Polyester Textured Yarn From the People's Republic of China: Preliminary Affirmative Determinations of Critical Circumstances in the Antidumping and Countervailing Duty Investigations
| Published date | 23 April 2019 |
| Citation | 84 FR 16840 |
| Record Number | 2019-08275 |
| Section | Notices |
| Court | Commerce Department,International Trade Administration |
Federal Register, Volume 84 Issue 78 (Tuesday, April 23, 2019)
[Federal Register Volume 84, Number 78 (Tuesday, April 23, 2019)]
[Notices]
[Pages 16840-16843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08275]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-097 and C-570-098]
Polyester Textured Yarn From the People's Republic of China:
Preliminary Affirmative Determinations of Critical Circumstances in the
Antidumping and Countervailing Duty Investigations
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) preliminarily determines
that critical circumstances exist with respect to all imports of
polyester textured yarn (yarn) from the People's Republic of China
(China).
DATES: Applicable April 23, 2019.
FOR FURTHER INFORMATION CONTACT: George Ayache, AD/CVD Operations,
Office VIII, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
[[Page 16841]]
NW, Washington, DC 20230; telephone (202) 482-2623.
SUPPLEMENTARY INFORMATION:
Background
On October 18, 2018, Commerce received antidumping duty (AD) and
countervailing duty (CVD) petitions concerning imports of yarn from
China filed in proper form on behalf of Unifi Manufacturing, Inc. and
Nan Ya Plastics Corp. America (the petitioners).\1\ On November 19,
2018, we published the notices of initiation of the AD and CVD
investigations.\2\
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\1\ See the petitioners' letter, ``Polyester Textured Yarn from
the People's Republic of China and India--Petition for the
Imposition of Antidumping and Countervailing Duties,'' dated October
18, 2018 (Petitions).
\2\ See Polyester Textured Yarn from India and the People's
Republic of China: Initiation of Less-Than-Fair-Value
Investigations, 83 FR 58223 (November 19, 2018); see also Polyester
Textured Yarn from India and the People's Republic of China:
Initiation of Countervailing Duty Investigations, 83 FR 58232
(November 19, 2018).
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In the AD investigation, Commerce selected Fujian Billion
Polymerization Fiber Technology Industrial Co., Ltd. (Fujian Billion),
Fujian Zhengqi High Tech Fiber, and Suzhou Shenghong Fiber Co., Ltd.
(Suzhou Shenghong) as the respondents for individual examination.\3\ In
the CVD investigation, Commerce selected Fujian Billion, Jiangsu
Shenghong Textile Imp & Exp Co., Suzhou Shenghong, and Suzhou Shenghong
Garmant Development Co.\4\ On April 2, 2019, the petitioners alleged
that critical circumstances exist with respect to imports of yarn from
China, pursuant to sections 703(e)(1) and 733(e)(1) of the Tariff Act
of 1930, as amended (the Act), and 19 CFR 351.206.\5\
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\3\ See Memorandum, ``Less-Than-Fair-Value Investigation of
Polyester Textured Yarn from the People's Republic of China:
Respondent Selection,'' dated December 11, 2018.
\4\ See Memorandum, ``Countervailing Duty Investigation of
Polyester Textured Yarn from the People's Republic of China:
Respondent Selection,'' dated December 11, 2018.
\5\ See the petitioners' letter, ``Polyester Textured Yarn from
the People's Republic of China--Petitioners' Allegation of Critical
Circumstances,'' dated April 2, 2018 (Critical Circumstances
Allegation).
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In accordance with 19 CFR 351.206(c)(2)(i), if the petitioner
submits an allegation of critical circumstances more than 20 days
before the scheduled date of the preliminary determination, Commerce
must issue a preliminary finding whether there is a reasonable basis to
believe or suspect that critical circumstances exist by no later than
the date of the preliminary determination.\6\ In these AD and CVD
investigations, the petitioners requested that Commerce issue
preliminary critical circumstances determinations on an expedited
basis.\7\
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\6\ The preliminary determination for the AD investigation is
currently due no later than June 25, 2019, and the preliminary
determination for the CVD investigation is currently due no later
than April 26, 2019.
