52300 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

1Regulations to Improve Administration and 

Enforcement of Antidumping and Countervailing 

Duty Laws, 85 FR 49472 (August 13, 2020) 

(Proposed Rule). 

2See generally Title VII of the Act (19 U.S.C. 1671 

et. seq.); see also titles I, II, and IV of the Uruguay 

Round Agreements Act (URAA), Public Law 103– 

465, 108 Stat. 4809 (1994) (implementing into law 

the World Trade Organization (WTO) agreements, 

the Agreement on Implementation of Article VI of 

the General Agreement on Tariffs and Trade 1994 

(the Anti-Dumping (AD) Agreement) and the 

Agreement on Subsidies and Countervailing 

Measures ((SCM) Agreement)); and Uruguay Round 

Agreements Act, Statement of Administrative 

Action, H.R. Doc. No. 103–316, vol. 1 (1994) (SAA). 

3See Guangdong Wireking Housewares & 

Hardware Co. v. United States, 745 F.3d 1194, 1203 

(Fed. Cir. 2014) (Guangdong Wireking) (‘‘The 

congressional intent behind the enactment of 

countervailing duty and antidumping law generally 

was to create a civil regulatory scheme that 

remedies the harm unfair trade practices cause.’’). 

4A countervailable subsidy is further defined 

under section 771(5)(B) of the Act as existing when: 

A government or any public entity within the 

territory of a country provides a financial 

contribution; provides any form of income or price 

support; or makes a payment to a funding 

mechanism to provide a financial contribution, or 

entrusts or directs a private entity to make a 

financial contribution, if providing the contribution 

would normally be vested in the government and 

the practice does not differ in substance from 

DEPARTMENT OF COMMERCE 

International Trade Administration 

19 CFR Part 351 

[Docket No. 210813–0162] 

RIN 0625–AB10 

Regulations To Improve 

Administration and Enforcement of 

Antidumping and Countervailing Duty 

Laws 

AGENCY: Enforcement and Compliance, 

International Trade Administration, 

Department of Commerce. 

ACTION: Final rule. 

SUMMARY: Pursuant to its authority 

under Title VII of the Tariff Act of 1930, 

as amended (the Act), the Department of 

Commerce (Commerce) is modifying its 

regulations to improve administration 

and enforcement of the antidumping 

duty (AD) and countervailing duty 

(CVD) laws. Specifically, Commerce is 

modifying its regulation concerning the 

time for submission of comments 

pertaining to industry support in AD 

and CVD proceedings; modifying its 

regulation regarding new shipper 

reviews; modifying its regulation 

concerning scope matters in AD and 

CVD proceedings; promulgating a new 

regulation concerning circumvention of 

AD and CVD orders; promulgating a 

new regulation concerning covered 

merchandise referrals received from 

U.S. Customs and Border Protection 

(CBP); promulgating a new regulation 

pertaining to Commerce requests for 

certifications from interested parties to 

establish whether merchandise is 

subject to an AD or CVD order; and is 

modifying its regulation regarding 

importer reimbursement certifications 

filed with CBP. Finally, Commerce is 

modifying its regulations regarding 

service lists, entries of appearance, and 

importer filing requirements for access 

to business proprietary information in 

AD and CVD proceedings. 

DATES: Effective date: The amendments 

to §§ 351.203, 351.214, 351.228, and 

351.402(f)(2) in instructions 3, 4, 8, and 

10, respectively, are effective October 

20, 2021. The amendments to 

§§ 351.103(d), 351.225, 351.226, 

351.227, and 351.305(d) in instructions 

2, 5, 6, 7, and 9, respectively, are 

effective November 4, 2021. 

For information concerning 

applicability dates, see SUPPLEMENTARY

INFORMATION. 

FOR FURTHER INFORMATION CONTACT: 

Scott McBride at (202) 482–6292; David 

Mason at (202) 482–5051; or Jessica 

Link at (202) 482–1411. 

SUPPLEMENTARY INFORMATION: 

Applicability Dates 

• Amendments to § 351.203 apply to 

segments of the proceeding for which a 

petition is filed on or after October 20, 

2021. 

• Amendments to § 351.214 apply to 

new shipper reviews for which a new 

shipper review request is filed on or 

after October 20, 2021. 

• Amendments to § 351.225 and 

corresponding amendments to 

§§ 351.103(d) and 351.305(d) apply to 

scope inquiries for which a scope ruling 

application is filed, as well as any scope 

inquiry self-initiated by Commerce, on 

or after November 4, 2021. For 

information on specific applicability 

dates for amendments to § 351.225(l), 

please see section 12 in the preamble 

under ‘‘Scope—§ 351.225.’’ 

• Added § 351.226 and corresponding 

amendments to § 351.103(d) and 

§ 351.305(d) apply to circumvention 

inquiries for which a circumvention 

request is filed, as well as any 

circumvention inquiry self-initiated by 

Commerce, on or after November 4, 

2021. For information on specific 

applicability dates for § 351.226(l), 

please see section 12 in the preamble 

under ‘‘Circumvention—§ 351.226.’’ 

• New § 351.227 and corresponding 

amendments to § 351.103(d) and 

§ 351.305(d) apply to covered 

merchandise inquiries for which a 

covered merchandise referral 

determined to be sufficient is received 

on or after November 4, 2021. For 

information on specific applicability 

dates for § 351.227(l), please see section 

8 in the preamble under ‘‘Covered 

Merchandise Referrals—§ 351.227.’’ 

• Added § 351.228 is applicable on or 

after October 20, 2021. 

• Amendments to § 351.402(f)(2) are 

applicable on or after October 20, 2021. 

General Background 

On August 13, 2020, Commerce 

published proposed amendments to its 

existing regulations, 19 CFR part 351, to 

strengthen and improve the 

administration and enforcement of the 

AD/CVD laws.1 Relevant to this final 

rule are the AD/CVD statutory and 

regulatory provisions in general, as well 

as those pertaining to industry support, 

new shipper reviews, scope inquiries, 

circumvention inquiries, covered 

merchandise inquiries, certifications, 

and certain procedures, which we 

briefly summarize below. 

Title VII of the Act vests Commerce 

with authority to administer the AD/ 

CVD laws.2 In general, the AD/CVD 

laws are intended to provide relief to 

domestic industries, including 

businesses, workers, farmers, and 

ranchers from the injurious effects of 

unfairly traded imports through the 

imposition of AD/CVDs.3

Title VII allows for a domestic 

interested party to file a petition seeking 

an AD or CVD order, and corresponding 

duties, on certain imports. If the petition 

meets all the elements necessary for 

initiation, Commerce will initiate and 

conduct an AD or CVD investigation. 

Similarly, the U.S. International Trade 

Commission (ITC) will conduct a 

separate investigation concerning 

material injury or threat of material 

injury to the domestic industry. Section 

731 of the Act directs Commerce to 

impose an AD order on merchandise 

entering the United States when it 

determines that a producer or exporter 

is selling a class or kind of foreign 

merchandise into the United States at 

less than fair value (i.e., dumping), and 

material injury or threat of material 

injury to that industry in the United 

States is found by the ITC. Section 701 

of the Act directs Commerce to impose 

a CVD order when it determines that a 

government of a country or any public 

entity within the territory of a country 

is providing, directly or indirectly, a 

countervailable subsidy with respect to 

the manufacture, production, or export 

of a class or kind of merchandise that 

is imported into the United States, and 

material injury or threat of material 

injury to that industry in the United 

States is found by the ITC.4

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52301 

practices normally followed by governments; and a 

benefit is thereby conferred. To be countervailable, 

a subsidy must be specific within the meaning of 

section 771(5A) of the Act. 

5 ‘‘Liquidation’’ is the point at which CBP 

ascertains and assesses the final rate and amount of 

duty on an entry. See generally 19 U.S.C. 1500. 

6See generally section 706 of the Act; section 736 

of the Act; see also 19 CFR 351.211. 

7See section 751(a)(1) of the Act; see also 19 CFR 

351.212–213. 

8 19 CFR 351.212–213. 

9Section 751(a)(2)(B) of the Act was enacted in 

the URAA in 1994. See SAA at 816 (‘‘Article 9.5 

[of the AD Agreement] establishes special 

procedures for imposing antidumping duties on 

exporters or producers who did not export the 

product to the importing country during the 

original period of investigation (so-called ‘new 

shippers’).’’). Section 351.214 was subsequently 

adopted pursuant to a rulemaking in 1997. See 

Antidumping Duties; Countervailing Duties, 

Proposed Rule, 61 FR 7308, 7317–18 (Feb. 27, 1996) 

(1996 Proposed Rule) (discussing the proposed new 

shipper review regulation); Antidumping Duties; 

Countervailing Duties, Final Rule, 62 FR 27296, 

27318–19 (May 19, 1997) (1997 Final Rule) 

(discussing the finalized new shipper review 

regulation). 

10Trade Facilitation and Trade Enforcement Act 

of 2015, Public Law 114–125, 130 Stat. 122 (2016) 

(TFTEA). 

11See Public Law 114–125, section 433, 130 Stat. 

at 171. See also H.R. Rep. No. 114–114, at 89 (2015) 

(‘‘The Committee is concerned that the ability of 

new exporters and producers to obtain their own 

individual weighted average dumping margins or 

individual countervailing duty rates from the 

Department of Commerce on an expedited basis 

(known as ‘new shipper reviews’) has been abused 

to avoid antidumping and countervailing duties.’’) 

12See Public Law 114–125, section 433, 130 Stat. 

at 171. See also H.R. Rep. No. 114–114, at 89; H.R. 

Rep. No. 114–376, at 192 (2015) (Conf. Rep.). 

13See Public Law 114–125, section 433, 130 Stat. 

at 171. See also Conf. Rep., H.R. Rep No. 114–376 

at 192–193. 

14See section 706(a)(2) of the Act; section 

736(a)(2) of the Act; section 771(25) of the Act. 

15Canadian Solar, Inc. v. United States, 918 F.3d 

909, 917 (Fed. Cir. 2019) (internal citations and 

punctuation omitted) (Canadian Solar). 

16Ad Hoc Shrimp Trade Action Committee v. 

United States, 637 F. Supp. 2d 1166, 1174 (CIT 

2009). 

17See Xerox Corp. v. United States, 289 F.3d 792, 

795 (Fed. Cir. 2002) (‘‘Commerce should in the first 

instance decide whether an antidumping order 

covers particular products, because the order’s 

meaning and scope are issues particularly within 

the expertise of that agency.’’) (internal citations 

and punctuation omitted). 

18See Sunpreme Inc. v. United States, 946 F.3d 

1300, 1303 (Fed. Cir. 2020) (Sunpreme) (holding 

that ‘‘it is within Customs’s authority to 

preliminarily suspend liquidation of goods based 

on an ambiguous [AD or CVD] order, such that the 

suspension may be continued following a scope 

inquiry by Commerce.’’); and Fujitsu Ten Corp. v. 

United States, 957 F. Supp. 245, 248 (CIT 1997) 

(Fujitsu) (‘‘The statute recognizes Customs makes 

the initial determination that an existing 

antidumping order applies to a specific entry of 

merchandise. The statute states that such a decision 

is ‘final and conclusive’ unless it is appealed by 

petition to Commerce.’’ (citations omitted)). 

19 Id., 946 F.3d at 1317 (citing 19 U.S.C. 1500(c)). 

20See TR International Trading Co. v. United 

States, 433 F. Supp. 3d 1329, 1341 (CIT 2020) 

(citing Sunpreme, 946 F.3d at 1318) (TR 

International) (appeal pending) (referencing section 

516 of the Act); see also Fujitsu, 957 F. Supp. at 

248. 

After issuance of an AD/CVD order, 

Commerce directs CBP to ‘‘suspend 

liquidation’’ 5 and collect cash deposits, 

or estimated amounts of duties, on 

appropriate entries subject to the scope 

of the order corresponding to the 

margins of dumping established under 

an AD order and the CVD rates 

established under a CVD order.6 On a 

yearly basis, interested parties may 

request that Commerce conduct an 

administrative review to determine the 

appropriate dumping margin or CVD 

rate for entries subject to the order 

during the previous review year.7

Pursuant to its administrative review 

procedures, Commerce instructs CBP to 

‘‘lift the suspension of liquidation’’ and 

assess AD/CVDs at the appropriate 

amount.8

With respect to industry support, 

once an AD petition under section 

732(b) of the Act or a CVD petition 

under section 702(b) is filed, the statute 

provides Commerce with 20 days in 

which to determine whether the 

elements necessary for initiation of an 

investigation have been satisfied, 

including the requirement to 

demonstrate industry support. In 

exceptional circumstances, Commerce 

may extend the 20-day period to a 

maximum of 40 days solely for purposes 

of determining industry support. In the 

Proposed Rule, Commerce proposed to 

modify § 351.203 to provide for the 

establishment of a deadline by which 

parties may file comments on industry 

support. As discussed below, we are 

adopting the modifications from the 

Proposed Rule. 

Regarding new shipper reviews, 

section 751(a)(2)(B) of the Act and 

§ 351.214 provide a procedure by which 

exporters or producers who did not 

export the product during the original 

AD or CVD investigation can obtain 

their own individual dumping margin 

or countervailing duty rate on an 

accelerated basis (referred to as a ‘‘new 

shipper review’’).9 Commerce explained 

in the Proposed Rule that in 2016 the 

Trade Facilitation and Trade 

Enforcement Act of 2015 (TFTEA) was 

signed into law, which contains title 

IV—Prevention of Evasion of 

Antidumping and Countervailing Duty 

Orders (short title ‘‘Enforce and Protect 

Act of 2015’’ or ‘‘EAPA’’).10 Section 433 

(entitled ‘‘Addressing Circumvention by 

New Shippers’’) added two key 

provisions to the new shipper 

procedures under section 751(a)(2)(B) of 

the Act.11 First, section 433 removed the 

ability for importers to post AD/CVDspecific bonds or security in lieu of AD/ 

CVD cash deposits by striking this 

provision from section 751(a)(2)(B) of 

the Act.12 Second, section 433 added a 

provision that the individual dumping 

margin or countervailing duty rate 

determined for a new shipper must be 

based on bona fide sales in the United 

States and codified the factors that 

Commerce has historically used to 

determine whether a sale is bona fide.13

Accordingly, in the Proposed Rule, 

Commerce proposed conforming 

amendments to § 351.214, which are 

adopted in this final rule. The 

modifications to § 351.214 clarify the 

circumstances under which Commerce 

will grant a new shipper review and 

establish specific factors to be 

considered in determining whether the 

sales at issue constitute bona fide sales 

for purposes of the AD and CVD laws. 

With respect to scope inquiries, upon 

issuance of an AD or CVD order, the Act 

requires Commerce to provide a 

description of the class or kind of 

merchandise subject to the order at 

issue (i.e., subject merchandise).14 That 

description is known as the scope of the 

AD/CVD order. Because the statute 

‘‘does not require Commerce to define 

the class or kind of foreign merchandise 

in any particular manner[,] Commerce 

has the authority to fill that gap and 

define the scope of an order consistent 

with the countervailing duty and 

antidumping duty laws.’’ 15 Further, 

‘‘under the statutory scheme, Commerce 

owes deference to the intent of the 

proposed scope of an antidumping 

investigation as expressed in an 

antidumping petition.’’ 16

Under the statutory framework, as 

recognized by the U.S. Court of 

International Trade (CIT) and U.S. Court 

of Appeals for the Federal Circuit 

(Federal Circuit), Commerce is the 

agency charged with establishing and 

interpreting the scope of AD/CVD 

orders,17 and CBP is the agency charged 

with applying and enforcing the AD/ 

CVD orders.18 As part of its statutory 

responsibility ‘‘to fix the amount of duty 

owed on imported goods[,]’’ CBP ‘‘is 

both empowered and obligated to 

determine in the first instance whether 

goods are subject to existing [AD/CVD 

orders].’’ 19 Pursuant to 19 U.S.C. 

1514(b) (section 514 of the Act), this 

‘‘determination is then ‘final and 

conclusive’ unless an interested party 

seeks a scope ruling from Commerce 

(which ruling would then be reviewable 

pursuant to [19 U.S.C. 1516a]).’’ 20

Commerce retains discretion to define 

the scope of the order to ensure that all 

imports causing injury have been 

addressed, and, additionally, may take 

into account potential circumvention 

and duty evasion concerns in crafting 

52302 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

21See Canadian Solar, 918 F.3d at 921–22 (‘‘It is 

unnecessary for Commerce to engage in a game of 

whack-a-mole when it may reasonably define the 

class or kind of merchandise in a single set of 

orders, and within the context of a single set of 

investigations, to include all imports causing 

injury.’’). 

22See section 516A(a)(2)(B)(vi) of the Act 

(referencing, in the judicial review provision of the 

statute, ‘‘[a] determination by the administering 

authority as to whether a particular type of 

merchandise is within the class or kind of 

merchandise described in an existing finding or 

dumping our antidumping or countervailing duty 

order.’’) 

23Omnibus Trade Act of 1987, Report of the 

Senate Finance Committee, S. Rep. No. 100–71, at 

101 (1987). 

24 Id. 

25 Id. 

26See SAA at 892–95. 

27Tung Mung Development Co., Ltd. v. United 

States, 219 F. Supp. 2d 1333, 1343 (CIT 2002) (Tung 

Mung) (quoting Mitsubishi Elec. Corp. v. United 

States, 700 F. Supp. 538, 555 (CIT 1988) (Mitsubishi 

I), aff’d 898 F.2d 1577, 1583 (Fed. Cir. 1990) 

(Mitsubishi II)). 

28See Public Law 114–125, 421, 130 Stat. at 161– 

69. 

29See H.R. Rep. No. 114–376, at 190 (‘‘If the 

Commissioner is unable to determine whether the 

merchandise at issue is covered merchandise, the 

Commissioner shall refer the matter to the 

Department of Commerce to determine whether the 

merchandise is covered merchandise. The 

Department of Commerce is to make this 

determination pursuant to its applicable statutory 

and regulatory authority, and the determination 

shall be subject to judicial review under 19 U.S.C. 

1516a(a)(2). The Conferees intend that such 

determinations include whether the merchandise at 

issue is subject merchandise under 19 U.S.C. 

1677j.’’ (referencing sections 516 and 781 of the 

Act)). 30See generally section 777(a) of the Act. See also 

19 CFR 351.104 (describing the official record of 

AD/CVD proceedings). 

31Section 351.303(b)(2) contains procedures 

regarding the filing of documents through 

Commerce’s Antidumping and Countervailing Duty 

Centralized Electronic Service System (ACCESS). 

the scope language.21 Because the scope 

of an AD/CVD order is written in 

general terms, questions may arise as to 

whether a certain product is covered by 

the scope of an order. Beyond a general 

recognition that Commerce may issue 

‘‘class or kind of merchandise’’ 

determinations,22 the statute is 

otherwise silent regarding the 

procedures and standards that 

Commerce may apply in issuing a scope 

ruling. Therefore, Commerce’s 

regulation, § 351.225, describes the 

applicable procedures and standards 

concerning ‘‘scope rulings’’ that 

Commerce will issue upon application 

of an interested party, or by initiating a 

‘‘scope inquiry.’’ In the Proposed Rule, 

Commerce proposed numerous 

revisions to § 351.225, many of which 

are further revised or adopted in this 

final rule. 

Concerning circumvention inquiries 

(considered another type of ‘‘class or 

kind determination’’ under the 

jurisdictional provisions of the statute), 

section 781 of the Act identifies four 

types of products that may be found 

circumventing an AD/CVD order, and, 

therefore, may be included within the 

scope of the order. The legislative 

history accompanying the Omnibus 

Trade and Competitiveness Act of 1988 

provides that ‘‘[a]n order on an article 

presumptively includes articles altered 

in minor respects in form or 

appearance[,]’’ and that the purpose of 

the circumvention statute ‘‘is to 

authorize the Commerce Department to 

apply AD and [CVD] orders in such a 

way as to prevent circumvention and 

diversion of U.S. law.’’ 23 Further, the 

legislative history indicates that 

Congress was concerned with the 

existence of ‘‘loopholes,’’ i.e., foreign 

companies evading orders by making 

slight changes in their method of 

production, because such scenarios 

‘‘seriously undermine the effectiveness 

of the remedies provided by the 

antidumping and countervailing duty 

proceedings, and frustrated the 

purposes for which these laws were 

enacted.’’ 24 Congress also recognized 

that ‘‘aggressive implementation of [the 

circumvention statute] by the Commerce 

Department can foreclose these 

practices.’’ 25 With the implementation 

of the URAA, the SAA expressed similar 

concerns about scenarios limiting the 

effectiveness of the AD duty law (i.e., 

completion or assembly in a country 

other than the subject country).26

Accordingly, Commerce ‘‘has been 

vested with authority to administer the 

antidumping laws in accordance with 

the legislative intent’’ and, thus, ‘‘has a 

certain amount of discretion [to act] . . . 

with the purpose in mind of preventing 

the intentional evasion or 

circumvention of the antidumping duty 

law.’’ 27 In the Proposed Rule, 

Commerce proposed to adopt a new 

regulation, § 351.226, to address 

circumvention inquiries and 

determinations. After making some 

revisions from the Proposed Rule, 

Commerce is adopting § 351.226 in this 

final rule. 

Pertaining to covered merchandise 

inquiries, title IV of the TFTEA (referred 

to as EAPA), section 421, added section 

517 to the Act,28 which establishes a 

formal process for CBP to conduct civil 

administrative investigations of 

potential duty evasion of AD and CVD 

orders on the basis of an allegation by 

an interested party or upon referral by 

another Federal agency (referred to 

herein as an ‘‘EAPA investigation’’). 

Pursuant to section 517(b)(4)(A) of the 

Act, if CBP is conducting an EAPA 

investigation based on an allegation 

from an interested party, and is unable 

to determine whether the merchandise 

at issue is ‘‘covered merchandise’’ 

within the meaning of section 517(a)(3) 

of the Act, it shall refer the matter to 

Commerce to make a covered 

merchandise determination (referred to 

herein as a ‘‘covered merchandise 

referral’’).29 Although Congress did not 

require that Commerce promulgate 

regulations with respect to section 517 

of the Act, in the Proposed Rule, 

Commerce proposed to adopt § 351.227, 

a new regulation to address procedures 

and standards specific to Commerce’s 

consideration of covered merchandise 

referrals. In particular, this new 

regulation would govern Commerce’s 

receipt of a covered merchandise 

referral, Commerce’s initiation and 

conduct of a covered merchandise 

inquiry, and Commerce’s covered 

merchandise determination, pursuant to 

section 517(b)(4) of the Act. With some 

revisions, Commerce is adopting 

§ 351.227 in this final rule. 

Regarding certifications, in the 

Proposed Rule, Commerce proposed to 

adopt § 351.228, a regulation to codify 

and enhance Commerce’s existing 

authority and practice to require 

certifications by importers and other 

interested parties as to whether 

merchandise is subject to an AD/CVD 

order. With minor revisions, Commerce 

is adopting § 351.228 in this final rule. 

