Notice2023-14371
Hydrofluorocarbon Blends From the People's Republic of China: Initiation of Circumvention Inquiries on the Antidumping Duty Order
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Published
July 7, 2023
Issuing agencies
Commerce DepartmentInternational Trade Administration
Abstract
In response to a request from the American HFC Coalition (the petitioner), the U.S. Department of Commerce (Commerce) is initiating four country-wide circumvention inquiries to determine whether: (1) U.S. imports from the People's Republic of China (China) of R-410B, R- 407G, and a custom blend, which are further processed in the United States, are circumventing the antidumping duty (AD) order on hydrofluorocarbon (HFC) blends from China; (2) U.S. imports from Malaysia of R-410A and R-407C, which are completed in Malaysia using Chinese components, are circumventing the AD order on HFC blends from China; (3) U.S. imports of R-410B from Turkey, which are completed in Turkey using Chinese components and further processed in the United States, are circumventing the AD order on HFC blends from China; and (4) U.S. imports of R-410A from Turkey, which are completed in Turkey using Chinese components, are circumventing the AD order on HFC blends from China.
Full Text
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<title>Federal Register, Volume 88 Issue 129 (Friday, July 7, 2023)</title>
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[Federal Register Volume 88, Number 129 (Friday, July 7, 2023)]
[Notices]
[Pages 43275-43277]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-14371]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-028]
Hydrofluorocarbon Blends From the People's Republic of China:
Initiation of Circumvention Inquiries on the Antidumping Duty Order
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from the American HFC Coalition (the
petitioner), the U.S. Department of Commerce (Commerce) is initiating
four country-wide circumvention inquiries to determine whether: (1)
U.S. imports from the People's Republic of China (China) of R-410B, R-
407G, and a custom blend, which are further processed in the United
States, are circumventing the antidumping duty (AD) order on
hydrofluorocarbon (HFC) blends from China; (2) U.S. imports from
Malaysia of R-410A and R-407C, which are completed in Malaysia using
Chinese components, are circumventing the AD order on HFC blends from
China; (3) U.S. imports of R-410B from Turkey, which are completed in
Turkey using Chinese components and further processed in the United
States, are circumventing the AD order on HFC blends from China; and
(4) U.S. imports of R-410A from Turkey, which are completed in Turkey
using Chinese components, are circumventing the AD order on HFC blends
from China.
DATES: Applicable July 7, 2023.
FOR FURTHER INFORMATION CONTACT: Genevieve Coen or Melissa Porpotage,
AD/CVD Operations, Office II, Enforcement and Compliance, International
Trade Administration, U.S. Department of Commerce, 1401 Constitution
Avenue NW, Washington, DC 20230; telephone: (202) 482-3251 or (202)
482-1413, respectively.
SUPPLEMENTARY INFORMATION:
Background
On May 15 and 16, 2023, pursuant to sections 781(a) and 781(b) of
the Tariff Act of 1930, as amended, (the Act) and 19 CFR 351.226(c),
the American HFC Coalition filed circumvention inquiry requests
alleging that HFC blends from China, which are further processed in the
United States, and HFC blends completed in Malaysia or Turkey from
Chinese components are circumventing the order \1\ and, accordingly,
should be included within the scope of the Order.\2\ On June 9, 2023,
we extended the deadline to initiate these circumvention inquiries, in
accordance with 19 CFR 351.226(d)(1).\3\ On June 9, 2023, Commerce
issued supplemental questionnaires to the American HFC Coalition.\4\ On
June 14, 2023, the American HFC Coalition responded to our supplemental
questionnaires.\5\
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\1\ See Hydrofluorocarbon Blends and Components Thereof from the
People's Republic of China: Antidumping Duty Order, 81 FR 55436
(August 19, 2016) (Order).
\2\ See American HFC Coalition's Letters, ``Request to Initiate
Anti-Circumvention Inquiry with Respect to Imports of R410B, R-407G,
and Certain `Custom' HFC Blends from China,'' and ``Request to
Initiate Anti-Circumvention Inquiries with Respect to Imports of R-
410A and R-407C Blended in Malaysia,'' dated May 15, 2023; and
``Request to Initiate Anti-Circumvention Inquiries with Respect to
Imports of R-410A and R-410B from Turkey Pursuant to Sections 781(a)
and (b) of the Act,'' dated May 16, 2023 (collectively, Inquiry
Requests).