\7\ See Critical Circumstances Allegation at 3-5.
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Section 703(e)(1) of the Act provides that Commerce, upon receipt
of a timely allegation of critical circumstances, will preliminarily
determine that critical circumstances exist in CVD investigations if
there is a reasonable basis to believe or suspect that: (A) ``the
alleged countervailable subsidy'' is inconsistent with the Subsidies
and Countervailing Measures (SCM) Agreement of the World Trade
Organization; and (B) there have been massive imports of the subject
merchandise over a relatively short period. Section 733(e)(1) of the
Act provides that Commerce, upon receipt of a timely allegation of
critical circumstances, will preliminarily determine that critical
circumstances exist in AD investigations if there is a reasonable basis
to believe or suspect that: (A)(i) There is a history of dumping and
material injury by reason of dumped imports in the United States or
elsewhere of the subject merchandise, or (ii) the person by whom, or
for whose account, the merchandise was imported knew or should have
known that the exporter was selling the subject merchandise at less
than its fair value and that there was likely to be material injury by
reason of such sales; and (B) there have been massive imports of the
subject merchandise over a relatively short period.
Sections 351.206(h)(2) and (i) of Commerce's regulations provide
that imports must increase by at least 15 percent during the
``relatively short period'' to be considered ``massive'' and defines a
``relatively short period'' as normally being the period beginning on
the date the proceeding begins (i.e., the date the petition is filed)
and ending at least three months later. Commerce's regulations also
provide, however, that if Commerce finds that importers, or exporters
or producers, had reason to believe, at some time prior to the
beginning of the proceeding, that a proceeding was likely, Commerce may
consider a period of not less than three months from that earlier
time.\8\
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\8\ See 19 CFR 351.206(i).
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Critical Circumstances Analysis
Alleged Countervailable Subsidies Are Inconsistent With the SCM
Agreement
To determine whether an alleged countervailable subsidy is
inconsistent with the SCM Agreement, in accordance with section
703(e)(1)(A) of the Act, Commerce considered the evidence currently on
the record of the CVD investigation. Specifically, as reflected in the
initiation checklist, the following subsidy programs, alleged in the
Petitions and supported by information reasonably available to the
petitioners, appear to be either export contingent or contingent upon
the use of domestic goods over imported goods, which would render them
inconsistent with the SCM Agreement: \9\
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\9\ See CVD Initiation Checklist: Polyester Textured Yarn from
the People's Republic of China, dated November 7, 2018.
Export Loans from Chinese State-Owned Banks
Export Seller's Credit
Export Buyer's Credit
Export Credit Guarantees
GOC and Sub-Central Government Subsidies for the Development
of Famous Brands and China World Top Brands
SME International Market Exploration/Development Fund
Export Assistance Grants
VAT Refunds for FIEs Purchasing Domestically-Produced
Equipment
Therefore, Commerce preliminarily determines that there is a
reasonable basis to believe or suspect that alleged subsidies in the
CVD investigation are inconsistent with the SCM Agreement.
History of Dumping and Material Injury/Knowledge of Sales Below Fair
Value and Material Injury
To determine whether there is a history of dumping pursuant to
section 733(e)(1)(A)(i) of the Act, Commerce generally considers
current or previous AD orders on subject merchandise from the country
in question in the United States and current orders imposed by other
countries regarding imports of the same merchandise. However, in the
Critical Circumstances Allegation, the petitioners did not provide
information on the history of dumping.\10\
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\10\ See Critical Circumstances Allegation at 5-7.