Another form of certifications relates 

to importer reimbursement certifications 

as provided for under § 351.402(f)(2). In 

the Proposed Rule, Commerce proposed 

to amend § 351.402(f)(2) regarding 

importer certifications for the payment 

or reimbursement of AD/CVDs on 

entries subject to AD orders to account 

for updated procedures. With minor 

revisions, Commerce is adopting the 

amendments to § 351.402(f)(2) in this 

final rule. 

To implement the substantive changes 

in the final rule, Commerce is also 

adopting proposed changes to two 

procedural regulations. First, in 

conducting its administrative 

proceedings, the statute directs 

Commerce to make certain information 

generally available on a public record.30

Pursuant to § 351.103(d)(1), with some 

exceptions, parties that wish to be 

served with public information on a 

segment of a proceeding must file an 

entry of appearance on that record to be 

placed on the relevant segment-specific 

public service list.31 In the Proposed 

Rule, Commerce proposed to amend 

§ 351.103(d)(1) to reflect that certain 

interested parties need not file an entry 

of appearance to be placed on the 

segment-specific service list for the 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52303 

32Pursuant to section 777(c)(1)(A) of the Act, 

Commerce must make BPI submitted to it during 

the course of an AD/CVD proceeding available to 

interested parties who have been authorized to 

receive such information under an APO. 

Additionally, section 777(d) of the Act requires that 

parties submitting BPI to Commerce which is 

covered by an APO must serve such information on 

‘‘all interested parties who are parties to the 

proceeding’’ that are subject to the APO. ‘‘Interested 

party’’ is defined under section 771(9) of the Act 

and 19 CFR 351.102(b)(29); ‘‘party to the 

proceeding’’ is defined under 19 CFR 

351.102(b)(36). 

33On September 10, 2020, in response to 

concerns raised by interested parties, Commerce 

determined that it would benefit ‘‘the public and 

the agency’’ if parties had ‘‘the opportunity to 

submit rebuttal comments in response to comments 

filed by other parties on the proposed rule.’’ 

Regulations to Improve Administration and 

Enforcement of Antidumping and Countervailing 

Duty Laws; Extension of Comment Period to Allow 

Submissions of Rebuttal Comments and 

Requirement of Electronic Submission of Comments 

and Rebuttal Comments, 85 FR 55801 (Sept. 10, 

2020). Accordingly, Commerce granted ‘‘an 

extension of time solely for the purpose of allowing 

the public to file such rebuttal comments.’’ Id. 34Proposed Rule, 85 FR 49472 at 49472–73. 

relevant segment. With a minor 

revision, these changes are adopted in 

this final rule. Additionally, 

§ 351.103(d) contains a cross-reference 

to the service list procedures for scope 

ruling applications, which are further 

described in § 351.225(n). This language 

has been updated to include reference to 

service list procedures for requests for 

circumvention inquiries, which are 

further described in § 351.226(n). 

Second, because of the nature of 

Commerce’s proceedings, which 

frequently require Commerce to rely on 

non-public information such as business 

proprietary information (BPI) in issuing 

its determinations, the statute also 

requires Commerce to make BPI 

available to interested parties who have 

been authorized to receive such 

information under an administrative 

protective order (APO).32 Section 

351.305(d) provides specific filing 

requirements for importers to access BPI 

in Commerce’s proceedings, including 

certain requirements for importers in 

scope inquiries. In the Proposed Rule, 

Commerce proposed to amend 

§ 351.305(d) to add reference to 

importers in circumvention inquiries 

and to exempt importers identified by 

CBP in a covered merchandise referral 

from these specific filing requirements. 

These changes are adopted in this final 

rule. 

Explanation of Modifications From the 

Proposed Rule to the Final Rule and 

Responses to Comments 

In the Proposed Rule published on 

August 13, 2020, Commerce invited the 

public to submit comments.33

Commerce received 37 submissions 

providing comments and 17 rebuttal 

submissions from interested parties, 

including domestic producers, 

exporters, importers, surety companies, 

and foreign governments. We have 

determined to make certain 

modifications to the Proposed Rule in 

response to issues and concerns raised 

in those comments and rebuttal 

comments. We considered the merits of 

each submission and on many of the 

issues and concerns raised, we analyzed 

the legal and policy arguments in light 

of both our past practice, as well as our 

desire to strengthen the administration 

and enforcement of our AD/CVD laws. 

As we explained in the Proposed 

Rule,34 the purpose of these 

modifications and additions to our 

regulations is to strengthen the 

administration and enforcement of AD/ 

CVD laws, make such administration 

and enforcement more efficient, and to 

create new enforcement tools for 

Commerce to address circumvention 

and evasion of trade remedies. These 

modifications allow Commerce to better 

fulfill the Congressional intent behind 

the AD/CVD laws—namely, to remedy 

the injurious effects of unfairly traded 

imports. In addition, these regulations 

promote the Administration’s objective 

to strongly enforce and efficiently 

administer the AD/CVD laws rigorously. 

The preamble to the Proposed Rule 

provides extensive background, 

analysis, and explanation which are 

relevant to these regulations. With some 

modifications, as noted, this final rule 

codifies those proposed on August 13, 

2020. Accordingly, to the extent that 

parties and the public wish to have a 

more detailed and comprehensive 

interpretation of these regulations, we 

advise not only considering the 

preamble to these final regulations, but 

also the analysis and explanations in the 

preamble to the Proposed Rule. 

In drafting this final rule, Commerce 

carefully considered each of the 

comments received. The following 

sections generally contain a brief 

discussion of each regulatory provision, 

a summary of the comments we 

received (if any) and Commerce’s 

responses to those comments. In 

addition, these sections contain an 

explanation of any changes Commerce 

has made to the Proposed Rule, either in 

response to comments or that it deemed 

necessary for conforming, clarifying, or 

providing additional public benefit. The 

final section discusses other comments 

received not related to the regulations 

covered in this final rule. 

Comment Period on Industry Support 

Prior to Initiation Determination— 

§ 351.203(g) 

Section 351.203(g) establishes a 

deadline for comments on industry 

support no later than five business days 

before the scheduled date of initiation, 

and rebuttal comments no later than two 

calendar days thereafter. We received 

several comments and rebuttal 

comments both in support and in 

opposition to the Proposed Rule. In 

addition, some commenters proposed 

that the final rule should impose 

additional requirements for parties 

filing comments in opposition to the 

petitioning party’s claims of industry 

support. 

After considering the comments and 

rebuttal comments, we have not adopted 

the suggested modifications to the 

Proposed Rule and, therefore, have left 

unchanged proposed § 351.203(g). We 

believe the Proposed Rule to establish a 

deadline for industry support comments 

and rebuttal comments is reasonable 

because it provides sufficient time for 

parties to submit comments and rebuttal 

comments, while balancing the need for 

Commerce to have sufficient time to 

consider and analyze the comments and 

information on the record within the 

normal timeframe established by 

Congress. We also believe the deadlines, 

as set forth in the Proposed Rule, 

recognize the importance of giving 

parties adequate time to prepare 

meaningful comments. Last, we 

recognize that establishing regulatory 

deadlines is a reasonable exercise of 

Commerce’s authority to implement the 

statutory provisions the agency is 

responsible for administering. 

1. Time Limits for Comments 

Several commenters understand 

Commerce’s desire to have adequate 

time to consider comments on industry 

support, and several commenters 

support and agree with Commerce’s 

proposal to set a new deadline. Other 

commenters contend that Commerce’s 

justification about needing time to 

review industry support comments does 

not outweigh the importance of giving 

parties time to prepare meaningful 

comments because the issue cannot be 

revisited after initiation. 

In particular, one commenter asserts 

that adding a limitation on the timeline 

for filing comments on industry support 

is contrary to the Act because the Act 

does not permit Commerce to limit the 

period for comments on industry 

support and the statute is unambiguous 

in allowing comments any time before 

Commerce initiates the investigation. 

The commenter further argues that even 

52304 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

if the Act were silent on this issue, 

Commerce’s interpretation is arbitrary 

and capricious and not based on a 

permissible construction of the statute. 

Another commenter disagrees, arguing 

that the commenter’s statutory analysis 

is flawed. The rebutting commenter 

contends the Act does not set forth an 

explicit timeline for submitting 

comments on industry support and 

further that the Act allows Commerce to 

promulgate regulations such as this one. 

Moreover, the rebutting commenter 

states, this proposed regulation is 

neither arbitrary nor capricious because 

Commerce’s proposal provides 

sufficient time for interested parties to 

challenge the industry support claim 

provided in the petition for relief. 

Response: 

Contrary to the commenter’s argument 

that the statute prohibits Commerce 

from limiting the time for comments on 

industry support, there is nothing in the 

statute that precludes Commerce from 

adopting a rule that provides parties 

with specific deadlines for submission 

of comments or rebuttal comments on 

the issue of industry support. The sole 

commenter advancing the statutory 

argument did not cite to any express 

language in the statute for support. To 

the contrary, sections 702(c)(4)(E) and 

732(c)(4)(E) of the Act provide that, 

before the administering authority 

makes a determination with respect to 

initiating an investigation, any person 

who would qualify as an interested 

party may submit comments or 

information on the issue of industry 

support. The Act does not set forth an 

explicit timeline for submitting 

comments, provided it is before 

Commerce makes its determination. 

Thus, based upon its authority to 

promulgate regulations, Commerce may 

establish a reasonable timeframe for 

when industry support comments are to 

be submitted. Nothing in the Act 

restricts Commerce from doing so. 

Indeed, the Act allows for, and 

Commerce has set, deadlines for most 

other types of submissions in its AD and 

CVD proceedings. 

2. Sufficiency of Time for Comment 

Several commenters claim that 

shortening the time to file comments on 

industry support would prejudice 

interested parties because respondents 

do not have advanced notice of new 

petitions and, therefore, a limited time 

to prepare comments. Commenters also 

allege that there is a delay in obtaining 

access to the petitions because the 

respondents must obtain APO approval 

to access BPI in the petition, although 

other commenters contradict this claim, 

arguing that interested parties have 

notice of the petitioner’s industry 

support claims on the first day the 

petition is filed. 

Other commenters raise concerns 

about the rebuttal comment deadline, 

arguing that this is an insufficient 

amount of time. These commenters 

suggest expanding the rebuttal deadline 

from two days to five days and 

recommend that Commerce revise the 

rule to restrict the deadline for industry 

support comments further, to ten days 

before the date of initiation, rather than 

five business days, as Commerce 

proposed. Another commenter wonders 

how Commerce would take rebuttal 

claims into account if due only two days 

before the scheduled date of the 

initiation decision. Alternatively, some 

commenters propose that Commerce 

should work with Congress to amend 

the Act and expand the timeframe for 

initiation decisions from 20 days to 40 

days. 

Response: 

We have not accepted these proposed 

changes. With respect to the arguments 

of insufficient time for parties to 

provide information and comment, we 

disagree. The Proposed Rule provides 

parties with, at a minimum, more than 

a week, and in many cases a longer 

period, for preparation of comments. 

This amount of time should be 

sufficient. As a general rule, we believe 

the deadlines proposed for the 

submission of comments and rebuttal 

comments on the sole issue of industry 

support provide a sufficient and 

reasonable amount of time for interested 

parties to address industry support 

issues. 

With respect to the point made by 

certain commenters regarding 

insufficient notice, we disagree. 

Subsections 702(b)(4) and 732(b)(4) of 

the Act state that, upon receipt of a 

petition, the administering authority is 

required to notify the government of any 

exporting country named in the petition 

by delivering a public version of the 

petition to an appropriate representative 

of such country. Thus, the government 

of the exporting country receives notice 

of the petition on or about the day of 

receipt by Commerce. The commenters 

seem to imply there should be advance 

notice of a petition filing. This is 

incorrect, and in any case, it is not 

possible to provide advance notice 

before a petition is filed. Nonetheless, 

we are mindful that in establishing due 

dates for submissions, Commerce must 

balance the interests of parties to submit 

information and comment with 

Commerce’s ability to consider fully 

such information and comments and to 

make a decision on initiation supported 

by evidence on the record. 

With respect to the claim that there 

may be delays in obtaining access to the 

petitions because the parties must first 

obtain APO approval to access the BPI 

contained in such petitions, we do not 

believe this will be an issue. First, based 

on Commerce’s years of experience with 

petitions and the arguments parties have 

advanced against industry support in 

the past, we find that, in general, the 

types of claims made against the 

petitioner’s establishment of industry 

support tend to focus on the scope of 

subject merchandise as defined in 

petitions, the domestic like product, the 

methodology the petitioner uses to 

calculate industry support, and whether 

U.S. producers within the industry are 

left out of the industry support 

calculation. Our experience has been 

that these types of arguments in 

opposition to the petitioner’s industry 

support claims generally can be 

advanced based on the public 

information provided in the petitions. 

Therefore, obtaining access to BPI is 

generally not needed for submission of 

comments and information on the issue 

of industry support. 

Second, in the instance in which APO 

access is needed in order for parties to 

comment on the industry support claim 

contained in a petition, we do not 

believe obtaining such access will be an 

impediment to a timely submission of 

comments. We note that while obtaining 

APO access has the potential to delay 

access to BPI, the APO/Dockets Unit of 

Enforcement & Compliance issues an 

APO and routinely expedites the 

approval process once an APO 

application is filed. We, therefore, 

believe obtaining APO access to BPI will 

not be an impediment to parties seeking 

to comment on industry support. 

With respect to the comment as to 

how Commerce would take rebuttal 

claims into account if due only two days 

before the scheduled date of the 

initiation decision, we note that, under 

the current rule, Commerce must take 

into account comments that are filed up 

to and including the day of the 

scheduled decision. Thus, we believe 

the commenter’s point highlights the 

issue with the current situation and 

recognizes that a procedural 

improvement is necessary, and one that 

is aimed at providing Commerce with 

sufficient time to make an informed 

initiation decision in accordance with 

the statute’s 20-day period. Providing 

two days for Commerce to consider any 

rebuttal comments is a significant 

improvement over the current process 

which allows comments and rebuttal 

comments to be submitted up to the 

close of business on the scheduled date 

of the decision. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52305 

35 1997 Final Rule, 62 FR 27296 at 27319 

(discussing the finalized new shipper review 

regulation). 

3. Additional Requirements 

Two commenters suggest that 

Commerce include a regulatory 

provision that requires parties objecting 

to industry support to: (1) If they are 

domestic producers, provide their 

affiliation status and whether they are 

related to a foreign producer; and (2) 

identify the sources of industry data and 

indicate why the data is more accurate 

than the data in the petition. Other 

commenters disagree with the suggested 

additions to the proposed regulation 

and argue that, pursuant to the Act, the 

petitioner bears the burden of 

establishing industry support, and not 

for opposing parties to establish a lack 

of industry support. 

Response: 

We have not adopted the proposed 

additions. The suggestion to impose 

new requirements on parties that object 

to a petition would establish a 

substantive change beyond the scope of 

the procedural rule Commerce has 

proposed. In addition, in our view, the 

suggested requirement is unnecessary. 

The petitioners are responsible for 

establishing industry support of the 

petition. To the extent industry support 

is not established in accordance with 

the Act, or is unclear from the evidence 

on the record, Commerce has authority 

to address these situations as they arise, 

such as through polling the industry or 

otherwise determining whether there is 

sufficient industry support to initiate an 

AD or CVD investigation. 

4. Pre-Initiation CVD Consultations 

One commenter expressed concern 

that shortening the time period for 

industry support comments may 

prevent parties from requesting preinitiation consultations pursuant to the 

SCM Agreement. 

Response: 

With respect to CVD consultations, 

we do not see how the new procedural 

deadlines for comments ‘‘may prevent 

parties from requesting pre-initiation 

consultations’’ under the SCM 

Agreement, nor did the commenter 

explain the basis for its concern on this 

point. To clarify, Commerce does not 

wait for the government of the exporting 

country to make a request for 

consultations. Instead, in every instance 

in which a CVD petition is filed, 

consistent with subsection 

702(b)(4)(A)(ii) of the Act, Commerce 

invites the government of the exporting 

country to engage in consultations, if it 

wishes. 

New Shipper Reviews—§ 351.214 

After considering the comments and 

rebuttal comments, Commerce is 

removing §§ 351.214(b)(2)(iv)(A), 

351.214(k)(3), and 351.214(k)(4). 

Commerce is also modifying 

§ 351.214(b)(2)(iv)(A) and (B) of the 

Proposed Rule to clarify that the 

exporter or producer requesting the new 

shipper review will provide 

certifications pertaining to necessary 

information related to the unaffiliated 

customer in the United States and the 

unaffiliated customer’s willingness to 

participate in the new shipper review, 

and provide information relevant to the 

new shipper review, if requested by 

Commerce or an explanation by the 

producer/exporter of why such 

certification from the unaffiliated 

customer cannot be provided. With the 

elimination of §§ 351.214(k)(3) and 

(k)(4), §§ 351.214(k)(5) and (k)(6) are 

now designated as §§ 351.214(k)(3) and 

(k)(4), respectively; and §§ 351.214(k)(5) 

and (k)(6) are eliminated. 

In addition, Commerce is modifying 

§ 351.214(b)(2)(v)(B) by adding the 

terms ‘‘shipment’’ and ‘‘any’’ to this 

provision, for consistency with the 

language utilized in § 351.214(b)(v)(C) 

and to clarify that a new shipper is 

required to provide documentation 

establishing the volume of any 

subsequent shipments where 

subsequent shipments have occurred. 

Commerce is also modifying 

§ 351.214(b)(v)(C) by removing the 

‘‘and’’ at the end of the clause and 

placing it at the end of 

§ 351.214(b)(v)(D)(4) to grammatically 

conform with the additions of 

§ 351.214(b)(v)(D) and (E) to the 

regulation. Next, Commerce is 

modifying § 351.214(b)(2)(v)(E)(4) by 

replacing the term ‘‘unrelated’’ with the 

term ‘‘unaffiliated’’ to conform more 

closely to the terms of sections 772(a) 

and (b) of the Act. 

Last, we note that in § 351.214(k) of 

the Proposed Rule, Commerce 

inadvertently cited to section 

752(a)(2)(B)(iv) of the Act. Commerce, 

however, intended to cite to section 

751(a)(2)(B)(iv) of the Act in this 

provision of the Proposed Rule. 

Accordingly, Commerce is correcting 

this error in its final rule. 

1. The Requirements for Requesting a 

New Shipper Review (§ 351.214(b)) 

(a) Certification Requirements for 

Unaffiliated Purchasers 

To obtain a new shipper review, 

§ 351.214(b) of the Proposed Rule sets 

forth documentation requirements for 

an exporter or producer requesting a 

new shipper review. In particular, 

§ 351.214(b)(2)(iv)(A) and (B) of the 

Proposed Rule establish the 

requirements that the producer or 

exporter requesting the review provide 

certifications from the unaffiliated 

customer in the United States certifying 

that (1) it did not purchase the subject 

merchandise from the producer or 

exporter during the period of 

investigation; and (2) it will provide 

necessary information requested by 

Commerce regarding its purchase of 

subject merchandise. 

Several commenters oppose 

Commerce’s additional requirements. 

One commenter asserts that these 

requirements are contrary to the intent 

of the statute and Commerce’s authority 

to conduct new shipper reviews. Both 

this commenter and several others argue 

these requirements deprive a requestor 

the option of filing a new shipper 

review where an unaffiliated customer 

chooses not to certify. 

Two commenters argue that requiring 

unaffiliated customer certifications is 

burdensome and may discourage 

meritorious new shipper claims. One 

commenter points out that the concern 

raised here is similar to the concern 

Commerce articulated when it 

previously considered and rejected a 

proposal to require unaffiliated 

customer certifications in the 1997 Final 

Rule.35 The commenter further argues 

that the requirement in 

§ 351.214(b)(2)(iv)(B) risks use of 

adverse facts available if the customer is 

not forthcoming, particularly with a 

requestor’s limited control over an 

unaffiliated customer. Similarly, 

another commenter argues that applying 

an adverse inference based on an 

unaffiliated party’s failure to cooperate 

is ‘‘potentially unfair’’ to a respondent, 

while another commenter asserts this 

requirement is too burdensome on a 

requestor. Another commenter argues 

there are legitimate circumstances 

where a new shipper has no sales to 

unaffiliated customers in the United 

States, such as when a multinational 

company sells a component to its U.S. 

subsidiary for purposes of later selling 

a downstream product. 

By contrast, two commenters support 

the new standards and documentation 

requirements for requesting new shipper 

reviews in the Proposed Rule. One 

commenter asserts that other 

commenters have vastly overstated the 

burden of providing customer 

certifications to demonstrate bona fide 

sales because (1) no customer has 

commented that it could not comply 

with Commerce’s requirements; (2) 

providing customer certifications is a 

limited burden given that often only a 

52306 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

36H.R. Rep. No. 114–114 at 89; see also Proposed 

Rule, 85 FR 49472 at 49473. 37Proposed Rule, id. at 49474. 

small number of sales and customers are 

involved; and (3) the certifications are 

limited to information pertaining to the 

customer’s purchase of the subject 

merchandise. The commenter, therefore, 

concludes that Commerce’s proposed 

certification requirements are not 

unduly burdensome. 

Response: 

We have made changes to the 

Proposed Rule with respect to the 

unaffiliated customer certifications. In 

particular, we have removed the 

certification requirements contained in 

§ 351.214(b)(2)(iv)(A) and (B) of the 

Proposed Rule and have replaced the 

certification requirements with 

additional exporter or producer 

certifications, as explained further 

below. 

As an initial matter, we disagree with 

the commenters that assert the 

certification requirements in 

§ 351.214(b)(2)(iv)(A) and (B) are 

contrary to the intent of the statute and 

Commerce’s authority to conduct new 

shipper reviews. Section 751(a)(2)(B)(i) 

of the Act provides that if Commerce 

receives a request from an exporter or 

producer of subject merchandise 

establishing that the requestor (1) did 

not export subject merchandise during 

the period of investigation, and (2) is 

not affiliated with any exporter or 

producer who exported the subject 

merchandise during the period of 

investigation, Commerce shall conduct a 

new shipper review to establish an 

individual weighted average dumping 

margin or countervailing duty rate. 

These certification requirements are 

consistent with the requirements a new 

shipper review requestor must satisfy in 

order for Commerce to conduct a new 

shipper review, as identified in this 

section of the Act. 

However, in the interest of 

eliminating unnecessary requirements, 

the final rule modifies § 351.214(b)(2) of 

the Proposed Rule by removing the 

requirement in § 351.214(b)(2)(iv)(A) 

that requires the producer or exporter 

requesting the review to submit 

certifications from the unaffiliated 

customer in the United States that it did 

not purchase the subject merchandise 

from the producer or exporter during 

the period of investigation. Upon further 

consideration, we find this certification 

to be unnecessary given the certification 

requirement from the requestor in 

§ 351.214(b)(2)(i) and (ii) that it did not 

sell the subject merchandise to the 

United States during the period of the 

investigation. 

In response to comments concerning 

the burden of obtaining the unaffiliated 

customer’s certification, we have 

replaced both § 351.214(b)(2)(iv)(A) and 

(B). The final rule replaces 

§ 351.214(b)(2)(iv)(A) of the Proposed 

Rule with the requirement that the 

exporter/producer certify that it will 

provide during the course of the new 

shipper review, and to the fullest extent 

possible, necessary information related 

to the unaffiliated customer in the 

United States. 

