2024-29911. Oil Country Tubular Goods From the People's Republic of China: Initiation of Circumvention Inquiry on the Antidumping and Countervailing Duty Orders

Document Headings

Document headings vary by document type but may contain the following:

1. the agency or agencies that issued and signed a document
2. the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to
3. the agency docket number / agency internal file number
4. the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions

See the Document Drafting Handbook for more details.

Department of Commerce

International Trade Administration

1. [A-570-943, C-570-944]

AGENCY:

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

SUMMARY:

In response to a request from the Committee on Pipe and Tube Imports Subcommittee for OCTG (the CPTI OCTG Subcommittee) and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (USW) (collectively, the requestors), the U.S. Department of Commerce (Commerce) is initiating a country-wide circumvention inquiry to determine whether imports of seamless oil country tubular goods (OCTG) from the People's Republic of China (China) which are completed in Thailand from steel billets produced in China are circumventing the antidumping (AD) and countervailing duty (CVD) orders on OCTG from China.

DATES:

Applicable December 18, 2024.

FOR FURTHER INFORMATION CONTACT:

Barb Rawdon, AD/CVD Office of Policy, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On July 18, 2024, pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.226(i), the requestors ^[1] filed a circumvention inquiry request alleging that OCTG completed in Thailand using steel billets manufactured in China, is circumventing the AD and CVD orders on OCTG from China ^[2] and, accordingly, should be included within the scope of the Orders .^[3] On August 20, 2024, we extended the deadline to initiate this circumvention inquiry in accordance with 19 CFR 351.226(d)(1).^[4]

On September 6, 2023, we issued a supplemental (deficiency) questionnaire to the requestors, directing them to re-submit their inquiry requests and provide additional information.^[5] In our 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 the 30-day time period for Commerce to consider whether to initiate on the requestors' circumvention inquiry will begin with the requestors' response to Commerce's September 6, 2024, letter.^[6] On September 25, 2024, the requestors filed their response.^[7] On October 23, 2024, Commerce issued a second supplemental questionnaire.^[8] In our 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 the 30-day time period for Commerce to consider whether to initiate on the requestors' circumvention inquiry will begin with the requestors' response to Commerce's October 23, 2024, letter.^[9] On November 12, 2024, the requestors responded to Commerce's request for information.^[10] Thus, we consider the inquiry request to have been filed on November 12, 2024.

Scope of the Orders

The merchandise covered by the scope of the Orders is OCTG, which are hollow steel products of circular cross-section, including oil well casing and tubing, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish. For a full description of the scope of the Orders, see the Circumvention Initiation Checklist.^[11]

Merchandise Subject to the Circumvention Inquiry

The circumvention inquiry covers seamless OCTG completed in Thailand using Chinese-produced steel billets, and subsequently exported from Thailand 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 ( print page 102865) 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 allege “that the elements necessary for a circumvention determination under section 781 of the Act exist” and be “accompanied by information reasonably available to the interested party supporting these allegations.” The requestors alleged circumvention pursuant to section 781(b) of the Act (merchandise completed or assembled in other foreign countries).

Section 781(b)(1) of the Act provides that Commerce may find circumvention of an 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; (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 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.

In determining whether the process of assembly or completion in a foreign country is minor or insignificant under section 781(b)(1)(C) of the Act, section 781(b)(2) of the Act directs Commerce to consider: (A) the level of investment in the foreign country; (B) the level of research and development in the foreign country; (C) the nature of the production process in the foreign country; (D) the extent of production facilities in the foreign country; and (E) whether 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 foreign country is minor or insignificant.^[12] Accordingly, Commerce will evaluate each of these five factors as they exist in the foreign country, depending on the particular circumvention scenario.

In addition, section 781(b)(3) of the Act sets forth additional factors to consider in determining whether to include merchandise assembled or completed in a foreign country within the scope of an AD or CVD order. Specifically, Commerce shall take into account such factors as: (A) the pattern of trade, including sourcing patterns; (B) whether the manufacturer or exporter of the merchandise that was shipped to the foreign country is affiliated with the person who, in the foreign 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 foreign country have increased after the initiation of the investigation that resulted in the issuance of such order.