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To determine whether importers knew or should have known that
exporters were selling the subject merchandise at less than fair value
pursuant to section 733(e)(1)(A)(ii) of the Act, we typically consider
the magnitude of dumping margins, including margins alleged in
petitions.\11\
[[Page 16842]]
Commerce has found margins of 15 percent or more (for constructed
export price) to 25 percent or more (for export price) to be sufficient
for this purpose.\12\ The dumping margins of 74.98 percent and 77.15
percent alleged in the AD Petition Supplement significantly exceed the
15 to 25 percent threshold.\13\ Therefore, on that basis, we
preliminarily conclude importers knew, or should have known, that
exporters in China were selling at less than fair value.
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\11\ See, e.g., Notice of Preliminary Determinations of Critical
Circumstances: Certain Cold-Rolled Carbon Steel Flat Products from
Australia, the People's Republic of China, India, the Republic of
Korea, the Netherlands, and the Russian Federation, 67 FR 19157,
19158 (April 18, 2002) (unchanged in Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel
Flat Products from Australia, 67 FR 47509 (July 19, 2002), Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Carbon Steel Flat Products from the People's Republic of
China, 67 FR 62107 (October 3, 2002), Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel
Flat Products from India, 67 FR 47518 (July 19, 2002), Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Carbon Steel Flat Products from Korea, 67 FR 62124 (October
3, 2002), Notice of Final Determination of Sales at Less Than Fair
Value and Critical Circumstances: Certain Cold-Rolled Carbon Steel
Flat Products from The Netherlands, 67 FR 62112 (October 3, 2002),
Notice of the Final Determination Sales at Less Than Fair Value and
Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat
Products from the Russian Federation, 67 FR 62121 (October 3,
2002)).
\12\ Id.
\13\ See the petitioners' letter, ``Polyester Textured Yarn from
the People's Republic of China--Petitioners' Supplement for Volume
II Regarding China Antidumping Duties,'' dated October 29, 2018 (AD
Petition Supplement), at 7 and Exhibit AD-PRC-Supp-5.
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To determine whether importers knew, or should have known, that
there was likely to be material injury caused by reason of such imports
pursuant section 733(e)(1)(A)(ii) of the Act, Commerce normally will
look to the preliminary injury determination of the International Trade
Commission (ITC).\14\ If the ITC finds a reasonable indication of
material injury to the relevant U.S. industry, Commerce will determine
that a reasonable basis exists to impute importer knowledge that
material injury is likely by reason of such imports. In these
investigations, the ITC found that there is a ``reasonable indication''
of material injury to the domestic industry because of the imported
subject merchandise.\15\ Therefore, the ITC's preliminary injury
determination in the AD investigation is sufficient to impute importer
knowledge.
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\14\ See, e.g., Antidumping and Countervailing Duty
Investigations of Certain Softwood Lumber Products from Canada:
Preliminary Determinations of Critical Circumstances, 82 FR 19219,
19220 (April 26, 2017) (Softwood Lumber from Canada Preliminary
Critical Circumstances Determination), unchanged in Certain Softwood
Lumber Products from Canada: Final Affirmative Determination of
Sales at Less Than Fair Value and Affirmative Final Determination of
Critical Circumstances, 82 FR 51806, 51807-08 (November 8, 2017)
(Softwood Lumber from Canada Final AD Determination).
\15\ See Polyester Textured Yarn from China and India:
Investigation Nos. 701-TA-612-613 and 731-1429-1430 (Preliminary),
83 FR 63532 (December 10, 2018).
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Massive Imports
In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to sections 703(e)(1)(B) and
733(e)(1)(B) of the Act, Commerce normally compares the import volumes
of the subject merchandise for at least three months immediately
preceding the filing of the petition (i.e., the ``base period'') to a
comparable period of at least three months following the filing of the
petition (i.e., the ``comparison period'').\16\ Imports will normally
be considered massive when imports during the comparison period have
increased by 15 percent or more compared to imports during the base
period.\17\
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\16\ See Softwood Lumber from Canada Preliminary Critical
Circumstances Determination, 82 FR at 19220, unchanged in Softwood
Lumber from Canada Final AD Determination, 82 FR at 51807-08.
\17\ Id.
