Certain Hardwood Plywood Products From the People's Republic of China: Initiation of Anti-Circumvention Inquiries and Scope Inquiries on the Antidumping Duty and Countervailing Duty Orders; Vietnam Assembly
| Published date | 17 June 2020 |
| Citation | 85 FR 36530 |
| Record Number | 2020-13075 |
| Section | Notices |
| Court | International Trade Administration |
Federal Register, Volume 85 Issue 117 (Wednesday, June 17, 2020)
[Federal Register Volume 85, Number 117 (Wednesday, June 17, 2020)]
[Notices]
[Pages 36530-36535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13075]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-051, C-570-052]
Certain Hardwood Plywood Products From the People's Republic of
China: Initiation of Anti-Circumvention Inquiries and Scope Inquiries
on the Antidumping Duty and Countervailing Duty Orders; Vietnam
Assembly
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: In response to allegations of circumvention from the Coalition
for Fair Trade in Hardwood Plywood (the petitioner), the Department of
Commerce (Commerce) is initiating country-wide anti-circumvention
inquiries to determine whether certain hardwood plywood products
(plywood) completed in Vietnam using plywood components (face veneer,
back veneer, and/or either an assembled core or individual core
veneers) manufactured in the People's Republic of China (China), or
Chinese components (assembled cores, multi-ply core panels, or
individual core veneers) combined in Vietnam with other components
(face and/or back veneers) manufactured in Vietnam or third countries,
are circumventing the antidumping duty (AD) and countervailing duty
(CVD) orders on plywood from China. We are also initiating scope
inquiries to determine whether any of the products produced under
various production scenarios alleged by the petitioner are covered by
the scope of the AD/CVD orders on plywood from China. Finally, we are
aligning the deadline for the scope inquiries associated with a covered
merchandise referral from U.S. Customs and Border Protection (CBP)
under the Enforce and Protect Act of 2015 (EAPA) with the
anticircumvention inquiries.
DATES: Applicable June 17, 2020.
FOR FURTHER INFORMATION CONTACT: Kabir Archuletta, AD/CVD Operations,
Office V, Enforcement & Compliance, International Trade Administration,
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington,
DC 20230, telephone: (202) 482-2593.
SUPPLEMENTARY INFORMATION:
Background
On January 4, 2018, Commerce issued AD and CVD orders on plywood
from China.\1\ On September 16, 2019, Commerce received an EAPA covered
merchandise referral from CBP.\2\ On January 17, 2020, Commerce
published a notice of initiation of scope inquiries related to this
referral in order to determine whether plywood produced by Vietnam
Finewood Company Limited from China-origin materials are covered
merchandise subject to the Orders.\3\
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\1\ See Certain Hardwood Plywood Products from the People's
Republic of China: Amended Final Determination of Sales at Less Than
Fair Value, and Antidumping Duty Order, 83 FR 504 (January 4, 2018);
and Certain Hardwood Plywood Products from the People's Republic of
China: Countervailing Duty Order, 83 FR 513 (January 4, 2018)
(collectively, Orders).
\2\ See Certain Hardwood Plywood from the People's Republic of
China: Notice of Covered Merchandise Referral and Initiation of
Scope Inquiry, 85 FR 3024 (January 17, 2020) (EAPA Scope Inquiry
Initiation).
\3\ Id.
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On February 25, 2020, pursuant to section 781(b) of the Tariff Act
of 1930, as amended (the Act) and 19 CFR 351.225(c) and (h), the
petitioner requested that Commerce issue a scope ruling, or in the
alternative, an anti-circumvention ruling, that plywood completed in
Vietnam using plywood components manufactured in China, and imported
into the United States as Vietnamese-origin plywood, are either within
the scope of the Orders or are circumventing the Orders. Specifically,
the petitioner alleged that Chinese plywood components are undergoing
minor assembly and finishing in Vietnam that does not remove the
merchandise from coverage of the Orders, and that these products are
entering the United States as Vietnamese-origin plywood for the express
purpose of avoiding AD/CVD duties. In the alternative to a scope
ruling, the petitioner requested that Commerce find that these products
constitute merchandise completed or assembled in a third country that
is circumventing, and should be included within, the scope of the
Orders.\4\
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\4\ See Petitioner's Letter, ``Certain Hardwood Plywood Products
from the People's Republic of China: Request for Scope Ruling/Anti-
Circumvention Ruling,'' dated February 25, 2020 (Petitioner's
Request).
