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

<NOTICE> DEPARTMENT OF COMMERCE <SUBAGY>International Trade Administration</SUBAGY> <DEPDOC>[A-570-943, C-570-944]</DEPDOC> <SUBJECT>Oil Country Tubular Goods From the People's Republic of China: Initiation of Circumvention Inquiry on the Antidumping and Countervailing Duty Orders</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Enforcement and Compliance, International Trade Administration, Department of Commerce. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Applicable December 18, 2024. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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: (202) 482-0474. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> 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  <SU>1</SU> <FTREF/> 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  <SU>2</SU> <FTREF/> and, accordingly, should be included within the scope of the <E T="03">Orders</E> . <SU>3</SU> <FTREF/> On August 20, 2024, we extended the deadline to initiate this circumvention inquiry in accordance with 19 CFR 351.226(d)(1). <SU>4</SU> <FTREF/> <FTNT> <SU>1</SU>  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. <E T="03">See</E> Requestors' Letter, “Response to Second Request for Information,” dated November 12, 2024 (Circumvention Request). </FTNT> <FTNT> <SU>2</SU>   <E T="03">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,</E> 75 FR 28551 (May 21, 2010); <E T="03">see also Certain Oil Country Tubular Goods from the People's Republic of China: Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order,</E> 75 FR 3203 (January 20, 2010) (collectively, <E T="03">Orders</E> ). </FTNT> <FTNT> <SU>3</SU>   <E T="03">See</E> Requestor's Letter, “Request for Circumvention Inquiry,” dated July 18, 2024. </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Memorandum, “Extension of Time to Determine Whether to Initiate Circumvention Inquiry,” dated August 20, 2024. </FTNT> 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. <SU>5</SU> <FTREF/> 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. <SU>6</SU> <FTREF/> On September 25, 2024, the requestors filed their response. <SU>7</SU> <FTREF/> On October 23, 2024, Commerce issued a second supplemental questionnaire. <SU>8</SU> <FTREF/> 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. <SU>9</SU> <FTREF/> On November 12, 2024, the requestors responded to Commerce's request for information. <SU>10</SU> <FTREF/> Thus, we consider the inquiry request to have been filed on November 12, 2024. <FTNT> <SU>5</SU>   <E T="03">See</E> Commerce's Letter, “Supplemental Questionnaire,” dated September 6, 2024. </FTNT> <FTNT> <SU>6</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Requestors' Letter, “Request for Circumvention Inquiry,” dated September 25, 2024. </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> Commerce's Letter, “Supplemental Questionnaire,” dated October 23, 2024. </FTNT> <FTNT> <SU>9</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>10</SU>   <E T="03">See</E> Circumvention Request. </FTNT> <HD SOURCE="HD1">Scope of the Orders</HD> The merchandise covered by the scope of the <E T="03">Orders</E> 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 <E T="03">Orders, see</E> the Circumvention Initiation Checklist. <SU>11</SU> <FTREF/> <FTNT> <SU>11</SU>   <E T="03">See</E> Initiation Checklist, “OCTG Completed in Thailand Circumvention Initiation Checklist,” dated concurrently with, and hereby adopted by, this notice (Circumvention Initiation Checklist) at Attachment I. </FTNT> <HD SOURCE="HD1">Merchandise Subject to the Circumvention Inquiry</HD> The circumvention inquiry covers seamless OCTG completed in Thailand using Chinese-produced steel billets, and subsequently exported from Thailand to the United States. <HD SOURCE="HD1">Initiation of Circumvention Inquiry</HD> 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 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. <SU>12</SU> <FTREF/> Accordingly, Commerce will evaluate each of these five factors as they exist in the foreign country, depending on the particular circumvention scenario. <FTNT> <SU>12</SU>   <E T="03">See</E> Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Doc. 103-316, Vol. 1 (1994), at 893. </FTNT> In addition, section 781(b)(3) of the Act sets forth additional facto ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 15k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━