\3\ See Memorandum, ``Extension of Time to Determine Whether to
Initiate Circumvention Inquiry,'' dated June 9, 2023.
\4\ See Commerce's Letters, ``U.S. Custom Blends Circumvention
Inquiry Request Supplemental Questionnaire,'' ``Custom Blends from
Malaysia Circumvention Inquiry Request Supplemental Questionnaire,''
and ``Custom Blends from Turkey Circumvention Inquiry Request
Supplemental Questionnaire,'' dated June 9, 2023.
\5\ See American HFC Coalition's Letters, ``Response to
Circumvention Supplemental Questionnaire--United States,''
``Response to Circumvention Supplemental Questionnaire--Malaysia,''
and ``Response to Circumvention Supplemental Questionnaire--
Turkey,'' dated June 14, 2023.
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Scope of the Order
The products subject to the Order are HFC blends. HFC blends
covered by the scope are R-404A, a zeotropic mixture consisting of 52
percent 1,1,1-Trifluoroethane, 44 percent Pentafluoroethane, and 4
percent 1,1,1,2-Tetrafluoroethane; R-407A, a zeotropic mixture of 20
percent Difluoromethane, 40 percent Pentafluoroethane, and 40 percent
1,1,1,2-Tetrafluoroethane; R-407C, a zeotropic mixture of 23 percent
Difluoromethane, 25 percent Pentafluoroethane, and 52 percent 1,1,1,2-
Tetrafluoroethane; R-410A, a zeotropic mixture of 50 percent
Difluoromethane and 50 percent Pentafluoroethane; and R-507A, an
azeotropic mixture of 50 percent Pentafluoroethane and 50 percent
1,1,1-Trifluoroethane also known as R-507. The foregoing percentages
are nominal percentages by weight. Actual percentages of single
component refrigerants by weight may vary by plus or minus two percent
points from the nominal percentage identified above.\6\
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\6\ R-404A is sold under various trade names, including
Forane[supreg] 404A, Genetron[supreg] 404A, Solkane[supreg] 404A,
Klea[supreg] 404A, and Suva[supreg]404A. R-407A is sold under
various trade names, including Forane[supreg] 407A, Solkane[supreg]
407A, Klea[supreg]407A, and Suva[supreg]407A. R-407C is sold under
various trade names, including Forane[supreg] 407C, Genetron[supreg]
407C, Solkane[supreg] 407C, Klea[supreg] 407C and Suva[supreg] 407C.
R-410A is sold under various trade names, including EcoFluor R410,
Forane[supreg] 410A, Genetron[supreg] R410A and AZ-20,
Solkane[supreg] 410A, Klea[supreg] 410A, Suva[supreg] 410A, and
Puron[supreg]. R-507A is sold under various trade names, including
Forane[supreg] 507, Solkane[supreg] 507, Klea[supreg]507,
Genetron[supreg]AZ-50, and Suva[supreg]507. R-32 is sold under
various trade names, including Solkane[supreg]32, Forane[supreg]32,
and Klea[supreg]32. R-125 is sold under various trade names,
including Solkane[supreg]125, Klea[supreg]125, Genetron[supreg]125,
and Forane[supreg]125. R-143a is sold under various trade names,
including Solkane[supreg]143a, Genetron[supreg]143a, and
Forane[supreg]125.
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Any blend that includes an HFC component other than R-32, R-125, R-
143a, or R-134a is excluded from the scope of the Order.
Excluded from the Order are blends of refrigerant chemicals that
include products other than HFCs, such as blends including
chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs),
hydrocarbons (HCs), or hydrofluoroolefins (HFOs).