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On March 4, 2020, Commerce accepted the petitioner's scope-ruling
and circumvention-ruling request and established deadlines for
interested parties to provide comments.\5\ Between March 18, 2020 and
May 1, 2020, we received comments from interested parties in response
to the allegations made by the petitioner.\6\
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\5\ See Memorandum, ``Certain Hardwood Plywood Products from the
People's Republic of China: Deadline for Comments on the Vietnam
Assembly Scope Ruling Request,'' dated March 4, 2020.
\6\ See Vietnam Timber and Forest Product Association's Letter,
``Certain Hardwood Plywood Products from the People's Republic of
China: Response Comments to Scope/Anti-Circumvention Inquiry
Requests,'' dated March 18, 2020; see also Truong Son Industrial
Wood JSC's Letter, ``The Petitioner's Request for Determining Range
of Products/Anti-Circumvention Investigation into Certain Hardwood
Plywood Products,'' dated March 20, 2020; VietBac Plywood JSC and
Plywood Source LLC's Letter, ``Certain Hardwood Plywood Products
from the People's Republic of China: Response Comments to Scope/
Anti-Circumvention Inquiry Requests,'' dated March 20, 2020; TL
Trung Viet Co., Ltd.'s Letter, ``Letter of Request to Consider about
Tax Imposition,'' dated March 20, 2020; Thanh Hoa Wood Industry Co.,
Ltd.'s Letter, ``The Petitioner's Request for Determining Range of
Products/Anti-Circumvention Investigation into Certain Hardwood
Plywood Products,'' dated March 20, 2020; DH Respondent Letter,
``Hardwood Plywood from the People's Republic of China: Comments to
Petitioner's Request for Scope/Anti-Circumvention Inquiry,'' dated
March 20, 2020; Importers Alliance's Letter, ``Investigation of the
Antidumping and Countervailing Duty Orders on Hardwood Plywood
Products from the People's Republic of China, Scope-Vietnam
Assembly: Objection to Request for Scope and Anti-Circumvention
Inquiry,'' dated March 20, 2020; Vietnam Ministry of Industry and
Trade's Letter, ``The Petitioner's Request for Scope of Ruling/Anti-
Circumvention Ruling for Hardwood Plywood Products,'' dated March
25, 2020; and Ike Trading Co., Ltd.'s Letter, ``Certain Hardwood
Plywood Products from the People's Republic of China: Resubmission
of Ike Trading's Scope Comments,'' dated May 1, 2020.
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On April 14, 2020, Commerce extended the deadline for either
issuing a final scope and/or anti-circumvention ruling or initiating a
formal scope and/or anti-circumvention inquiry to June 2, 2020.\7\ On
May 8, 2020, we requested additional information from the
petitioner,\8\ and on May 13, 2020, the petitioner submitted its
response to this request.\9\ In this response, the petitioner requested
that Commerce expand its inquiry to determine whether plywood assembled
in Vietnam from mainly Chinese components, but also including face and/
or back veneers from Vietnam or third countries, are within the scope
or are circumventing the Orders.\10\
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\7\ See Commerce's Letter, ``Certain Hardwood Plywood Products
from the People's Republic of China: Extension of Deadline,'' dated
April 14, 2020.
\8\ See Commerce's Letter, ``Certain Hardwood Plywood from the
People's Republic of China: Clarification of Scope Ruling/
Anticircumvention Ruling Request,'' dated May 8, 2020.
\9\ See Petitioner's Letter, ``Hardwood Plywood Products from
the People's Republic of China: Coalition's Response to Request for
Clarification,'' dated May 12, 2020 (Petitioner's Clarification).
\10\ Id.
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On June 2, 2020, we again extended the deadline to either issue a
final scope and/or anti-circumvention ruling or
[[Page 36531]]
initiate a formal scope and/or anti-circumvention inquiry to June 9,
2020.\11\
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\11\ See Commerce's Letter, ``Certain Hardwood Plywood Products
from the People's Republic of China: Extension of Deadline,'' dated
June 2, 2020.
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Scope of the Orders
The product covered by the Orders is hardwood and decorative
plywood from China. For a complete description of the scope of the
orders, see Appendix.
