14910 Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 

From the Socialist Republic of Vietnam: Final 

Results and Final Partial Rescission of 

Antidumping Duty Administrative Review, 73 FR 

52273 (September 9, 2008). 

24See Rhone Poulenc, Inc. v. United States, 899 

F.2d 1185, 1190–91 (Fed. Cir. 1990); Ta Chen 

Stainless Steel Pipe, Inc. v. United States, 24 CIT 

841, 848 (2000) (respondents should not benefit 

from failure to cooperate). 

25The PRC–Wide entity, including Zibo Aifudi 

Plastic Packaging Co., Ltd. 

the rate selected is the rate currently 

applicable to the PRC-wide entity and 

was corroborated in the LTFV Final 

Determination, using Zibo Aifudi’s 

CONNUM margins. See LTFV Final 

Determination, 73 FR at 35648. The 

Department assumes that if an 

uncooperative respondent could have 

obtained a lower rate, it would have 

cooperated.24 Consequently, as there is 

no information on the record of this 

review that demonstrates that this rate 

is not appropriate for use as AFA, we 

determine that this rate continues to 

have relevance. 

Based on our analysis as described 

above, we find that the margin of 91.73 

percent is reliable and has relevance. As 

the 91.73 percent rate is both reliable 

and relevant, we determine that it has 

probative value. Accordingly, we 

determine that the calculated rate of 

91.73 percent, which is the current PRCwide rate, is in accordance with the 

requirement of section 776(c) of the Act 

that secondary information be 

corroborated to the extent practicable 

(i.e., that it have probative value). 

Consequently, we have assigned this 

AFA rate to exports of the subject 

merchandise from the PRC-wide entity, 

including Zibo Aifudi. 

Final Results of Review 

The weighted-average dumping 

margins for the POR are as follows: 

Exporter 

Weighted 

Average 

Percent Margin 

PRC–Wide Rate 25 ........... 91.73 

Assessment 

Pursuant to section 751(a)(2)(A) of the 

Act and 19 CFR 351.212(b), the 

Department will determine, and CBP 

shall assess, antidumping duties on all 

appropriate entries of subject 

merchandise in accordance with the 

final results of this review. For 

assessment purposes, we calculated 

importer (or customer)-specific 

assessment rates for merchandise 

subject to this review. Where 

appropriate, we calculated an ad 

valorem rate for each importer (or 

customer) by dividing the total dumping 

margins for reviewed sales to that party 

by the total entered values associated 

with those transactions. For dutyassessment rates calculated on this 

basis, we will direct CBP to assess the 

resulting ad valorem rate against the 

entered customs values for the subject 

merchandise. Where appropriate, we 

calculated a per-unit rate for each 

importer (or customer) by dividing the 

total dumping margins for reviewed 

sales to that party by the total sales 

quantity associated with those 

transactions. For duty-assessment rates 

calculated on this basis, we will direct 

CBP to assess the resulting per-unit rate 

against the entered quantity of the 

subject merchandise. Where an importer 

(or customer)-specific assessment rate is 

de minimis (i.e., less than 0.50 percent), 

the Department will instruct CBP to 

assess that importer (or customer’s) 

entries of subject merchandise without 

regard to antidumping duties, in 

accordance with 19 CFR 351.106(c)(2). 

The Department intends to issue 

assessment instructions to CBP 15 days 

after the date of publication of these 

final results of review. 

Cash Deposit Requirements 

The following cash-deposit 

requirements will be effective upon 

publication of the final results of this 

administrative review for all shipments 

of the subject merchandise entered, or 

withdrawn from warehouse, for 

consumption on or after the publication 

date, as provided for by section 

751(a)(2)(C) of the Act: (1) The cash 

deposit rate for each of the reviewed 

companies that received a separate rate 

in this review will be the rate listed in 

the final results of review (except that 

if the rate for a particular company is de 

minimis, i.e., less than 0.5 percent, no 

cash deposit will be required for that 

company); (2) for previously 

investigated companies not listed above, 

the cash deposit rate will continue to be 

the company-specific rate published for 

the most recent POR; (3) if the exporter 

is not a firm covered in this review, a 

prior review, or the original less than 

fair value investigation, but the 

manufacturer is, the cash deposit rate 

will be the rate established for the most 

recent period for the manufacturer of 

the merchandise; and (4) the cash 

deposit rate for all other manufacturers 

or exporters will be the PRC-wide rate 

of 91.73 percent. These deposit 

requirements, when imposed, shall 

remain in effect until further notice. 

Reimbursement of Duties 

This notice also serves as a final 

reminder to importers of their 

responsibility under 19 CFR 351.402(f) 

to file a certificate regarding the 

reimbursement of antidumping duties 

prior to liquidation of the relevant 

entries during this POR. Failure to 

comply with this requirement could 

result in the Department’s presumption 

that reimbursement of antidumping 

duties has occurred and the subsequent 

assessment of doubled antidumping 

duties. 

Administrative Protective Orders 

This notice also serves as a reminder 

to parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the return or 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305, which continues 

to govern business proprietary 

information in this segment of the 

proceeding. Timely written notification 

of the return/destruction of APO 

materials or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and terms of an APO is a violation 

which is subject to sanction. 

We are issuing and publishing this 

administrative review and notice in 

accordance with sections 751(a)(1) and 

777(i) of the Act. 

Dated: March 14, 2011. 

Kim Glas, 

Acting Deputy Assistant Secretary for Import 

Administration. 

Appendix I—Issues and Decision 

Memorandum 

Comment 1: Preliminary Decision 

Regarding Country of Origin 

1a. Procedures in Determining 

Country of Origin 

1b. Department’s Decision of Country 

of Origin of Sacks 

1c. Authority to Issue Clarification 

Instruction to CBP 

1d. Finalizing the Country-of-Origin 

Memorandum 

Comment 2: Liquidation Instructions 

[FR Doc. 2011–6450 Filed 3–17–11; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–929] 

Small Diameter Graphite Electrodes 

From the People’s Republic of China: 

Initiation of Anti-Circumvention Inquiry 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to requests from 

SGL Carbon LLC and Superior Graphite 

Co. (‘‘Petitioners’’), Petitioners in the 

original investigation, the Department of 


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Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 14911 

1See Antidumping Duty Order: Small Diameter 

Graphite Electrodes from the People’s Republic of 

China, 74 FR 8775 (February 26, 2009) (‘‘SDGE 

Order’’). 

2According to Petitioners, the unfinished 

merchandise in question is defined in UKCG’s 

submissions as, e.g., ‘‘graphite electrodes,’’ ‘‘rods,’’ 

‘‘graphite billets,’’ graphite shapes,’’ ‘‘synthetic 

graphite electrode rod,’’ and ‘‘re-machined graphite 

electrode.’’ Petitioners characterize these inputs as 

‘‘unfinished SDGE,’’ whereas UKCG refers to them 

as ‘‘artificial graphite.’’ For customs purposes, these 

materials are, generally, classified under HTS 

3801.10.00, defined as ‘‘Artificial Graphite; 

Colloidal or Semi-Colloidal Graphite; Preparations 

Based on Graphite or Other Carbon in the Form of 

Pastes, Blocks, Plates or Other Semi-Finished 

Goods.’’ For ease of reference, these materials are 

referred to as ‘‘unfinished SDGE components’’ or 

‘‘artificial graphite rods’’ throughout this notice. 

