Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Circular Welded Carbon Quality Steel Pipe from the People's Republic of China

Circular Welded Carbon Quality Steel Pipe From the People's Republic of China: Initiation of Circumvention Inquiry on the Antidumping and Countervailing Duty Orders

DATES:

Applicable November 19, 2024.

SUPPLEMENTARY INFORMATION:

Background

On July 9, 2024, pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.226(i), the domestic interested parties filed circumvention inquiry requests alleging that CWP completed in Oman using HRS manufactured in China is circumventing the AD and CVD Orders ⁽¹⁾ on CWP from China and, accordingly, should be included within the scope of the Orders. ⁽²⁾ On July 19, 2024, Al Jazeera Steel Products Co. SAOG (Al Jazeera), an Omani producer of CWP, filed comments in opposition to the domestic interested parties' request. ⁽³⁾ On July 29, 2024, the domestic interested parties filed rebuttal comments to Al Jazeera's July 19, 2024 comments. ⁽⁴⁾

On August 12, 2024, we extended the deadline to initiate this circumvention inquiry by 30 days, in accordance with 19 CFR 351.226(d)(1). ⁽⁵⁾

On August 28, 2024, we issued a request for information questionnaire to the domestic interested parties. ⁽⁶⁾ In the Request for Information, we clarified that we issued the request because we had found that the request to conduct the circumvention inquiry was insufficient for purposes of initiation, in accordance with 19 CFR 351.226(d)(1). Additionally, we clarified that 30-day time period for Commerce to consider whether to initiate on domestic interested parties' circumvention inquiry would begin with domestic interested parties' response to the Request for Information. ⁽⁷⁾ Subsequently, on September 27, 2024, the domestic interested parties filed their response to our request for information. ⁽⁸⁾ Thus, we consider the inquiry request to have been filed on September 27, 2024.

On October 7, 2024, Al Jazeera filed opposition comments in response to the Domestic Interested Parties' Request. ⁽⁹⁾ On October 15, 2024, the domestic interested parties filed rebuttal comments to Al Jazeera's Circumvention Request. ⁽¹⁰⁾ On October 28, 2024, Commerce rejected both the Al Jazeera Opposition Comments and the Domestic Interested Party Rebuttal Comments. ⁽¹¹⁾

Scope of the Orders

The merchandise covered by the scope of the Orders is CWP from China. For a complete description of the scope of Orders, see the Circumvention Initiation Checklist. ⁽¹²⁾

Merchandise Subject to the Circumvention Inquiry

This circumvention inquiry covers CWP from China, completed in Oman using Chinese-produced HRS, and subsequently exported from Oman to the United States.

Initiation of Circumvention Inquiry

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 alleges "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." The domestic interested parties alleged circumvention pursuant to section 781(b) of the Act, which pertains to merchandise completed or assembled in other foreign countries.

Section 781(b)(1) of 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 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 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 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. ⁽¹³⁾ Accordingly, it is Commerce's practice to evaluate each of these five factors, depending on the totality of the circumstances of the particular circumvention inquiry. ⁽¹⁴⁾

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 third 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 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.

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 initiations of circumvention inquiries of these Orders. Therefore, pursuant to 19 CFR 351.226(d)(1)(ii), we are initiating the requested circumvention inquiries. For a full discussion of the basis for our decisions to initiate these circumvention inquiries, see the Circumvention Initiation Checklist. ⁽¹⁵⁾ As explained in the Circumvention Initiation Checklist, the information provided by the domestic interested parties in this instance 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. ⁽¹⁶⁾

Consistent with the approach in the prior circumvention inquiries that we initiated on a country-wide basis, Commerce intends to issue questionnaires to solicit information from producers and exporters in Oman concerning their shipments of CWP, made from Chinese-origin HRS, to 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 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. 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 domestic interested parties' requests 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 imports of CWP from China, completed in and exported from Oman using HRS inputs manufactured in China, are circumventing the Orders. In addition, we have included a description of the products that are 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 Checklist. ⁽¹⁷⁾ In accordance with 19 CFR 351.226(e)(2), Commerce intends to issue its final circumvention determination within 300 days from the date of publication of the notice of initiation of a circumvention inquiry 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).

[FR Doc. 2024-26890 Filed 11-18-24; 8:45 am]

BILLING CODE 3510-DS-P

⁽¹⁾ See Notice of Antidumping Duty Order: Circular Welded Carbon Quality Steel Pipe from the People's Republic of China, 73 FR 42547 (July 22, 2008); see also Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order, 73 FR 42545 (July 22, 2008) (collectively, Orders ).

⁽²⁾ See Domestic Interested Parties' Letter, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China-Request for Circumvention Inquiry", dated July 9, 2024.

⁽³⁾ See Al Jazeera's Letter, "Circular Welded Carbon-Quality Steel Pipe from the People's Republic of China; Al Jazeera comments on petitioners' request for anti-circumvention inquiry," dated July 19, 2024.

⁽⁴⁾ See Domestic Interested Parties' Letter, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China-Response and Rebuttal Factual Information Regarding Comments on Request for Circumvention Inquiry," dated July 29, 2024.

⁽⁵⁾ See Memorandum, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China (A-570-910 and C-570-911): Extension of Time to Determine Whether to Initiate Circumvention Inquiry," dated August 12, 2024.

⁽⁶⁾ See Commerce's Letter, "Circumvention Request with Respect to the Antidumping Order and Countervailing Duty Order on Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Request for Information," dated August 28, 2024 (Request for Information).

⁽⁷⁾ Id.

⁽⁸⁾ See Domestic Interested Parties' Letter, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China-Request for Circumvention Inquiry," dated September 27, 2024 (Circumvention Request). We note that the Circumvention Request contained a new circumvention allegation as well as responses to our Request for Information. See Circumvention Request at Appendix.

⁽⁹⁾ See Al Jazeera's Letter, "Circular Welded Carbon-Quality Steel Pipe from People Republic of China: Al Jazeera comments on petitioners' request for anti-circumvention inquiry," dated October 7, 2024 (Al Jazeera Opposition Comments).

⁽¹⁰⁾ See Domestic Interested Parties' Letter, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China-Response and Rebuttal Factual Information Regarding Comments on Request for Circumvention Inquiry," dated October 15, 2024 (Domestic Interested Party Rebuttal Comments).

⁽¹¹⁾ See Commerce's Letters, "Circumvention Request with Respect to the Antidumping Order and Countervailing Duty Order on Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Rejection of Al Jazeera comments on domestic interested parties' revised request for anti-circumvention inquiry," and "Circumvention Request with Respect to the Antidumping Order and Countervailing Duty Order on Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Rejection of Response and Rebuttal Factual Information Regarding Comments on Request for Circumvention Inquiry," both dated October 28, 2024

⁽¹²⁾  For a complete description of the scope of the Orders, see Checklist, "Circular Welded Carbon Quality Steel Pipe from the People's Republic of China (Circumvention Initiation Checklist).

⁽¹³⁾ See Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994) (SAA), at 893.

⁽¹⁴⁾ 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.

⁽¹⁵⁾ See Circumvention Initiation Checklist. The Circumvention Initiation Checklist is a public document available electronically online via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS).

⁽¹⁶⁾ 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).

⁽¹⁷⁾ See Circumvention Initiation Checklist.