Merchandise Subject to the Anti-Circumvention Inquiries
These anti-circumvention inquiries cover plywood completed in
Vietnam using plywood components (face veneer, back veneer, and/or
either an assembled core or individual core veneers) manufactured in
China, or Chinese components (assembled cores, multi-ply core panels,
or individual core veneers) combined in Vietnam with other components
(face and/or back veneers) manufactured in Vietnam or third countries,
and subsequently exported to the United States.\12\
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\12\ Specifically, these inquiries will cover plywood completed
in Vietnam using: (1) Face veneer, back veneer, and assembled core
components manufactured in China; and (2) face veneer, back veneer,
and individual core veneers produced in China. Additionally, these
inquiries will also examine, should such production scenarios exist,
plywood completed in Vietnam using: (1) Fully assembled veneer core
platforms manufactured in China and face and/or back veneers
produced in Vietnam or third countries; (2) multi-ply panels of
glued core veneers manufactured in China that are combined in
Vietnam to produce veneer core platforms and combined with either a
face and/or back veneer produced in China, Vietnam, or a third
country; and (3) core veneers manufactured in China and processed
into a veneer core platform in Vietnam and combined with a face and/
or back veneer produced in Vietnam or other third country. A veneer
core platform is defined as two or more wood veneers that form the
core of an otherwise completed hardwood plywood product (i.e., a
hardwood plywood product to which the outer (face and back) veneers
have not yet been affixed (see Petitioner's Request at Exhibit 11).
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Initiation of Anti-Circumvention Inquiry Proceedings
Section 781(b) of the Act and 19 CFR 351.225(h) provide 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 another foreign country before being exported to the
United States. In conducting anti-circumvention inquiries under section
781(b)(1) of the Act, Commerce relies upon the following criteria: (A)
Merchandise imported into the United States is of the same class or
kind as 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 produced in the
foreign country that is subject to the order; (C) the process of
assembly or completion in another foreign country 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) Commerce determines that action is appropriate to prevent
evasion of such order or finding. As discussed below, the petitioner
provides evidence with respect to these criteria.
A. Merchandise of the Same Class or Kind
The petitioner states that, pursuant to section 781(b)(1)(A) of the
Act, the inquiry merchandise being completed in Vietnam and imported
into the United States is of the same class or kind as the merchandise
subject to the Orders.\13\ The petitioner further argues that the
products being completed in Vietnam are identical to the subject
merchandise produced in China and are entering the United States under
the same Harmonized Tariff Schedule subheadings as subject plywood from
China.\14\
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\13\ See Petitioner's Request at 33-34.
\14\ Id. According to the petitioner, the main components of
plywood include face and back veneers, and/or either an assembled
core or individual core veneers.
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B. Completion of Merchandise in Another Foreign Country
The petitioner contends that section 781(b)(1)(B)(ii) of the Act
covers the completion of plywood in Vietnam, because the main
components in the production of plywood are manufactured in China, the
country to which the Orders apply.\15\ The petitioner also asserts that
fully- or partially-assembled cores, or individual core veneers,
produced in China that are combined in Vietnam with face and/or back
veneers produced in Vietnam or a third country should be covered by the
Orders; according to the petitioner, the vast majority of the cost of
the finished plywood, in terms of materials, labor, and investment, is
related to the production of the Chinese components (including core
veneers in particular).\16\
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\15\ Id. at 34-35.
\16\ See Petitioner's Clarification at 2-6.
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C. Minor or Insignificant Process
Under sections 781(b)(1)(C) and 781(b)(2) of the Act, Commerce will
take into account five factors to determine whether the process of
assembly or completion of merchandise in other foreign countries is
minor or insignificant. Specifically, Commerce will 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 portion
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.\17\ Accordingly, it is Commerce's practice to
evaluate each of these five factors as they exist in the third country,
depending on the totality of the circumstances of the particular anti-
circumvention inquiry.\18\
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\17\ See Statement of Administrative Action accompanying the
Uruguay Round Agreements Act (SAA), H.R. Doc. No. 103-316, vol. 1
(1994) at 893.
\18\ 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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1. Level of Investment in the Foreign Country
The petitioner states that, based on the production steps that are
occurring in China and Vietnam, the relative investment in Vietnam for
the assembly operations at issue is likely minimal. According to the
petitioner, with respect to the plywood produced solely from wooden
components of Chinese origin, the circumvention involves assembling
face and back veneers and/or a core (assembled or individual core
veneers) that were manufactured in China, which accounts for the vast
majority of the cost of production for plywood. The petitioner asserts
that the vast majority of the production process, up through the
production of the wooden veneers, occurs in China, and that these parts
of the production process require more complex equipment, as well as
much more plant space, than the later production processes that occur
in Vietnam.