Analysis

Based on our analysis of the requestors' circumvention inquiry request, we determine that they have satisfied the criteria under 19 CFR 351.226(c), and thus, pursuant to 19 CFR 351.226(d)(1)(iii), we are initiating the requested circumvention inquiry. For a full discussion of the basis for our decision to initiate this circumvention inquiry, see the Circumvention Initiation Checklist. As explained in the Circumvention Initiation Checklist, the information provided by the requestors 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.^[13]

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 Thailand concerning their shipments of OCTG made from Chinese-origin steel billets to the United States.

Respondent Selection

Commerce intends to base respondent selection on responses to quantity and value (Q&V) questionnaires. Commerce intends to identify the companies to which it will issue the Q&V questionnaire, in part, based on U.S. Customs and Border Protection (CBP) data. Parties to which Commerce does not issue the Q&V questionnaire may also respond to the Q&V questionnaire, which will be available on Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS), before the applicable deadline. ACCESS is available to registered users at https://access.trade.gov.

Commerce intends to place the CBP data on the record via ACCESS within five days of the publication of this initiation notice. Comments regarding the CBP data and respondent selection should be submitted within seven days after placement of the CBP data on the record of the inquiry.

Commerce intends to establish a schedule for questionnaire responses after Commerce selects respondents. A company's failure to completely respond to Commerce's requests for information may result in the application of 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 CBP of this 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 and to apply the cash deposit rates that would be applicable if the products were determined to be covered by the scope of the Orders. Should Commerce issue affirmative 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 requestors' request for a 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 OCTG from China, which is completed in Thailand from steel billets produced in China, is circumventing the Orders. In addition, we have included a description of the products that are the subject to this inquiry and an explanation of Commerce's decision to initiate this inquiry as provided in the accompanying Circumvention Initiation ( print page 102866) Checklist.^[14] In accordance with 19 CFR 351.226(e)(1), Commerce intends to issue its preliminary circumvention determination no later than 150 days from the date of publication of the notice of initiation of this 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)(iii).

Dated: December 12, 2024.

Abdelali Elouaradia,

Deputy Assistant Secretary for Enforcement and Compliance.

Footnotes

1.  The Requestors are the Committee on Pipe and Tube Imports Subcommittee for OCTG (CPTI OCTG Subcommittee) and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (USW). The individual members of the CPTI OCTG Subcommittee are Axis Pipe and Tube, Benteler Steel & Tube Corporation, Borusan Mannesmann Pipe US Inc., PTC Liberty Tubulars LLC, Vallourec Star, and Welded Tube USA, Inc. See Requestors' Letter, “Response to Second Request for Information,” dated November 12, 2024 (Circumvention Request).

2.   See Certain Oil Country Tubular Goods from the People's Republic of China: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order,75 FR 28551 (May 21, 2010); see also Certain Oil Country Tubular Goods from the People's Republic of China: Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order,75 FR 3203 (January 20, 2010) (collectively, Orders).

3.   See Requestor's Letter, “Request for Circumvention Inquiry,” dated July 18, 2024.

4.   See Memorandum, “Extension of Time to Determine Whether to Initiate Circumvention Inquiry,” dated August 20, 2024.

5.   See Commerce's Letter, “Supplemental Questionnaire,” dated September 6, 2024.

6.   Id.

7.   See Requestors' Letter, “Request for Circumvention Inquiry,” dated September 25, 2024.

8.   See Commerce's Letter, “Supplemental Questionnaire,” dated October 23, 2024.

9.   Id.

10.   See Circumvention Request.

11.   See Initiation Checklist, “OCTG Completed in Thailand Circumvention Initiation Checklist,” dated concurrently with, and hereby adopted by, this notice (Circumvention Initiation Checklist) at Attachment I.

12.   See Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Doc. 103-316, Vol. 1 (1994), at 893.

13.   See, e.g., Hydrofluorocarbon Blends from the People's Republic of China: Initiation of Circumvention Inquiry on the Antidumping Duty Order,88 FR 74150 (October 30, 2023).

14.   See Circumvention Initiation Checklist at 13.