Also excluded from the Order are patented HFC blends, including,
but not limited to, ISCEON[supreg] blends, including MO99\TM\ (R-438A),
MO79 (R-422A), MO59 (R-417A), MO49Plus\TM\ (R-437A) and MO29\TM\ (R-4
22D), Genetron[supreg] Performax\TM\ LT (R-407F), Choice[supreg] R-
421A, and Choice[supreg] R-421B.
HFC blends covered by the scope of the Order are currently
classified in the Harmonized Tariff Schedule of the United States
(HTSUS) at subheadings 3827.61.0000, 3827.63.0000, 3827.64.0000,
3827.65.0000, 3827.68.0000, 3827.69.0000. Although the HTSUS
subheadings are provided for convenience and customs purposes, the
written description of the scope is dispositive.\7\
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\7\ See Order.
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[[Page 43276]]
Merchandise Subject to the Circumvention Inquiries
(1) One circumvention inquiry covers R-410B, R-407G, and a custom
blend of 50 percent R-125 and 50 percent R-134a exported from China
that are further processed in the United States into in-scope blends.
(2) The second circumvention inquiry covers R-410A and R-407C from
Malaysia that are completed in Malaysia using Chinese R-32 and R-125
(for R-410A), and R-32, R-125, and R-134a (for R-407C), and
subsequently exported from Malaysia to the United States.
(3) The third circumvention inquiry covers R-410B from Turkey that
is completed in Turkey using Chinese R-32 and R-125 and subsequently
exported to and further processed in the United States into an in-scope
blend.
(4) The fourth circumvention inquiry covers R-410A from Turkey that
is completed in Turkey using Chinese R-32 and R-125 and subsequently
exported from Turkey to the United States.
Initiation of Circumvention Inquiries
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 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 American HFC Coalition
alleged circumvention pursuant to sections 781(a) and 781(b) of the Act
(merchandise completed or assembled in the United States and
merchandise completed or assembled in other foreign countries,
respectively).
Section 781(a)(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 the United States. In
conducting a circumvention inquiry, under section 781(a)(1) of the Act,
Commerce relies on the following criteria: (A) merchandise sold in the
United States is of the same class or kind as any merchandise that is
the subject of an AD or countervailing duty (CVD) order; (B) such
merchandise sold in the United States is completed or assembled in the
United States from parts or components produced in the foreign country
with respect to which such order or finding applies; (C) the process of
assembly or completion in the United States is minor or insignificant;
and (D) the value of the parts or components referred to in
subparagraph (B) is a significant portion of the total value of the
merchandise.
In determining whether the process of assembly or completion in the
United States is minor or insignificant under section 781(a)(1)(C) of
the Act, section 781(a)(2) of the Act directs Commerce to consider: (A)
the level of investment in the United States; (B) the level of research
and development in the United States; (C) the nature of the production
process in the United States; (D) the extent of production facilities
in the United States; and (E) whether the value of the processing
performed in the United States represents a small proportion of the
value of the merchandise sold in the United States. However, no single
factor, by itself, controls Commerce's determination of whether the
process of assembly or completion in the United States is minor or
insignificant.\8\ Accordingly, it is Commerce's practice to evaluate
each of these five factors as they exist in the United States, and to
reach an affirmative or negative circumvention determination based on
the totality of the circumstances of the particular circumvention
inquiry.\9\
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\8\ See Statement of Administrative Action Accompanying the
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994)
(SAA), at 893.
\9\ See Hydrofluorocarbon Blends from the People's Republic of
China: Final Negative Scope Ruling on Gujarat Fluorochemicals Ltd.'s
R-410A Blend; Affirmative Final Determination of Circumvention of
the Antidumping Duty Order by Indian Blends Containing CCC
Components, 85 FR 61930 (October 1, 2020), and accompanying Issues
and Decision Memorandum (IDM), at 20 (specifying same in the context
of a section 781(b) inquiry).
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In addition, section 781(a)(3) of the Act sets forth additional
factors to consider in determining whether to include merchandise
assembled or completed in the United States 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 parts or components is
affiliated with the person who assembles or completes the merchandise
sold in the United States from the parts or components produced in the
foreign country with respect to which the order applies; and (C)
whether imports into the United States of the parts or components
products in such foreign country have increased after the initiation of
the investigation which resulted in the issuance of such order.