Additionally, the final rule modifies 

§ 351.214(b)(2)(iv)(B) of the Proposed 

Rule to clarify that the exporter/ 

producer will provide a certification by 

the unaffiliated customer of its 

willingness to participate in the new 

shipper review and provide information 

relevant to the new shipper review, if 

such information is requested by the 

Secretary. To the extent the unaffiliated 

customer cannot provide its 

certification, the exporter/producer is 

required to provide, in the alternative, 

an explanation of why the unaffiliated 

customer cannot provide its 

certification. 

Section 351.214(b) of the Proposed 

Rule provides further guidance, 

consistent with section 751(a)(2)(B)(i) of 

the Act, on the requirements necessary 

for Commerce to conduct a new shipper 

review. We consider the new 

certification requirement in 

§ 351.214(b)(2)(iv)(B) of the Proposed 

Rule to be a necessary supplement to a 

new shipper review request that 

comports with the requirements in 

section 751(a)(2)(B)(i) of the Act which 

requires a new shipper to establish that 

it did not export subject merchandise 

during the period of investigation and 

that such exporter or producer is not 

affiliated with any exporter or producer 

who exported the subject merchandise 

to the United States during the period 

of investigation. In particular, this 

requirement addresses concerns that 

Congress expressly identified involving 

abuse of the new shipper review 

procedures where a new shipper 

‘‘enter[s] into a scheme to structure a 

few sales to show little or no dumping 

or subsidization when those sales are 

reviewed . . . resulting in a low or zero 

antidumping or countervailing duty rate 

for that producer or exporter.’’ 36

In response to commenters’ concerns 

that the requirements in 

§ 351.214(b)(2)(iv)(A) and (B) are overly 

burdensome, we clarify that the aim of 

these provisions is to ensure that 

Commerce can obtain the necessary 

information for Commerce to determine 

whether the sales at issue are bona fide, 

consistent with the intent of Congress 

pursuant to section 751(a)(2)(B)(iv) of 

the Act. In balancing the aim of these 

provisions consistent with the intent of 

Congress with the burdens imposed, we 

have crafted these amended 

certifications in as least burdensome a 

manner as possible, while ensuring that 

Commerce obtains all of the necessary 

information to conduct the bona fide 

sale analysis intended by Congress. As 

explained in the Proposed Rule, at the 

time Commerce rejected the proposal to 

require such certifications in 1997, 

Commerce had limited experience 

dealing with new shipper reviews.37 In 

light of the more than 20 years of agency 

experience involving new shipper 

reviews, and in particular given 

concerns over abuse of procedures 

expressed by Congress, as discussed in 

the Proposed Rule, we believe these 

additions to the requirements are 

necessary to ensure that Commerce is 

able to conduct a proper new shipper 

review consistent with the intent of 

Congress. 

Further, one commenter expressed 

concern that there may be legitimate 

circumstances in which an exporter or 

producer does not sell subject 

merchandise to an unaffiliated customer 

and, therefore, cannot obtain a 

certification from such a customer. 

The aim of a new shipper review, 

however, is to establish an individual 

margin of dumping or countervailing 

duty rate for each qualified new 

shipper. To establish an individual 

margin, for example, Commerce needs 

to obtain sales data pertaining to the 

sale from the foreign exporter or 

producer to the first unaffiliated 

customer in the United States in order 

to calculate the new shipper’s margin of 

dumping. Contrary to the commenter’s 

contention, the sale to the first 

unaffiliated customer is a necessary 

element for Commerce to provide a new 

shipper with its own antidumping duty 

or countervailing duty rate. 

(b) Documentation Requirements 

Related to the Issue of Whether Sales 

Are Bona Fide 

Sections 351.214(b)(2)(v)(A) through 

(E) of the Proposed Rule sets forth 

specific documentation a requestor must 

provide to Commerce in its request for 

a new shipper review. In particular, 

§ 351.214(b)(2)(v)(D) requires that a new 

shipper establish the circumstances 

surrounding the sales, including the 

price, any expenses arising from such 

sales, whether the subject merchandise 

was resold at a profit, and whether such 

sales were made on an arms-length 

basis. Section 351.214(b)(2)(v)(E) 

provides that a new shipper submit 

documentation regarding the business 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52307 

38The Agreement on Implementation of Article 

VI of the General Agreement on Tariffs and Trade 

1994 (AD Agreement). 

39See 1996 Proposed Rule, 61 FR 7308 at 7317– 

18. 

40See section 751(a)(2)(B) of the Act. 

41See section 751(a)(2)(B)(iv) of the Act. 

42Agreement on Subsidies and Countervailing 

Measures (SCM Agreement). 

activities of the producer or exporter. 

These include the producer’s or 

exporter’s offers to sell merchandise in 

the United States, identification of the 

complete circumstances surrounding 

sales to the United States, any home 

market, or third country sales, 

identification of the producer or 

exporter’s relationship to the first 

unrelated United States purchaser, and 

with respect to non-producing 

exporters, an explanation of the nonproducing exporter’s relationship with 

its supplier. 

Two commenters support the new 

documentation requirements in 

§ 351.214(b)(2)(v)(D) through (E) for a 

new shipper to obtain a review. One 

commenter argues that Commerce 

should not require the documentation in 

§ 351.214(b)(2)(v)(D) through (E) at the 

time of the new shipper request, but 

rather Commerce should ask for more 

information from the producers or 

exporters requesting a new shipper 

review before determining whether to 

initiate. Similarly, one commenter 

argues that requiring this additional 

documentation to establish a bona fide 

sale is inconsistent with Article 9.5 of 

the AD Agreement 38 because these are 

additional preconditions to conducting 

a new shipper review that expand 

beyond what was provided for in that 

agreement. Another commenter opposes 

the Proposed Rule’s new documentation 

requirements for new shipper review 

requests which, the commenter argues, 

are likely to unfairly discourage 

legitimate requests because ‘‘new 

shipper reviews are often the only 

alternative for producers and exporters 

who would otherwise face high all other 

rates, separate rates, or country-wide 

rates.’’ 

Response: 

We have left unchanged 

§ 351.214(b)(2)(v)(D) through (E). 

Commerce explained in the 1996 

Proposed Rule that it was requiring 

certain certifications from the requestor 

‘‘demonstrating that the party is a bona 

fide new shipper.’’ 39 Consistent with 

this earlier discussion, and in light of 

the concerns related to circumvention 

and abuse of new shipper review 

procedures expressed by Congress in 

enacting section 751(a)(2)(B)(iv) of the 

Act, the Proposed Rule limits initiations 

of new shipper reviews to where there 

is a reasonable likelihood of bona fide 

sales for Commerce to review. Further, 

as clarified in section 1(e) below, 

normally, when a requestor of a new 

shipper review submits all of the 

documentation necessary for Commerce 

to perform a bona fide sales analysis, as 

outlined in the Proposed Rule 

§ 351.214(b)(2)(i) through (v), and (vi) 

for countervailing duty new shipper 

reviews, the requestor has demonstrated 

a reasonable likelihood that there are 

bona fide sales for Commerce to base its 

initiation of a new shipper review. 

These requirements, as contained in 

§ 351.214(b)(2)(v)(D) through (E), are 

consistent with Commerce’s statutory 

obligation to provide new shipper 

reviews to those exporters and 

producers with bona fide sales of 

subject merchandise to the United 

States.40 The documentation 

requirements in § 351.214(b)(2)(v)(A) 

through (E) assist Commerce in 

determining whether a party qualifies as 

a new shipper and whether a new 

shipper review should, therefore, be 

conducted, consistent with Commerce’s 

statutory obligation to calculate a 

dumping margin or countervailing duty 

rate based solely on bona fide United 

States sales.41 Accordingly, we find it 

reasonable for the agency to require that 

a requestor for a new shipper review 

provide the required bona fide sales 

documentation necessary for Commerce 

to perform the bona fide sales analysis 

in the review. 

For these reasons, we also disagree 

that this regulatory modification is 

inconsistent with the United States’ 

international obligations under the AD 

and SCM Agreements.42 While Articles 

9.5 and 19.3 of the AD and SCM 

Agreements, respectively, identify broad 

qualifications for conducting a new 

shipper review, the requirements 

identified in § 351.214(b)(2)(v)(D) 

through (E) are consistent with U.S. law, 

which is consistent with our obligations 

under the AD and SCM Agreements. 

Further, historically, new shipper 

reviews have involved very few sales. In 

such cases, Commerce must fully 

understand the circumstances 

surrounding these limited number of 

transactions as these provide the basis 

for a new shipper’s future selling of 

subject merchandise into the United 

States and the level of dumping or 

subsidization, if any. 

(c) Documentation Requiring Volume of 

the Sale and Subsequent Sales 

Paragraphs (B) and (C) of 

§ 351.214(b)(2)(v) of the Proposed Rule 

require that a new shipper provide in its 

new shipper review request information 

regarding the volume of its shipment(s), 

including whether such shipments were 

made in commercial quantities, and the 

date of sales to an unaffiliated customer 

in the United States. 

One commenter argues that requiring 

documentation establishing that sales 

are of ‘‘commercial quantities’’ in 

§ 351.214(b)(2)(v)(B) is inconsistent with 

Article 9.5 and 19.3 of the AD 

Agreement and the SCM Agreement, 

respectively, which only require that a 

new shipper not have exported subject 

merchandise during the period of 

investigation and is not related to any of 

the investigated exporters and/or 

producers. Further, another commenter 

argues that the criteria requiring ‘‘the 

date of any subsequent sales’’ when 

requesting a new shipper review is 

‘‘unrealistic in a commercial context’’ 

because the commercial reality renders 

few importers with the financial 

position to import multiple shipments 

of products that are subject to high 

antidumping duty margins. 

Response: 

With respect to the issue of requiring 

documentation pertaining to whether 

the sales were made in commercial 

quantities under § 351.214(b)(2)(v)(B), 

we disagree with the commenter’s 

objection. Section 751(a)(2)(B)(iv)(II) of 

the Act requires Commerce to consider, 

depending on the circumstances 

surrounding such sales, whether the 

sales were made in commercial 

quantities. Section 351.214(b)(v)(B) of 

the Proposed Rule is intended to 

implement this provision of the statute. 

Regarding the commenters’ concerns 

that Commerce is requiring requestors to 

establish that ‘‘subsequent shipments’’ 

and ‘‘subsequent sales’’ occurred under 

§ 351.214(b)(2)(v)(B) and (C) of the 

Proposed Rule in order to obtain a new 

shipper review, these concerns are 

misplaced. The Proposed Rule does not 

establish such requirements. Rather, 

Commerce simply requires that a 

producer or exporter requesting a new 

shipper review provide documentation 

of any subsequent sales or shipments 

and the dates of such sales to the extent 

such sales or shipments were made. 

Thus, there is no requirement to make 

subsequent sales or shipments in order 

to obtain a new shipper review. In 

addition, we note the requirement to 

provide such information was not added 

to the Proposed Rule, but rather exists 

in the current regulations. Under this 

same requirement, Commerce 

previously initiated new shipper 

reviews where subsequent shipments or 

52308 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

43See, e.g., Polyethylene Terephthalate Film, 

Sheet and Strip from India: Initiation of 

Antidumping Duty and Countervailing Duty New 

Shipper Reviews, 75 FR 10758 (March 9, 2010); see 

also Hardwood Plywood Products from the People’s 

Republic of China: Initiation of Antidumping New 

Shipper Review; 2019, 84 FR 44862 (Aug. 27, 2019). 

44See Public Law 114–125, section 433, 130 Stat. 

at 171 (enacting modifications to the Act, including 

section 751(a)(2)(B)(iv), ‘‘Determinations Based on 

Bona fide Sales,’’ in the context of new shipper 

reviews to address circumvention). 

45 1 U.S.C. 1. 

46See Life Techs. Corp. v. Promega Corp., 137 S. 

Ct. 734, 742. 580 USll(2017) (asserting that the 

Court’s departure from 1 U.S.C. 1 that ‘‘words 

importing the plural include the singular’’ resulted 

from the statute’s text, context and structure). 

47See Proposed Rule, 85 FR 49472 at 49474 

(emphasis added). 

48 Id. (emphasis added). 

sales did not occur.43 However, as 

identified above, for consistency with 

the language utilized in 

§ 351.214(b)(v)(C) and for further clarity, 

Commerce is modifying 

§ 351.214(b)(v)(B) for consistency with 

the language utilized in 

§ 351.214(b)(v)(C) and to clarify that a 

new shipper is required to provide 

documentation establishing the volume 

of any subsequent shipments where 

subsequent shipments have occurred. 

(d) Proposal for Documentation 

Requiring Proof of Multiple Sales in the 

New Shipper Request 

Paragraph (b) of § 351.214 outlines the 

requirements for requesting a new 

shipper review. Several commenters 

propose that Commerce amend 

§ 351.214(b) of the Proposed Rule to 

require that requestors demonstrate they 

have made multiple bona fide sales, as 

opposed to a singular ‘‘sale’’ in their 

request for purposes of initiating a new 

shipper review. These commenters 

argue that by using the plural term 

‘‘sales,’’ as opposed to the singular term 

‘‘sale’’ in section 751(a)(2)(B)(iv), 

Congress expressed its clear intent to 

require multiple bona fide sales as a prerequisite to obtain a new shipper 

review. In their view, such single-sale 

reviews should be prohibited because 

Commerce lacks the statutory authority 

to conduct a new shipper review based 

on a singular sale. To support their 

interpretation of the statute, the 

commenters point out that only the 

plural term ‘‘sales’’ is consistent with 

the legislative history and language of 

the TFTEA, and section 751(a)(2)(B)(iv) 

of the Act. In their view, Commerce 

should therefore clarify in the final rule 

that proof of multiple bona fide sales is 

required to obtain a new shipper review. 

Response: 

We disagree and have not accepted 

the suggested interpretation of the 

statute or its legislative history, and, 

therefore, have left § 351.214(b) 

unchanged with respect to this issue. 

The Proposed Rule pertaining to new 

shipper reviews does not require proof 

of more than one sale for a requestor to 

obtain a new shipper review. Declining 

to create a regulatory bar to the new 

shipper review process for singular sales 

is consistent with the proper 

construction of the TFTEA 44 and 

section 751(a)(2)(B)(iv) of the Act, as 

amended, in accordance with federal 

law. 

Interpretative canons guide statutory 

construction because the language used 

by Congress in the making of laws is 

often ambiguous with respect to 

meaning. Title 1 of the United States 

Code codified the interpretative canons 

that govern the construction of federal 

statutory law.45 Section 1 of Title 1 

specifies that, ‘‘[i]n determining the 

meaning of any Act of Congress, [ . . . ] 

words importing the plural include the 

singular[.]’’ Id. The text, context, and 

structure of TFTEA and section 

751(a)(2)(B)(iv) do not compel a 

departure from this interpretative 

canon.46

Therefore, although Congress used the 

word ‘‘sales’’ in section 433 of EAPA in 

the TFTEA, and as a result, the plural 

‘‘sales’’ appears in section 

751(a)(2)(B)(iv) of the Act, the use of the 

plural form of the word ‘‘sale’’ does not 

support the conclusion that the statute 

should be construed to mean multiple 

sales are required for a new shipper 

review. Pursuant to 1 U.S.C. 1, the 

plural ‘‘sales’’ includes the singular 

‘‘sale.’’ Congress has not indicated to 

Commerce that it intended to exclude 

single sales with its use of plural ‘‘sales’’ 

and, therefore, Commerce believes that 

a single sale could be subject to review. 

Moreover, a single sale could, for 

example, include substantial quantities 

such as thousands or even hundreds of 

thousands of units, and thus does not, 

by itself, provide a basis to bar new 

shipper reviews of such sales or create 

a per se rule that such sales are not bona 

fide sales for purposes of the AD and 

CVD laws. 

Consistent with federal law governing 

the construction of federal statutes, 

Commerce’s proposed new shipper 

review regulation does not impose a 

regulatory bar to review of singular 

sales. While Commerce will not act 

contrary to federal law in construing the 

meaning of a statute, the agency believes 

that other practical considerations 

support the position that a regulatory 

bar to new shipper reviews for singular 

sales is unnecessary. First, the number 

of sales continues to be a factor which 

Commerce considers in its bona fide 

sales analysis conducted in a new 

shipper review. At the same time, as 

noted, Commerce looks to the volume 

and quantity of the sales as a factor to 

consider in the context of determining 

whether the sales or sale is bona fide for 

purposes of the AD and CVD laws. 

Historically, new shipper reviews 

have often involved the review of few or 

singular sales because the new shipper 

review provides a path for a new entrant 

to the U.S. market to receive its own rate 

based on its individual activity on an 

expedited basis. Commerce’s Proposed 

Rule, as adopted in this final rule, does 

not intend to limit a new shipper’s 

eligibility for review based on whether 

the applicant can demonstrate one (as 

opposed to more than one) sale, 

provided the sale at issue is bona fide 

for purposes of the AD and CVD laws. 

(e) The Appropriate Standard for 

Initiating New Shipper Reviews 

One commenter requests that 

Commerce clarify whether the 

‘‘reasonable indication’’ standard (i.e., 

the same standard applied by the ITC in 

its preliminary material injury 

determinations) is intended to be the 

legal threshold which respondents must 

satisfy in order to obtain a new shipper 

review. This commenter requests that if 

Commerce intends to use this legal 

standard, then Commerce should 

include language that reflects that 

standard in the final rule. 

Response: 

We have left unchanged § 351.214(b) 

with respect to this issue. The Proposed 

Rule did not apply the ITC’s 

‘‘reasonable indication’’ standard for 

material injury determinations to the 

required showing for the initiation of a 

new shipper review. Commerce intends 

to initiate new shipper reviews, as 

stated in the Proposed Rule, where there 

is a ‘‘reasonable likelihood that there 

ultimately will be a bona fide sale for 

Commerce to review.’’ 47 Additionally, 

Commerce intends to initiate new 

shipper reviews, as stated in the 

Proposed Rule, unchanged in this final 

rule, where ‘‘there is a reasonable 

likelihood that the unaffiliated customer 

will participate in the review.’’ 48

Therefore, the standard articulated by 

Commerce in the Proposed Rule is the 

‘‘reasonable likelihood’’ standard which 

imposes a burden on the new shipper 

review requestor to demonstrate that 

there is a reasonable likelihood that the 

request for review involves bona fide 

sales. As outlined in the Proposed Rule 

§§ 351.214(b)(2)(i) through (v), and (vi) 

for countervailing duty new shipper 

reviews, unchanged in this final rule, 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52309 

49 Id. at 49495. 

when a requestor of a new shipper 

review submits all of the documentation 

necessary for Commerce to perform a 

bona fide sales analysis, the requestor 

has demonstrated a reasonable 

likelihood that there are bona fide sales 

for Commerce to base its initiation of a 

new shipper review. 

2. Enumerated Factors for Commerce’s 

Bona Fide Sales Analysis (§ 351.214(k)) 

(a) Sections 351.214(k)(2), (k)(3), and 

(k)(4) 

The elements outlined in 

§ 351.214(k)(2) through (4) identify 

additional factors that Commerce shall 

consider in determining whether a new 

shipper requestor’s sales are bona fide, 

consistent with section 

751(a)(2)(B)(iv)(VII) of the Act. These 

sections provide that Commerce shall 

consider whether an exporter, producer, 

or customer has lines of business 

unrelated to the subject merchandise; 

whether there is an established history 

of duty evasion or circumvention with 

respect to new shipper reviews under 

the relevant order; and whether there is 

an established history of evasion or 

circumvention with respect to new 

shippers under any order in the same or 

similar industry. 

One commenter opposes 

§ 351.214(k)(2) of the Proposed Rule, 

arguing that whether the producer, 

exporter, or customer has lines of 

business unrelated to the subject 

merchandise is not relevant for a bona 

fide sales analysis. Oppositely, another 

commenter supports Commerce’s 

proposed § 351.214(k)(2), a factor to 

analyze a new shipper’s line of 

businesses that are not subject 

merchandise, because new shipper 

reviews have been in the past misused 

to engineer low dumping margins. This 

commenter argues that looking to 

whether the subject merchandise is sold 

in the new shipper’s existing line of 

business can provide insight into 

whether the sale was made in the 

normal course of business. Another 

commenter similarly opposes 

Commerce’s requirement that the ‘‘full 

operations’’ of a producer or exporter 

requesting a new shipper review be 

examined as part of the bona fide sales 

analysis. This commenter argues that 

Commerce should limit its review to the 

actual sales transactions and 

relationship between the requestor and 

importer. 

Additionally, two commenters oppose 

factors related to the history of duty 

evasion which Commerce will consider 

as part of the bona fide sales analysis 

listed in § 351.214(k)(3) and (4) of the 

Proposed Rule.49 These commenters 

argue that whether there is an 

established history of duty evasion with 

respect to new shipper reviews or 

circumvention under the relevant 

antidumping or countervailing duty 

order or any antidumping or 

countervailing duty order in the same or 

similar industry is not relevant for a 

bona fide sales analysis. One of these 

commenters asserts that unless 

Commerce finds collusion at play, any 

wrongdoing that may have occurred in 

the past is not pertinent to the review 

because there is no nexus between the 

current shipper and any past 

wrongdoing. Contrary to this 

opposition, one commenter supports the 

Proposed Rule which considers the 

history of duty evasion of an 

antidumping duty order because it 

would prevent further harm to the 

domestic industry, particularly in cases 

where Commerce has not applied a 

circumvention ruling on a country-wide 

basis. 

Response: 

We have modified the mandatory 

factors to be considered for purposes of 

the final rule. First, § 351.214(k)(2) is 

retained in the final rule. Commerce’s 

consideration of the lines of business in 

which the producer, exporter, or 

customer is engaged can be telling as to 

the bona fide nature of the sales 

involved in a new shipper review. For 

example, Commerce’s consideration of 

the lines of business unrelated to the 

subject merchandise may indicate that 

sales of subject merchandise are entirely 

unrelated to the company’s primary 

business, that it has little or limited 

knowledge and expertise in the subject 

merchandise, and, thus, may be 

indicative of whether the sale or sales 

are considered bona fide, in conjunction 

with other relevant factors. Section 

351.214(k)(2) of the Proposed Rule, 

unchanged in this final rule, will assist 

Commerce in developing a consistent 

practice of evaluating typical behavior 

of new shippers and more clearly 

identifying unmeritorious claims of 

bona fide sales based on schemes to 

engineer low dumping margins 

involving companies not engaged in the 

relevant business for purposes of the AD 

and CVD laws. 