3See Letter from Petitioners entitled, ‘‘Small 

Diameter Graphite Electrodes from the People’s 

Republic of China,’’ dated October 12, 2010 

(‘‘Initiation Request’’). 

4See Letter from UKCG entitled, ‘‘Small Diameter 

Graphite Electrodes from the People’s Republic of 

China: Response to Petitioners’ Submission of 

October 12, 2010, On Behalf of UK Graphite and 

Carbon Co., Ltd.,’’ dated October 29, 2010 

(‘‘Initiation Rebuttal Comments’’). 

5See Letter from Petitioners entitled, ‘‘Small 

Diameter Graphite Electrodes from the People’s 

Republic of China,’’ dated November 12, 2010 

(‘‘Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments’’). 

6See the Department’s Letter to Petitioners 

entitled, ‘‘Small Diameter Graphite Electrodes from 

the People’s Republic of China: Scope Inquiry 

Request Regarding Certain Merchandise Imported 

By UK Carbon and Graphite Company, Ltd.,’’ dated 

November 24, 2010 (‘‘Pre-Initiation Supplemental 

Questionnaire’’ or Pre-Initiation SQ’’). 

7See Letter from Petitioners entitled, ‘‘Small 

Diameter Graphite Electrodes from the People’s 

Republic of China,’’ dated November 30, 2010 

(‘‘Petitioners’ Pre-Initiation Supplemental 

Questionnaire Response’’ or ‘‘Petitioners’ SQR’’). 

Upon receipt of this submission, we found that the 

record, henceforth, contained sufficient information 

from which the Department may determine whether 

a formal anti-circumvention inquiry is warranted. 

8See Letter from UKCG entitled, ‘‘Small Diameter 

Graphite Electrodes from the People’s Republic of 

China: Response to Petitioners’ Submission of 

November 30, 2010, On Behalf of UK Graphite and 

Carbon Co., Ltd.,’’ dated December 14, 2010 

(‘‘UKCG’s Rebuttal to Petitioners’ Pre-Initiation 

Supplemental Questionnaire Response’’ or ‘‘UKCG’s 

SQR Rebuttal’’). 

9See the Department’s Memorandum from 

Brendan Quinn to The File entitled, ‘‘Scope/AntiCircumvention Inquiry of Small Diameter Graphite 

Electrodes from the People’s Republic of China: 

Placing Document on the Record,’’ dated February 

2, 2011. In this document, the British Government 

related its support for UKCG and implored the 

Department to take into consideration certain 

arguments forwarded in UKCG’s submissions, 

particularly with regard to the Binding Origin 

Information ruling discussed below. Because this 

document did not provide any new argument or 

information onto the record, we have not further 

summarized the British Embassy’s letter for the 

purposes of this notice. 

10See the Department’s letter to Petitioners 

entitled, ‘‘Small Diameter Graphite Electrodes from 

the People’s Republic of China: Scope Inquiry 

Request Regarding Certain Unfinished Merchandise 

Imported By UK Carbon and Graphite Company, 

Ltd.,’’ dated January 13, 2011 (‘‘Initiation Extension 

Letter’’). 

11See the Department’s letter to Petitioners 

entitled, ‘‘Small Diameter Graphite Electrodes from 

the People’s Republic of China: Scope Inquiry 

Request Regarding Certain Unfinished Merchandise 

Imported By UK Carbon and Graphite Company, 

Ltd.,’’ dated February 4, 2011 (‘‘Second Initiation 

Extension Letter’’). 

Commerce (‘‘Department’’) is initiating 

an anti-circumvention inquiry pursuant 

to section 781(b) of the Tariff Act of 

1930, as amended (‘‘the Act’’), to 

determine whether certain merchandise 

from the United Kingdom (‘‘U.K.’’) is 

being exported to the United States by 

U.K. Carbon and Graphite Co., Ltd. 

(‘‘UKCG’’) in circumvention of the 

antidumping duty order on small 

diameter graphite electrodes (‘‘SDGE’’) 

from the People’s Republic of China 

(‘‘PRC’’).1

DATES: Effective Date: March 18, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Brendan Quinn, AD/CVD Operations, 

Office 8, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–5848. 

SUPPLEMENTARY INFORMATION: 

Background 

On October 12, 2010, Petitioners filed 

a submission alleging that UKCG, a 

company located in the United 

Kingdom, is engaged in circumvention 

of the SDGE Order, by importing 

unfinished SDGE components 2 from the 

PRC to the United Kingdom, performing 

minor completion and assembly on 

these items, and exporting finished 

subject merchandise to the United 

States as SDGE of U.K. origin, thus, not 

subject to the SDGE Order.3 In this 

submission, Petitioners request that the 

Department initiate and conduct a 

proceeding to clarify whether the scope 

of the SDGE Order includes unfinished 

graphitized SDGE components, as 

imported by UKCG from the PRC based 

on either the dispositive written 

descriptions of the scope pursuant to 19 

CFR 351.225(k)(1) or, a further analysis 

of the product in question pursuant to 

factors enumerated in 19 CFR 

351.225(k)(2). Alternatively, Petitioners 

request that the Department initiate an 

anti-circumvention proceeding, 

pursuant to 19 CFR 351.225(h), to 

determine whether the importation of 

the aforementioned SDGE components 

by UKCG from the PRC for finishing in 

the United Kingdom and subsequent 

sale to the United States constitutes 

circumvention of the SDGE Order, as 

defined in section 781(b) of the Act. 

On October 29, 2010, the Department 

received a letter on behalf UKCG in 

rebuttal to Petitioners’ request for a 

scope or anti-circumvention ruling.4 In 

this submission, UKCG asserts that there 

is no need for the Department to 

undertake a full scope or anticircumvention inquiry, arguing that the 

unfinished SDGE component inputs in 

question have already been excluded 

from the scope of the SDGE Order. On 

November 12, 2010, we received further 

comments from Petitioners in response 

to UKCG’s October 29, 2010, 

submission.5

On November 24, 2010, the 

Department requested that Petitioners 

supplement their scope request with 

certain additional information to aide in 

our decision whether to initiate a formal 

scope or anti-circumvention inquiry.6 In 

this questionnaire, the Department 

requested that Petitioners provide 

further information regarding both the 

pattern of trade for imports of 

unfinished SDGE components into the 

United Kingdom from the PRC and 

domestic U.K. production of unfinished 

SDGE components during the relevant 

time period. On November 30, 2010, we 

received Petitioners’ response to the 

Department’s pre-initiation 

questionnaire.7 On December 14, 2010, 

we received a rebuttal from UKCG in 

response to Petitioners’ SQR.8

On November 29, 2010, the 

Department received, via e-mail, a 

document from the British Embassy in 

support of UKCG’s arguments, which 

the Department placed on the record of 

this proceeding.9

On January 13, 2011, the Department 

extended the deadline to initiate an 

anti-circumvention inquiry by 21 days, 

pursuant to 19 CFR 351.302(b).10 On 

February 4, 2011, the Department 

further extended the deadline to initiate 

by 14 days, pursuant to 19 CFR 

351.302(b).11

Scope of the Order 

The merchandise covered by this 

order includes all small diameter 

graphite electrodes of any length, 

whether or not finished, of a kind used 

in furnaces, with a nominal or actual 

diameter of 400 millimeters (16 inches) 

or less, and whether or not attached to 

a graphite pin joining system or any 

other type of joining system or 

hardware. The merchandise covered by 

this order also includes graphite pin 

joining systems for small diameter 

graphite electrodes, of any length, 

whether or not finished, of a kind used 

in furnaces, and whether or not the 

graphite pin joining system is attached 

to, sold with, or sold separately from, 

the small diameter graphite electrode. 