With respect to the plywood assembled in Vietnam from Chinese
components and non-Chinese face and/or back veneers, the petitioner
claims that the cost and production related to the face and back
veneers is minimal relative to the production of core veneers. In
particular, the petitioner claims that the majority of the veneers in
any given plywood product are used
[[Page 36532]]
for the core while the face and back veneers each constitute only a
single veneer.\19\ Therefore, the petitioner contends that, to the
extent that Commerce examines production scenarios described above that
involve a combination of assembled cores, or individual core veneers,
produced in China and face/back veneers produced in Vietnam or third
countries, the cost, production, and value remains in the Chinese
components (and in the core veneers in particular). As a result, the
petitioner maintains that the minor processing that occurs in Vietnam
also likely requires a minimal investment in Vietnam.\20\
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\19\ See Petitioner's Clarification at 5-6.
\20\ See Petitioner's Request at 36-37; see also Petitioner's
Clarification at 9-10 and Exhibits 1 and 3.
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2. Level of Research and Development in the Foreign Country
The petitioner states that there is likely no research and
development occurring in Vietnam because in some cases the Vietnamese
producers are just completing the end of the plywood production
process. The petitioner asserts that, while the research and
development required for setting up a production facility for plywood
in China would be substantial, the level of research and development,
if any, required for setting up an assembly facility in Vietnam would
be very minimal.\21\ The petitioner estimates that, for a fully
integrated facility, approximately 90 percent of the research and
development costs would relate to veneer production, with the vast
majority of the veneers used for the core, while only 10 percent of the
research and development costs would relate to assembly operations.\22\
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\21\ See Petitioner's Request at 38; see also Petitioner's
Clarification at 10-11 and Exhibits 1 and 3.
\22\ See Petitioner's Clarification at 11 and Exhibit 3.
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3. Nature of the Production Process in the Foreign Country
The petitioner states that the process in Vietnam to complete the
assembly of Chinese face and back veneers and Chinese core into
plywood, or to apply Vietnamese or third-country face and back veneers
to a Chinese core, or core veneers, involves very minimal processing
compared to the production steps in China. The production steps that
occur in China entail the majority and most significant portion of the
production process (i.e., the production of wooden veneers from logs,
the vast majority of which are used for the core). The petitioner
asserts that in certain cases the only production steps occurring in
Vietnam are the layup of the veneers as necessary, and the application
of glue and the assembly of the veneers using a cold and hot press, as
well as any final trimming, sanding, and/or finishing.\23\ Moreover,
the petitioner asserts that adding additional veneers to an in-scope
veneer core is minor further processing that does not move the
completed merchandise out of the scope.\24\
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\23\ See Petitioner's Request at 38-39.
\24\ See Petitioner's Clarification at 4.
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4. Extent of Production Facilities in the Foreign Country
According to the petitioner, the extent of the facilities in
Vietnam is necessarily limited because the companies in Vietnam are
simply assembling into finished plywood the face and back veneers and/
or the core (assembled core or individual core veneers), which are
manufactured by Chinese producers. Moreover, the petitioner cites
information indicating that there has been no increase in production
facilities in Vietnam, despite the massive increase in exports of
plywood to the United States.\25\ The petitioner also explains that the
production facilities required for veneer production, with the vast
majority of the veneers used for the core, are substantial compared to
those required to assemble face and back veneers and cores (assembled
core or individual core veneers).\26\
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\25\ Id. at 40; see also Petitioner's Clarification at 12-13 and
Exhibits 1 and 4.
\26\ See Petitioner's Clarification at 12-13 and Exhibits 1 and
4.
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5. Value of Processing Performed in the Foreign Country
The petitioner asserts that the value of processing in Vietnam
represents a minority of the value of the merchandise imported into the
United States. According to the petitioner, the production steps that
take place in China make up the most significant portion of the
production process and the cost of goods sold (COGS) for the plywood.
The petitioner also cites to the investigation by the U.S.
International Trade Commission (ITC), which found that the percentage
of COGS accounted for by raw materials alone ranged from 78.8 percent
to 79.4 percent from 2014 through 2016, and that the major raw material
costs are the veneer, with the vast majority of the veneers used for
the core, and other plywood used in the production of plywood.\27\
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\27\ See Petitioner's Request at 41.
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The petitioner also provided proprietary data to demonstrate that
the most significant portion of the production costs is incurred in
China from the production of veneers, and that a very small proportion
of the value is accounted for by the assembly of the veneers in
Vietnam.\28\ The petitioner stated that, to the extent that assembled
cores, or individual core veneers, produced in China that are being
combined with Vietnam or third-country origin face/back veneers, the
cost and production related to the face/back veneers is minimal
relative to the production of core veneers and, thus, the vast majority
of the cost, production, and value would still remain with the core
veneers.\29\
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\28\ Id. at 42.