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Accordingly, to determine preliminarily whether there has been a
massive surge in imports for each mandatory respondent which provided
shipment data, Commerce compared the total volume of shipments from
November 2018 through January 2019, the comparison period (i.e., all
months for which shipment data was available), with the preceding
three-month period of August 2018 through October 2018, the base
period. Regarding the CVD investigation, for ``all others,'' Commerce
compared Global Trade Atlas (GTA) data for the period November 2018
through January 2019 with the preceding three-month period of August
2018 through October 2018,\18\ after subtracting from the GTA data
shipments reported by the mandatory respondents which provided such
data. Similarly, regarding the AD investigation, for non-individually
examined companies requesting separate rate status, we performed the
same comparison. For those mandatory respondents in either the CVD or
AD investigation that are not participating in the investigation, we
preliminarily determine, on the basis of adverse facts available,\19\
that there has been a massive surge in imports. Accordingly, based on
our analysis of information on the record, we preliminarily determine
that all producers/exporters of yarn from China had massive surges in
imports.\20\
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\18\ Commerce gathered GTA data under the following harmonized
tariff schedule numbers: 5402.33.3000 and 5402.33.6000.
\19\ See section 776 of the Act.
\20\ See Memorandum, ``Polyester Textured Yarn from the People's
Republic of China: Preliminary Critical Circumstances Calculation,''
dated concurrently with this notice.
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Based on the criteria and findings discussed above, we
preliminarily determine in both the AD and CVD investigations that
critical circumstances exist with respect to all imports of yarn from
China.
Final Critical Circumstances Determination
We will issue our final determinations concerning critical
circumstances when we issue our final CVD and AD determinations. All
interested parties will have the opportunity to address this
determination in case briefs to be submitted after the completion of
the preliminary CVD and AD determinations by a deadline to be
established at a later date.
ITC Notification
In accordance with sections 703(f) and 733(f) of the Act, we will
notify the ITC of these preliminary determinations of critical
circumstances.
Suspension of Liquidation
In accordance with section 703(e)(2) of the Act, because we have
preliminarily found that critical circumstances exist with regard to
imports from all producers and exporters of yarn from China, if we make
an affirmative preliminary determination that countervailable subsidies
have been provided to these same producers/exporters at above de
minimis rates, we will instruct U.S. Customs and Border Protection
(CBP) to suspend liquidation of all entries of subject merchandise from
these producers/exporters that are entered, or withdrawn from warehouse
for consumption, on or after the date that is 90 days prior to the
effective date of ``provisional measures'' (e.g., the date of
publication in the Federal Register of the notice of an affirmative
preliminary determination that countervailable subsidies have been
provided at above de minimis rates). At such time, we will also
instruct CBP to require a cash deposit equal to the estimated
preliminary subsidy rates reflected in the preliminary determination
published in the Federal Register. The suspension of liquidation will
remain in effect until further notice.
In accordance with section 733(e)(2) of the Act, because we have
preliminarily found that critical circumstances exist with regard to
imports from all producers and
[[Page 16843]]
exporters of yarn from China, if we make an affirmative preliminary
determination that sales at less than fair value have been made by
these same producers/exporters at above de minimis rates, we will
instruct CBP to suspend liquidation of all entries of subject
merchandise from these producers/exporters that are entered, or
withdrawn from warehouse, for consumption on or after the date that is
90 days prior to the effective date of ``provisional measures'' (e.g.,
the date of publication in the Federal Register of the notice of an
affirmative preliminary determination of sales at LTFV at above de
minimis rates). At such time, we will also instruct CBP to require a
cash deposit equal to the estimated preliminary dumping margins
reflected in the preliminary determination published in the Federal
Register. The suspension of liquidation will remain in effect until
further notice.
These determinations are issued and published pursuant to section
777(i)(1) of the Act and 19 CFR 351.206(c)(2).
Dated: April 18, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2019-08275 Filed 4-22-19; 8:45 am]
BILLING CODE 3510-DS-P
