 
or finding applies; (C) the process of assembly or completion in the 
foreign country referred to in subparagraph (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 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 the value of 
processing performed in the foreign country represents a small 
proportion of the value of the merchandise imported into the United 
States.
    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 for completion or assembly is affiliated 
with the person in the foreign country who assembles or completes the 
merchandise that is subsequently imported into the United States; and 
(C) whether imports into the foreign country of the merchandise that 
was completed or assembled have increased after the initiation of the 
investigation which resulted in the issuance of the order or finding.
    Based on our analysis of Senco's circumvention inquiry requests, we 
determined that Senco satisfied the criteria under 19 CFR 351.226(c), 
and thus, pursuant to 19 CFR 351.226(d)(1)(ii), we have accepted the 
request and are initiating the requested circumvention inquiries of the 
Orders. For a full discussion of the basis for our decision to initiate 
the requested circumvention inquiries, see the Initiation Memorandum. 
Moreover, as explained in the Initiation Memorandum, based on the 
information provided by Senco, we have initiated country-wide 
circumvention inquiries. Commerce has taken this approach in prior 
circumvention inquiries where the facts warranted initiation on a 
country-wide basis.\4\
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    \4\ 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 taken in prior circumvention inquiries 
that Commerce initiated on a country-wide basis, we intend to solicit 
information from certain companies in Thailand and Vietnam concerning 
their production of collated staples and their shipments thereof to the 
United States. A company's failure to completely respond 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.
    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.'' \5\ 
Further, ``{o{time} nce 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.'' \6\ Accordingly, once Commerce 
concludes this circumvention inquiry, Commerce intends to place its 
final circumvention determination on the record of the companion CVD 
proceedings.
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    \5\ See 19 CFR 351.226(m)(2).
    \6\ Id.
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Suspension of Liquidation

    Pursuant to 19 CFR 351.226(l)(1), Commerce will notify U.S. Customs 
and Border Protection (CBP) of its initiation of the requested 
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 
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 has determined that Senco's request for circumvention 
inquiries satisfies the requirements of 19 CFR 351.226(c). Accordingly, 
Commerce is notifying all interested parties of the initiation of 
circumvention inquiries to determine whether U.S. imports of collated 
staples that have been completed in, and exported from, Thailand or 
Vietnam using parts and components manufactured in China, are 
circumventing the Orders. We included a description of the products 
that are subject to the circumvention inquiries, and an explanation of 
the reasons for Commerce's decision to initiate these inquiries, in the 
accompanying Initiation Memorandum.\7\ In accordance with 19 CFR 
351.226(e)(1), Commerce intends to issue its preliminary determinations 
in these circumvention proceedings no later than 150 days from the date 
of publication of this notice in the Federal Register.
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    \7\ See Initiation Memorandum.
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    This notice is published in accordance with section 781(b) of the 
Act and 19 CFR 351.226(d)(1)(ii).

    Dated: December 14, 2022.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.

Appendix

List of Topics Discussed in the Circumvention Initiation Memo

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 Opposing the Initiation of the Circumvention Inquiries
X. Country-Wide Circumvention Inquiries
XI. Suspension of Liquidation
XII. Recommendation

[FR Doc. 2022-27692 Filed 12-20-22; 8:45 am]
BILLING CODE 3510-DS-P