\29\ See Petitioner's Clarification at 5-6.
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D. Value of Merchandise Produced in the Foreign Country Is a
Significant Portion of the Value of the Merchandise
The petitioner emphasizes that the overwhelming majority of the
production and costs are accounted for by the raw materials (i.e., the
wooden veneers and core that are produced in China and shipped to
Vietnam for assembly). According to the petitioner, this demonstrates
that the value of the merchandise produced in China, which include the
face veneer, back veneer, and/or core (assembled or individual core
veneers), accounts for a significant portion of the total value of the
merchandise ultimately exported to the United States.\30\
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\30\ Id. at 44.
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As noted above, the petitioner stated that, for plywood made from
core veneers produced in China and further processed and combined with
face and/or back veneers produced in Vietnam or a third country, the
vast majority of the value of the merchandise exported remains in the
core veneers from China.\31\
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\31\ See Petitioner's Clarification at 5-6.
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E. Factors To Consider in Determining Whether Action Is Necessary
Section 781(b)(1)(E) of the Act states that Commerce will determine
whether action is appropriate to prevent evasion of an AD or CVD order,
and section 781(b)(3) of the Act identifies additional factors that
Commerce shall consider in determining whether to include parts or
components in an AD or CVD order as part of an anti-circumvention
inquiry, including: (A) The pattern of trade, including sourcing
patterns; (B) whether the manufacturer or exporter of the merchandise
described in section 781(b)(1)(B) of the Act is affiliated with the
person who uses the merchandise described in (1)(B) to assemble or
complete in the foreign country the
[[Page 36533]]
merchandise that is subsequently imported in the United States; and (C)
whether imports into the foreign country of the merchandise described
in (1)(B) have increased after initiation of the investigation which
resulted in the issuance of such order or finding.
1. Pattern of Trade
The petitioner argues that the pattern of trade demonstrates
circumvention of the Orders.\32\ The petitioner asserts that, since the
investigations and imposition of the Orders, Chinese exports of plywood
to the United States have decreased substantially. The petitioner
further states that U.S imports of plywood from Vietnam have increased
by approximately 950 percent while Chinese exports of plywood to
Vietnam have effectively doubled since 2015. In addition, trade data
submitted by the petitioner indicate that Chinese exports of wood
veneers to Vietnam have increased by more than 350 percent over the
same period.\33\ The petitioner also points out that the Vietnamese
government not only has recognized the nature of these trade trends,
but it also suspects that the surge in exports of plywood products to
the United States from Vietnam is a result of Chinese companies
improperly seeking to avoid tariffs.\34\
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\32\ See Petitioner's Request at 46-47.
\33\ See Petitioner's Clarification at Exhibit 2.
\34\ See Petitioner's Request at 46-47.
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2. Affiliation
The petitioner asserts that it has reason to believe that some of
the Chinese producers/exporters and Vietnamese assembly operators are
affiliated. It argues that importers that previously imported Chinese
plywood to the United States are now importing significant quantities
of plywood from Vietnam from certain Vietnamese producers/exporters.
The petitioner claims that this suggests that there may be a
relationship between the prior Chinese producers/exporters and the
entities that are now importing from Vietnam.\35\
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\35\ Id. at 48.
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3. Subsequent Import Volume
The petitioner presents evidence indicating that Chinese exports of
plywood to the United States have decreased substantially since the
implementation of the Orders.\36\ The evidence also shows that U.S
imports of plywood from Vietnam have skyrocketed since 2015, increasing
by approximately 950 percent. At the same time, Chinese exports of
plywood to Vietnam have doubled.
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\36\ Id. at 49.
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Conclusion
Based on the available information provided by the petitioner, we
determine that there is sufficient basis to initiate anti-circumvention
inquiries, pursuant to section 781(b) of the Act and 19 CFR 351.225(h).
Commerce will determine whether the merchandise subject to the
inquiries (as described in the ``Merchandise Subject to the Anti-
Circumvention Inquiry'' section supra) is circumventing the Orders such
that it should be considered to be within the scope of the Orders.