While we have retained 

§ 351.214(k)(2), the factors pertaining to 

the history of duty evasion found in 

paragraphs (k)(3) and (4) are removed 

from the final rule solely on the ground 

that these factors need not be 

considered in every case. However, 

where the evidence compels 

consideration, Commerce continues to 

be authorized to consider the issue of 

duty evasion under an order and 

industry-wide basis. While the evidence 

may not be specific to the particular 

new shipper, and, thus, cannot by itself 

be considered sufficient to determine 

whether the sales at issue are bona fide, 

such evidence may be indicative of a 

pattern of behavior under an order or in 

an industry that is generally reflective of 

activity of a contrived nature and, thus, 

may contribute to a finding of sales 

being non-bona fide for purposes of the 

AD and CVD laws (e.g., where actors 

within an industry tend to engage in 

similar conduct and are generally faced 

with similar facts and circumstances, 

such as low barriers to entry, a high 

degree of changes in ownership, or 

where an industry is typified by a high 

degree of turnover of companies). In 

such cases, an established history of 

duty evasion or circumvention may be 

relevant and, therefore, may be 

considered by Commerce in making its 

determination. Because the enumerated 

factors are not exhaustive, these types of 

factors, where relevant, should be 

considered in determining whether the 

sales at issue are bona fide for purposes 

of the AD and CVD laws. 

(b) Section 351.214(k)(6) 

Section 351.214(k)(6) provides that 

Commerce shall consider ‘‘any other 

factor’’ it determines relevant with 

respect to the future selling behavior of 

a new shipper, including indicia that 

the sale was not commercially viable. 

Several commenters support the 

Proposed Rule as reflecting the 2016 

statutory changes in the TFTEA which 

require an exporter or producer to 

demonstrate that its sale(s) is bona fide 

pursuant to the bona fide sales factors 

in section 751(a)(2)(B)(iv) of the Act. 

One commenter opposes § 351.214(k)(6) 

of the Proposed Rule, asserting that this 

section of the regulation provides 

‘‘vague and unlimited authority’’ to 

reject new shipper requests. 

Accordingly, this commenter argues that 

Commerce should remove 

§ 351.214(k)(6) from its final rule to 

‘‘ensure Commerce doesn’t exceed its 

statutorily granted authority’’ or, in the 

alternative, define the circumstances in 

the regulations as to the factors it may 

consider in determining whether or not 

to reject a request for a new shipper 

review. 

Response: 

We have left unchanged 

§ 351.214(k)(6). Contrary to the 

commenter’s assertion that paragraph 

(k)(6) provides Commerce unlawful and 

unlimited authority in analyzing a 

request for a new shipper review, 

section 751(a)(2)(B)(iv) of the Act 

52310 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

50See section 751(a)(2)(B)(iv)(VII) of the Act. 

51See Public Law 114–125, section 433, 130 Stat. 

at 171. 

provides that Commerce may consider 

‘‘any other factor’’ it determines relevant 

with respect to the future selling 

behavior of the producer or exporter. 

This may include any other indicia that 

indicate whether the sale was or was not 

commercially viable, and, thus, bona 

fide for purposes of the AD and CVD 

laws. Accordingly, this section of the 

Proposed Rule conforms to the intent of 

Congress for purposes of examining 

whether the sales at issue are bona fide 

for purposes of the AD and CVD laws. 

Regarding the commenter’s request 

that Commerce define the circumstances 

in the regulations as to the factors it may 

consider in determining whether it will 

initiate on a request for a new shipper 

review, Commerce has three 

clarifications. First, regarding the 

request to clarify what Commerce will 

consider in determining whether to 

initiate a new shipper review, 

Commerce clarifies that normally 

Commerce will initiate a new shipper 

review where a requestor submits the 

required documentation necessary for 

Commerce to perform a bona fide sales 

analysis, as outlined in § 351.214(b)(2)(i) 

through (v), and (vi) in the 

countervailing duty context. By 

providing such documentation, the 

requestor is able to demonstrate a 

reasonable likelihood that the sales 

subject to the review are bona fide sales 

for purposes of initiation and that the 

unaffiliated customer will participate in 

the review. 

Second, Commerce notes that the 

factors enumerated in § 351.214(k)(1) 

and (2) provide further clarity as to the 

other factors Commerce will look to, 

pursuant to section 751(a)(2)(B)(iv)(VII) 

of the Act. 

Third, Commerce clarifies that, 

regarding the factors it may consider 

beyond those enumerated in the final 

rule, such additional factor or factors to 

be considered may vary based on the 

facts and circumstances in a given case. 

Congress provided Commerce with the 

authority to consider ‘‘any other factor 

the administering authority determines 

to be relevant as to whether such sales 

are, or are not, likely to be typical of 

those the exporter or producer will 

make after completion of the review,’’ 

affording Commerce the flexibility to 

evaluate additional factors based on the 

facts and circumstances of a given 

case.50 Thus, consistent with its 

statutory authority, Commerce will 

continue to consider factors that it 

determines, based on the facts and 

circumstances in a given case, are 

relevant with respect to the future 

selling behavior of the producer or 

exporter, including any other indicia 

that the sales were not commercially 

viable. 

(c) Whether Commerce Should Require 

Documentation of Genuine Negotiations 

and/or Order Inquiries From an 

Unrelated Purchaser 

Several commenters propose that 

Commerce add an additional factor to 

the bona fide sales requirements of 

§ 351.214(k) that would require 

producers or exporters requesting a new 

shipper review to provide 

documentation of ‘‘genuine negotiations 

or order inquiries,’’ such as emails or 

internal sales approval documentation 

from the unaffiliated purchaser, to 

further ensure that new shippers have 

not coordinated with purchasers to 

‘‘engineer’’ lower margins. 

Response: 

We have not changed § 351.214(k) 

with respect to the proposed change. 

The Proposed Rule requires 

documentation establishing the 

circumstances surrounding such sale(s), 

including the producer or exporter’s 

offers to sell merchandise in the United 

States under § 351.214(b)(v)(E)(1). This 

includes the offers made to the 

unaffiliated purchaser in the United 

States, along with information on price, 

expenses, and whether such 

merchandise was resold at a profit 

under § 351.214(b)(v)(D). We believe the 

requirements established for a new 

shipper review request are sufficient for 

purposes of the request. In addition, 

Commerce is not precluded from 

requesting additional documentation, as 

needed, during the course of the review, 

including documents typically 

examined during verification. For these 

reasons, Commerce’s final rule captures 

the additional documentation we 

believe necessary to prevent meritless 

new shipper review claims. 

(d) Discussion of a Single or Low 

Number of Sales in the Bona Fide 

Analysis 

One commenter argues that 

Commerce should explain in the 

preamble to the final rule that ‘‘a single 

or low number of sales, particularly a 

single sale, will rarely be found to be 

bona fide, unless the shipper can 

establish that a low number of sales is 

typical for the merchandise in question 

in the U.S. market for the period 

covered by a new shipper review.’’ 

Further, this commenter asserts that 

should Commerce find that a ‘‘multiple 

sales’’ requirement cannot be 

implemented in every case, Commerce 

should modify § 351.214(k)(5) to read: 

‘‘the quantity and number of sales; and 

. . . .’’ 

Response: 

We have not adopted the commenter’s 

proposal that a single or low number of 

sales will rarely be found to be bona fide 

or the commenter’s proposed 

modification to § 351.214(k)(5) 

concerning the quantity and number of 

sales. Commerce makes its bona fide 

sales determinations on a case-by-case 

basis. Any statement, therefore, 

concerning the frequency of affirmative 

or negative bona fide sales 

determination would be inappropriate. 

However, Commerce clarifies that the 

language in § 351.214(k)(5) identifying 

‘‘the quantity of sales’’ as a factor 

Commerce will consider in accordance 

with section 751(a)(2)(B)(iv)(VII) of the 

Act, means the same as ‘‘number of 

sales.’’ Therefore, the suggested change 

is unnecessary. 

(3) Rescission of Initiated New Shipper 

Reviews 

(a) Rescission if Information To 

Establish Multiple Sales Is Missing 

From the Record 

Section 351.214(f) of the Proposed 

Rule describes the circumstances under 

which Commerce may rescind a new 

shipper review. One commenter argues 

that Commerce should amend 

§ 351.214(f) to state that Commerce shall 

rescind a new shipper review if it finds 

that information to establish bona fide 

sales, plural, are missing from the new 

shipper review request to alleviate 

administrative burdens. 

Response: 

As an initial matter, the commenter’s 

position that rescission based on lack of 

bona fide ‘‘sales’’—plural, is addressed 

at length in comment 1(d). To reiterate, 

there is no statutory or regulatory bar to 

the new shipper review process based 

on the existence of only one, as opposed 

to more than one, bona fide sale. 

Therefore, Commerce declines to adopt 

the commenter’s proposal that 

§ 351.214(f) be amended to reflect a 

requirement that multiple sales are 

required for a new shipper review to 

proceed in regular course. 

As Commerce explained in the 

Proposed Rule, the purpose of the 

conforming amendments to § 351.214 

pertaining to new shipper reviews is to 

implement the modifications to section 

751(a)(2)(B) of the Act enacted by 

Congress in 2016.51 Therefore, we do 

not amend the Proposed Rule’s 

rescission provision to require 

Commerce to rescind a review where 

proof of multiple sales is absent from 

the record. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52311 

52 1997 Final Rule, 62 FR 27296 at 27395. 

53See Proposed Rule, 85 FR 49472 at 49494. 

(b) Rescission as a Bar to Future New 

Shipper Review Requests 

One commenter requests that 

Commerce include in its final rule a 

new paragraph (f)(5) that states: ‘‘[i]f the 

Secretary rescinds a new shipper review 

pursuant to § 351.214(f)(3), then the 

party that requested the rescinded new 

shipper review may not subsequently 

request a further new shipper review, 

but must instead request an 

administrative review as provided in 

§ 351.213(b)’’ to prevent a party from 

filing a new shipper review request if it 

failed to establish its sales are bona fide. 

Response: 

We are not adopting this commenter’s 

suggestion to add a new paragraph (f)(5) 

to § 351.214. To clarify, if Commerce 

rescinds a review of specific sales 

pursuant to § 351.214(f)(3), we will not 

revisit that determination with respect 

to those particular sales as there is 

finality with respect to Commerce’s 

determinations. However, a new shipper 

will not be barred from requesting a new 

shipper review, consistent with 

§ 351.214(c), for later, unreviewed, sales 

made within one year of the date 

referred to in § 351.214(b)(2)(v)(A). 

(4) Procedure for Parties To Challenge a 

Decision Not To Initiate a New Shipper 

Review at the Administrative Level 

One commenter argues that the 

Proposed Rule is not clear regarding 

what a respondent is required to 

provide to Commerce in order to obtain 

a new shipper review, and that the 

Proposed Rule grants ‘‘unfettered 

discretion’’ to Commerce on whether to 

initiate a new shipper review. This 

commenter argues that because the 

Proposed Rule indicates Commerce will 

determine whether the information 

provided in a new shipper request will 

reasonably indicate a bona fide sale 

occurred in order to initiate a new 

shipper review, Commerce will open 

itself up to litigation over any 

determination not to initiate. Therefore, 

this commenter asserts that Commerce 

should amend its proposed regulation 

and provide for a preliminary 

determination by Commerce on whether 

to initiate a new shipper review, 

providing opportunities for parties to 

comment and submit additional factual 

information, before making a final 

decision on initiation. Relatedly, this 

commenter requests that Commerce 

establish ‘‘specific objective thresholds’’ 

that a requestor needs to satisfy in order 

to obtain a new shipper review. 

Several commenters oppose the 

former commenter’s proposal to 

establish a preliminary determination, 

briefing, and comment process 

regarding Commerce’s decision whether 

to initiate a new shipper review 

because, these commenters assert, doing 

so would needlessly use additional 

Commerce resources and provide an 

avenue for arbitrary appeals of 

Commerce’s preliminary determinations 

to the CIT. 

Response: 

We have left unchanged § 351.214 

with respect to this issue. Contrary to 

the commenter’s concern that the 

Proposed Rule grants ‘‘unfettered 

discretion’’ to Commerce as to whether 

to initiate a new shipper review, 

Commerce’s determinations whether to 

initiate a new shipper review are 

limited by the requirements identified 

in the final rule, including whether the 

documentation submitted in a new 

shipper review request indicates a 

reasonable likelihood of bona fide sales 

for Commerce to review. Additionally, 

as clarified in this preamble, if a new 

shipper review requestor provides 

Commerce with the documentation 

identified in the proposed 

§ 351.214(b)(2)(i) through (v), and (vi) in 

the countervailing duty context, then 

the requestor will normally be able to 

demonstrate a reasonable likelihood that 

there ultimately will be a bona fide sale 

for Commerce to review and base its 

determination. Thus, in such cases, 

Commerce will initiate a new shipper 

review. 

Further, the Proposed Rule provides 

additional clarity as to the specific 

requirements of a producer and/or 

exporter when requesting a new shipper 

review. Such clarity, as provided in 

§ 351.214(b)(iv) and (v), offers producers 

and exporters ‘‘specific objective 

threshold’’ requirements that a new 

shipper review requestor needs to 

provide Commerce in order to seek a 

new shipper review. In addition, the 

procedure we have adopted provides 

that Commerce will not initiate a new 

shipper review where the information 

submitted with the request pursuant to 

the documentation requirements 

outlined in § 351.214(b) is insufficient. 

In the event that Commerce determines 

that the requirements for a request for a 

new shipper review have not been 

satisfied, in denying the request, 

Commerce will provide a written 

explanation of the reasons for the 

denial. In this way, the requestor has an 

understanding of the deficiencies of the 

request and the basis for Commerce’s 

decision. We see no reason to add 

further procedural steps. These 

decisions are analogous to the 

requirement that Commerce not initiate 

an AD or CVD investigation where the 

petition fails to provide support for the 

necessary elements for initiation. In 

those cases, Commerce determines not 

to initiate the investigation. Here, where 

a request for a new shipper review fails 

to meet the requirements outlined in 

§ 351.214(b), Commerce expects to deny 

the requestor a new shipper review. 

(5) Whether the Proposed Rule Permits 

Commerce Up to 6 Months To Initiate a 

New Shipper Review 

Promulgated in 1997 with the new 

shipper review regulations, 

§ 351.214(d)(1) outlines the specific 

times when Commerce will initiate a 

new shipper review under a relevant 

order: In the calendar month 

immediately following the anniversary 

month or in the calendar month 

immediately following the semiannual 

anniversary month, depending on when 

a new shipper request is received.52

One commenter requests that 

Commerce confirm whether the 

Proposed Rule will continue to permit 

up to six months for Commerce to 

initiate a new shipper review and 

whether the goods would be subject to 

the residual duty during this period. 

Response: 

The Proposed Rule makes no change 

to the current regulation pertaining to 

the time limits for the initiation of a 

new shipper review (with the exception 

of a minor grammatical edit in 

paragraph (d)(2)). As required by the 

current and proposed § 351.214(d)(1), 

Commerce will initiate a new shipper 

review in the calendar month 

immediately following the anniversary 

month or the semiannual anniversary 

month if the request for the review is 

made during the six-month period 

ending with the end of the anniversary 

month or the semiannual anniversary 

month (whichever is applicable).53 The 

regulation thus requires Commerce to 

initiate a new shipper review pertaining 

to an order during two months in a 

calendar year: (1) In the month after the 

order’s anniversary month; and (2) in 

the month after the order’s semiannual 

anniversary month. Given that the two 

months in which Commerce may 

initiate a new shipper review are 

separated by six months, the rule does 

permit six months for Commerce to 

initiate a new shipper review. However, 

the time permitted depends on when 

the new shipper requests a review. For 

example, the rule provides for a much 

shorter time period for the initiation of 

a new shipper review based on the 

proximity to the anniversary and 

semiannual anniversary of the relevant 

order. 

52312 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

54 Id., at 49476–77. 

55See, e.g., Bell Supply Co. v. United States, 888 

F.3d 1222, 1229 (Fed. Cir. 2018) (Bell Supply) 

(stating that extending the reach of a scope 

determination backwards is consistent with the 

Federal Circuit’s finding that a determination of 

origin of imported merchandise for the purposes of 

a scope ruling necessarily precedes a circumvention 

inquiry); AMS Associates, Inc. v. United States, 737 

F.3d 1338, 1343–1344 (Fed. Cir. 2013) (AMS); 

Sunpreme, 946 F.3d at 1316–1322; United Steel and 

Fasteners, Inc. v. United States, 947 F.3d 794, 801– 

803 (Fed. Cir. 2020) (Fasteners). 

56See Notice of Scope Rulings and 

Anticircumvention Inquiries, 65 FR 41957, 41958 

(July 7, 2000) (‘‘pasta in packages weighing (or 

labeled as weighing) up to and including five 

pounds, four ounces is within scope; May 24, 

1999.’’); see also Certain Pasta From Italy: Final 

Results of Antidumping Duty Administrative 

Review, 65 FR 77852, 77853 (Dec. 13, 2000) (‘‘On 

October 26, 1998, the Department self-initiated a 

scope inquiry to determine whether a package 

weighing over five pounds as a result of allowable 

industry tolerances is within the scope of the 

antidumping and countervailing duty orders. On 

May 24, 1999 we issued a final scope ruling finding 

that, effective October 26, 1998, pasta in packages 

weighing or labeled up to (and including) five 

pounds four ounces is within the scope of the 

antidumping and countervailing duty orders.’’). 

57 1997 Final Rule, 62 FR 27296 at 27328. 

58See section 706(a)(2) of the Act; section 

736(a)(2) of the Act; section 771(25) of the Act. 

With respect to the comment to 

confirm whether the merchandise 

would be subject to a duty, in 

accordance with § 351.214(e) of the 

Proposed Rule, Commerce will direct 

the suspension or continued suspension 

of liquidation for any unliquidated 

entries of subject merchandise from the 

relevant exporter or producer at the 

applicable cash deposit rate upon its 

initiation of the new shipper review. 

(6) Whether the New Documentation 

Requirements Identified in § 351.214(b) 

of the Proposed Rule Applies to 

Expedited Reviews 

One commenter requests that 

Commerce clarify that expedited 

reviews in CVD proceedings for noninvestigated exporters do not impose the 

new documentation requirements listed 

in the Proposed Rule pertaining to the 

initiation of a new shipper review. This 

commenter asserts that there is no 

reason to apply such requirements to 

expedited reviews based on the current 

language of § 351.214(l)(3). 

Response: 

The Proposed Rule addressed new 

shipper review requests, and was not 

intended to, and does not, impose new 

documentation requirements for 

requesting expedited reviews. Apart 

from the request, however, in the 

context of an expedited review, as with 

administrative reviews, a respondent 

may be subject to a bona fide sales 

analysis, where the facts or 

circumstances warrant examination. 

Scope—§ 351.225 

Section 351.225 covers procedures in 

which Commerce addresses scoperelated matters following the issuance of 

an AD or CVD order, most frequently 

through a scope inquiry and scope 

ruling. We received many comments 

and rebuttal comments on the proposed 

provisions under this regulation. Below, 

we briefly discuss each provision, 

address any comments received, and, 

where appropriate, explain any changes 

to the Proposed Rule in response to 

comments. In addition, we explain 

additional modifications to the 

Proposed Rule where we have 

determined that such amendments 

brought § 351.225 into greater 

conformity with circumvention and 

covered merchandise regulations 

§§ 351.226 and 351.227, or otherwise 

provided greater clarity to these 

regulations. 

1. Section 351.225(a)—Introduction 

Section 351.225(a) is the general 

provision set forth in the beginning of 

the scope regulations, in which 

Commerce has explained that it will 

conduct a scope ruling at the request of 

an interested party or on Commerce’s 

initiative. One of the proposed 

modifications is the addition of 

Commerce’s understanding that a scope 

ruling that a product is covered by the 

scope of an order is a determination that 

the product in question has always been 

covered by the scope of that order. 

Commerce also explained in the 

preamble to the Proposed Rule that it 

was removing the term ‘‘clarify’’ from 

the existing regulations because scope 

inquiries are ‘‘intended to cover a wide 

variety of scope questions, and are not 

intended to be restrictive to only those 

scenarios in which certain language in 

the scope requires ‘clarification.’ ’’ 54

Commerce received multiple 

comments on this provision. Several 

commenters express complete support 

for the provision as written, 

emphasizing that concerns about 

evasion and duty collection should be 

one of the primary drivers Commerce 

considers in designing and 

implementing its revised scope 

regulations. Those commenters also 

stress that the Federal Circuit has issued 

multiple holdings which support 

Commerce’s interpretation of its scope 

rulings that a determination in a scope 

ruling that a product is covered by the 

scope of an order means that a product 

has always been covered by the scope of 

an order.55

Other commenters challenge that 

understanding of scope coverage. They 

argue that such an interpretation of a 

scope ruling would have an unfair effect 

on importers and sureties, with one 

commenter citing to a 1999 scope ruling 

in which Commerce modified a scope 

after a scope ruling, as an example in 

which importers were unfairly forced to 

pay duties when they did not believe 

their entries were subject merchandise, 

and could not have been expected to 

know their merchandise was covered by 

an order.56

In rebuttal comments, some challenge 

Commerce’s removal of the word 

‘‘clarify’’ and argue that scope rulings 

should only apply retroactively when 

the scope is ‘‘clear’’ and not 

‘‘ambiguous,’’ while others disagree that 

importers would be penalized by the 

proposed modifications to the 

regulations. It was pointed out that in 

the 1997 Final Rule, Commerce 

expressed concerns that ‘‘[i]t would be 

extremely unfair to importers and 

exporters to subject entries not already 

suspended to suspension of liquidation 

and possible duty assessment with no 

prior notice and based on nothing more 

than a domestic interested party’s 

allegation,’’ 57 but that such concerns 

never came to fruition, and, in fact, the 

primary users of scope proceedings have 

been importers and foreign exporters. 

Those commenters went on to argue in 

their rebuttal comments that any 

arguments based on the innocence of 

importers is misplaced, as concerned 

importers have appropriate tools 

available to them through scope rulings 

to determine whether a product may be 

covered by the order. 

Response: 

When Commerce initiates a scope 

inquiry, the purpose of that inquiry is to 

determine whether a product is covered 

by the language of the scope of an AD/ 

CVD order. The scope of an order (i.e., 

the description of the class or kind of 

merchandise subject to the order) is 

established during the investigation and 

published in the Federal Register notice 

of the final determination and order.58

As explained further below in the 

discussion of § 351.225(l), the 

publication of the scope of an order in 

the Federal Register generally provides 

notice to producers, exporters, and 

importers that their products may be 

covered by the scope of the order. The 

fact that an importer did not declare 

merchandise as subject to an AD and/or 

CVD order for a period of time before 

Commerce issued a scope ruling, for 

whatever reason, does not mean the 

product was not covered by the scope 

up until the scope ruling was issued. If 

a product is found to be covered by the 

language of the scope, then the product 

has always been covered by that 

language. As some commenters note, the 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52313 

59AMS, 737 F.3d at 1343–1344; Sunpreme, 946 

F.3d at 1316–1322; Fasteners, 947 F.3d at 801–803. 

60See Notice of Scope Rulings and 

Anticircumvention Inquiries, 65 FR 41957, 41958 

(July 7, 2000) (‘‘pasta in packages weighing (or 

labeled as weighing) up to and including five 

pounds, four ounces is within scope; May 24, 

1999.’’); Certain Pasta From Italy: Final Results of 

Antidumping Duty Administrative Review, 65 FR 

77852, 77853 (Dec. 13, 2000); Duferco Steel, Inc. v. 