Small diameter graphite electrodes and 

graphite pin joining systems for small 


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14912 Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 

12As such, the remainder of this notice will focus 

on the statutory criteria for the initiation of an anticircumvention inquiry, as defined in section 781(b) 

of the Act. See the Initiation of Anti-Circumvention 

Proceeding section of this notice, below, for a full 

summary of both Petitioners’ and UKCG’s 

comments regarding initiation of an anticircumvention inquiry. See also the Analysis 

section of this notice, below, for the full discussion 

of the Department’s determination to initiate an 

anti-circumvention inquiry pursuant to section 

781(b) of the Act and 19 CFR 351.225(h). 

13 In determining whether the process of assembly 

or completion is minor or insignificant, section 

781(b)(2) of the Act instructs the Department into 

account: (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 the processing 

performed in the foreign country represents a small 

proportion of the value of the merchandise 

imported into the United States. 

14Petitioners’ request included arguments for 

both the initiation of a scope and anticircumvention inquiry. Because, as noted in the 

Determination Not To Initiate a Scope Proceeding, 

above, we are focusing this notice on the 

determination as to whether to initiate an anticircumvention ruling, we have not summarized or 

addressed the arguments forwarded by Petitioners, 

which were submitted to specifically support the 

initiation of a scope ruling. However, we have 

included and addressed all arguments submitted in 

support of the initiation of an anti-circumvention 

inquiry, even in the instance that they were first 

presented in support of a scope initiation. 

15See Initiation Request at 23. 

16With respect to the description of in-scope 

merchandise, Petitioners cite to the Letter from 

Petitioners entitled, ‘‘Small Diameter Graphite 

Electrodes from the People’s Republic of China— 

Antidumping Duty Petition,’’ dated January 17, 

2008 (‘‘Petition’’), Small Diameter Graphite 

Electrodes, Inv. 731–TA–1143 (Final), Pub. 4062, 

dated February 2009 (‘‘Final ITC Determination’’), 

and the SDGE Order. They argue that the scope of 

the SDGE Order, as established in these documents, 

explicitly includes ‘‘unfinished’’ SDGEs whether or 

not attached to a pin joining system. They assert 

that the inclusion of the ‘‘unfinished’’ language 

reflects the fact that unfinished SDGEs undergo no 

further processing beyond the graphitization stage, 

other than machining, as stated in the Final ITC 

Determination. As such, Petitioners contend that 

the scope is unambiguously dispositive regarding 

the inclusion of unfinished SDGE. Contrary to 

UKCG’s claims that the SDGE components 

purchased from the PRC were not ‘‘unfinished’’ 

SDGE but, rather, inputs transformed into SDGE by 

manufacturing operations in the United Kingdom, 

Petitioners note that: (a) The 2009 UKCG financial 

statement describes the business of UKCG as the 

‘‘purchasing, processing, and sale of synthetic 

graphite electrodes for the steel and foundry 

industries;’’ (b) the unfinished SDGE components in 

question contain the correct grade of petroleum 

coke mix, and have been baked, formed, 

carbonized, impregnated, and graphitized, thus, the 

resulting cylindrical rod, as produced in the PRC 

and imported into the U.K., has all the essential 

characteristics of a graphite electrode; (c) UKCG’s 

own proprietary description of the U.K. processing 

on these artificial graphite rods demonstrates that 

only minor machining and finishing operations are 

performed, which do not impart any essential 

performance characteristics to the finished product. 

Therefore, according to Petitioners, the 

merchandise that UKCG imports from the PRC is 

‘‘unfinished’’ SDGE as defined by the scope of the 

SDGE Order and, because the concept of scope 

encompasses both the product description and the 

country of origin of the product, the merchandise 

in question is of PRC origin and is subject 

merchandise both before and after finishing in the 

United Kingdom. See Initiation Request at 8–16. 

diameter graphite electrodes are most 

commonly used in primary melting, 

ladle metallurgy, and specialty furnace 

applications in industries including 

foundries, smelters, and steel refining 

operations. Small diameter graphite 

electrodes and graphite pin joining 

systems for small diameter graphite 

electrodes that are subject to this order 

are currently classified under the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) subheading 

8545.11.0000. The HTSUS number is 

provided for convenience and customs 

purposes, but the written description of 

the scope is dispositive. 

Determination Not To Initiate a Scope 

Proceeding 

As noted above, Petitioners have 

requested the Department initiate either 

a scope proceeding to clarify whether 

the scope of the SDGE Order includes 

the merchandise in question pursuant to 

19 CFR 351.225(k) or an anticircumvention proceeding pursuant to 

section 781(b) of the Act and 19 CFR 

351.225(h). 

In the instant case, although 

Petitioners have provided substantial 

record evidence which may support the 

initiation of either type of inquiry, the 

Department has concluded that the 

issues raised by the parties are better 

addressed in the context of an anticircumvention proceeding pursuant to 

section 781(b) of the Act and 19 CFR 

351.225(h).12 In particular, due to the 

specificity of Petitioners’ request as it 

pertains to a particular company (i.e., 

UKCG) and certain record information 

as to the timing of the pattern of trade 

(as discussed below), the Department 

has determined that a decision to 

initiate an anti-circumvention inquiry is 

the most appropriate course of action to 

address Petitioners’ concerns at present. 

As a result of this determination, the 

Department will not initiate a scope 

proceeding pursuant to 19 CFR 

351.225(k) at this time. 

Initiation of Anti-Circumvention 

Proceeding 

Statutory Criteria for Initiation of AntiCircumvention Proceeding 

Section 781(b)(1) of the Act provides 

that the Department may find that 

importation of certain merchandise 

completed or assembled in a third 

country constitutes circumvention of an 

antidumping duty order if: 

(A) The merchandise imported into 

the United States is of the same class or 

kind as merchandise produced in a 

foreign country that is subject to the 

order. 

(B) Before importation to the United 

States, such imported merchandise is 

completed or assembled in another 

foreign country from merchandise 

which is either subject to the order or 

is produced in the foreign country 

subject to the order. 

(C) The process of assembly or 

completion in the third country is minor 

or insignificant.13

(D) The value of the merchandise 

produced in the country subject to the 

order amounts to a significant portion of 

the total value of the merchandise 

exported to the United States. 

(E) Such action would be appropriate 

to prevent evasion of the order in 

question. In evaluating these 

aforementioned criteria, section 

781(b)(3) of the Act further instructs the 

Department to take into account: 

1. The pattern of trade, including 

sourcing patterns. 

2. Whether the manufacturer or 

exporter of the merchandise in question 

from the country subject to the order 

(i.e., the PRC producer of unfinished 

SDGE components) is affiliated with the 

third country party that completes or 

assembles the merchandise for 

subsequent importation into the United 

States (i.e., UKCG). 