We find that the available information warrants initiating these
anti-circumvention inquiries on a country-wide basis.\37\ Commerce has
taken this approach in prior anti-circumvention inquiries, where the
facts warranted initiation on a country-wide basis.\38\ Consistent with
the approach in these prior anti-circumvention inquiries initiated on a
country-wide basis, Commerce intends to request comments from
interested parties regarding respondent selection and to issue
questionnaires to solicit information from producers and exporters in
Vietnam concerning their shipments of plywood to the United States and
the origin of any plywood components being processed into completed
plywood. A company's failure to respond completely and timely 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.
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\37\ Id. at Exhibit 6.
\38\ 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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Additionally, as part of these anti-circumvention inquiries, we
intend to examine the scope inquiry requests filed by the petitioner
under 19 CFR 351.225(c), as discussed below.\39\ Our final findings in
these anti-circumvention inquiries will include a final finding with
regard to the scope inquiries to the extent that they determine whether
any of the production scenarios identified by the petitioner are
properly considered subject to the scope of the Orders. Additionally,
Commerce is aligning the deadline to issue a final determination in the
EAPA scope inquiries with the deadline associated with these anti-
circumvention inquiries.\40\
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\39\ See Petitioner's Request at 21-31.
\40\ See EAPA Scope Inquiry Initiation.
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In accordance with 19 CFR 351.225(l)(2), if Commerce issues
preliminary affirmative determinations, 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 inquiries.
Before issuance of any affirmative determination, Commerce intends
to notify the ITC of any proposed inclusion of the inquiry merchandise
under the scope of the Orders, in accordance with section 781(e)(1)(B)
of the Act. Pursuant to section 781(f) of the Act, Commerce intends to
issue its final determinations within 300 days of the date of
publication of this notice of initiation.
Initiation of Scope Inquiries
The scope of the Orders states that the scope ``includes hardwood
and decorative plywood that has been further processed in a third
country, including but not limited to trimming, cutting, notching,
punching, drilling, or any other processing that would not otherwise
remove the merchandise from the scope of the Orders if performed in the
country of manufacture of the in-scope product.'' \41\
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\41\ See Appendix.
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The petitioner requests that Commerce confirm that, where Chinese
producers and/or exporters are shipping the main components of plywood
that are manufactured in China, as explained above, to Vietnam for
assembly into completed plywood before being imported to the United
States, such further processing does not remove the merchandise from
the coverage of the Orders.\42\ Because the scope of the Orders
provides that certain types of further processing do not remove the
merchandise from the Orders, we find it appropriate to also initiate
scope inquiries, in accordance with 19 CFR 351.225(e), to determine if
any of the products made in the production
[[Page 36534]]
scenarios described by the petitioner are covered by the scope of the
Orders.
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\42\ See Petitioner's Request at 21-30.
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Notification to Interested Parties
This notice is published in accordance with sections 781(b) of the
Act and 19 CFR 351.225(e) and (h).
Dated: June 9, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
Appendix--Scope of the Orders
The merchandise covered by the Orders is hardwood and decorative
plywood, and certain veneered panels as described below. For
purposes of this proceeding, hardwood and decorative plywood is
defined as a generally flat, multilayered plywood or other veneered
panel, consisting of two or more layers or plies of wood veneers and
a core, with the face and/or back veneer made of non-coniferous wood
(hardwood) or bamboo. The veneers, along with the core may be glued
or otherwise bonded together. Hardwood and decorative plywood may
include products that meet the American National Standard for
Hardwood and Decorative Plywood, ANSI/HPVA HP-1-2016 (including any
revisions to that standard).
For purposes of the Orders, a ``veneer'' is a slice of wood
regardless of thickness which is cut, sliced or sawed from a log,
bolt, or flitch. The face and back veneers are the outermost veneer
of wood on either side of the core irrespective of additional
surface coatings or covers as described below.
The core of hardwood and decorative plywood consists of the
layer or layers of one or more material(s) that are situated between
the face and back veneers. The core may be composed of a range of
materials, including but not limited to hardwood, softwood,
particleboard, or medium-density fiberboard (MDF).
All hardwood plywood is included within the scope of the Orders
regardless of whether or not the face and/or back veneers are
surface coated or covered and whether or not such surface coating(s)
or covers obscures the grain, textures, or markings of the wood.
Examples of surface coatings and covers include, but are not limited
to: Ultra violet light cured polyurethanes; oil or oil-modified or
water based polyurethanes; wax; epoxy-ester finishes; moisture-cured
urethanes; paints; stains; paper; aluminum; high pressure laminate;
MDF; medium density overlay (MDO); and phenolic film. Additionally,
the face veneer of hardwood plywood may be sanded; smoothed or given
a ``distressed'' appearance through such methods as hand-scraping or
wire brushing. All hardwood plywood is included within the scope
even if it is trimmed; cut-to-size; notched; punched; drilled; or
has underwent other forms of minor processing.