United States, 296 F.3d 1087, 1095 (Fed. Cir. 2002) 

(Duferco) (‘‘Commerce cannot ‘interpret’ an 

antidumping order so as to change the scope of that 

order, nor can Commerce interpret an order in a 

manner contrary to its terms.’’) (citing Eckstrom 

Indus., Inc. v. United States, 254 F.3d 1068, 1072 

(Fed. Cir. 2001)). 

61This is distinguished from a scope clarification, 

found in the new provision section 225(q). A scope 

clarification does not change the scope of an order 

but does clarify the scope—frequently through a 

footnote to the scope of the order. 

62The term ‘‘interested party’’ is defined in 

section 771(9) of the Act, and pertains, for example, 

to ‘‘foreign manufacturers,’’ ‘‘producers,’’ 

‘‘exporters,’’ or ‘‘United States importers’’ ‘‘of 

subject merchandise.’’ However, the nature of a 

scope ruling is to determine whether the 

merchandise produced, imported by, or exported by 

a party is subject to an AD or CVD order. Thus, in 

many cases, the question of whether a party is an 

‘‘interested party’’ depends in part on whether the 

merchandise at issue is subject merchandise. 

Accordingly, for purposes of these scope 

regulations, the term ‘‘interested party’’ includes a 

party that would meet the definition of ‘‘interested 

party’’ under section 771(9) of the Act, if the 

merchandise at issue in the scope inquiry is in fact 

in-scope. This clarification of the term ‘‘interested 

party’’ for purposes of this regulation is in no way 

intended to weaken the requirement that the 

product is, or has been, in actual production as of 

the filing of the scope ruling application, as 

required by paragraph (c)(1). 

63Proposed Rule, 85 FR 49472 at 49477. 

Federal Circuit has stated through a 

variety of cases that the current 

regulations do not adequately 

acknowledge this fact.59 Accordingly, 

we are adopting proposed paragraph (a), 

with some minor modifications to more 

clearly emphasize this point. 

Further, as discussed above, the 

statute is silent regarding the procedures 

and standards that Commerce may 

apply in issuing a scope ruling. In the 

absence of any such statutory guidance, 

Commerce’s position is that a factual 

determination that a product is covered 

by the scope of the order amounts to a 

determination that the product has 

always been covered by the scope of the 

order. With respect to issues concerning 

the application of such a determination 

to certain entries of products and notice 

to exporters and importers, those issues 

are addressed below in response to 

comments under § 351.225(l). As 

discussed below, the purpose of these 

modifications is not to penalize 

companies acting in good faith, but to 

ensure that scope rulings are properly 

applied to products that are covered by 

the scope of an order. 

Additionally, as we also explained in 

the preamble to the Proposed Rule, 

Commerce’s scope rulings frequently do 

more than merely clarify the language of 

a scope, and we do not believe the 

degree of ambiguity or clarity of the 

coverage of a particular product in the 

language of a scope should support or 

detract from the fact that a product 

which is determined to be covered by an 

order has always been covered by an 

order, and a product which Commerce 

determines is not covered by the scope 

of an order was not covered by the 

scope of that order before the scope 

ruling was issued. 

Furthermore, we agree with the 

commenters who explain that any 

concerned importer who believes a 

scope is unclear or is uncertain whether 

its entries may be covered by an AD/ 

CVD order has the appropriate tools 

available to it, through these 

regulations, to request a scope ruling. 

With respect to the 1999 scope ruling 

raised by one of the commenters which 

modified the text of a scope, the Federal 

Circuit in several subsequent holdings 

explained that Commerce does not have 

the authority to outright change the 

scope of an order through 

reinterpretation in a scope ruling.60

There are other means, such as changed 

circumstances reviews under section 

751(b) of the Act, through which the 

scope may be modified, but with respect 

to scope rulings, Commerce will not 

modify the text of a scope in the context 

of a scope inquiry.61 In addition, 

Commerce may conduct a 

circumvention inquiry under section 

781 of the Act to determine whether 

certain types of products are covered by 

the scope of the order. 

Finally, to bring this provision into 

conformity with language used in other 

provisions under § 351.225, as well as 

language which was already contained 

in proposed § 351.225(a), we have 

replaced references to a product being 

‘‘within’’ the scope of an order to a 

description of the product at issue being 

‘‘covered by the scope of an order.’’ This 

change is made only to use consistent 

terminology, and not to modify the 

meaning of the provision. 

2. Section 351.225(b)—Self-Initiation of 

Scope Inquiry 

Section 351.225(b) addresses 

Commerce’s authority to self-initiate a 

scope ruling. In the Proposed Rule, 

Commerce indicated that if it selfinitiated a scope inquiry, it would notify 

all parties on the annual inquiry service 

list. The only comments that Commerce 

received on this provision pertained to 

notice of the agencies’ decision to 

initiate. Specifically, commenters worry 

that producers, exporters, importers, 

sureties, and foreign governments who 

were not on the annual inquiry service 

list might not get sufficient notice under 

that procedure should Commerce selfinitiate a scope ruling. They, therefore, 

suggest that Commerce publish its selfinitiation in the Federal Register. 

Response: 

In response to those comments, we 

have revised our notice requirements for 

self-initiation. The regulation now 

provides that if Commerce self-initiates 

a scope inquiry, it will publish a notice 

of initiation in the Federal Register, as 

suggested by certain commenters. We 

believe this will satisfy all notice 

concerns raised by the commenters 

pertaining to this provision. 

3. Section 351.225(c)—Scope Ruling 

Application 

Section 351.225(c) sets forth the 

requirements for an interested party 62

to submit a standardized scope ruling 

application. This is a significant change 

from Commerce’s current procedures, 

which do not require a detailed 

standardized application. Commerce 

explained in the preamble to the 

Proposed Rule that it was now requiring 

an application, with specific 

information required in that application, 

as a result of various concerns, 

including the fact that ‘‘scope ruling 

requests do not always include the 

requisite sufficient description and 

supporting information necessary for 

Commerce to complete an analysis.’’ 63

Several commenters indicate their 

strong support for the standardized 

application procedure, and both they, 

and other commenters, provide 

suggestions to modify the application 

requirements. One commenter argues 

that Commerce should provide further 

guidance on what the phrase ‘‘to the 

extent reasonably available’’ means, 

while others complain that requests for 

‘‘narrative history of the production of 

the product’’ and the ‘‘volume of annual 

production of the product for the most 

recently completed fiscal year’’ would 

be too burdensome for certain parties. 

Others complain that the application 

would seem to require more data from 

producers, exporters, and importers of 

certain merchandise than a requesting 

domestic industry, and one claims that 

Commerce seemed to request 

unnecessary or ‘‘superfluous’’ data, such 

as ‘‘past models of products.’’ 

Certain commenters also suggest that 

the application require further detailed 

quantity and value data, including a 

disclosure of how much scope inquiry 

merchandise was imported or shipped 

to the United States without the 

payment of duties. Further, they argue 

52314 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

64While the ‘‘Department may consider the 

decisions of Customs, it is not obligated to follow, 

nor is it bound by, the classification determinations 

of Customs. . . .’’ Wirth Ltd. v. United States, 5 F. 

Supp. 2d 968, 973 (CIT 1998) (Wirth) (‘‘Commerce, 

not Customs, has authority to clarify the scope of 

AD/CVD orders and findings.’’). 

that Commerce should request the 

identity of an importer’s U.S. customer 

or customers if the product was already 

imported into the United States. They 

argue that the provision of the quantity 

and value information, as well as the 

customer lists, would provide further 

enforcement tools to Commerce in 

administering and implementing its 

scope rulings. 

In addition, another commenter 

argues that Commerce should require 

that a scope applicant indicate in the 

application if any of its imports are 

currently subject to suspension of 

liquidation and cash deposits. 

Another commenter suggests that 

Commerce insert this clause at the end 

of § 351.225(c)(2)(i)(C): ‘‘. . . and copies 

of any Customs rulings relevant to the 

tariff classification,’’ because it claims 

that such additional information would 

permit Commerce and other interested 

parties to verify the scope requestor’s 

classification as accurate. The same 

commenter also voices concerns about 

Commerce’s proposed requirement of a 

‘‘concise public description of the 

product,’’ in § 351.225(c)(2)(ii), without 

any details about what would be 

included in that description, claiming 

that the lack of clarity in that respect 

could lead to confusion, manipulation 

by the party filling out the application, 

and litigation concerns. 

Furthermore, another party expresses 

its concerns that once a certain number 

of years have passed since an 

investigation or earlier administrative 

review segments, and certain 

proprietary versions of the requested 

information once available to the 

requestor are no longer available to 

interested parties under the terms of an 

APO, Commerce should consider 

adopting a procedural mechanism to 

allow parties access to such data, or at 

least provide a procedure by which 

Commerce itself could place the 

proprietary versions of documents on 

the record of the scope inquiry. 

In rebuttal comments, one commenter 

disagrees that Commerce should request 

additional quantity and value 

information, or customer lists, noting 

that such information requests would be 

unduly burdensome to respond to and 

completely unnecessary to Commerce’s 

determination if a product is subject to 

an AD or CVD order. 

Response: 

We have considered all of the 

comments received on this provision 

and have determined to make certain 

modifications to the proposed 

§ 351.225(c); some in response to the 

comments raised and others to clarify 

the information which Commerce needs 

from a requestor to initiate a scope 

inquiry. 

First, as explained in more detail in 

the discussion of § 351.225(j) below, 

Commerce continues to recognize that, 

in addressing country of origin issues in 

the context of Commerce proceedings, 

Commerce is not bound by the country 

of origin determinations of other 

agencies, such as CBP.64 That said, such 

determinations may be informative to 

our analysis, and are identified as 

relevant secondary interpretive sources 

under § 351.225(k)(1), discussed below. 

Therefore, we agree with the commenter 

that proposes requesting copies of any 

Customs rulings relevant to a given tariff 

classification. Such rulings would be 

beneficial to our analysis, and we have 

included that request in our regulation. 

Second, we also agree with the same 

commenter that there should be some 

clarification as to the requirements of 

the concise public summary, and have 

modified the regulation to reflect that 

the physical characteristics of the 

product, the countries where the 

product is produced and from which it 

is exported, the declared country of 

origin (if imported and known to the 

requestor), and the product’s tariff 

classification should all be included in 

that concise public summary of the 

product’s description. Because 

Commerce sometimes conducts scope 

inquiries on merchandise that is already 

in commercial production but has not 

yet been exported to the United States, 

we recognize that there may be cases in 

which there is no declared country of 

origin to report under 

§ 351.225(c)(2)(i)(B). 

Third, we realize that the proposed 

regulations neglected to note that we 

need parties to identify the countries of 

production, export, and declared origin, 

both in the detailed description of the 

product, as well as the concise public 

summary of the product’s description, 

for our scope inquiry analysis. 

Accordingly, we have added those 

requirements to the list of necessary 

information requested in the 

application. 

Fourth, we are no longer requiring the 

names and addresses of the producers, 

exporters, and importers in the public 

summary, but we still need such 

information in the detailed description 

of the product in the application, so we 

have modified the language to reflect 

that change. 

Fifth, we recognize that the term 

‘‘physical characteristics’’ is a term used 

in Commerce’s current regulations, and 

includes not only chemical and 

technical characteristics, but 

dimensional characteristics, as well 

(such as the height, length, 

circumference, and width of a product). 

We have, therefore, revised the 

regulations to once again use the term 

‘‘physical characteristics’’ and noted 

that the term ‘‘physical characteristics’’ 

includes all of those additional 

descriptive terms. It is our 

understanding that the term ‘‘technical 

characteristics,’’ which is not defined, 

covers a wide array of characteristics, 

such as the mass or weight of the 

product, the volume of the product, the 

buoyancy, conductivity, and 

aerodynamic properties of product, and 

even various mechanical characteristics 

and properties of the product, such as 

elasticity, tensile strength, elongation, 

ductility, brittleness, malleability, 

plasticity, and hardness of the product. 

Furthermore, we wish to be clear that by 

using the term ‘‘including’’ in this 

description, we are expressly indicating 

that we do not believe these descriptors 

are exhaustive. Frequently, the physical 

characteristics relevant to a scope ruling 

are almost entirely dependent on the 

language used in the scope of an order 

to describe the particular product, as 

well as the additional descriptions 

provided in the petition or during the 

underlying investigation. Accordingly, 

our use of this term is meant to be 

broadly interpreted and adaptable to the 

facts of a given scope and inquiry. 

Sixth, and finally, we have clarified in 

§ 351.225(c)(2)(vi) that, for imported 

merchandise that an importer has 

declared to be subject to an order, or for 

merchandise which has been 

determined by CBP to be subject to an 

order, we need the applicant to provide 

an explanation for either situation in the 

application. The language provided in 

proposed § 351.225(c)(2)(v) was unclear 

in that regard, appearing to only request 

information if CBP had determined the 

entry was covered by the scope of the 

applicable order and not if the importer 

had declared it to be subject to an order 

upon importation. 

On the other hand, we do not believe 

that quantity and value data, or 

customer lists, should be provided to 

Commerce in every scope application, 

as requested by certain domestic 

producers. Although we agree that such 

information might be of value to 

Commerce’s analysis in certain 

situations, we do not believe that in 

most scope rulings such information 

would inform our determination as to 

whether a product at issue is covered by 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52315 

65As discussed further below, Commerce is 

modifying § 351.225(l) to provide that Commerce 

normally will apply a scope ruling that a product 

is covered by the scope of an order to unliquidated 

entries not yet suspended which entered prior to 

the date of initiation of the scope inquiry, with 

certain exceptions. One of those exceptions would 

allow for a party to timely request that Commerce 

consider whether to direct CBP to suspend 

liquidation and collect cash deposits at an 

alternative date. Such request must be based on a 

specific argument supported by evidence 

establishing the appropriateness of that alternative 

date, as explained further below. 

the scope of an order. Instead, in those 

cases in which Commerce determines 

that quantity and value data, or 

customer lists, might be of value to 

Commerce’s analysis, Commerce retains 

the authority to request that information 

of the applicant or other interested 

parties to the scope inquiry. 

Accordingly, we will not include this 

additional data request in the scope 

application. 

In addition, although we do request 

that an applicant making a request for 

a scope inquiry on a product already 

imported into the United States as of the 

date of the scope ruling application 

indicate whether an entry of the product 

has been declared by an importer, or 

determined by CBP, as subject to an 

order, under § 351.225(c)(2)(vi), we do 

not believe it is necessary to also request 

that the applicant inform us if imports 

of the merchandise at issue are currently 

subject to suspension and cash deposits. 

We agree with the commenter that such 

information might be relevant at some 

point in our inquiry, for example, for 

purposes of our CBP instructions under 

§ 351.225(l).65 However, for purposes of 

evaluating a scope application to 

determine if a product is covered, or not 

covered, by the scope of an AD/CVD 

order, it is only whether the product has 

been previously declared by an 

importer, or determined by CBP, as 

subject to an order which is relevant to 

our analysis under § 351.225(k). 

Notably, if a producer, exporter, or 

petitioner is the party filing the scope 

inquiry application, unlike the importer, 

they may not even know if the product 

at issue is currently subject to 

suspension and cash deposits. 

In response to the concerns expressed 

by some of the commenters that they 

would be unable to obtain all of the 

information listed, that is the reason we 

have included the words ‘‘to the extent 

reasonably available to the applicant’’ in 

this paragraph. Whether or not 

information is reasonably available to an 

applicant will be a determination made 

on a case-by-case basis. We understand 

that interested parties requesting a 

scope ruling may not have access to all 

the information that is listed, and 

despite the criticisms of some of the 

commenters, it is a fact that domestic 

industries will likely have less 

information about a particular exporter 

and its production experience, for 

example, than the producer, exporter, 

and possibly importer of that product. 

Accordingly, Commerce will allow 

applicants to explain the reasons they 

do not have certain information when 

filling out the scope application. 

Further, Commerce retains the authority 

to either issue supplemental questions 

about those explanations if necessary, or 

reject a scope ruling application 

entirely, if Commerce determines that it 

cannot conduct a scope inquiry in the 

absence of the missing information at 

issue. 

Accordingly, the information 

identified in the Proposed Rule for the 

scope application has remained largely 

the same in this final rule, as we believe 

those data requests, including 

information as to the history of earlier 

versions of the product if this is not the 

first model of the product under 

§ 351.225(c)(2)(C)(iv), are important to 

our scope analysis. Again, if a party is 

unable to provide certain information, 

and can provide a reasoned explanation 

as to why those data are unavailable, 

Commerce will consider such claims in 

determining whether to accept or reject 

an application or issue supplemental 

questionnaires. 

Finally, with respect to the request 

that Commerce create a procedure to 

place proprietary information on the 

record of a scope inquiry from 

proceedings which are a few years old, 

or make such data generally available to 

a scope applicant, we have determined 

not to implement such a procedure in 

these regulations. To the extent that 

information is relevant for a scope 

application, we believe public data will 

likely usually suffice. We do not believe 

that Commerce should establish a whole 

new regulatory exception to the APO 

procedures for what we foresee as a rare 

occurrence in which an interested party 

seeks access to proprietary data no 

longer available for use in a scope 

application. 

4. Section 351.225(d)—Initiation of a 

Scope Inquiry and Other Actions Based 

on a Scope Ruling Application 

Section 351.225(d) of the modified 

regulations provides for the process by 

which a scope inquiry may be initiated 

based on a scope application. Certain 

commenters indicate that they support 

Commerce’s determination to deem a 

scope inquiry automatically initiated if 

no further action is taken within 30 

days, while another commenter requests 

that Commerce publish notice of its 

scope applications and initiations in the 

Federal Register to provide notice to 

interested parties who may not be on 

the annual inquiry service list. In 

addition, another commenter argues that 

Commerce should provide surety 

companies with notice of scope 

initiations so that they can participate in 

scope inquiry proceedings that are 

relevant to their interests. 

In related comments, several 

commenters argue that Commerce 

should allow interested parties an 

opportunity to submit comments and 

factual information prior to initiation of 

a scope inquiry. 

Response: 

As explained above, Commerce has 

modified its self-initiation procedures 

under § 351.225(b) to publish notice of 

the self-initiation in the Federal 

Register. However, given deadlines and 

complications in scope inquiry 

procedures initiated pursuant to a scope 

application, consistent with our current 

procedures, we will not publish notices 

of initiations of scope inquiries in the 

Federal Register under § 351.225(d). 

Instead, we will, as requested by a 

commenter, under § 351.225(d)(2), 

publish on a monthly basis a notice in 

the Federal Register that lists scope 

applications from the past couple of 

months filed with Commerce. It is our 

expectation that usually that list will 

reflect most, if not all, of the scope 

applications filed over the past month, 

but we also recognize that given certain 

timing constraints, issues frequently 

arise which make that goal 

impractical—such as when an 

application has been filed after the 

monthly notice has been sent to the 

Federal Register for publication. In that 

situation, it would be understood that 

the scope application would be 

included in the following month’s 

Federal Register notice. 

We have added this requirement to 

ensure adequate notification is provided 

via the Federal Register to interested 

parties not on the annual inquiry service 

list. By listing the applications received 

by Commerce requesting a scope 

inquiry, it is our expectation that the 

descriptions of the applications will 

give all interested parties an 

opportunity to consider if the scope 

inquiry request is relevant to them and 

their interests, and allow them the 

opportunity to file a notice of 

appearance with Commerce on the 

record of that scope inquiry. To the 

extent that surety companies wish to 

have notice of Commerce’s scope 

inquiries, although they are not 

interested parties under section 771(9) 

of the Act (as discussed further below 

regarding § 351.225(l), comment 12(f)), 

52316 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

66 Given the short turn-around of scope 

initiations, at its discretion, Commerce may, but is 

not required to, consider such arguments before a 

scope inquiry is initiated. 67Proposed Rule, 85 FR 49472 at 49478. 68 Id. 

this monthly published list will also 

provide them with that notice. 

It is our expectation that the Federal 

Register list will include, where 

appropriate, for each scope application 

the following data: (1) Identification of 

the AD and/or CVD orders at issue; (2) 

a concise public summary of the 

product’s description, including the 

physical characteristics (including 

chemical, dimensional and technical 

characteristics) of the product; (3) the 

country(ies) where the product is 

produced and the country from where 

the product is exported; (4) the full 

name of the applicant; and (5) the date 

that the scope application was filed 

with Commerce. We anticipate that 

Commerce may include additional 

information in the monthly Federal 

Register list at its discretion and may 

leave off the list references to 

applications which have been rejected 

and not properly resubmitted. 

In addition, Commerce has revised 

§ 351.225(d) to explain that deemed 

initiation will only occur if Commerce 

has neither rejected the scope 

application nor initiated the scope 

inquiry at an earlier date, and that after 

30 days the scope application will be 

deemed accepted and the scope inquiry 

will be deemed initiated. 

In response to complaints that 

Commerce should permit parties a 

greater amount of time in which they 

can submit comments on the scope 

application before initiation, we have 

declined to modify our regulations in 

that manner. Interested parties on the 

annual inquiry service list, as provided 

under § 351.225(n), will be 

electronically notified soon after an 

application is filed with Commerce, and 

the applicant will otherwise serve the 

application on those interested parties 

in accordance with § 351.225(c) and (n). 

Those parties will, therefore, have an 

opportunity to file arguments with 

Commerce before initiation.66

Nonetheless, even if they do not file 

comments on the application before it is 

deemed accepted and the scope inquiry 

is initiated, they will also have an 

opportunity afterward to comment on 

the application and provide responsive 

facts and arguments on the record, in 

accordance with § 351.225(f). This is 

true for interested parties who received 

notice of the filing of the scope 

application in the Federal Register as 

well, as described in this provision. 

We recognize that under Commerce’s 

current practice, interested parties 

frequently submit comments prior to the 

initiation of a scope inquiry in order to 

provide Commerce with additional 

factual information that rebuts or 

clarifies a scope ruling request. 

However, we believe that, under the 

new scope inquiry procedures, the need 

for such an opportunity to submit 

comments/additional factual 

information pre-initiation will be largely 

alleviated with Commerce’s proposed 

standardized scope ruling application 

because use of the scope ruling 

application should result in more 

fulsome and complete information being 

filed at the outset. 

We continue to believe that requiring 

a more fulsome standardized scope 

application (rather than what is required 

in the current regulation), and having a 

scope application deemed accepted and 

a scope inquiry commenced after 30 

days, is reasonable and will speed up 

Commerce’s scope ruling procedures. If 

we were to extend that time longer, as 

requested by several commenters, that 

goal would be less likely to be achieved. 

Therefore, we have made no 

modification to the timetable spelled 

out in § 351.225(d) from that set forth in 

the Proposed Rule. 

Finally, we have also added a 

provision to § 351.225(d) that if 

Commerce determines upon review of a 

scope ruling application that the scope 

issue should be addressed in another, 

ongoing segment of the proceeding, 

such as a circumvention inquiry, then 

Commerce will notify the applicant, 

within 30 days after the scope ruling 

application has been filed, that the 

agency will not initiate the scope 

inquiry, but address the scope issue in 

that other segment. 