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.\10\ Accordingly, it is
Commerce's practice to evaluate each of these five factors as they
exist in the foreign country, depending on the totality of the
circumstances of the particular circumvention inquiry.\11\
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\10\ See SAA at 893.
\11\ 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 IDM at 4.
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In addition, section 781(b)(3) of the Act sets forth additional
factors to
[[Page 43277]]
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 American HFC Coalition's circumvention
requests, Commerce determines that American HFC Coalition has satisfied
the criteria under 19 CFR 351.226(c) to warrant the initiation of
circumvention inquiries of the Order. For a full discussion of the
basis for our decision to initiate these circumvention inquiries, see
the Initiation Checklists.\12\ As explained in the Initiation
Checklists, the information provided by domestic interested parties
warrants initiating these circumvention inquiries 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\
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\12\ See Checklist, ``Enforcement and Compliance, Office of AD/
CVD Operations, U.S. Custom Blends Circumvention Initiation
Checklist,'' dated June 29, 2023; see also Checklist, ``Enforcement
and Compliance, Office of AD/CVD Operations, Custom Blends from
Malaysia Circumvention Initiation Checklist,'' dated June 29, 2023;
Checklist, ``Enforcement and Compliance, Office of AD/CVD
Operations, R410A from Turkey Circumvention Initiation Checklist,''
dated June 29, 2023; and Checklist, ``Enforcement and Compliance,
Office of AD/CVD Operations, R10B from Turkey Circumvention
Initiation Checklist,'' dated June 29, 2023 (Collectively,
Initiation Checklists).
\13\ 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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Consistent with the approach in the prior circumvention inquiries
that were initiated on a country-wide basis, Commerce intends to issue
four questionnaires (one for China, one for Malaysia, and two for
Turkey) to solicit information from producers and exporters in China,
Malaysia, and Turkey, respectively, concerning their shipments to the
United States and the origin of any imported HFC blends being further
processed into HFC blends subject to the Order.
Respondent Selection
Commerce intends to base respondent selection on U.S. Customs and
Border and Protection (CBP) data. Commerce intends to place CBP data on
each record within five days of the publication of the 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 relevant inquiry.
Commerce intends to establish a schedule for questionnaire
responses after respondent selection. A company's failure to completely
respond 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 CBP of the
initiation of these circumvention inquiries and direct CBP to continue
the suspension of liquidation of entries of products subject to the
circumvention inquiries that were already subject to the suspension of
liquidation under the Order and to apply the cash deposit rate that
would be applicable if the products were determined to be covered by
the scope of the Order. 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 sections 781(a) and (b) of
the Act, Commerce determines that the American HFC Coalition's requests
for these circumvention inquiries satisfies the requirements of 19 CFR
351.226(c). Accordingly, Commerce is notifying all interested parties
of the initiation of these four circumvention inquiries to determine
whether: (1) U.S. imports from China of R-410B, R-407G, and a custom
blend that are further processed in the United States, are
circumventing the Order; (2) U.S. imports from Malaysia of R-410A and
R-407C that are completed in Malaysia using Chinese components are
circumventing the Order; (3) U.S. imports of R-410B from Turkey that
are completed in Turkey using Chinese components and further processed
in the United States into in-scope blends are circumventing the Order;
and (4) U.S. imports from Turkey of R-410A that are completed in Turkey
using Chinese components are circumventing the Order. In addition, we
included a description of the products that are the subject of these
inquiries and an explanation of the reasons for Commerce's decision to
initiate these inquiries as provided above and in the accompanying
Initiation Checklists. In accordance with 19 CFR 351.226(e)(1),
Commerce intends to issue its preliminary determination no later than
150 days from the date of publication of the notice of initiation of
these circumvention inquiries in the Federal Register.
This notice is published in accordance with sections 781(a) and (b)
of the Act and 19 CFR 351.226(d)(1)(ii).
Dated: June 29, 2023.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2023-14371 Filed 7-6-23; 8:45 am]
BILLING CODE 3510-DS-P
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