[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 79994-79996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27308]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-905]


4th Tier Cigarettes From the Republic of Korea: Final Affirmative 
Determination of Sales at Less Than Fair Value, and Final Negative 
Determination of Critical Circumstances

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

SUMMARY: The Department of Commerce (Commerce) determines that 4th tier 
cigarettes from the Republic of Korea (Korea) are being, or are likely 
to be, sold in the United States at less than fair value (LTFV) during 
the period of investigation (POI), October 1, 2018 through September 
30, 2019. The final weighted-average dumping margins are listed below 
in the section entitled ``Final Determination.''

DATES: Applicable December 11, 2020.

FOR FURTHER INFORMATION CONTACT: Thomas Martin, AD/CVD Operations, 
Office IV, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 1401

[[Page 79995]]

Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-
3936.

SUPPLEMENTARY INFORMATION:

Background

    On July 22, 2020, Commerce published the Preliminary Determination 
in this investigation, and invited interested parties to comment on our 
findings.\1\ The petitioner in this investigation is the Coalition 
Against Korean Cigarettes.\2\ The mandatory respondent subject to this 
investigation is KT&G Corporation (KT&G). A summary of the events that 
occurred since Commerce published the Preliminary Determination, as 
well as a full discussion of the issues raised by parties for this 
final determination, may be found in the Issues and Decision 
Memorandum.\3\
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    \1\ See 4th Tier Cigarettes from the Republic of Korea: 
Preliminary Affirmative Determination of Sales at Less Than Fair 
Value, and Preliminary Negative Determination of Critical 
Circumstances, 85 FR 44281 (July 22, 2020) (Preliminary 
Determination), and accompanying Preliminary Decision Memorandum.
    \2\ The members of the Coalition Against Korean Cigarettes are 
Xcaliber International and Cheyenne International.
    \3\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Affirmative Determination in the Less-Than-Fair-Value 
Investigation of 4th Tier Cigarettes from the Republic of Korea,'' 
dated concurrently with, and hereby adopted by, this notice (Issues 
and Decision Memorandum).
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    The Issues and Decision Memorandum is a public document and is 
available electronically via Enforcement and Compliance's Antidumping 
and Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov. In 
addition, a complete version of the Issues and Decision Memorandum can 
be accessed directly at http://enforcement.trade.gov/frn/index.html. 
The signed and electronic versions of the Issues and Decision 
Memorandum are identical in content.

Period of Investigation

    The POI is October 1, 2018 through September 30, 2019.

Scope of the Investigation

    The products covered by this investigation are 4th tier cigarettes 
from Korea. For a complete description of the scope of this 
investigation, see Appendix I.

Analysis of Comments Received

    All issues raised in the case briefs and rebuttal briefs submitted 
by interested parties in this proceeding are discussed in the Issues 
and Decision Memorandum. A list of the issues raised by parties and 
responded to by Commerce in the Issues and Decision Memorandum is 
attached to this notice as Appendix II.

Verification

    Commerce normally verifies information relied upon in making its 
final determination, pursuant to section 782(i)(1) of the Tariff Act of 
1930 amended (the Act). However, during the course of this 
investigation, we were unable to conduct verification.\4\ Pursuant to 
section 776(a)(2)(D) of the Act, in situations where information has 
been provided but the information cannot be verified, Commerce will use 
``facts otherwise available'' in reaching the applicable determination. 
Accordingly, we relied on facts available in making our final 
determination.
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    \4\ See Memorandum, ``Cancellation of Verification,'' dated 
October 21, 2020.
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Changes Since the Preliminary Determination

    Based on our analysis of the comments received, we made no changes 
to the scope of the merchandise under investigation but made one change 
to the margin calculation for KT&G since the Preliminary Determination. 
For a discussion of this change, see the Issues and Decision 
Memorandum.

All-Others Rate

    Section 735(c)(5)(A) of the Act provides that the estimated 
weighted-average dumping margin for all other producers and exporters 
not individually investigated shall be equal to the weighted average of 
the estimated weighted-average dumping margins established for 
individually investigated exporters and producers, excluding any 
margins that are zero, de minimis, or any margins determined entirely 
under section 776 of the Act.
    Commerce calculated a weighted-average dumping margin for KT&G, the 
only individually examined exporter/producer in this investigation, 
that is above de minimis. We have assigned KT&G's margin to all other 
producers and exporters, pursuant to section 735(c)(5)(A) of the Act.