5. Section 351.225(e)—Deadlines for 

Scope Rulings 

Section 351.225(e) provides that 

Commerce shall issue a final scope 

ruling within 120 days after the date on 

which the scope inquiry was initiated, 

although it may be extended up to an 

additional 180 days for good cause (for 

a fully-extended total of 300 days). This 

was a change from the 45-day deadline 

in the current regulations, which 

Commerce explained in the preamble to 

the Proposed Rule has been a ‘‘difficult 

and frequently unworkable deadline.’’ 67

Commerce explained that the shorter 

deadline led to ‘‘unnecessary delay and 

questions on the part of outside 

parties,’’ and if Commerce had to solicit 

and ‘‘receive new factual information 

and comments from numerous parties,’’ 

it left ‘‘little time to consider the 

evidence and arguments and reach a 

well-reasoned decision within the time 

allotted.’’ 68 Therefore, Commerce 

frequently had to extend deadlines in a 

large number of its scope inquiries. 

Accordingly, Commerce revised these 

regulations to provide for a more 

realistic and manageable timetable. 

We received many comments and 

rebuttal comments on this provision. 

One commenter argues that the current 

45-day deadline is already too long for 

certain simple and non-controversial 

scope rulings. If Commerce has the 

authority to extend the 45-day deadline 

for good cause, the elimination of the 

importers’ ability to obtain a scope 

ruling within 45 days is unnecessary 

because the agency can already achieve 

a short delay when necessary under its 

current regulations. The same 

commenter also opposes removing the 

distinction between an informal and 

formal scope ruling under the current 

regulations, arguing that, in fact, such a 

change would slow down the scope 

ruling process rather than speed it up 

and the 120-day deadline would become 

the automatic default in every case. That 

commenter, therefore, argues Commerce 

should make no changes to its scope 

inquiry procedures in the modified 

regulations. 

Other commenters argue that 

Commerce should not just have a 

deadline for final scope rulings, but 

should also have a deadline for 

preliminary scope rulings, i.e., when 

Commerce determines to issue a 

preliminary scope ruling. They express 

concern that there could be a period of 

time between the initiation and the 

preliminary scope ruling where 

potential subject merchandise is being 

liquidated without regard to duties, 

given that entries are deemed liquidated 

by operation of law after one year. The 

commenters suggest that Commerce 

should establish a deadline for 

preliminary scope rulings of no later 

than 150 days after initiation. They 

argue that this would be consistent with 

Commerce’s proposed circumvention 

regulations, which identify a 150-day 

deadline for preliminary circumvention 

determinations. 

Furthermore, one commenter argues 

that Commerce should inquire into 

whether an importer has entries of the 

merchandise at issue subject to 

suspension of liquidation or cash 

deposit requirements under the AD or 

CVD order at issue, and if that entity’s 

imports are not currently being 

suspended or subject to cash deposits, 

the regulations should mandate that 

Commerce issue a preliminary scope 

ruling no later than 120 days after 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52317 

69 Id. at 49478. 

initiation of the scope inquiry, to ensure 

relief to the injured domestic industry. 

In addition, two other commenters 

express concern over the fully extended 

deadline of 300 days. They argue that 

such a deadline is excessive, 

inconsistent with other provisions in 

the proposed regulations, and that 

providing Commerce with six more 

months to consider a scope ruling 

request would increase burdens on U.S. 

companies in terms of legal and 

business uncertainty. 

In their rebuttal submissions, certain 

commenters agree with the request for a 

150-day deadline for preliminary scope 

rulings, and strongly disagree with the 

argument that Commerce should retain 

its 45-day deadline. They point out that 

the proposed regulations do not 

preclude Commerce from issuing its 

scope ruling before the 120-day 

deadline, only that the 120-day deadline 

is a maximum deadline. Indeed, certain 

domestic industry commenters state that 

they believe that the 120-day deadline 

will result in more predictable, and 

possibly shorter, deadlines than under 

the current system, where they claim 

there have been too many extensions, 

and that each day Commerce does not 

initiate or issue a scope ruling is another 

day where injury to the domestic 

industry occurs. 

Further, in their rebuttal submissions, 

certain commenters challenge the idea 

that the length of a scope inquiry is 

unfair to importers, arguing that if an 

importer conducts proper due diligence, 

it will have the appropriate tools to 

analyze whether its product may or may 

not be covered by an order, and if it 

does not, it should request a scope 

ruling sooner rather than later. Due 

diligence, they argue, is a best practice 

and should not be seen as an 

unreasonable burden or unfairness to 

importers. 

Response: 

After considering the submitted 

comments regarding scope segment 

deadlines, we have determined not to 

modify the deadlines set forth in the 

proposed § 351.225(e). For all of the 

reasons we explained in the preamble to 

the Proposed Rule, the current system is 

unwieldy and forces Commerce to issue 

multiple extensions. We also disagree 

that the current system of an informal 

and formal scope ruling dichotomy is a 

preferable way to conduct our scope 

rulings. As we also explained in the 

Preamble to the Proposed Rule, the 

distinction between those two 

procedures sometimes causes confusion 

and adds unnecessary delay to our 

proceedings; accordingly, we believe the 

burden resulting from the current 

system outweighs the benefit of a 

simpler, single scope inquiry 

procedure.69

Furthermore, we believe the use of a 

standardized scope application and a 

120-day deadline is reasonable, and if a 

case is complicated and good cause 

exists to warrant an extension, allowing 

Commerce to extend its scope inquiry 

proceedings up to an additional 180 

days is also reasonable. As one of the 

commenters argues, this does not mean 

that Commerce will always take 120 

days to issue scope rulings, especially 

when a scope ruling is fairly simple, 

straightforward, and/or uncontested. In 

those cases, it is not unreasonable to 

expect that Commerce might issue a 

scope ruling in a shorter time frame. 

Similarly, it does not mean that every 

time Commerce extends the proceeding, 

it will automatically extend the full 180 

days. 

Moreover, we do not agree with the 

commenter who argues that Commerce 

should be mandated by the regulations 

to: (1) Request that every applicant that 

imports the product subject to the scope 

inquiry inform us whether liquidation 

of its entries of the particular product 

are currently being suspended and if it 

is paying cash deposits on those entries; 

and (2) if the requestor responds that the 

imports at issue are not being 

suspended or that the importer is not 

paying cash deposits on those entries, 

Commerce must issue a preliminary 

scope ruling within 120 days after 

initiation of the scope inquiry. We do 

not believe such a requirement is 

appropriate. We agree with the 

commenter that such information might 

be relevant at some point in our inquiry, 

for example, for purposes of our CBP 

instructions under § 351.225(l), but, for 

the reasons explained above in the 

discussion of § 351.225(c), such 

information normally is not relevant for 

our scope analysis under § 351.225(k). 

In addition, we do not agree with the 

parallels drawn to preliminary 

circumvention determinations. 

Preliminary circumvention 

determinations are issued in every 

circumvention inquiry, but Commerce 

does not issue a preliminary scope 

ruling in all scope inquiries. When 

Commerce determines that a 

preliminary scope ruling is warranted, 

we do not believe it should be restricted 

by a specific deadline in the regulations. 

Instead, we believe that Commerce 

should have the flexibility to determine 

when to issue a preliminary scope 

ruling and request comments from 

participating interested parties. Thus, it 

would be unreasonable to require 

Commerce to issue a preliminary scope 

ruling when the facts on the record are 

simple and clear enough for Commerce 

to issue a final scope ruling before or on 

120 days after initiation of the scope 

inquiry. Therefore, we have not 

modified § 351.225(e) to mandate the 

issuance of preliminary scope rulings 

within 120 days, or even 150 days as 

suggested by some, after initiation of the 

scope inquiry. 

We also disagree with the commenter 

expressing concerns regarding the 

prolonged uncertainty for U.S. 

importers as to the ultimate status of 

products subject to a scope inquiry 

under the 300-day deadline, when 

coupled with the potential for 

retroactive suspension of liquidation. As 

other commenters have argued, all 

importers of merchandise to the United 

States are required to conduct their 

business affairs with due diligence and 

should be informed as to the potential 

trade remedies that may be applied to 

imported merchandise when they 

decide to import that merchandise. If a 

party is concerned that its products 

might be covered by an AD or CVD 

order, it is the party’s responsibility to 

request a scope ruling at the earliest 

possible time. We do not believe the 

potential 120-day or fully-extended 300- 

day deadlines set forth in § 351.225(e) 

are unnecessarily lengthy or 

burdensome on importers, and we do 

not believe that the firm deadlines in 

the regulations will result in uncertainty 

or unpredictability, as some 

commenters asserted. In fact, we find 

the opposite to be true. Commerce will 

now be required by regulation to issue 

scope rulings no later than 300 days 

after initiation—a requirement not 

found in the current regulations. 

Finally, we have revised the heading 

of this section to ‘‘Deadlines for scope 

rulings’’ from ‘‘Time limits,’’ to better 

reflect the provisions covered by this 

section of the regulation, and we have 

moved the provision allowing for 

alignment of scope rulings with other 

segments of a proceeding from proposed 

§ 351.225(i)(2) to this section to clarify 

that all of the deadlines described in 

this section may be adjusted if the scope 

inquiry is aligned with another segment. 

6. Section 351.225(f)—Scope Inquiry 

Procedures 

Section 351.225(f) provides the 

deadlines for rebuttal comments and 

factual information and other 

procedural matters. We received 

multiple comments specifically on the 

various deadlines contained within the 

proposed procedures. All of those 

comments requested more time, 

claiming that the deadlines as proposed 

were too short for interested parties and 

52318 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

70 Id. at 49479. 

71See id. 

Commerce to effectively analyze 

questionnaire responses and other 

submissions prior to the deadline for 

responses and rebuttal submissions. 

Furthermore, one commenter argues 

that Commerce should not indicate in 

§ 351.225(f)(3) that it may limit issuance 

of questionnaires to a reasonable 

number of respondents, because such a 

limitation would also have the effect of 

limiting verification of those 

respondents to whom questionnaires 

had been issued. That commenter 

argues that it would be inappropriate to 

decline gathering information via 

questionnaire from all potential 

respondents. 

Finally, certain commenters express 

their support for § 351.225(f)(6), which 

acknowledges that Commerce maintains 

the ability to rescind a scope inquiry if 

it determines it is appropriate to do so. 

One of those commenters points to the 

Proposed Rule where Commerce 

explained that it might ‘‘rescind a scope 

inquiry, for example, if an interested 

party has failed to provide information 

necessary for Commerce to issue a scope 

ruling,’’ 70 in ‘‘instances in which a 

scope matter may be addressed in 

another segment of a proceeding’’ or in 

‘‘instances in which a new scope 

inquiry or scope ruling is unnecessary 

because of a related or prior scope 

ruling.’’ 71 That commenter requests that 

Commerce codify those examples in the 

regulation. Further, that same 

commenter notes that Commerce stated 

in a footnote in the preamble to the 

Proposed Rule that it ‘‘maintains the 

discretion to apply facts available 

pursuant to section 776 of the Act, as 

appropriate, rather than rescind a scope 

inquiry,’’ and argues that Commerce 

should, therefore, codify its authority to 

apply facts available with an adverse 

inference when an interested party has 

failed to supply requested necessary 

information. 

Response: 

Upon consideration of the various 

comments about Commerce’s proposed 

deadlines, as well as consideration of 

our own practice in other 

circumstances, we have determined to 

modify our proposed deadlines under 

§ 351.225(f) to allow interested parties 

additional time to provide responses 

and new factual information as follows: 

• Under § 351.225(f)(1), parties will 

have 30 days, rather than 20 days, to 

submit comments and factual 

information after Commerce selfinitiates a scope inquiry; 

• Under § 351.225(f)(1), parties will 

have 14 days, rather than 10 days, to 

submit comments and factual 

information to rebut, clarify, or correct 

factual information submitted by the 

other interested parties; 

• Under § 351.225(f)(2), parties will 

have 30 days, rather than 20 days, to 

submit comments and factual 

information after Commerce initiates a 

scope inquiry pursuant to a scope 

application; 

• Under § 351.225(f)(2), the applicant 

will have 14 days, rather than 10 days, 

to submit comments and factual 

information to rebut, clarify, or correct 

factual information in response to the 

interested parties’ submissions; 

• Under § 351.225(f)(3), interested 

parties will have 14 days, rather than 10 

days, to submit comments and factual 

information to rebut, clarify, or correct 

factual information contained in a 

questionnaire response; 

• Under § 351.225(f)(3), the original 

submitter will have seven days, rather 

than five days, to submit comments and 

factual information to rebut, clarify, or 

correct factual information submitted in 

the interested party’s rebuttal, 

clarification, or correction; 

• Under § 351.225(f)(4), interested 

parties will have 14 days, rather than 10 

days, after the preliminary scope ruling 

to submit comments; and 

• Under § 351.225(f)(4), interested 

parties will have seven days, rather than 

five days, to submit rebuttal comments 

thereafter. 

With respect to the commenter’s 

argument that we should codify our 

ability to apply facts available, pursuant 

to section 776(a) of the Act, and an 

adverse inference, pursuant to section 

776(b) of the Act, we have declined to 

do so because Commerce already has 

the authority to apply adverse facts 

available when an interested party fails 

to provide necessary information in all 

of its proceedings, including scope 

inquiries. 

Furthermore, we have also declined to 

list the scenarios under which 

Commerce would rescind a scope 

inquiry in § 351.225(f)(6) because such a 

determination to rescind a scope inquiry 

is made on a case-by-case basis, and, 

although the examples provided in the 

preamble of the Proposed Rule were 

illustrative, they were by no means 

exhaustive. Accordingly, we do not 

believe it would be beneficial in this 

case to codify a non-exhaustive list of 

examples in the final regulations in 

which we would rescind a scope 

inquiry. We acknowledge that we have 

provided some common examples in the 

circumvention inquiry (§ 351.226) and 

covered merchandise inquiry 

(§ 351.227) regulations in which we may 

rescind those inquiries, but again, even 

those examples are not exhaustive. 

With respect to Commerce’s authority 

to rescind a scope inquiry, we have 

made some additional changes to 

conform this section with parallel or 

similar language in the circumvention 

inquiry (§ 351.226) and covered 

merchandise inquiry (§ 351.227) 

regulations. Specifically, we have edited 

§ 351.225(f)(6) to clarify that rescission 

of scope rulings can be in whole or in 

part. This is consistent with 

Commerce’s current practice. For 

example, Commerce may conduct a 

scope inquiry in which a single 

importer has filed six scope applications 

covering six different products from the 

same producer and exporter. Commerce 

may determine in that situation to 

conduct a single segment of the 

proceeding covering all six products, 

but then later in the combined scope 

inquiry segment determine to rescind 

the inquiry with respect to three or four 

of the products. In another example, 

Commerce may determine to consider 

and analyze in one segment of the 

proceeding scope inquiries covering 

products with the same physical 

characteristics produced and exported 

by different entities and imported by 

different importers. As with the segment 

covering multiple products, Commerce 

may rescind in whole or in part a 

segment covering different 

combinations of producers, exporters, 

and/or importers. The language of 

§ 351.225(f)(6) is meant to cover various 

scenarios, including examples such as 

these. 

In response to the commenter’s 

argument that Commerce should not be 

permitted to limit issuance of 

questionnaires to a reasonable number 

of respondents under § 351.225(f)(3), we 

disagree. In the context of a scope 

inquiry, such situations most frequently 

arise when a domestic producer 

requests a scope ruling covering certain 

products produced and exported by 

multiple entities. If Commerce had 

unlimited resources, we agree that the 

best-case scenario would have 

Commerce never limiting the number of 

questionnaires it issues and respondents 

that it considers. However, in reality, 

Commerce conducts its administrative 

proceedings with limited resources and 

under specific time constraints. 

Accordingly, and in consideration of 

Commerce’s authority to limit 

respondents under section 777A(c)(2) of 

the Act for investigations, we continue 

to believe that it is appropriate to retain 

the language in our regulations that 

clarifies that we may limit the issuance 

of questionnaires to a reasonable 

number of respondents if the record of 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52319 

72 Id. at 49479. 

73 Medline Industries, Inc. v. United States, 911 

F. Supp. 2d 1358, 1361 (CIT 2013); see also Bond 

St., Ltd. v. United States, 521 F. Supp. 2d 1377, 

1381 (CIT 2007). 

the scope inquiry warrants such a 

limitation. 

Finally, for greater clarity, we have 

made some minor edits to 

§ 351.225(f)(7) to explain that Commerce 

can both alter or extend time limits if it 

determines it is appropriate to do so on 

a case-by-case basis. 

7. Section 351.225(g)—Preliminary 

Scope Ruling 

Section 351.225(g) would authorize 

Commerce to issue a preliminary scope 

ruling as to whether there is a 

reasonable basis to believe or suspect 

that the product is covered by the scope 

of the order. Additionally, § 351.225(g) 

would continue to allow Commerce to 

use its discretion in issuing a 

preliminary scope ruling at the same 

time Commerce initiates a scope 

inquiry. Pursuant to § 351.225(n)(4), 

Commerce will notify interested parties 

on the segment-specific service list of 

the issuance of the preliminary scope 

ruling. 

One commenter argues that 

notification of a preliminary scope 

ruling only to the parties participating 

in the scope inquiry is insufficient and 

might be inconsistent with U.S. 

obligations under the AD and SCM 

Agreements. The commenter, therefore, 

argues that Commerce should publish 

its preliminary scope ruling in the 

Federal Register, rather than just notify 

the parties on the segment-specific 

service list. 

In their rebuttal comments, several 

commenters disagree with this 

argument, arguing that Commerce’s 

implementation and use of an annual 

inquiry service list and segment-specific 

service list is fully consistent with U.S. 

international obligations, and that 

Commerce is not required to publish 

preliminary scope rulings in the Federal 

Register. 

Response: 

As explained above, Commerce is 

modifying its regulations under 

§ 351.225(b) and (d), such that we will 

publish in the Federal Register notices 

of self-initiation and monthly lists 

describing scope applications which 

have recently been filed with 

Commerce. We believe both types of 

those Federal Register notices, which 

we anticipate will identify the product, 

AD or CVD order, and country of 

production and export (the latter where 

the product has already been imported), 

will provide adequate notification to the 

public. Following such publication, 

however, it will be incumbent upon 

interested parties to take the necessary 

steps to participate in Commerce’s 

proceedings in accordance with 

§ 351.225(n)(4) by filing an entry of 

appearance to stay apprised of the status 

of a scope inquiry. The final rule is in 

compliance with U.S. international 

obligations under the AD and SCM 

Agreements, and we do not believe 

there is any additional requirement that 

Commerce publish preliminary scope 

rulings in the Federal Register. 

Accordingly, we have declined to make 

the commenter’s suggested modification 

to our regulations. 

8. Section 351.225(h)—Final Scope 

Ruling 

Under proposed § 351.225(h), 

Commerce would convey final scope 

rulings to interested parties who are 

parties to the scope inquiry proceeding 

in accordance with the requirements of 

section 516A(a)(2)(A)(ii) of the Act. 

Such interested parties would be 

required to have legal standing to appeal 

the final scope ruling. Additionally, 

under proposed § 351.225(n), all parties 

on the segment-specific service lists 

would be notified of the final scope 

ruling through Commerce’s electronic 

ACCESS system. 

One commenter observes that 

currently scope mailings are 

‘‘conveyed’’ by first class mail, and 

advocates that Commerce revise that 

requirement in its regulations to have 

‘‘conveyance’’ be made solely through 

ACCESS. 

Response: 

With respect to the commenter’s 

request, we agree that conveying our 

scope rulings to interested parties who 

are parties to the scope inquiry 

proceeding through first class mail or 

common carriers, such as Federal 

Express, is largely superfluous and 

unnecessary in light of the notification 

they receive through ACCESS. However, 

section 516A(a)(2)(A)(ii) of the Act 

states that judicial review of ‘‘class or 

kind’’ determinations, such as scope 

rulings, are based off the ‘‘date of 

mailing’’ of the determination.72 The 

CIT has explicitly held that it ‘‘refuses 

to extend the definition of ‘mailing’ to 

include email messages,’’ faxes, or other 

such electronic conveyances for 

purposes of this provision.73 For that 

reason, we believe that Commerce is 

required to continue to convey its final 

scope rulings through first class mail or 

common carriers at this time. Should 

Congress eventually modify this 

statutory provision and allow for 

conveyance of scope rulings through 

electronic means, our use of the term 

‘‘conveyance’’ in the modified 

regulation will allow us to convey scope 

rulings through electronic means, 

without further revision of the 

regulation. 

Additionally, we note that 

Commerce’s current regulations under 

part 356 of Title 19 (current §§ 356.6 

and 356.7) contain specific notification 

requirements for ‘‘scope 

determinations’’ made by Commerce 

applicable to producers and exporters 

from a free trade agreement (FTA) 

country to the governments of those 

FTA countries. We have, therefore, 

added a clause to § 351.225(h) in the 

final regulations which acknowledges 

that scope rulings applicable to FTA 

countries are governed, where relevant, 

by those provisions. 

9. Section 351.225(i)—Other Segments 

of the Proceeding 

Section 351.225(i) recognizes that 

Commerce may make a scope 

determination in the context of another 

segment of the proceeding, such as an 

administrative review under section 

751(a) of the Act, and acknowledges the 

flexibility Commerce has to modify 

deadlines and other actions to ensure 

that its scope analysis is complete in 

those other segments. 

One commenter indicates its support 

for this provision, and stresses the 

importance of Commerce’s ability to 

request further information concerning a 

product subject to a scope inquiry in 

other segments of the proceeding, set 

forth in proposed § 351.225(i)(3). 

Another commenter requests that 

Commerce clarify how it will notify 

entities when it opts to address scope 

issues within the context of a segment 

of the proceeding that is not a scope 

inquiry, and suggests that Commerce do 

so by notifying entities on the annual 

inquiry service list under 

§ 351.225(n)(3). 

Response: 

Section 351.225(i)(1), which has been 

slightly modified, applies to at least two 

scenarios in which Commerce might 

address a scope issue in another 

segment of the proceeding. First, if a 

scope issue is raised for the first time in 

the context of another segment and we 

determine that it would be illogical to 

self-initiate a new scope inquiry under 

§ 351.225(b), Commerce may address 

the scope issue in that other segment 

without following the procedures of a 

scope inquiry under § 351.225. This 

could happen, for instance, in a 

circumvention inquiry under § 351.226, 

a covered merchandise inquiry under 

§ 351.227, or in an administrative 

review under § 351.213. The parties to 

that segment of the proceeding would be 

notified of the pending scope issue 

52320 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

74 In addition, if those interested parties wished 

to submit new factual information, they would 

follow the procedures in § 351.301 to request 

permission to do so. 

through a variety of means. For 

example, the issue would likely be 

raised by the parties, and they would 

have the opportunity to provide new 

factual information or comment, as 

appropriate, or Commerce may request 

additional information of the parties. In 

addition, parties not already 

participating in that segment of the 

proceeding would be notified of the 

scope issue in Commerce’s preliminary 

results (in the case of an administrative 

review under § 351.213) or preliminary 

determination (in the case of a 

circumvention inquiry under § 351.226 

or a covered merchandise inquiry under 

§ 351.227), which would be published 

in the Federal Register. At that time, 

interested parties not yet participating 

in that segment of the proceeding could 

file a notice of appearance and submit 

case briefs.74

Second, where a scope inquiry has 

already been initiated and is ongoing, 

but Commerce determines that it would 

be best addressed in another segment 

which is also ongoing or just beginning, 

Commerce would rescind the scope 

inquiry under § 351.225(f)(6) and 

conduct its scope analysis solely in that 

other segment and notify interested 

parties. 