3. Whether imports into the third 

country (i.e., the United Kingdom) of the 

merchandise in question (i.e., 

unfinished SDGE components from the 

PRC) have increased after the initiation 

of the investigation which resulted in 

the issuance of the order. 

Petitioners’ Request for Initiation of an 

Anti-Circumvention Proceeding 14

In their October 12, 2010, Initiation 

Request, Petitioners presented the 

following evidence with respect to each 

of the aforementioned statutory criteria: 

A. Merchandise of the Same Class or 

Kind 

Petitioners contend that the SDGE 

products exported to the United States 

by UKCG are identical to those subject 

to the SDGE Order.15

B. Completion of Merchandise in a 

Foreign Country 

Petitioners further assert that the 

unfinished SDGE component inputs 

imported by UKCG from the PRC for 

further processing before exportation to 

the United States are themselves subject 

merchandise.16 Petitioners argue that 

the language of the scope (as included 

in the initial Petition, SDGE Order, and 

Final ITC Determination) identifies the 

graphitization process as the point at 


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17With respect to the specific argument that the 

graphitization process confers ‘‘unfinished’’ status to 

the SDGE in process and is, thus, at that point 

‘‘subject’’ to the SDGE Order and, furthermore, 

origin of the country in which this process takes 

place, Petitioners cite to the Petition at 3, stating, 

‘‘The electrode form then undergoes the 

graphitization process, in which the electrode is 

heated in a furnace to an extremely high 

temperature (2600–3000 degrees centigrade). 

Through this process, the electrodes are 

transformed into graphite.’’ Petitioners also cite to 

the Final ITC Determination at 4, stating, 

‘‘unfinished SDGEs undergo no further processing 

beyond the graphitization stage other than 

machining.’’ 

18See Initiation Request at 23–24. 

19See Initiation Request at 25–26. 

20See Initiation Request at 26. 

21Petitioners note that the ‘‘finishing’’ process 

involves machining of an electrode’s outside 

surface so that it is sized to exact dimensions and 

tolerances (according to National Electrical 

Manufacturers Association standards for U.S. 

bound products), and may also include machining 

and fitting the ends of an electrode with a threaded 

graphite pin connecting/joining system. See 

Initiation Request at 28. 

22See Initiation Request at 27–30. 

23See Initiation Request at 30–31. 

24See Initiation Request at 31–32. 

25See Initiation Request at 32. 

26See Initiation Request at 32–35. 

27See Small Diameter Graphite Electrodes From 

the People’s Republic of China: Preliminary 

Determination of Sales at Less Than Fair Value, 

Postponement of Final Determination, and 

Affirmative Preliminary Determination of Critical 

Circumstances, in Part, 73 FR 49408 (August 21, 

2008). 

which an electrode form becomes a 

graphite electrode subject to the SDGE 

Order.17 As such, Petitioners contend 

that this graphitization process 

(performed in the PRC) confers both 

country of origin and, thus, ‘‘unfinished’’ 

subject merchandise status on the SDGE 

components in question, even if further 

machining occurs in a third country to 

become ‘‘finished’’ subject merchandise. 

Therefore, Petitioners conclude, the 

finished merchandise exported to the 

United States is not only produced from 

subject merchandise but, due to the 

nature of further processing not being 

sufficient to alter the country of origin, 

the finished merchandise is itself 

subject merchandise produced in the 

PRC.18

C. Minor or Insignificant Process 

1. Level of Investment 

Petitioners note that PRC producers 

have invested extensively in the SDGE 

industry, which includes significant 

investment in both manufacturing 

facilities and production equipment 

worth many millions of dollars. 

Petitioners contend that the bulk of this 

investment goes to the heavy industrial 

processes required for the production of 

SDGE (e.g., raw material handling, 

mixing, forming, baking, impregnating, 

and graphitizing), each of which occur 

prior to the final machining stage. 

Petitioners point out that, on the 

contrary, the total worth of UKCG’s 

plant, including its single machine shop 

and finishing equipment, as shown in 

UKCG’s financial statement, 

demonstrates that the level of 

investment required for a PRC 

manufacturer to produce an unfinished 

graphitized electrode is far greater than 

the level of investment needed by UKCG 

to perform its finishing processes.19

2. Level of Research and Development 

Petitioners argue that, although they 

do not have detailed information 

regarding research and development 

(‘‘R&D’’) expenses incurred by either 

UKCG or Chinese producers of SDGE, as 

explained in the ‘‘Level of Production 

Processes’’ section, immediately below, 

the technology required to manufacture 

merchandise up to the graphitization 

process of production (and, thus, the 

related R&D costs), should greatly 

exceed the R&D costs associated with 

finishing of the merchandise and that 

the R&D costs associated with the 

finishing of the merchandise are 

relatively insignificant by comparison.20

3. Level of Production Processes 

Petitioners contend that an 

understanding of the production of 

subject merchandise is essential to the 

analysis of whether or not UKCG is 

engaged in minor or insignificant 

production. As such, Petitioners detail 

the SDGE production process, 

demonstrating how raw materials are 

formed, baked, impregnated (if needed), 

re-baked, graphitized, finished and 

packaged. Petitioners emphasize the 

significant energy needed to graphitize 

the product and emphasize that, upon 

completion of this process, the electrode 

becomes an ‘‘unfinished’’ SDGE subject 

to the SDGE Order. Petitioners point out 

that, for PRC manufacturers to produce 

unfinished SDGE components for 

shipment to UKCG, they must perform 

each of these processes from the mixing 

of raw materials through to packaging, 

save finishing, which accounts for the 

vast majority of production costs (based 

on an analysis of proprietary 

information provided in the initial 

antidumping petition). In contrast, 

Petitioners argue that UKCG merely 

finishes 21 and repackages SDGE into 

UKCG branded cartons, processes 

amounting to insignificant costs when 

compared to those incurred by PRC 

producers to perform the heavy 

industrial processes summarized 

above.22

4. Extent of Production Facilities 

As detailed above, Petitioners note 

that the facilities needed to form, bake, 

impregnate, re-bake, graphitize and pack 

the subject merchandise in the PRC for 

exportation to the United Kingdom (e.g., 

equipment such as mills, sifters, 

calcinatories, presses, ovens, and tanks) 

is far more significant than the single 

machining shop needed to finish the 

products exported by UKCG to the 

United States.23

5. Value of Further Processing 

Compared to Total Value of Exported 

Merchandise 

As noted above, Petitioners assert 

that, based on proprietary information 

supplied in the Petition, the cost of 

finishing a graphite electrode represents 

an insignificant amount of the total cost 

of manufacture for a SDGE.24

D. Value of Merchandise Produced in 

the PRC 

Petitioners argue that, for reasons 

summarized above, the value of 

merchandise produced in the PRC 

represents the vast majority of the total 

value of the product.25

E. Whether Action Is Appropriate To 

Prevent Evasion of the Order 

Petitioners reassert that UKCG 

imports graphitized components of 

SDGE (which, they contend are, subject 

merchandise) from PRC producers of 

subject merchandise, which are then 

finished and packaged for export to the 

United States as a product of the United 

Kingdom. Petitioners note that UKCG 

has relied on a European Binding Origin 

Information (‘‘BOI’’) ruling as support for 

the U.K. origin designation it applied to 

the merchandise in question. However, 

Petitioners argue, this ruling was issued 

for the purposes of trade within the 

European common market, and has no 

legal status in the United States. 

