[Federal Register Volume 76, Number 82 (Thursday, April 28, 2011)]
[Notices]
[Pages 23791-23793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10325]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-916; C-570-917]
Laminated Woven Sacks From the People's Republic of China:
Initiation of Anti-Circumvention Inquiry
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from the Laminated Woven Sacks
Committee and its individual members, Coating Excellence International,
LLC and Polytex Fibers Corporation (collectively ``Petitioners''), the
Department of Commerce (``Department'') is initiating an anti-
circumvention inquiry to determine whether certain imports are
circumventing the antidumping and countervailing duty orders on
laminated woven sacks from the People's Republic of China (``PRC'').
DATES: Effective Date: April 28, 2011.
FOR FURTHER INFORMATION CONTACT: Catherine Bertrand, telephone: (202)
482-3207, or Jamie Blair-Walker, telephone: (202) 482-2615; AD/CVD
Operations, Office 9, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Background
On January 26, 2011, pursuant to sections 781(c) and 781(d) of the
Tariff Act of 1930, as amended (``Act''), and 19 CFR 351.225(i) and
(j), Petitioners submitted requests for the Department to initiate and
conduct a minor alterations and a later-developed merchandise anti-
circumvention inquiry to determine whether laminated woven sacks
printed with two colors in register and with the use of a screening
process are circumventing the antidumping and countervailing duty
orders on laminated woven sacks from the PRC. See Notice of Antidumping
Duty Order: Laminated Woven Sacks From the People's Republic of China,
73 FR 45941 (August 7, 2008) and Laminated Woven Sacks From the
People's Republic of China: Countervailing Duty Order, 73 FR 45955
(August 7, 2008) (collectively, ``Orders''). On March 25, 2011,
Petitioners withdrew their request for the Department to initiate a
minor alterations anti-circumvention inquiry pursuant to 781(c) of the
Act and 19 CFR 351.225(i). The later-developed merchandise anti-
circumvention request filed pursuant to 781(d) of the Act and 19 CFR
351.225(j) remains active.
In their request, Petitioners allege that PRC manufacturers of
subject merchandise have been circumventing the Orders by using two ink
colors printed in register and a screening process \1\ which allows for
one of the original inks to print on the sacks in a different shade
than the original ink color. Specifically, Petitioners allege that the
sacks produced using a screening process are a later-developed product
of the subject merchandise because there was no knowledge of such a
product being commercially available in the U.S. market at the time of
the investigation. No other parties submitted comments regarding
Petitioners' allegations in the circumvention of the Orders.
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\1\ In essence, Petitioners allege that the screening process,
which they contend is a later-developed process, in effect permits
manufacturers to replace a print stand in register with the screen,
thereby circumventing the Orders.
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On February 24, 2011, the Department extended the deadline to
initiate the anti-circumvention inquiry by 45 days, pursuant to 19 CFR
351.302(b).\2\ On April 8, 2011, Commercial Packaging, a U.S. supplier
of packaging and packaging materials, provided comments.
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\2\ See Letter to Petitioners dated February 24, 2011.
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Scope of the Orders
The merchandise covered by the orders is laminated woven sacks.
Laminated woven sacks are bags or sacks consisting of one or more plies
of fabric consisting of woven polypropylene strip and/or woven
polyethylene strip, regardless of the
[[Page 23792]]
width of the strip; with or without an extrusion coating of
polypropylene and/or polyethylene on one or both sides of the fabric;
laminated by any method either to an exterior ply of plastic film such
as biaxially-oriented polypropylene (``BOPP'') or to an exterior ply of
paper that is suitable for high quality print graphics; \3\ printed
with three colors or more in register; with or without lining; whether
or not closed on one end; whether or not in roll form (including
sheets, lay-flat tubing, and sleeves); with or without handles; with or
without special closing features; not exceeding one kilogram in weight.
Laminated woven sacks are typically used for retail packaging of
consumer goods such as pet foods and bird seed.
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\3\ ``Paper suitable for high quality print graphics,'' as used
herein, means paper having an ISO brightness of 82 or higher and a
Sheffield Smoothness of 250 or less. Coated free sheet is an example
of a paper suitable for high quality print graphics.
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Effective July 1, 2007, laminated woven sacks are classifiable
under Harmonized Tariff Schedule of the United States (``HTSUS'')
subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were
previously classifiable under HTSUS subheading 6305.33.0020. If entered
with plastic coating on both sides of the fabric consisting of woven
polypropylene strip and/or woven polyethylene strip, laminated woven
sacks may be classifiable under HTSUS subheadings 3923.21.0080,
3923.21.0095, and 3923.29.0000. If entered not closed on one end or in
roll form (including sheets, lay-flat tubing, and sleeves), laminated
woven sacks may be classifiable under other HTSUS subheadings including
3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500. If the
polypropylene strips and/or polyethylene strips making up the fabric
measure more than 5 millimeters in width, laminated woven sacks may be
classifiable under other HTSUS subheadings including 4601.99.0500,
4601.99.9000, and 4602.90.0000. Although HTSUS subheadings are provided
for convenience and customs purposes, the written description of the
scope of this order is dispositive.