All hardwood and decorative plywood is included within the scope
of the Orders, without regard to dimension (overall thickness,
thickness of face veneer, thickness of back veneer, thickness of
core, thickness of inner veneers, width, or length). However, the
most common panel sizes of hardwood and decorative plywood are 1,219
x 1,829 mm (48 x 72 inches), 1,219 x 2,438 mm (48 x 96 inches), and
1,219 x 3,048 mm (48 x 120 inches).
Subject merchandise also includes hardwood and decorative
plywood that has been further processed in a third country,
including but not limited to trimming, cutting, notching, punching,
drilling, or any other processing that would not otherwise remove
the merchandise from the scope of the Orders if performed in the
country of manufacture of the in-scope product.
The scope of the orders excludes the following items: (1)
Structural plywood (also known as ``industrial plywood'' or
``industrial panels'') that is manufactured to meet U.S. Products
Standard PS 1-09, PS 2-09, or PS 2-10 for Structural Plywood
(including any revisions to that standard or any substantially
equivalent international standard intended for structural plywood),
and which has both a face and a back veneer of coniferous wood; (2)
products which have a face and back veneer of cork; (3) multilayered
wood flooring, as described in the antidumping duty and
countervailing duty orders on Multilayered Wood Flooring from the
People's Republic of China, Import Administration, International
Trade Administration. See Multilayered Wood Flooring from the
People's Republic of China, 76 FR 76690 (December 8, 2011) (amended
final determination of sales at less than fair value and antidumping
duty order), and Multilayered Wood Flooring from the People's
Republic of China, 76 FR 76693 (December 8, 2011) (countervailing
duty order), as amended by Multilayered Wood Flooring from the
People's Republic of China: Amended Antidumping and Countervailing
Duty Orders, 77 FR 5484 (February 3, 2012); (4) multilayered wood
flooring with a face veneer of bamboo or composed entirely of
bamboo; (5) plywood which has a shape or design other than a flat
panel, with the exception of any minor processing described above;
(6) products made entirely from bamboo and adhesives (also known as
``solid bamboo''); and (7) Phenolic Film Faced Plyform (PFF), also
known as Phenolic Surface Film Plywood (PSF), defined as a panel
with an ``Exterior'' or ``Exposure 1'' bond classification as is
defined by The Engineered Wood Association, having an opaque
phenolic film layer with a weight equal to or greater than 90g/m3
permanently bonded on both the face and back veneers and an opaque,
moisture resistant coating applied to the edges.
Excluded from the scope of the orders are wooden furniture goods
that, at the time of importation, are fully assembled and are ready
for their intended uses. Also excluded from the scope of the Orders
is ``ready to assemble'' (RTA) furniture. RTA furniture is defined
as (A) furniture packaged for sale for ultimate purchase by an end-
user that, at the time of importation, includes (1) all wooden
components (in finished form) required to assemble a finished unit
of furniture, (2) all accessory parts (e.g., screws, washers,
dowels, nails, handles, knobs, adhesive glues) required to assemble
a finished unit of furniture, and (3) instructions providing
guidance on the assembly of a finished unit of furniture; (B)
unassembled bathroom vanity cabinets, having a space for one or more
sinks, that are imported with all unassembled hardwood and hardwood
plywood components that have been cut-to-final dimensional component
shape/size, painted or stained prior to importation, and stacked
within a singled shipping package, except for furniture feet which
may be packed and shipped separately; or (C) unassembled bathroom
vanity linen closets that are imported with all unassembled hardwood
and hardwood plywood components that have been cut-to-final
dimensional shape/size, painted or stained prior to importation, and
stacked within a single shipping package, except for furniture feet
which may be packed and shipped separately.
Excluded from the scope of the orders are kitchen cabinets that,
at the time of importation, are fully assembled and are ready for
their intended uses. Also excluded from the scope of the Orders are
RTA kitchen cabinets. RTA kitchen cabinets are defined as kitchen
cabinets packaged for sale for ultimate purchase by an end-user
that, at the time of importation, includes (1) all wooden components
(in finished form) required to assemble a finished unit of
cabinetry, (2) all accessory parts (e.g., screws, washers, dowels,
nails, handles, knobs, hooks, adhesive glues) required to assemble a
finished unit of cabinetry, and (3) instructions providing guidance
on the assembly of a finished unit of cabinetry.