Moreover, Petitioners conclude that 

their arguments, as summarized above, 

invalidate any claim by UKCG that the 

finishing process is so substantial that it 

warranted a change in country of origin 

from the PRC to the United Kingdom.26

F. Additional Factors 

1. Pattern of Trade 

Petitioners argue that, since the filing 

of the antidumping Petition and 

issuance of the preliminary 

determination in the initial less than fair 

value (‘‘LTFV’’) investigation in August 

2008,27 UKCG has shipped SDGE to the 

United States, sourced and finished 

from PRC-produced graphitized 

components, in significant and 

increasing quantities. According to 


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28See Small Diameter Graphite Electrodes From 

the People’s Republic of China: Initiation of 

Antidumping Duty Investigation, 73 FR 8287 

(February 13, 2008). 

29Petitioners note that the preliminary margins 

ranged from 132.80 to 159.34, indicating that 

significant dumping margins might be levied 

against SDGE from the PRC in the final 

determination. 

30See Initiation Request at 35–37. 

31See Initiation Request at 38. 

32See id. 

33See UKCG’s Initiation Rebuttal Comments at 

1–2. 

34See UKCG’s Initiation Rebuttal Comments at 3. 

35See UKCG’s Initiation Rebuttal Comments at 

3–4. 

36See UKCG’s Initiation Rebuttal Comments at 

4–6. 37See UKCG’s Initiation Rebuttal Comments at 6. 38See UKCG’s Initiation Rebuttal Comments at 6– 

8. This BOI ruling is provided in UKCG’s Initiation 

Rebuttal Comments at Exhibit 2. 

Petitioners, at the time of initiation of 

the LTFV investigation in February 

2008,28 the United Kingdom had no 

exports of SDGE of U.K. origin to the 

United States, but that UKCG began 

exporting the merchandise in question 

to the United States beginning two 

months after the publication of the 

preliminary determination.29 According 

to Petitioners, during the period 

November 2008 through March 2010, 

UKCG exports of SDGE represented 96 

percent of the total SDGE exports from 

the United Kingdom to the United 

States, and such exports occurred in 

significant and increasing quantities 

subsequent to the issuance of the SDGE 

Order. Petitioners also placed Chinese 

Customs data on the record, which they 

claim demonstrates a significant 

increase in imports of finished SDGE 

from the PRC into the U.K. 

corresponding to the aforementioned 

increase in exports to the U.S.30

2. Affiliation 

Though Petitioners do not claim that 

UKCG is affiliated with any of the PRC 

producers from which it sourced the 

merchandise in question, they cite to 

UKCG’s existing business relationship 

with PRC producers of merchandise 

subject to the SDGE Order.31

3. Import Volume Subsequent to the 

Investigation and Order 

As noted above, Petitioners identify 

the following trends since the filing of 

the antidumping petition and issuance 

of the preliminary determination of the 

initial LTFV investigation in August 

2008: UKCG has shipped Chinesesourced subject merchandise to the 

United States in significant and 

increasing quantities; UKCG exports of 

SDGE represent the vast majority of the 

total SDGE exports from the United 

Kingdom to the United States; and 

customs data from the PRC and United 

States show a significant increase in 

PRC exports of SDGE to the United 

Kingdom and U.K exports to the United 

States.32

Comments Received Subsequent to the 

Initiation Request 

A. UKCG’s Rebuttal Comments 

On October 29, 2010, the Department 

received a letter on behalf UKCG in 

rebuttal to Petitioners’ October 12, 2010, 

requests for a scope and/or anticircumvention ruling. In this 

submission, UKCG asserts that there is 

no need for the Department to undertake 

a full scope or anti-circumvention 

inquiry, arguing that the unfinished 

SDGE component inputs in question 

have already been excluded from the 

scope of the SDGE Order, the finished 

SDGE exports are of U.K. origin, and 

that Petitioners’ October 12, 2010, 

submission merely reiterates old 

allegations which have been previously 

rebutted based on record evidence.33

UKCG presents the following arguments 

in support of its position: 

Legal Standards: UKCG argues that 

the scope of the SDGE Order, which was 

drafted by Petitioners, explicitly 

excludes the unfinished material in 

question. Citing to Hylsa, S.A. de C.V. 

v. United States, 22 C.I.T. 44, 49 (1998), 

UKCG asserts that it is legally 

impermissible to bring such excluded 

merchandise back into the case, either 

as part of a scope or anti-circumvention 

proceeding.34

Artificial Graphite Is Not Covered by 

the SDGE Order: UKCG argues that the 

addition of the term ‘‘unfinished’’ to the 

scope of the SDGE Order is a lawyercreated term with no meaning in the 

industry and, as such, the term 

‘‘unfinished’’ electrode could be applied 

to even the raw materials used to create 

SDGE. UKCG claims that the items 

imported into the United Kingdom are 

not ‘‘unfinished’’ SDGE but, rather, 

artificial graphite rods. UKCG cites to 

separate customs rulings from the 

United States and the United Kingdom/ 

European Union (‘‘E.U.’’) that it purports 

define the product in question as 

artificial graphite and not unfinished 

SDGE.35

Petitioners Did Not Include Artificial 

Graphite Rods in the Scope of the Order: 

UKCG notes that SGL Carbon, a 

Petitioner, and Graftech, a producer of 

electrodes who supported Petitioners in 

their filing of the initial Petition, have 

themselves imported items classified as 

artificial graphite rods under the 3801 

tariff classification used by UKCG in its 

classification of the unfinished 

materials in question. As such, UKCG 

asserts that Petitioners knew of such 

materials and their classification under 

HTS subheading 3801, but expressly did 

not include them within the scope of 

the SDGE Order, either in the 

dispositive scope narrative or in the 

HTS classification listed in the 

narrative. Therefore, UKCG concludes 

that, because Petitioners were aware of 

the use of separate terminology and HTS 

classification for artificial graphite 

products and finished graphite electrode 

products, considering the fact that they 

refrained from including the former 

within the scope of the SDGE Order, 

their request to include such products 

in the order is inappropriate at this stage 

of the proceeding.36

Petitioners’ Country of Origin Citation 

Is Without Factual Basis: UKCG avers 

that Petitioners have provided no 

factual basis for their assertion that the 

ITC Final Determination holds that the 

graphitization process confers the final 

country of origin status for the purposes 

of the SDGE Order, and that any 

offhanded remark on this issue in the 

ITC Final Determination is without 

authority and contradicted by customs 

rulings from both the United Kingdom 

and the United States.37

A U.K. BOI Ruling Found That 

Artificial Graphite Rods Are Not 

Electrodes, and Petitioners Misstate the 

Effect of This BOI Ruling: UKCG argues 

that U.K. authorities examined the issue 

at hand and determined that the 

unfinished SDGE components in 

question were properly classified as 

‘‘Artificial Graphite’’ under HTS 

subcategory 3801.10, rather than as 

‘‘Carbon Electrodes’’ under HTS 

subcategory 8548.11. UKCG asserts that 

Petitioners have misunderstood the 

impact of this BOI, because the 

submission of any untrue information 

on an E.U. export declaration is 

considered an illegal act.38

A U.S. CBP Ruling Also Found That 

Artificial Graphite Rods Are Not 

Electrodes: UKCG notes that a February 

23, 2009, ruling by U.S. Customs and 

Border Protection (‘‘CBP’’) found that 

semi-manufactures of artificial graphite 

rods are expressly included in the 

explanatory note of HTSUS 3801. UKCG 

points out the CPB ruling states that 

‘‘artificial graphite rods in their 

imported condition will consist of unmachined semi-manufactures that must 

be cut, machined to fine tolerances and 

surface finished before they can be 

considered finished articles in {HTSUS} 


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39See UKCG’s Initiation Rebuttal Comments at 

8–9. 