Merchandise Subject to the Anti-Circumvention Request
The merchandise subject to the anti-circumvention request is
laminated woven sacks produced with two ink colors printed in register
and a screening process. The screening process described only uses two
colored inks printed in register at two different print stations.
However, one of the colors is printed using a screen, allowing for
different shades of that one color to appear on the bag. Thus, when two
shades of one color are printed along with a second colored ink from
the second print station, three distinct colors are visible on the bag.
Later-Developed Merchandise Anti-Circumvention Request
Section 781(d)(1) of the Act provides that the Department may find
circumvention of an antidumping or countervailing duty order when
merchandise is developed after an investigation is initiated (``later-
developed merchandise''). In conducting later-developed merchandise
anti-circumvention inquiries, under section 781(d)(1) of the Act, the
Department will also evaluate whether the general physical
characteristics of the merchandise under consideration are the same as
subject merchandise covered by the order,\4\ whether the expectations
of the ultimate purchasers of the merchandise under consideration are
no different than the expectations of the ultimate purchasers of
subject merchandise,\5\ whether the ultimate use of the subject
merchandise and the merchandise under consideration are the same,\6\
whether the channels of trade of both products are the same,\7\ whether
there are any differences in the advertisement and display of both
products,\8\ and if the merchandise under consideration was
commercially available at the time of the investigation.\9\
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\4\ See section 781(d)(1)(A) of the Act.
\5\ See section 781(d)(1)(B) of the Act.
\6\ See section 781(d)(1)(C) of the Act.
\7\ See section 781(d)(1)(D) of the Act.
\8\ See section 781(d)(1)(E) of the Act.
\9\ See Later-Developed Merchandise Anticircumvention Inquiry of
the Antidumping Duty Order on Petroleum Wax Candles from the
People's Republic of China: Affirmative Preliminary Determination of
Circumvention of the Antidumping Duty Order, 71 FR 32033, 32035
(June 2, 2006).
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A. General Physical Characteristics
Petitioners contend that there are no differences in the physical
characteristics of subject merchandise and sacks produced using two ink
colors printed in register and a screening process.\10\ At issue is
only the printing process used to create graphics on the sack, not the
physical construction of the sack itself. Petitioners supported this
allegation with an affidavit from the President of one of the
petitioners.\11\
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\10\ See Petitioners' Request for Determination of
Circumvention, dated January 26, 2011, at 16.
\11\ See id. at Exhibit 11.
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B. Expectations of the Ultimate Purchasers
Petitioners allege that the expectations of ultimate purchasers of
both types of laminated woven sacks are the same. Petitioners state
that when choosing to purchase laminated woven sacks in general,
ultimate purchasers are concerned with the construction and durability
of the laminated woven sacks in comparison to paper sacks.\12\
Petitioners supported this allegation with affidavits from the
Presidents of two of the petitioners.\13\
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\12\ See id. at 19.
\13\ See id. at Exhibits 11 and 12.
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C. Ultimate Use of Merchandise, Channels of Trade, and Advertisement
and Display of Product
Petitioners maintain that the ultimate uses, channels of trade, and
methods of advertisement and display of laminated woven sacks produced
using two ink colors printed in register and a screening process are
the same as those for subject merchandise, because the only difference
between subject merchandise and the merchandise under consideration is
the printing process used to produce graphics.\14\ Petitioners
supported this allegation with affidavits from the Presidents of two of
the petitioners.\15\
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\14\ See id. at 19 and footnote 76.
\15\ See id. at Exhibits 11 and 12.
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D. Commercial Availability
Petitioners state that, at the time of the investigation, laminated
woven sacks produced using two ink colors printed in register and a
screening process were unknown in the U.S. industry. Petitioners cite
the International Trade Commission (``ITC'') final determination in the
laminated woven sacks investigation, in which the ITC deemed the
domestic industry to be present, but found that the industry was young
and hindered by the significant level of imports from the PRC.\16\
Petitioners contend that no domestic producer was using or was aware of
the printing process involving a screen to produce different shades of
one ink color at the time of the investigation. In addition,
Petitioners note that at no point during the investigation was there
any discussion by the Department, the ITC, the respondents, or other
interested parties of sacks being printed with an alternative screening
printing process.
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\16\ See Laminated Woven Sacks from China, Investigation Nos.
701-TA-450 and 731-TA-1122 (Final), ITC Publication 4025 (July,
2008) at 30.
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Thus, Petitioners allege that laminated woven sacks produced using
two ink colors printed in register and a
[[Page 23793]]
screening process were not commercially available at the time of the
investigation. Petitioners supported this allegation with affidavits
from the Presidents of two of the petitioners.\17\
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\17\ See id. at Exhibits 11 and 12.