Additionally, § 351.225(i)(2) 

(proposed § 351.225(i)(3)) provides that 

during the pendency of a scope inquiry 

or upon issuance of a final scope ruling, 

Commerce may take any further action, 

as appropriate, with respect to another 

segment of the proceeding. As 

referenced by a commenter, this means 

that Commerce has the ability to request 

further information concerning a 

product subject to a scope inquiry in 

other segments of the proceeding, such 

as an administrative review under 

§ 351.213. 

Furthermore, at any point during an 

ongoing segment of a proceeding, 

Commerce retains the ability to selfinitiate a separate scope inquiry in 

accordance with § 351.225(b), rather 

than address the scope issue in the 

context of the other segment of the 

proceeding. 

Finally, as already noted above, to 

provide clarity with regard to scope 

ruling deadlines, we have moved what 

was proposed § 351.225(i)(2) to 

§ 351.225(e)(3), and as a result of that 

modification, prior § 351.225(i)(3) is 

now § 351.225(i)(2). 

10. Section 351.225(j)—Country of 

Origin Determinations 

Section 351.225(j) addresses 

Commerce’s country of origin analysis, 

and in particular provides the factors 

Commerce considers when applying its 

‘‘substantial transformation’’ test. Each 

scope contains a description of the 

physical class or kind of merchandise 

covered by that order, while 

Commerce’s country of origin analysis 

determines at what point in the 

production and processing of the 

product the country of origin of the 

class or kind of merchandise is 

established. The country of origin 

determined through this analysis 

applies to all merchandise in the 

production and processing chain of the 

product meeting the physical 

descriptions of the scope originating in 

that country, regardless of the point in 

the production and processing chain of 

the product at which the country of 

origin is established. We received 

several comments on this provision. 

One commenter points out that 

Commerce indicates that it ‘‘may’’ 

consider relevant factors on a case-bycase basis in the regulation, rather than 

stating that it ‘‘will’’ consider the listed 

factors in every case. That commenter 

stresses that Commerce should state 

clearly that not all of the numbered 

factors are necessarily required to be 

considered in every case. 

A second commenter suggests that 

Commerce should take into 

consideration the activities of tollers in 

the production chain when it conducts 

a substantial transformation analysis. 

That commenter argues that Commerce 

does not consider tollers to be 

‘‘manufacturers’’ or ‘‘producers’’ if they 

do not acquire ownership and control 

the relevant sale of subject merchandise, 

but nothing prevents exporters or 

importers from declaring foreign 

processors to be tollers, thereby evading 

Commerce’s country of origin analysis. 

That commenter argues that to prevent 

such manipulation of Commerce’s 

country of origin analysis, Commerce 

should codify a consideration of 

whether or not a toller is a toller or 

foreign processor as part of its 

substantial transformation test. 

Other commenters express concerns 

that Commerce does not explain in its 

regulations the scenarios in which it 

will use an alternative to the substantial 

transformation test, and appears to give 

Commerce wide discretion in applying 

the factors in the regulation when 

determining the country of origin of a 

product. They request that for both the 

substantial transformation and the 

alternative options, Commerce codify 

further guidance in the regulations. 

The proposed regulation states that 

Commerce is not ‘‘bound’’ by the 

country of origin ‘‘determinations of any 

other agency.’’ One commenter argues 

that Commerce should be required to 

justify its determination when it departs 

from the country of origin 

determinations of CBP or other agencies. 

That same commenter also argues that 

Commerce should not conduct a 

country of origin analysis in a scope 

ruling, but instead should conduct that 

analysis in its third country processing 

circumvention analysis, under 

§ 351.226(i). That comment appears to 

reflect a misunderstanding of the 

relationship between Commerce’s 

country of origin analysis pursuant to 

investigations, administrative reviews 

and scope rulings, and the separate 

analysis conducted pursuant to third 

country processing circumvention 

inquiries. Accordingly, we address this 

argument below, with respect to 

comments on § 351.226(i). 

In rebuttal submissions, some 

commenters respond that Commerce’s 

country of origin analysis is 

fundamental to determining if a 

particular product is covered by the 

scope of an order, that the Proposed 

Rule simply codifies Commerce’s 

longstanding use of the substantial 

transformation test, and that the 

Proposed Rule recognizes that on a caseby-case basis Commerce should retain 

the flexibility to address other casespecific factors or the need for an 

entirely different test when the facts on 

the record warrant such an analysis. 

They argue that because country of 

origin determinations can be complex, 

especially when complicated global 

supply chain sourcing issues arise, the 

language as proposed in § 351.225(j) 

should not be changed, as that language 

provides Commerce with the tools to 

adequately determine the country of 

origin based on relevant characteristics 

of the particular product at issue. 

In addition, in their rebuttal 

submissions, certain parties challenge 

the idea that Commerce must justify its 

determinations when those 

determinations come to a different 

conclusion as to the country of origin 

from CBP. The commenters argue that, 

just as the proposed language states, 

Commerce is not bound by the 

determinations of other agencies when 

conducting a country of origin analysis, 

since Commerce’s analysis is ultimately 

made independently of CBP and is 

based upon the information on the 

record of the proceeding. 

Finally, in their rebuttal submissions, 

some commenters express their 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52321 

75Proposed Rule, 85 FR 49472 at 49480. 

76 Id. 77See Canadian Solar, 918 F.3d at 918–20. At 

issue in Canadian Solar was a situation in which 

Commerce applied its substantial transformation 

test in one investigation, and as a result, exporters 

evaded the payment of duties by shifting the 

country of production of solar cells to a third 

country. Thus, in the context of the second 

investigation claiming solar panels continued to 

cause the petitioners injury, Commerce determined 

the use of its substantial transformation test again 

would be ill-advised, as it would not provide a 

meaningful remedy to the injured petitioners. 

Accordingly, Commerce applied a second test, 

which the Federal Circuit affirmed as in accordance 

with law, focusing on the country where solar 

panels were completed, thereby granting the injured 

petitioners relief from dumped and subsidized 

Chinese solar panels. Id., 918 F.3d at 915–20. 

78 Venus Wire Industries Pvt. Ltd. v. United 

States, 471 F. Supp. 3d 1289, 1299 (CIT 2020) 

(Venus Wire Industries). 

79See, e.g., Bell Supply, 888 F.3d at 1227. 

80To be clear, physically described products in 

the scope produced or processed in the country of 

origin, whether produced or processed before or 

after the point at which the country of origin is 

established, are subject to the scope of an AD/CVD 

order. 

81 Mitsubishi Electronics America, Inc., 44 F.3d 

973, 977 (Fed. Cir. 1994) (Mitsubishi (1994)). See 

also Wirth, 5 F. Supp. at 973 (‘‘Commerce, not 

Customs, has authority to clarify the scope of AD/ 

CVD orders and findings. Although the Department 

may consider the decisions of Customs, it is not 

obligated to follow, nor is it bound by, the 

classification determinations of Customs . . .’’). 

agreement that Commerce should add 

consideration of the facts surrounding 

reported toll processors as a factor to the 

substantial transformation test, stressing 

that foreign producers have increasingly 

used toll processors to escape affiliation 

issues and avoid duties, such as 

contracting with tollers that are former 

employees or tollers that are located 

within their own facilities. 

Response: 

We have made changes from the 

language published in the Proposed 

Rule. First, we have adopted minor 

renumbering changes. Second, we have 

revised the terminology of 

§ 351.225(j)(1)(ii) to cover ‘‘physical 

characteristics (including chemical, 

dimensional and technical 

characteristics)’’ to bring that language 

into conformity with other provisions of 

the regulations. Third, we have turned 

the listed five factors into six factors, 

separating the intended end-use of the 

downstream product from the physical 

characteristics factor. We believe this 

better reflects the distinct factors which 

Commerce considers when applying its 

substantial transformation analysis. 

With respect to the comments we 

received on this provision, we agree 

with those commenters who explain 

that the factors listed in the proposed 

regulation are not exhaustive. We 

understand the arguments that it would 

bring more certainty to certain parties if 

we set forth definitive factors that we 

would apply in every case, but as some 

commenters explain, every product is 

different and every supply chain and 

production process is different, as well. 

Accordingly, the listed factors are not 

exhaustive, because Commerce must 

retain the flexibility to adjust its country 

of origin analysis when the facts on the 

record warrant such an adjustment. The 

listed factors represent the factors we 

normally apply in most cases, but as we 

explained in the preamble to the 

Proposed Rule, there have been 

‘‘different iterations’’ of Commerce’s 

substantial transformation analysis and 

Commerce has ‘‘considered other factors 

in applying its substantial 

transformation analysis when 

necessary.’’ 75

Furthermore, as Commerce also 

explained in the preamble to the 

Proposed Rule, this provision states that 

Commerce ‘‘may’’ conduct its 

substantial transformation analysis, but 

is not required to apply that analysis if 

it determines ‘‘for some reason’’ that 

‘‘the substantial transformation test is 

not appropriate for purposes of 

determining the country of origin of a 

particular product.’’ 76 In those 

circumstances, as the Federal Circuit 

has affirmed, Commerce continues to 

have the authority to apply a different, 

reasonable test to determine the country 

of origin of a particular product.77

With respect to the argument that 

Commerce must justify its country of 

origin determinations when they differ 

from that of CBP’s country of origin 

analysis, conducted pursuant to 19 CFR 

134.1(b), it is well established that 

different Federal agencies apply 

different country of origin tests, 

depending on the context and purpose 

of the test. Commerce’s country of origin 

analysis in the context of AD and CVD 

proceedings differs from that of CBP in 

its own proceedings. 

As the CIT explained in Venus Wire 

Industries,78 Commerce has applied its 

own country of origin analysis for over 

40 years. It is an analysis which has 

been litigated and upheld by the Federal 

Circuit.79 That Commerce has a different 

county of origin analysis from CBP is 

not surprising, given that Commerce’s 

analysis has a different purpose from 

that of CBP and is applied specifically 

to determine the relevant point in a 

production and processing chain where 

the country of origin of the products 

described in AD/CVD orders is 

established.80 If there is tension between 

the two analyses, for purposes of 

Commerce’s proceedings, Commerce’s 

analysis applies. As the Federal Circuit 

held in Mitsubishi (1994),81 CBP’s role 

in liquidating AD duties is ‘‘ministerial’’ 

and CBP ‘‘cannot modify Commerce’s 

determinations, their underlying facts, 

or their enforcement.’’ Accordingly, we 

disagree with the commenter which 

argued that if Commerce determines the 

country of origin of a product for 

purposes of an AD or CVD order in a 

scope ruling, and that determination is 

different from the country of origin 

established by CBP for its purposes, 

Commerce must take an additional step 

to justify the distinction. Such an 

additional analysis in making a country 

of origin determination is generally 

unnecessary and unwarranted. 

In addition, it would be illogical for 

Commerce to remove its country of 

origin analysis from these scope 

regulations. As other commenters have 

noted, Commerce frequently conducts a 

country of origin test as a part of its 

scope rulings, and there is no reason to 

change this practice. As we have 

explained, the commenter who argued 

for this change cites to Commerce’s 

third country processing circumvention 

proceedings in relation to § 351.226(i) 

and we have, therefore, addressed its 

arguments in this regard with our 

response to other comments on that 

provision below. 

Finally, we understand the arguments 

from the various commenters that in 

certain cases Commerce may need to 

consider toll processors, the role of 

tollers in the production and supply 

chain, and the affiliations and 

relationships of those tollers with other 

processers, in considering the country of 

origin of a particular product. However, 

we do not believe it is necessary to 

codify such a requirement in this final 

rule. Based on experience, most prior 

scope rulings/substantial transformation 

analyses have not involved tollers or toll 

processors. In addition, Commerce’s 

primary focus in a country of origin 

analysis is the location of the 

production and/or processing of the 

product in an effort to determine the 

specific point in the production chain 

where the product’s origin is 

established, regardless of whether the 

production and/or processing are 

conducted by a toller, and regardless of 

whether the toller is affiliated with the 

producer or processor. We do not wish 

to overwhelm our country of origin 

analysis in most cases with processor 

and toller affiliation analyses if such an 

analysis is not helpful to determining 

the country of origin of a particular 

product. Furthermore, nothing in the 

final regulation prevents Commerce 

from conducting such an analysis if 

warranted. 

52322 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

82See Tak Fat Trade Co. v. United States, 396 

F.3d 1378, 1382–1383 (Fed. Cir. 2005) (citing 

Duferco, 296 F.3d at 1097). 

83Proposed Rule, 85 FR 49472 at 49481. 

84See Fedmet Res. Corp. v. United States, 755 

F.3d 912, 918 (Fed. Cir. 2014) (Fedmet). Under the 

Federal Circuit’s holding in Fedmet, because the 

plain language is ‘‘paramount,’’ in ‘‘reviewing the 

plain language of a duty order,’’ ‘‘Commerce must 

consider the descriptions of the merchandise 

contained in the petition, the initial investigation, 

and the determinations of the Secretary (including 

prior determinations) and the Commission.’’ See id. 

85See OMG, Inc. v. United States, 972 F.3d 1358, 

1363–66 (Fed. Cir. 2020) (OMG). 

86See OMG, 972 F.3d at 1363–66. 

87See Meridian Prods., LLC v. United States, 890 

F.3d 1272, 1280–1281 (Fed. Cir. 2018) (Meridian 

Products). 

11. Section 351.225(k)—Scope Rulings 

Section 351.225(k) provides the 

analysis Commerce utilizes in the 

conduct of a scope inquiry to determine 

whether a product at issue is covered by 

the scope of an order. We received many 

comments and rebuttal comments on 

this provision, which we address 

herein. Furthermore, we have 

determined to make certain edits to the 

proposed regulation to provide greater 

clarity to this provision. 

The comments which Commerce 

received on § 351.225(k) focused on 

topics relevant to individual paragraphs 

(k)(1) through (3). 

(a) Section 351.225(k)(1) 

In the proposed revision of 

§ 351.225(k), Commerce significantly 

revised § 351.225(k) introductory text 

and (k)(1). Commerce added a chapeau 

to the beginning of the provision which 

articulated that Commerce will first and 

foremost consider the language 

contained in the scope of an AD or CVD 

order in determining whether or not a 

product is covered by that AD or CVD 

order. Commerce explained that it was 

adding this language to § 351.225(k) to 

reflect an additional analysis that 

Commerce had applied in multiple 

cases, and was then affirmed by the 

Federal Circuit, which is that ‘‘ ‘a 

predicate for the interpretive process is 

language in the order that is subject to 

interpretation.’ The scope of the order 

can be clarified but it cannot be changed 

by the interpretive process’’ and that 

scope ‘‘orders are interpreted under 

[§ 351.225(k)] with the aid of the 

antidumping petition, investigation, and 

preliminary order.’’ 82

In the preamble to the Proposed Rule, 

Commerce explained that other 

traditional interpretive tools, such as 

industry usage of a particular word or 

phrase, dictionaries or other record 

evidence, could be used to interpret a 

scope as well, but, ‘‘in the event of a 

conflict between these interpretive tools 

or other record evidence and the sources 

identified in paragraph (k)(1), 

Commerce would adopt the 

interpretation supported by the (k)(1) 

sources.’’ 83

Notably, there appear to be differing 

views in the Federal Circuit as to 

whether the sources under the current 

§ 351.225(k)(1) are used to interpret the 

‘‘plain meaning’’ of the text of the 

scope,84 or whether the plain meaning 

analysis comes first, and only once a 

determination on the plain meaning is 

determined, then the current 

§ 351.225(k)(1) sources are considered.85

Those differing views appear to be 

reflected, as well, in the comments that 

we received on this paragraph. 

Accordingly, we have modified this 

provision to provide greater clarity on 

this point in this final rule. 

Several commenters in their 

comments and rebuttal comments 

indicate their support for Commerce’s 

inclusion in the proposed § 351.225(k) 

that the language of the scope is 

paramount in its scope analysis. They 

also agree with Commerce that, in most 

straightforward cases, the agency is not 

required to consider the four listed 

(k)(1) interpretive sources if such an 

analysis would waste agency time and 

resources. 

One commenter argues that 

Commerce should apply the four 

sources listed under paragraph (k)(1) in 

every case, no matter the 

straightforward nature of the language 

in the scope, because such an 

application would bring predictability 

to Commerce’s scope rulings. That 

commenter objects to Commerce’s 

removal of the language ‘‘will take into 

account’’ from the current paragraph 

(k)(1). Several commenters in their 

rebuttal comments disagree with this 

argument, saying consideration of those 

sources in simple cases would be a 

waste of time and resources for 

everyone. 

With respect to the arguments about 

secondary interpretive sources, such as 

Customs rulings and industry usage, one 

commenter points out that subsequent 

to Commerce’s issuance of the proposed 

regulations, the Federal Circuit issued 

its holding in OMG, which interpreted 

the current regulation in the reverse— 

finding that under the current regulatory 

hierarchy, dictionaries and other 

traditional interpretive tools should be 

considered in interpreting the scope of 

an order before the sources in the 

current paragraph (k)(1).86 The 

commenter stresses that such an 

interpretation ignores the intentions of 

those who have initially drafted the 

scope language and the petition—the 

injured domestic producers, as well as 

the understandings of Commerce, the 

ITC, and the domestic producers 

expressed throughout the underlying 

investigation. Accordingly, it advocates 

that, rather than just mention the 

hierarchy of interpretive sources in the 

preamble, Commerce should codify that 

hierarchy in the regulation itself. The 

commenter argues that the ‘‘primacy of 

the (k)(1) factors over other interpretive 

tools should be clearly articulated in the 

revised’’ § 351.225(k)(1) ‘‘to avoid any 

confusion among parties as to the 

importance of other interpretive tools in 

defining a scope and to provide clarity 

for courts of review of Commerce’s 

intended policy in scope inquiries.’’ The 

commenter states that if Commerce does 

not codify such a hierarchy, a court 

might ignore the fact that terms defined 

in a dictionary or other interpretive 

tools might not align with the 

interpretation of those terms as used in 

the industry at issue. 

In their rebuttal submissions, several 

other commenters voice their agreement 

that Commerce should codify its 

hierarchy of interpretive tools in the 

regulation, so that in the future, scopes 

will not be ‘‘voided by dictionary 

definitions and trade usage, contrary to 

the plain language of the scope and 

(k)(1) sources.’’ They argue that such an 

interpretation would be consistent with 

the Federal Circuit’s rejection of the 

primacy of ‘‘external interpretive tools’’ 

such as a dictionary over the (k)(1) 

sources in Meridian Products, where the 

Federal Circuit held that the lower court 

improperly narrowed the scope of the 

antidumping order by relying on its own 

findings as to the ‘‘common and 

commercial meaning’’ of the term 

‘‘fastener’’ using the dictionary.87

Finally, another commenter in its 

rebuttal comments challenges the 

majority of commenters who 

recommend codifying the hierarchy of 

interpretive sources in the regulation, 

arguing that the ‘‘dictionary definitions 

and industry usage’’ should be given 

more weight, not less, than the (k)(1) 

interpretive sources, as they ‘‘ensure’’ 

an ‘‘objective assessment of the manner 

in which the trade community 

understands the product subject to the 

Order.’’ They note that sometimes the 

proposed scope language in a petition is 

not the same as the ultimate language 

memorialized in an AD or CVD order, 

and that if that language is given greater 

weight by Commerce in a scope inquiry 

than the actual language of the scope, as 

interpreted by a dictionary, such an 

analysis would allow domestic 

producers to create an ‘‘alternate 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52323 

reality,’’ arguing interpretations of the 

scope language which were not adopted 

by Commerce in the scope of the order. 

Response: 

We agree with the commenters that 

Commerce should have the discretion to 

not consider the current § 351.225(k)(1) 

sources in cases in which it determines 

that the language of the scope is clear 

and dispositive. However, we also agree 

with the commenters who argue that in 

most scope inquiries the language of the 

scope is written in more general or 

broad terms, and, therefore, in the 

majority of scope inquiries, it is likely 

that the current (k)(1) sources would be 

considered by Commerce in 

determining if a product is covered by 

the scope of an order in a scope ruling. 

It is Commerce’s understanding that the 

sources listed in current § 351.225(k)(1) 

were always intended to be interpretive 

tools to understand the plain meaning of 

the scope, recognizing that terms that 

may have been plain at the time they 

were drafted and adopted upon the 

issuance of the order could be 

interpreted differently at some later 

point. 

With respect to the need for codifying 

the hierarchy of interpretive sources, we 

agree with the commenters who warn 

that absent such codification, a court 

might rely on a secondary source, such 

as a dictionary definition, to interpret a 

word or phrase in a manner which is 

inconsistent with the meaning used by 

the injured domestic industry in 

drafting the proposed scope and 

petition, and the collective 

interpretation of Commerce, the 

industry, and the ITC of that term 

expressed in the underlying 

investigation. We agree with the 

commenters that if we do not 

incorporate the hierarchy into our 

regulations, the use by courts of 

‘‘external interpretive tools,’’ rather than 

the current (k)(1) sources, in analyzing 

Commerce’s scope rulings could 

potentially weaken or even undermine 

the effectiveness of Commerce’s orders. 

The purpose of an AD or CVD order is 

to provide a remedy to offset the harm 

caused by unfairly traded merchandise. 

Therefore, the intentions and 

interpretations of Commerce, the ITC, 

and the injured domestic parties 

themselves at the time of the underlying 

investigation should be given primary 

consideration in defining and 

interpreting the scope of the order. 

On the other hand, we agree with the 

commenter that argues that a proposed 

scope or petition may differ from the 

language ultimately adopted by 

Commerce in the final scope of an order, 

and, under a situation such as that one, 

Commerce may determine that it must 

not only consider the current (k)(1) 

sources, but additional, secondary 

sources as well. 

In light of all of these comments, we 

have, therefore, made several 

modifications to the proposed 

§ 351.225(k)(1) provision. First, we have 

moved the proposed chapeau language, 

which states that the language of the 

scope is dispositive, to paragraph (k)(1). 

This is because it is our belief that the 

traditional (k)(1) sources were never 

intended by Commerce to be separate 

from the initial analysis of the scope 

language, but were instead intended to 

be interpretive tools that could be 

considered by Commerce, at its 

discretion and under consideration of 

the arguments on the administrative 

record, to determine the meaning of the 

scope of the order. 