Excluded from the scope of the orders are finished table tops,
which are table tops imported in finished form with pre-cut or
drilled openings to attach the underframe or legs. The table tops
are ready for use at the time of import and require no further
finishing or processing.
Excluded from the scope of the orders are finished countertops
that are imported in finished form and require no further finishing
or manufacturing.
Excluded from the scope of the orders are laminated veneer
lumber door and window components with (1) a maximum width of 44
millimeters, a thickness from 30 millimeters to 72 millimeters, and
a length of less than 2,413 millimeters (2) water boiling point
exterior adhesive, (3) a modulus of elasticity of 1,500,000 pounds
per square inch or higher, (4) finger-jointed or lap-jointed core
veneer with all layers oriented so that the grain is running
parallel or with no more than 3 dispersed layers of veneer oriented
with the grain running perpendicular to the other layers; and (5)
top layer machined with a curved edge and one or more profile
channels throughout.
Imports of hardwood plywood are primarily entered under the
following Harmonized Tariff Schedule of the United States (HTSUS)
subheadings: 4412.10.0500; 4412.31.0520; 4412.31.0540; 4412.31.0560;
4412.31.0620; 4412.31.0640; 4412.31.0660; 4412.31.2510;
4412.31.2520; 4412.31.2610; 4412.31.2620; 4412.31.4040;
4412.31.4050; 4412.31.4060; 4412.31.4075; 4412.31.4080;
4412.31.4140; 4412.31.4150; 4412.31.4155; 4412.31.4160;
4412.31.4180; 4412.31.5125; 4412.31.5135; 4412.31.5155;
4412.31.5165;
[[Page 36535]]
4412.31.5175; 4412.31.5235; 4412.31.5255; 4412.31.5265;
4412.31.5275; 4412.31.6000; 4412.31.6100; 4412.31.9100;
4412.31.9200; 4412.32.0520; 4412.32.0540; 4412.32.0565;
4412.32.0570; 4412.32.0620; 4412.32.0640; 4412.32.0670;
4412.32.2510; 4412.32.2525; 4412.32.2530; 4412.32.2610;
4412.32.2630; 4412.32.3125; 4412.32.3135; 4412.32.3155;
4412.32.3165; 4412.32.3175; 4412.32.3185; 4412.32.3235;
4412.32.3255; 4412.32.3265; 4412.32.3275; 4412.32.3285;
4412.32.5600; 4412.32.3235; 4412.32.3255; 4412.32.3265;
4412.32.3275; 4412.32.3285; 4412.32.5700; 4412.33.0620;
4412.33.0640; 4412.33.0670; 4412.33.2630; 4412.33.3235;
4412.33.3255; 4412.33.3265; 4412.33.3275; 4412.33.3285;
4412.33.5700; 4412.34.2600; 4412.34.3235; 4412.34.3255;
4412.34.3265; 4412.34.3275; 4412.34.3285; 4412.34.5700;
4412.39.1000; 4412.39.3000; 4412.39.4011; 4412.39.4012;
4412.39.4019; 4412.39.4031; 4412.39.4032; 4412.39.4039;
4412.39.4051; 4412.39.4052; 4412.39.4059; 4412.39.4061;
4412.39.4062; 4412.39.4069; 4412.39.5010; 4412.39.5030;
4412.39.5050; 4412.94.1030; 4412.94.1050; 4412.94.3105;
4412.94.3111; 4412.94.3121; 4412.94.3141; 4412.94.3161;
4412.94.3175; 4412.94.4100; 4412.99.0600; 4412.99.1020;
4412.99.1030; 4412.99.1040; 4412.99.3110; 4412.99.3120;
4412.99.3130; 4412.99.3140; 4412.99.3150; 4412.99.3160;
4412.99.3170; 4412.99.4100; 4412.99.5115; and 4412.99.5710.
Imports of hardwood plywood may also enter under HTSUS
subheadings 4412.10.9000; 4412.94.5100; 4412.94.9500; 4412.99.6000;
4412.99.7000; 4412.99.8000; 4412.99.9000; 4412.99.9500;
9403.90.7005; 9403.90.7010; and 9403.90.7080. While the HTSUS
subheadings are provided for convenience and customs purposes, the
written description of the scope of these orders is dispositive.
[FR Doc. 2020-13075 Filed 6-16-20; 8:45 am]
BILLING CODE 3510-DS-P