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Comments From Commercial Packaging
On April 8, 2011, Commercial Packaging submitted comments to the
Department stating there is no basis for initiation of the anti-
circumvention inquiry because sacks printed with two colors in register
are not later-developed products of the subject sacks. Specifically,
Commercial Packaging contends that an anti-circumvention inquiry is not
warranted because the anti-circumvention provisions of the statute do
not apply to merchandise that is originally unambiguously outside the
scope of the Orders and, here, sacks printed with less than three
colors in register are excluded from the Orders.\18\ Commercial
Packaging also argues that the sacks at issue are not later-developed
merchandise because sacks printed with two colors in register were
available during the investigation and the screening process is decades
old.\19\
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\18\ See Notice of Scope Rulings, 75 FR 14138 (March 24, 2010)
(Shapiro Packaging's three imported sacks are outside the scope of
the orders (July 29, 2009)).
\19\ See Commercial Packaging's submission, dated April 8, 2011.
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Analysis of Commercial Packaging Comments
We disagree with Commercial Packaging's contention that an anti-
circumvention inquiry is not warranted in this case for the reason that
sacks printed with two colors in register are expressly excluded from
the Orders. The language of the Orders does not discuss laminated woven
sacks printed with two colors in register using a screening process.
Therefore, unlike in Wheatland Tube,\20\ as cited by Commercial
Packaging, we conclude that the Orders do not expressly exclude the
merchandise under consideration. Although the Department previously
concluded in a scope ruling that found sacks printed with two colors in
register to be outside the scope of the Orders, we are not precluded
from now conducting an anti-circumvention inquiry because the factors
to be considered in 19 CFR 351.225(k)(1) are not the same factors as
those required under section 781(d)(1) of the Act.\21\ Furthermore, by
its very nature, a later-developed merchandise anti-circumvention
inquiry examines merchandise that is either excluded from, or has been
designed to elude, an order.\22\ Thus, later-developed merchandise
cannot pose a threat of injury to the domestic industry at the time of
the order, because it either does not exist or is not commercially
available.
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\20\ See Wheatland Tube Co. v. United States, 161 F.3d 1365,
1371 (Fed. Cir. 1998) (``Wheatland Tube'').
\21\ See Later-Developed Merchandise Anticircumvention Inquiry
of the Antidumping Duty Order on Petroleum Wax Candles from the
People's Republic of China: Affirmative Final Determination of
Circumvention of the Antidumping Duty Order, 71 FR 59075 (October 6,
2006) and accompanying Issues and Decision Memorandum at Comment 2,
remanded on other grounds, 578 F. Supp. 2d 1369 (CIT 2008), aff'd,
626 F. Supp. 2d 1285 (CIT June 17, 2009), aff'd 609 F.3d 1352 (June
21, 2010).
\22\ See Erasable Programmable Read Only Memories From Japan;
Final Scope Ruling, 57 FR 11599 (April 6, 1992) at Comment 6; see
also Electrolytic Manganese Dioxide From Japan; Preliminary Scope
Ruling, 56 FR 56977 (November 7, 1991).
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We also disagree with Commercial Packaging's argument that
information supporting the existence of sacks printed with two-colors
in register prior to the investigation demonstrates that the sacks at
issue here are not later-developed merchandise. We find the fact that
sacks printed with two colors in register alone existed prior to the
investigation is not relevant to our inquiry because the issue
presented by this inquiry is whether sacks that are printed with two
colors in register and with the use of a screen process constitute
later-developed merchandise within the meaning of 781(d) of the Act.
Commercial Packaging does not provide evidence that the screening
process used in the production of laminated woven sacks was
commercially available during or before the investigation.
Initiation of Later-Developed Merchandise Antidumping and
Countervailing Duty Anti-Circumvention Inquiry
Based on the information provided by Petitioners, the Department
finds that there is sufficient basis to initiate an antidumping and
countervailing duty anti-circumvention inquiry pursuant to section
781(d) of the Act to determine whether laminated woven sacks produced
using two ink colors printed in register and a screening process are
later-developed products that can be considered subject to the Orders
under the later-developed merchandise provision. As a result, we are
initiating this inquiry under section 781(d) of the Act.
The Department will not order the suspension of liquidation of
entries of any additional merchandise at this time. However, in
accordance with 19 CFR 351.225(l)(2), if the Department issues an
affirmative preliminary determination, we will instruct U.S. Customs
and Border Protection to suspend liquidation and require a cash deposit
of estimated 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 inquiry.
We intend to notify the International Trade Commission in the event
of an affirmative preliminary determination of circumvention, in
accordance with 781(e)(1) of the Act and 19 CFR 351.225(f)(7)(i)(C), if
applicable. The Department will, following consultation with interested
parties, establish a schedule for questionnaires and comments on the
issues. The Department intends to issue its final determination within
300 days of the date of publication of this initiation notice.
This notice is published in accordance with section 781(d) of the
Act and 19 CFR 351.225(i) and (j).
Dated: April 22, 2011.
Paul Piquado,
Acting Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-10325 Filed 4-27-11; 8:45 am]
BILLING CODE 3510-DS-P