40See Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments at 1–4. 

41See Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments at 4–5. 

42See Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments at 6. 

43See Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments at 6–7. Citing to Tapered Roller 

Bearings and Parts Thereof, Finished and 

Unfinished, From the People’s Republic of China: 

Final Results of Antidumping Duty Administrative 

Review, 74 FR 3987 (January 22, 2009), and 

accompanying Issues and Decisions Memorandum 

(‘‘Tapered Roller Bearings’’) at Comment 1, 

Petitioners assert that only the Department has the 

authority to define what products are within or 

outside the scope of an order. 

44See Petitioners’ Response to UKCG’s Initiation 

Rebuttal Comments at 7–8. 45See Pre-Initiation Supplemental Questionnaire. 46See Petitioners’ SQR. 47See UKCG’s SQR Rebuttal. 

48 ‘‘Artificial Graphite; Colloidal or SemiColloidal Graphite; Preparations Based on Graphite 

or Other Carbon in the Form of Pastes, Blocks, 

Plates or Other Semi-Finished Goods.’’ 

49See Petitioners’ SQR at Attachment 1. These 

data were obtained from HM Revenue and Customs’ 

UK Overseas Trade Statistics and Regional Trade 

Statistics Web site, available at http:// 

www.hmrc.gov.uk/stats/trade-statistics.htm. 

50See Petitioners’ SQR at 1. 

51See Petitioners’ SQR at 1–2. 

52See Petitioners’ SQR at 2. 

53See Petitioners’ SQR at 2–3. 

heading 8545,’’ and ultimately 

determines that unfinished artificial 

graphite electrode rods identical to the 

product at issue in the instant case 

should be classified under HTSUS 

3801.10.5000. UKCG asserts that, in this 

ruling, CBP specifically declares that the 

items in question are a form of artificial 

graphite rods, which are semimanufactured inputs that have not yet 

taken on the nature of an electrode.39

B. Petitioners’ Response to UKCG’s 

Rebuttal 

On November 12, 2010, Petitioners 

submitted a response to UKCG’s 

Rebuttal Comments. Petitioners first 

note their disagreement with UKCG’s 

categorization of the unfinished SDGE 

components in question as artificial 

graphite rods not subject to the SDGE 

Order, and reiterate their contention 

that the scope of the SDGE Order clearly 

includes such merchandise.40

Petitioners then present specific 

rebuttals to certain arguments forwarded 

by UKCG, summarized below: 

‘‘Unfinished’’ SDGE Are Clearly 

Defined: Petitioners argue that, despite 

UKCG’s assertion that the term 

‘‘unfinished’’ is a term without meaning 

and that Petitioners’ conclusion that 

graphitization confers country of origin 

to the SDGE in question is unfounded, 

the Petition and Final ITC 

Determination clearly define 

‘‘unfinished SDGE’’ as SDGE that have 

been graphitized but not further 

machined or finished. Furthermore, 

Petitioners argue that whether or not the 

term ‘‘unfinished’’ has a specific 

meaning in the trade is irrelevant for 

antidumping purposes.41

UKCG’s Argument That Artificial 

Graphite Was Expressly Excluded From 

the Scope Is Flawed: Petitioners argue 

that, because the ‘‘unfinished’’ SDGE 

language was included within the scope 

of the SDGE Order (which, according to 

Petitioners, includes the unfinished 

SDGE components in question), there 

was no need to consider the 

classification of artificial graphite rods. 

Furthermore, Petitioners note that the 

scope clearly indicates that the HTSUS 

number provided is for convenience and 

customs purposes, but should not be 

considered dispositive.42

The BOI Ruling Is Not Relevant to 

This Proceeding: Petitioners contend 

that the BOI Ruling cited to by UKCG 

as evidence that the merchandise in 

question is of U.K. origin is not relevant 

for antidumping purposes because: (a) It 

speaks to HTS classifications, which are 

not dispositive to the scope of the SDGE 

Order; (b) the BOI does not address the 

specific issue relevant in the instant 

proceeding (i.e., whether artificial 

graphite rods are unfinished SDGE); (c) 

the BOI is a ruling applicable to trade 

within the European Community and 

has no application for exports to other 

countries, including the United States; 

and (d) no customs ruling, whether 

United Kingdom or United States in 

origin, can bind or limit the scope of a 

U.S. antidumping duty order.43

Commerce Should Request Immediate 

Suspension of Liquidation: Petitioners 

argue that because UKCG has 

incorrectly reported the country of 

origin in its entry documents (i.e., 

listing the United Kingdom rather than 

the PRC) and, in so doing, has avoided 

suspension of liquidation and 

antidumping duty deposits that are 

required under the SDGE Order, the 

Department should immediately request 

that CBP reverse the liquidation of such 

entries in order to properly suspend 

liquidation and collect the appropriate 

antidumping duty deposits.44

Responses to the Department’s Request 

for Supplemental Information 

On November 24, 2010, the 

Department requested that Petitioners 

supplement their scope request with 

certain additional information to aide in 

the Department’s decision to initiate a 

formal scope or anti-circumvention 

inquiry.45 In this questionnaire, the 

Department requested that Petitioners 

provide further information regarding 

both the pattern of trade for imports of 

‘‘unfinished SDGE’’ into the United 

Kingdom from the PRC and domestic 

U.K. production of ‘‘unfinished SDGE’’ 

during the relevant time period. On 

November 30, 2010, we received 

Petitioners’ response to the 

Department’s pre-initiation 

questionnaire.46 On December 14, 2010, 

we received a rebuttal from UKCG in 

response to Petitioners’ submission.47

A. Petitioners’ Supplemental 

Questionnaire Response 

In their November 30, 2010, response, 

Petitioners submitted information onto 

the record regarding U.K. imports under 

HTS 3801.10.00 48 from the PRC (i.e., 

the HTS subcategory most specific to 

unfinished SDGE components in 

question) for the years 2008–2010.49

Petitioners assert that these data show a 

direct correlation between the 

antidumping investigation on SDGE and 

imports of the unfinished merchandise 

in question into the United Kingdom 

from the PRC, noting that: 

• The monthly average volume of 

imports of merchandise classified under 

HTS 3801.10.00 from January through 

August 2008 was 66,208 kg, but in 

September 2008, the month following 

the preliminary determination, imports 

increased to a monthly average of 

603,944 kg.50

• In the four months between the 

announcement of the preliminary 

determination and the final 

determination, September through 

December 2008, the average monthly 

imports were 574,162 kg, but the 

volume of imports rose to 815,061 kg in 

January 2009, the month corresponding 

to the announcement of the final 

determination.51

• The volume of imports, by year, has 

increased dramatically since the filing 

of the initial antidumping duty petition, 

with 2,152,370 kg (averaging 180,198 kg 

per month) imported in 2008, 3,097,554 

kg (averaging 258,130 per month) in 

2009, and 8,751,286 kg (annualized, 

averaging 729,273 kg per month) in 

2010.52

Petitioners argue that these data 

demonstrate that the antidumping duty 

investigation resulted in a significant 

increase of imports of ‘‘unfinished 

SDGE’’ into the United Kingdom from 

the PRC, and allege that this increase is 

attributable to a scheme undertaken by 

PRC producers to unlawfully avoid U.S. 

antidumping duties.53 Finally, 

Petitioners maintain that they do not 

know of any SDGE manufacturing 

operations in the United Kingdom 

during the relevant time period, other 


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54See Petitioners’ SQR at 3. 