Final Determination

    The final weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                               Weighted-
                                                                average
                      Exporter/producer                         dumping
                                                                margin
                                                               (percent)
------------------------------------------------------------------------
KT&G Corporation............................................        5.48
All Others..................................................        5.48
------------------------------------------------------------------------

Disclosure

    We intend to disclose to interested parties the calculations and 
analysis performed in this final determination within five days of any 
public announcement or, if there is no public announcement, within five 
days of the date of the publication of this notice to parties in this 
proceeding in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we will 
instruct U.S. Customs and Border Protection (CBP) to continue the 
suspension of liquidation of all appropriate entries of 4th tier 
cigarettes, as described in Appendix I of this notice, which were 
entered, or withdrawn from warehouse, for consumption on or after July 
22, 2020, the date of publication of the Preliminary Determination of 
this investigation in the Federal Register.
    Further, Commerce will instruct CBP to require a cash deposit equal 
to the amount by which the normal value exceeds the U.S. price as 
follows: (1) For KT&G, the cash deposit rate will be equal to the 
weighted-average dumping margin determined in this final determination; 
(2) if KT&G is the producer, but not the exporter, then the cash 
deposit rate will be equal 5.48 percent; and (3) the cash deposit rate 
for all other producers and exporters will be 5.48 percent. These 
suspension of liquidation instructions will remain in effect until 
further notice.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we will notify the 
International Trade Commission (ITC) of the final affirmative 
determination of sales at LTFV. Because the final determination in this 
proceeding is affirmative, in accordance with section 735(b)(2) of the 
Act, the ITC will make its final determination as to whether the 
domestic industry in the United States is materially injured, or 
threatened with material injury, by reason of imports, or sales (or the 
likelihood of sales) for importation of 4th tier cigarettes no later 
than 45 days after our final determination. If the ITC determines that 
material injury or threat of material injury does not exist, the 
proceeding

[[Page 79996]]

will be terminated, and all cash deposits will be refunded. If the ITC 
determines that material injury or threat of material injury does 
exist, Commerce will issue an antidumping duty order directing CBP to 
assess, upon further instruction by Commerce, antidumping duties on all 
imports of the subject merchandise, entered, or withdrawn from 
warehouse, for consumption on or after the effective date of the 
suspension of liquidation.

Notification Regarding Administrative Protective Order

    This notice serves as the only reminder to parties subject to an 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely notification of the 
return or destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a violation subject to sanction.

Notification to Interested Parties

    We are issuing and publishing this determination and notice in 
accordance with sections 735(d) and 777(i) of the Act and 19 CFR 
351.210(c).

    Dated: December 4, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The merchandise covered by this investigation is certain tobacco 
cigarettes, commonly referred to as ``4th tier cigarettes.'' The 
subject cigarettes are composed of a tobacco blend rolled in paper, 
have a nominal minimum total length of 7.0 cm but do not exceed 12.0 
cm in total nominal length, and have a nominal diameter of less than 
1.3 cm. These sizes of cigarettes are frequently referred to as 
``Kings'' and ``100's,'' but subject merchandise that meets the 
physical description of the scope is included regardless of the 
marketing description of the size of the cigarettes. Subject 
merchandise typically has a tobacco blend that consists of 10% or 
more tobacco stems.
    Subject merchandise is typically sold in packs of 20 cigarettes 
per pack which generally includes the marking ``20 Class A 
Cigarettes'' but are included regardless of packaging. 4th tier 
cigarette packages are typically sold in boxes without a rounded 
internal corner and without embossed aluminum foil inside the pack.
    Both menthol and non-menthol cigarettes and cigarettes with or 
without a filter attached are covered by the scope of this 
investigation.
    Merchandise covered by this investigation is currently 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) under subheading 2402.20.8000. This HTSUS subheading is 
provided for convenience and customs purposes; the written 
description of the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Scope of the Investigation
IV. Changes Since the Preliminary Determination
V. Discussion of the Issues
    General Issues
    Comment 1: Whether 4th Tier Cigarettes are a Distinct Domestic 
Like Product
    Comment 2: Whether the Petition Established Industry Support to 
Initiate the Investigation
    Comment 3: Whether Commerce Clarified the Scope of the 
Investigation for Proper Product Comparisons
    Comment 4: Whether Commerce Correctly Determined Negative 
Critical Circumstances
    KT&G Calculation Issues
    Comment 5: Whether Commerce Should Deduct Korean Taxes in the 
Normal Value (NV) Calculation
    Comment 6: Whether Commerce should include KT&G's sales to Non-
Korean Military Forces in Home Market sales
    Comment 7: Whether Commerce's level of trade (LOT) adjustment in 
place of a constructed export price (CEP) Offset was in accordance 
with law
    Comment 8: Whether KT&G unlawfully deducted U.S. Taxes from 
KT&G's U.S. Price
    Comment 9: Whether Commerce Erred in the Rate It Selected to 
Compute KT&G USA's Imputed Credit Expenses and Inventory Carrying 
Costs
    Comment 10: Whether Commerce Erred in its Treatment of REBATE4U, 
REBATE5U, and REBATE6U
    Comment 11: Whether Commerce Improperly Assumed Certain Returns 
Were Billing Adjustments in the U.S. Market
    Comment 12: Whether Commerce Improperly Classified KT&G's 
Repacking Costs as a Selling Expense
VI. Recommendation

[FR Doc. 2020-27308 Filed 12-10-20; 8:45 am]
BILLING CODE 3510-DS-P