[Federal Register Volume 88, Number 208 (Monday, October 30, 2023)]
[Notices]
[Pages 74150-74152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23850]


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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 Inquiry 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, a 
domestic interested party, the U.S. Department of Commerce (Commerce) 
is initiating a country-wide circumvention inquiry to determine whether 
U.S. imports from Mexico of R-410B, which are completed in Mexico using 
Chinese components and further processed in the United States, are 
circumventing the antidumping duty (AD) order on hydrofluorocarbon 
(HFC) blends from the People's Republic of China (China).

DATES: Applicable October 30, 2023.

FOR FURTHER INFORMATION CONTACT: Genevieve Coen or Jerry Xiao, 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) 482-2273, 
respectively.

SUPPLEMENTARY INFORMATION: 

[[Page 74151]]

Background

    On September 22, 2023, pursuant to sections 781(a) of the Tariff 
Act of 1930, as amended (the Act) and 19 CFR 351.226(c), the American 
HFC Coalition \1\ filed a circumvention inquiry request alleging that 
HFC blends completed in Mexico from Chinese components and further 
processed in the United States are circumventing the AD order on HFC 
blends from Mexico \2\ and, accordingly, should be included within the 
scope of the Order.\3\ On October 17, 2023, the American HFC Coalition 
responded to our supplemental questionnaire.\4\
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    \1\ The American HFC Coalition consists of individual members, 
including Arkema, Inc., The Chemours Company FC LLC, Honeywell 
International Inc., and Mexichem Fluor Inc. (collectively, domestic 
interested parties).
    \2\ See Hydrofluorocarbon Blends and Components Thereof from the 
People's Republic of China: Antidumping Duty Order, 81 FR 55436 
(August 19, 2016) (Order).
    \3\ See American HFC Coalition's Letter, ``Request to Initiate 
Anti-Circumvention Inquiry with Respect to Imports of R-410B from 
Mexico Pursuant to Section 781(a) of the Act,'' dated September 22, 
2023.
    \4\ See American HFC Coalition's Letter, ``HFC Coalition's 
Response to Circumvention Supplemental Questionnaire--R-410B from 
Mexico,'' dated October 17, 2023.
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Scope of the Order

    The products subject to the Order are HFC blends. 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. For a full description of the scope the Order, see the 
attachment to the Initiation Checklist.\5\
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    \5\ See Initiation Checklist, ``Circumvention Initiation 
Checklist: Hydrofluorocarbon Blends from the People's Republic of 
China,'' dated concurrently with this notice (Initiation Checklist).
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Merchandise Subject to the Circumvention Inquiry

    The circumvention inquiry covers R-410B from Mexico that is 
completed in Mexico using Chinese R-32 and R-125 and then subsequently 
exported to and further processed in the United States into an in-scope 
blend (i.e., R-410A).

Initiation of Circumvention Inquiry

    Section 351.226(d) of Commerce's regulations states that if 
Commerce determines that a request for a circumvention inquiry 
satisfies the 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 section 781(a) of the Act 
(merchandise completed or assembled in the United States).
    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.\6\ 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.\7\
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    \6\ See Statement of Administrative Action Accompanying the 
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994), 
at 893.
    \7\ 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 at 20 (specifying the 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.

Analysis

    Based on our analysis of the American HFC Coalition's circumvention 
request, Commerce determines that the American HFC Coalition has 
satisfied the criteria under 19 CFR 351.226(c) to warrant the 
initiation of a circumvention inquiry of the Order. For a full 
discussion of the basis for our decision to initiate this circumvention 
inquiry, see the Initiation Checklist. As explained in the Initiation 
Checklist, the information provided by domestic interested parties 
warrants initiating this circumvention inquiry on a country-wide basis. 
Commerce has taken this approach in prior circumvention inquiries, 
where the facts warranted initiation on a country-wide basis.\8\
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    \8\ See, e.g., Hydrofluorocarbon Blends from the People's 
Republic of China: Initiation of Circumvention Inquiries on the 
Antidumping Duty Order, 88 FR 43275 (July 7, 2023); see also 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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[[Page 74152]]

    Consistent with the approach in the prior circumvention inquiries 
that were initiated on a country-wide basis, Commerce intends to issue 
questionnaires to solicit information from producers and exporters in 
Mexico, 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 
the 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 this 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 this circumvention inquiry and direct CBP to continue the 
suspension of liquidation of entries of products subject to the 
circumvention inquiry that were already subject to the suspension of 
liquidation under the Order and to apply the cash deposit rate that 
would be applicable if the product was determined to be covered by the 
scope of the Order. Should Commerce issue a preliminary or final 
circumvention determination, Commerce will follow the suspension of 
liquidation rules under 19 CFR 351.226(l)(2)-(4).

Notification to Interested Parties

    In accordance with 19 CFR 351.226(d) and section 781(a) of the Act, 
Commerce determines that the American HFC Coalition's request for this 
circumvention inquiry satisfies the requirements of 19 CFR 351.226(c). 
Accordingly, Commerce is notifying all interested parties of the 
initiation of this circumvention inquiry to determine whether U.S. 
imports from Mexico of R-410B that are completed in Mexico using 
Chinese components and then blended into in-scope R-410A in the United 
States are circumventing the Order. In addition, we included a 
description of the product that is the subject of this inquiry and an 
explanation of the reasons for Commerce's decision to initiate this 
inquiry as provided above and in the accompanying Initiation Checklist. 
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 this circumvention inquiry 
in the Federal Register.
    This notice is published in accordance with section 781(a) of the 
Act and 19 CFR 351.226(d)(1)(ii).

    Dated: October 23, 2023.
Lisa W. Wang,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2023-23850 Filed 10-27-23; 8:45 am]
BILLING CODE 3510-DS-P