55See UKCG’s SQR Rebuttal at 2. 

56See UKCG’s SQR Rebuttal at 2–4. 

57See UKCG’s SQR Rebuttal at 4. 

58See UKCG’s SQR Rebuttal at 4–5. 

59See UKCG’s SQR Rebuttal at 4. 60See UKCG’s SQR Rebuttal 5–6. 

than the finishing operations performed 

by UKCG.54

B. UKCG’s Rebuttal to Petitioners’ 

Supplemental Questionnaire Response 

In rebuttal, UKCG asserts that the 

information submitted by Petitioners in 

both their Initiation Request and SQR is 

misleading because it: (a) Misstates the 

amounts of SDGE exported by UKCG to 

the United States, (b) misinterprets the 

significance of UKCG’s increase of 

business with the United States as an 

attempt to circumvent the Order when 

it is only a result of increased global 

marketing on behalf of the company, 

and (c) draws incorrect conclusions 

regarding circumvention due to a 

reliance on publicly available 

information for HTS subcategory 3801, 

which is a basket category containing 

items much more broad than just 

artificial graphite rods.55

UKCG argues that the CBP data used 

by Petitioners in the Initiation Request 

to demonstrate the amount of SDGE 

exported to the United States by UKCG 

during the relevant time period do not 

accurately reflect the volume of exports. 

UKCG also disputes Petitioners’ 

assertion from the Initiation Request 

that UKCG did not export SDGE to the 

United States until November 2008 (two 

months after the Department’s 

announcement of the preliminary 

determination), and demonstrates that 

the company had certain exports of 

SDGE produced in the same manner as 

the merchandise in question prior to 

that date.56

Furthermore, UKCG attributes its 

increase in U.S. business to certain 

factors unrelated to the LTFV 

investigation and subsequent SDGE 

Order, including: 

• The actual significance of any U.S. 

sales being overstated, because the low 

base of existing sales volume would 

yield any increase (or decrease) to 

appear significant in percentage terms, 

even though the actual change in sales 

volume was considerably less 

meaningful.57

• Internal efforts to obtain a larger 

global market share, which predate the 

SDGE Order.58

• The increase in demand due to the 

shortage of electrodes in the United 

States, created by high antidumping 

duties imposed on PRC SDGE.59

Finally, UKCG argues that it is 

misleading for Petitioners to point to a 

swing in the import figures for a broadbasket 3801.10.00 ‘‘artificial graphite’’ 

HTS subcategory, such as the large 

increase in January 2009, and attribute 

such an increase to UKCG’s sales of 

finished SDGE to the United States, 

since the total amount UKCG sales of 

finished SDGE to the United States 

during that year was lower than the 

imports of unfinished artificial graphite 

imported into the country in that single 

month. UKCG also points out that, 

though Petitioners submitted import 

data extracted from the uktradeinfo.com 

website in the November 30, 2010 SQR, 

they did not provide other information 

available at the same Web site, which 

shows that over 40 U.K. companies 

imported products under HTS 

3801.10.00 in 2008. UKCG asserts that 

this information undermines 

Petitioners’ arguments regarding 

circumvention, and shows the import 

data for HTS 3801.10.00 to be overstated 

and unreliable.60

Analysis 

Based on our analysis of Petitioners’ 

anti-circumvention inquiry request, 

summarized above, the Department 

determines that Petitioners have 

satisfied the criteria to warrant an 

initiation of a formal anti-circumvention 

inquiry pursuant to section 781(b)(1) of 

the Act and 19 CFR 351.225(h). In 

accordance with 19 CFR 351.225(e), if 

the Department finds that the issue of 

whether a product is included within 

the scope of an order cannot be 

determined based solely upon the 

application and the descriptions of the 

merchandise, the Department will notify 

by mail all parties on the Department’s 

scope service list of the initiation of a 

scope inquiry, including an anticircumvention inquiry. In addition, in 

accordance with 19 CFR 

351.225(f)(1)(ii), a notice of the 

initiation of an anti-circumvention 

inquiry issued under paragraph (e) of 

this section will include a description of 

the product that is the subject of the 

anti-circumvention inquiry, i.e., SDGE, 

as provided in the scope of the SDGE 

Order, produced from unfinished 

artificial graphite rod components from 

the PRC that are further machined and 

finished in the United Kingdom for 

exportation to the United States. 

Furthermore, in accordance with 19 

CFR 351.225(f)(1)(ii), the Department 

will explain the reasoning for its 

decision to initiate an anticircumvention inquiry, which is 

provided below. 

With regard to whether the 

merchandise exported to the United 

States is of the same class or kind as 

subject merchandise produced in the 

PRC, Petitioners have presented 

information to the Department 

indicating that, pursuant to section 

781(b)(1)(A) of the Act, the merchandise 

being exported from the United 

Kingdom by UKCG may be of the same 

class or kind as SDGE produced in the 

PRC, which are subject to the SDGE 

Order. While UKCG contends that its 

finished SDGE exports to the United 

States are of U.K. origin, UKCG has not 

presented evidence demonstrating that 

the merchandise exported to the United 

States is not of the same class or kind 

as merchandise subject to the SDGE 

Order. Consequently, the Department 

finds that Petitioners have provided 

sufficient information in their requests 

regarding the class or kind of 

merchandise to warrant initiation of an 

anti-circumvention inquiry. 

With regard to completion or 

assembly of merchandise in a foreign 

country, pursuant to section 781(b)(1)(B) 

of the Act, Petitioners have also 

presented information to the 

Department indicating that the SDGE 

exported from the United Kingdom are 

being processed by UKCG from 

unfinished components which are 

produced in the PRC (i.e., the country 

subject to the SDGE Order) and which 

might be, themselves, ‘‘unfinished 

SDGE’’ subject to the SDGE Order. While 

UKCG argues that such inputs are not 

subject to the SDGE Order, it does not 

provide evidence to contradict 

Petitioners’ claim that the finished 

SDGE exported to the United States by 

UKCG are produced from inputs 

sourced from the PRC. Therefore, we 

find that the information presented by 

Petitioners regarding this criterion 

supports their request to initiate an anticircumvention inquiry. 

Further, we find that Petitioners have 

provided sufficient evidence to 

demonstrate that the processing 

performed in the United Kingdom may 

be minor or insignificant, as described 

by sections 781(b)(1)(C) and 781(b)(2) of 

the Act. In particular, we find that 

Petitioners’ submissions suggest that the 

level of overall investment, R&D, 

sophistication of production processes 

(and the degree to which they alter the 

fundamental characteristics of the 

merchandise), and production facilities 

needed for UKCG to machine and finish 

the components in question into 

finished SDGE for exportation to the 

United States may be insignificant, 

especially when compared to the level 

of investment, facilities, R&D, and 

processes required by SDGE producers 

in the PRC to manufacture said 

components. We find that Petitioners 


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61See, e.g., Tapered Roller Bearings at Comment 

1. 

have also provided evidence to 

demonstrate that finishing processes in 

the United Kingdom may add little 

value to the merchandise imported into 

the United Kingdom, as exported to the 

United States. Though UKCG provides 

rebuttal evidence to demonstrate that 

the processes performed in the United 

Kingdom are, indeed, sophisticated and 

contend that Petitioners’ arguments are 

based on the incorrect conclusion that 

the SDGE component inputs sourced 

from the PRC are in-scope (citing to the 

U.K. Customs and CBP rulings noted 

above), we do not find that their 

arguments are sufficient to deter the 

Department from initiating an anticircumvention inquiry to attain more 

information regarding the concerns 

raised by Petitioners. As a result, our 

subsequent analysis will focus on 

UKCG’s machining and finishing 

operations in the United Kingdom (in 

addition to information regarding 

pattern of trade, as discussed below) 

and we will closely examine the nature 

of the materials sourced from the PRC 

and whether those materials are subject 

to the scope of the SDGE Order. 

With respect to the value of the 

merchandise produced in the PRC 

pursuant to section 781(b)(1)(D) of the 

Act, Petitioners rely on their ‘‘minor or 

insignificant processing’’ arguments 

summarized above, as well as certain 

proprietary cost information provided in 

the initial Petition, to indicate that the 

value of the unfinished SDGE 

components may be significant relative 

to the total value of a the finished SDGE 

exported to the United States. We find 

that the information, as discussed 

above, adequately meets the 

requirements for initiation pursuant to 

section 781(b)(1)(D) of the Act. 

Regarding whether action is needed to 

prevent evasion of the SDGE Order, 

pursuant to section 781(b)(1)(E) of the 

Act, Petitioners do not address this 

issue directly, instead addressing this 

criterion in their arguments regarding 

‘‘pattern of trade’’ pursuant to section 

781(b)(3) of the Act. Specifically, they 

rebut UKCG’s reliance on the BOI ruling 

and the CBP ruling as support for either 

the appropriateness of the HTS 3801 

sub-classification for the unfinished 

components or confirmation of U.K. 

origin of the finished merchandise in 

question. Petitioners conclude that 

neither ruling is relevant for the 

purposes of the issues present in the 

instant proceeding. Conversely, UKCG 

emphasizes the weight of these 

determinations and implores the 

Department to consider them in its 

analysis on the issue of proper 

classification of the unfinished SDGE 

components for the purposes of this 

initiation determination. We will seek 

more information regarding the proper 

country of origin classification for the 

finished SDGE imported into the United 

States; however, we note that Petitioners 

are correct to point out that neither the 

BOI nor the CBP ruling are legally 

binding for the purposes of antidumping 

proceedings in the United States.61

While we will give each document due 

consideration for the purposes of our 

ultimate anti-circumvention 

determination, we do not find the 

content of either document sufficient to 

compel the Department to decline to 

initiate such a proceeding. 

Finally, we find that Petitioners have 

provided sufficient evidence, in both 

their Initiation Request and SQR, to 

fulfill the additional initiation criteria 

specified in section 781(b)(3) of the Act. 

Though Petitioners do not show that 

UKCG is affiliated with any PRC 

producer of subject merchandise, they 

demonstrate that the company has a 

business relationship with PRC 

producers of subject merchandise. 

Furthermore, information provided by 

Petitioners regarding imports and 

exports under HTS 3801 and 8545, 

suggests that (a) U.K. importers are 

sourcing PRC-produced unfinished 

SDGE components in increasing 

quantities, and (b) exports of finished 

SDGE from the United Kingdom have 

increased since the beginning of the 

initial SDGE investigation. Although 

UKCG provides evidence to demonstrate 

that Petitioners’ information may be 

distorted or misstated due to certain 

factors, the Department intends to seek 

further information on this pattern of 

trade issue during the course of this 

inquiry, and will request greater detail 

as to the nature of UKCG’s relationship 

with PRC producers of subject 

merchandise and timing of sales and 

sourcing. As such, though we recognize 

UKCG’s concerns regarding the 

conclusions reached by Petitioners in 

their analysis of the pattern of trade data 

placed on the record, we do not agree 

with UKCG that the Department should 

conclude that such concerns are 

sufficient to refrain from further inquiry. 

Therefore, for the reasons stated 

above, we have determined that 

Petitioners have provided sufficient 

basis for the Department to initiate a 

formal anti-circumvention inquiry 

concerning the SDGE Order, pursuant to 

section 781(b) of the Act. In accordance 

with 19 CFR 351.225(l)(2), if the 

Department issues a preliminary 

affirmative determination, we will then 

instruct CBP to suspend liquidation and 

require a cash deposit of estimated 

duties on the merchandise. 

This anti-circumvention inquiry 

covers UKCG only. If, within sufficient 

time, the Department receives a formal 

request from an interested party 

regarding potential circumvention of the 

SDGE Order by other companies in the 

United Kingdom, we will consider 

conducting additional inquiries 

concurrently. 

The Department will, following 

consultation with interested parties, 

establish a schedule for questionnaires 

and comments on the issues. The 

Department intends to issue its final 

determination within 300 days of the 

date of publication of this initiation 

pursuant to section 781(f) of the Act. 

This notice is published in accordance 

with 19 CFR 351.225(f). 

Dated: February 17, 2011. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2011–6451 Filed 3–17–11; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

North American Free-Trade Agreement 

(NAFTA), Article 1904 Binational Panel 

Reviews 

AGENCY: NAFTA Secretariat, United 

States Section, International Trade 

Administration, Department of 

Commerce. 

ACTION: Notice of decision of panel. 

SUMMARY: On March 10, 2011, the 

binational panel issued its decision in 

the review of the determination on 

remand made by the International Trade 

Commission, respecting Light-Walled 

Rectangular Pipe and Tube from 

Mexico: Final Determination of Material 

Injury to a U.S. Industry (NAFTA 

Secretariat File Number USA–MEX– 

2008–1904–04). The binational panel 

affirmed the International Trade 

Commission’s determination on 

remand. Copies of the panel’s order are 

available from the U.S. Section of the 

NAFTA Secretariat. 

FOR FURTHER INFORMATION CONTACT: 

Valerie Dees, United States Secretary, 

NAFTA Secretariat, Suite 2061,14th and 

Constitution Avenue, Washington, DC 

20230, (202) 482–5438. 

SUPPLEMENTARY INFORMATION: Chapter 

19 of the North American Free-Trade 

Agreement (‘‘Agreement’’) establishes a 

mechanism to replace domestic judicial 

review of final determinations in 

antidumping and countervailing duty 


Emcdonald on DSK2BSOYB1PROD with NOTICES