Second, we have modified the 

numbering of the paragraph and 

incorporated the hierarchy of the 

interpretive sources into the regulation 

itself. Specifically, using language from 

the current regulations, paragraph (k)(1) 

now states that, if Commerce determines 

that the language of the scope is not 

itself dispositive (i.e., it is not 

dispositive using no interpretive tools 

whatsoever), Commerce may take into 

account the identified primary 

interpretive sources, which are the 

traditional (k)(1) sources, in determining 

if the language is dispositive and the 

scope covers the product at issue. Those 

sources (in paragraph (k)(1)(i)) are then 

followed by a paragraph (paragraph 

(k)(1)(ii)) which states that Commerce 

may consider secondary interpretive 

sources such as other Commerce or ITC 

determinations not included in the 

primary interpretive sources, Customs 

rulings or determinations, industry 

usage, dictionaries, and any other 

relevant record evidence. This language 

provides clarity in that it distinguishes 

primary interpretive sources from 

secondary interpretive sources, and 

affirmatively acknowledges that 

Commerce may consider secondary 

sources in its scope inquiries under 

certain scenarios. The revised language 

uses the terms ‘‘may’’ and ‘‘discretion’’ 

to be clear that Commerce is not 

required to consider any of these 

sources in this manner if it believes the 

record does not warrant such a 

hierarchical consideration. We 

recognize that Commerce has always 

had the authority under the AD and 

CVD laws to consider secondary sources 

in interpreting the scope of AD and CVD 

orders, but we believe in light of our 

experience over the last 20 years that it 

is better to include reference to those 

sources in the regulations to avoid the 

possibility of confusion going forward 

and to describe the hierarchy of 

interpretive sources clearly. 

Third, we have also codified language 

in this final rule which addresses a 

conflict between the primary and 

secondary interpretive sources, 

providing that the primary interpretive 

sources will normally govern in 

determining whether a product is 

covered by the scope of the order at 

issue. We have used the word 

‘‘normally’’ in this provision because, as 

one commenter points out, there may be 

limited scenarios in which, under a 

certain set of facts, Commerce might 

elect to give greater weight to certain 

secondary sources. For example, a 

commenter has provided a hypothetical 

in which the proposed scope and 

petition contain language different from 

that of the ultimate order, and the other 

current (k)(1) sources provide no further 

guidance. Under those hypothetical 

facts, Commerce might determine it 

acceptable to give more weight to a 

secondary source, presuming that the 

secondary source is informative. 

Finally, in making these 

modifications, Commerce also 

determined that it would be beneficial 

to provide some clarity on the 

descriptions of the (k)(1) sources. For 

paragraphs (k)(1)(i)(A), (B), and (D), we 

have added language to clarify that the 

petition language, investigation 

language, and ITC determinations 

considered under (k)(1) all pertain to the 

order at issue. While this may seem 

obvious, we have concluded that it is 

appropriate to add that language to 

distinguish those sources from 

paragraph (k)(1)(i)(C), which includes 

determinations not always applicable to 

the order at issue. Specifically, we have 

modified paragraph (k)(1)(i)(C) to clarify 

that both previous or concurrent 

Commerce scope determinations may be 

considered by Commerce as part of its 

analysis, including prior scope rulings, 

memoranda, or clarifications which 

pertain to both the order at issue, as 

well as other orders with the same or 

similar language as that of the order at 

issue. This change reflects Commerce’s 

practice and interpretation of that 

provision over the years, and shows that 

unlike the other three primary sources, 

this primary source includes scope 

determinations, such as scope rulings 

and scope clarifications, from other 

proceedings addressing similar language 

used in the scopes of different orders 

that sometimes cover the same or 

similar physical merchandise from other 

countries. We have found it valuable 

over the years to consider such 

determinations as part of our scope 

inquiry analysis. 

52324 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

88Proposed Rule, 85 FR 49472 at 49481. 

(b) Section 351.225(k)(2) 

Section 351.225(k)(2) describes the 

factors Commerce considers if it finds 

that the sources listed under 

§ 351.225(k)(1) are still not dispositive 

as to whether or not the particular 

product is covered by the scope of an 

order. In the preamble to the Proposed 

Rule, Commerce explained that under 

§ 351.225(k)(2), it was ‘‘Commerce’s 

intent that the first factor—the 

characteristics of the product, including 

the technical, physical, or chemical 

characteristics of the product—may be 

given greater weight than the other 

factors. Nonetheless, Commerce should 

consider each of the factors in making 

its determination under paragraph 

(k)(2).’’ 88 One of the commenters 

objects to this ‘‘change’’ and argues that 

Commerce should consider all of the 

factors equally, and that ‘‘placing more 

importance on one factor skews’’ 

Commerce’s scope analysis. 

Response: 

We have made some changes to the 

language of § 351.225(k)(2) to clarify 

that Commerce will conduct its analysis 

under this paragraph only if the (k)(1) 

factors are not dispositive. Further, we 

have also modified the paragraph 

(k)(2)(i) factor to bring the term 

‘‘physical characteristics’’ into 

conformity with the way it is used in 

other parts of the regulation (i.e., 

physical characteristics (including 

chemical, dimensional, and technical 

characteristics)). In addition, we have 

adopted minor numbering changes. 

In addition, we have revised 

§ 351.225(k)(2)(i)(B) to clarify that 

Commerce considers the expectations of 

the ultimate users, instead of the 

expectations of the ultimate purchasers. 

This is because we have found in our 

practice that there are sometimes cases 

in which it is not the expectations of 

purchasers, but the expectations of the 

ultimate users of a product which 

inform whether or not a product was 

intended to be included in the scope of 

an order. There are several reasons an 

entity might purchase a product, 

including (for example) as an 

investment or as a gift, but in neither of 

those scenarios would the purchaser’s 

activities necessarily inform whether or 

not the product is subject to an order. 

On the other hand, as 

§ 351.225(k)(2)(i)(C) (the ultimate use of 

the product) informs us, it is the 

expectations of the ultimate user which 

better informs us as to whether or not 

a product was intended to be included 

in the scope of an order. We also note 

that § 351.225(k)(2)(i)(B) and (C) are 

distinguishable because, as a factual 

matter, the expectations of a user do not 

always align with the actual, ultimate 

use of the product. 

In response to the comment on our 

prioritization of the first (k)(2) factor, we 

disagree that such an interpretation is 

inconsistent with our current practice. 

Indeed, when there is a conflict between 

the five factors listed under (k)(2), it has 

been Commerce’s consistent practice to 

give greater weight to our analysis of the 

physical characteristics of the particular 

product. This is because the scopes of 

orders are generally written to cover 

products with certain physical 

characteristics, and it is an established 

principle in our scope practice that the 

objective characteristics of merchandise, 

including the physical descriptions of 

merchandise, should be given greater 

weight in case of a conflict between the 

factors under consideration. This is 

distinguishable from other factors, such 

as the expectations of the ultimate users 

under (k)(2)(i)(B) or the manner in 

which a product is advertised, and 

displayed under (k)(2)(i)(E), which 

might incorporate elements such as 

‘‘intended end use’’ or ‘‘design’’ into 

Commerce’s analysis, but also by their 

nature lend themselves to a more 

subjective outcome. Nonetheless, 

although this is Commerce’s general 

practice, we also recognize that there 

could be scenarios in which Commerce 

considers and determines that the 

physical characteristic factor should not 

be given greater weight in its analysis. 

Thus, it is our policy to ‘‘normally,’’ but 

not always, give greater weight to the 

physical characteristics factor as part of 

our (k)(2) analysis if there is a conflict 

between the five listed factors. 

Because this comment suggests that 

Commerce’s practice in this area may 

not be well-known or understood, we 

have, therefore, added to paragraph 

(k)(2)(ii) a sentence which clarifies that 

in the event of a conflict between the 

five listed factors under paragraph 

(k)(2)(i), paragraph (k)(2)(i)(A) will 

normally be allotted greater weight than 

the other factors. 

(c) Section 351.225(k)(3) 

Commerce proposed a codification of 

its analysis of component parts of larger 

products, colloquially referred to as its 

‘‘mixed-media analysis’’ (i.e., subject 

merchandise assembled or packaged 

with non-subject merchandise), in a 

new § 351.225(k)(3) in the Proposed 

Rule. 

One commenter argues that 

Commerce’s mixed-media test ‘‘lacks 

sufficient clarity’’ to allow importers ‘‘to 

discern reliably whether particular 

merchandise will be found to be within 

the scope of an order through the 

operation of this provision.’’ The 

commenter, therefore, argues that 

Commerce should provide more 

definitive factors in § 351.225(k)(3), 

which Commerce will consider in 

determining if a mixed media analysis 

should be applied, and that Commerce 

should remove the term ‘‘as 

appropriate’’ in this paragraph to 

provide more certainty for exporters and 

importers. 

Another commenter asks Commerce 

to explain how a party should establish 

the value of the components at issue 

under § 351.225(k)(3)(ii), arguing that 

importers may only have the price of the 

good as a whole available to them, so 

that they would be unable to report the 

value of the component to CBP for 

purposes of suspending and/or 

collecting AD or CVDs. 

In a rebuttal, a third commenter states 

that it disagrees that Commerce should 

list definitive factors under this 

provision, arguing that it is important 

that Commerce retain flexibility in 

applying the mixed-media factors 

because all products are different, and, 

therefore, its test should be able to adapt 

to the products under consideration. 

Response: 

We agree with one commenter that 

paragraph (k)(3) as proposed required a 

certain amount of revision to more 

clearly reflect Commerce’s mixed-media 

analysis. Accordingly, we have taken 

the three sentences as proposed, and 

reformatted the paragraph to reflect the 

sequential steps of the analysis. We 

have also revised some of the language 

used to describe the analysis. First, 

under paragraph (k)(3)(i), Commerce 

analyzes the component of the 

merchandise as a whole under 

paragraph (k)(1) and, if necessary, under 

(k)(2). If, after review under those 

provisions, Commerce determines that 

the component, taken alone, would not 

be covered by the scope of the order, 

then the inquiry ends. However, if the 

component, taken alone, would be 

covered by the scope of the order, under 

those provisions, then, under paragraph 

(k)(3)(ii), Commerce will analyze the 

scope under (k)(1) to determine whether 

the component product’s inclusion in 

the merchandise as a whole would 

result in the component product being 

excluded from the order. Finally, if 

Commerce determines the analysis 

under (k)(3)(ii) does not resolve whether 

the component product’s inclusion in 

the merchandise as a whole results in its 

exclusion from the scope of the order, 

then, under paragraph (k)(3)(iii), 

Commerce will consider additional 

relevant factors on a product-specific 

basis, including those explicitly listed. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52325 

89 Id. at 49481–84. 

90 Id. 

91The phrase ‘‘until appropriate liquidation 

instructions are issued’’ from the Proposed Rule is 

removed in paragraph (l)(1) (which refers to 

continued suspension of liquidation) as such 

language is unnecessary and redundant. The 

relevant language is retained in paragraph (l)(3) as 

discussed below. 

92As part of its statutory responsibility ‘‘to fix the 

amount of duty owed on imported goods[,]’’ CBP 

‘‘is both empowered and obligated to determine in 

the first instance whether goods are subject to 

existing [AD/CVD orders].’’ Pursuant to 19 U.S.C. 

1514(b) (section 514 of the Act), this ‘‘determination 

is then ‘final and conclusive’ unless an interested 

party seeks a scope ruling from Commerce (which 

ruling would then be reviewable pursuant to [19 

U.S.C. 1516a]).’’ See TR International, 433 F. Supp. 

at 1341 (citing Sunpreme, 946 F.3d at 1318) 

(referencing section 516 of the Act). The Federal 

Circuit has confirmed that CBP has authority to 

order suspension of liquidation pursuant to its 

authority if it determines that an AD/CVD order 

applies to the imported goods. See Sunpreme, 946 

F.3d at 1317–18. 

In addition, we also agree with the 

commenter that the first factor listed in 

Commerce’s mixed-media analysis, as 

proposed, should also be clarified. The 

term ‘‘practicability’’ in factor (i) is a 

general and undefined term. 

Accordingly, we have modified that 

factor to explain that Commerce will 

consider the relative difficulty and 

expense of separating components as 

part of its analysis of whether or not 

separation is practicable—which 

Commerce has historically considered 

as part of this analysis. 

Next, in response to concerns about 

how Commerce values an in-scope 

component, we must emphasize that a 

determination of how to measure the 

value of such a component is a casespecific analysis. Some merchandise as 

a whole might be extremely valuable 

when the component is included, even 

if the component, individually, is 

commercially inexpensive. Other 

merchandise as a whole does not 

undergo much of a change in value 

without the in-scope component, while 

the in-scope component might actually 

be quite valuable. Because such an 

analysis is case-specific, we will not 

include additional guidance in the 

regulation on this factor. We understand 

that the commenter’s primary concern is 

the knowledge of unaffiliated importers 

with respect to this factor. We cannot 

speak to the chain of knowledge 

between an importer and the producer 

of the imported merchandise, except to 

note, as we have explained above, that 

there is an expectation that importers 

should be able to obtain relevant 

information pertaining to the 

importation of the product at issue and 

should have familiarity with the U.S. 

AD/CVD laws which apply, or 

potentially apply, to that merchandise. 

With or without that information or 

knowledge, the importers understand 

that they take on certain risks when 

importing the product at issue. These 

regulations are intended to direct and 

guide parties on Commerce’s mixedmedia analysis, so that they may make 

informed decisions regarding whether to 

import merchandise potentially subject 

to an AD and/or CVD order. This final 

rule serves as notice to parties of 

Commerce’s intent to apply this 

analysis, as warranted, when examining 

such mixed-media products. 

Finally, we disagree with the 

commenter that argues that we should 

remove the language ‘‘as appropriate’’ 

from this provision. While we believe 

that, under most scenarios, the three 

enumerated factors listed in paragraph 

(k)(3)(iii) should be sufficient, we also 

believe that it is possible that, in some 

cases, additional factors might be 

relevant to our analysis. We agree with 

the commenter who states that it is 

important that Commerce retain 

flexibility in applying the mixed-media 

analysis. We, therefore, determine that it 

is best to leave the opportunity for 

consideration of additional factors ‘‘as 

appropriate’’ in the regulation. 

12. Section 351.225(l)—Suspension of 

Liquidation 

As discussed in the Proposed Rule, in 

the context of a formal scope inquiry, 

current paragraph (l) allows for 

Commerce to direct CBP to begin the 

suspension of liquidation of 

unliquidated entries not yet suspended 

which entered on or after the date of 

initiation of the scope inquiry, and 

collect applicable cash deposits, at the 

time of a preliminary or final scope 

ruling, whichever is applicable, 

determining that the product is covered 

by the scope of an order. The current 

regulation does not address 

unliquidated entries not yet suspended 

which pre-date the date of initiation of 

the formal scope inquiry.89

Furthermore, the Act does not provide 

direction to Commerce regarding the 

suspension of liquidation of entries 

subject to a scope inquiry. 

Under paragraph (l) in the Proposed 

Rule, among other changes, Commerce 

proposed to eliminate the distinction 

between formal and informal scope 

inquiries so that all scope inquiries 

would be conducted by a formal 

initiation. In addition, Commerce 

proposed that, at the time of a 

preliminary or final scope ruling 

determining that the product is covered 

by scope of an order, Commerce would 

direct CBP to begin suspension of 

liquidation for any unliquidated entries 

not yet suspended and collect 

applicable cash deposits.90 After 

consideration of comments on the 

Proposed Rule, Commerce is adopting 

certain changes to paragraph (l) in this 

final rule. In addition, Commerce is 

making a number of revisions to 

paragraph (l) on its own initiative. For 

clarity, we describe all revisions made 

to paragraph (l) in these introductory 

paragraphs before summarizing and 

addressing comments below. Also 

discussed herein are the specific 

applicability dates for paragraph (l) as 

referenced in the Applicability Dates 

section of this preamble. 

Paragraph (l)(1), which describes 

Commerce’s actions at the time of 

initiation of a scope inquiry, is slightly 

revised from the Proposed Rule as 

discussed below. Additionally, as 

discussed further below, Commerce is 

altering paragraphs (l)(2) and (3), which 

describe Commerce’s actions at the time 

of a preliminary or final scope ruling 

determining that the product is covered 

by the scope of an order. Paragraph 

(l)(4), which describes Commerce’s 

actions in the event of a negative final 

scope ruling, remains unchanged from 

the Proposed Rule. Lastly, Commerce is 

adding a new provision, paragraph 

(l)(5), to include specific reference to 

CBP’s authority. 

Minor revisions have been made to 

paragraphs (l)(1), (l)(2)(i), and (l)(3)(i) 

from the Proposed Rule. Specifically, 

paragraph (l)(2)(i) provides that, at the 

time of a preliminary scope ruling 

determining that the product is covered 

by the scope of an order, Commerce will 

direct CBP to continue the suspension 

of liquidation of previously suspended 

entries, but removes express reference to 

entries previously suspended as 

directed by paragraph (l)(1). Under 

paragraph (l)(1), Commerce does not 

direct CBP to suspend liquidation at the 

time of initiation of the scope inquiry; 

rather, under paragraph (l)(1), 

Commerce directs CBP to continue the 

suspension of liquidation of entries 

subject to the scope inquiry that were 

already subject to the suspension of 

liquidation and to collect the applicable 

cash deposits.91 As an initial matter, 

CBP has independent authority to 

suspend liquidation.92 Therefore, prior 

to a scope inquiry, entries may be 

previously suspended for a number of 

reasons, for example, because the 

importer declared the merchandise as 

subject to the order (e.g., Type 03 or 

Type 07), or CBP directed the importer 

to refile an entry that was previously 

declared as not subject to the order (e.g., 

Type 01) to an entry type indicating it 

is covered by an AD and/or CVD 

52326 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

93For further information, see discussion of new 

paragraph (l)(5) below. For a list of entry types, 

including those identifying the entries as subject to 

AD or CVD duties, see, ‘‘CBP Form 7501: 

Summary,’’ available at https://www.cbp.gov/trade/ 

programs-administration/entry-summary/cbp-form7501 (last visited June 9, 2021). 

94See Sunpreme, 946 F.3d at 1317–18 (citing 19 

U.S.C. 1500(c) and 1514(b); sections 500(c) and 

514(b) of the Act); TR International, 433 F. Supp. 

3d at 1341; and Fujitsu, 957 F. Supp. at 248. Section 

517 of the Act (concerning CBP’s civil 

administrative investigations of duty evasion of AD/ 

CVD orders) also authorizes CBP to suspend 

liquidation of entries for which it has reasonable 

suspicion, or, in the case of final determination, 

substantial evidence, that covered merchandise is 

entered into the United States through evasion 

under section 517(e) and (d) of the Act. 

95This is consistent with the Federal Circuit’s 

decision in Thyssenkrupp Steel North America, Inc. 

v. United States, 886 F.3d 1215 (Fed. Cir. 2018). In 

Thyssenkrupp, the Federal Circuit recognized that 

instructions revoking an antidumping duty order 

superseded previously issued liquidation 

instructions, as of the effective date of the 

revocation, and applied to entries under protest that 

entered the United States after the effective date of 

the revocation. Id. at 1223–27. The Federal Circuit 

explained that this ‘‘serves the purpose of the 

order.93 Thus, to avoid any unintended 

confusion regarding the underlying 

basis for suspension of liquidation of 

previously suspended entries, the 

reference to paragraph (l)(1) is removed 

from paragraph (l)(2)(i). 

Similar edits have been made to 

paragraph (l)(3)(i) by removing a 

reference to entries previously 

suspended ‘‘as directed under’’ 

paragraphs (l)(1) and/or (l)(2). Under 

paragraph (l)(2)(ii) (as further discussed 

below), if Commerce issues a 

preliminary scope ruling determining 

that the product is covered by the scope 

of an order, Commerce will direct CBP 

to begin the suspension of liquidation of 

certain entries. Therefore, at the time of 

a final scope ruling, entries may be 

previously suspended for the reasons 

described above, or because of 

Commerce’s instruction to CBP to begin 

the suspension of liquidation of certain 

entries at the time of the preliminary 

scope ruling. To avoid confusion 

regarding the underlying basis for 

suspension of liquidation of previously 

suspended entries, the reference to 

paragraphs (l)(1) and/or (l)(2) is 

removed from paragraph (l)(3)(i). 

Revised paragraph (l)(3)(i) eliminates 

potentially confusing language 

regarding entries subject to suspension 

of liquidation as a result of another 

segment of a proceeding, and revised 

paragraphs (l)(3)(i) and (ii) eliminate 

references to liquidation instructions 

issued pursuant to §§ 351.212 and 

351.213. There may be a number of 

reasons why entries may already be 

subject to suspension of liquidation in 

any given scope inquiry in which 

Commerce issues a final scope ruling 

determining that the product is covered 

by the scope of an order, and Commerce 

cannot immediately instruct CBP to lift 

suspension of liquidation and assess 

final duties. This includes, for example, 

an ongoing administrative review, or a 

pending circumvention inquiry or 

covered merchandise inquiry. 

Therefore, we find that a simple 

reference to continued suspension until 

appropriate liquidation instructions are 

issued in paragraph (l)(3) will account 

for various scenarios. In addition, the 

language in new paragraph (l)(5) will 

provide added clarification regarding 

CBP’s authority in relation to the 

framework established by Commerce 

under paragraph (l). Commerce intends 

to provide more details, as needed, in its 

individual instructions to CBP for a 

given case. 

On the other hand, we note that we 

have retained similar language in 

paragraph (l)(4) to provide that when 

Commerce issues a final scope ruling 

determining that the product is not 

covered by the scope of an order, entries 

subject to suspension of liquidation as 

a result of another segment of a 

proceeding will remain suspended until 

the other segment of the proceeding has 

concluded. This is because, as discussed 

in other parts of §§ 351.225, 351.226, 

and 351.227, it is possible that there 

could be a pending circumvention or 

covered merchandise inquiry on the 

same product at the time Commerce 

issues its final scope ruling. Therefore, 

to avoid confusion in this particular 

scenario, this language is retained in 

paragraph (l)(4). 

Paragraphs (l)(2)(ii) and (l)(3)(ii) 

clarify and maintain the status quo of 

the current regulation to provide that, at 

the time of a preliminary or final scope 

ruling determining that the product is 

covered by the scope of an order, 

Commerce will direct CBP to begin the 

suspension of liquidation of any 

unliquidated entries not yet suspended, 

which entered on or after the date of 

initiation of the scope inquiry, and 

collect applicable cash deposits. 

Paragraphs (l)(2)(ii) and (l)(3)(ii) also 

retain language from the current 

regulation regarding entries entered, or 

withdrawn from warehouse, for 

consumption, to maintain consistency 

with this long-standing language and to 

avoid confusion. 

New paragraphs (l)(2)(iii)(A) and 

(l)(3)(iii)(A) provide that, at the time of 

a preliminary or final scope ruling 

determining that the product is covered 

by the scope of an order, Commerce 

normally will direct CBP to begin the 

suspension of liquidation of 

unliquidated entries not yet suspended, 

which entered before the date of 

initiation of the scope inquiry, and 

collect applicable cash deposits. This 

includes any unliquidated entries back 

to the first date of suspension under the 

order that remain unliquidated at the 

time of the preliminary or final scope 

ruling. However, new paragraphs 

(l)(2)(iii)(B) and (l)(3)(iii)(B) provide an 

exception that, if Commerce determines 

it is appropriate to do so, Commerce 

may direct CBP to begin suspension of 

liquidation and application of cash 

deposits to merchandise entering at an 

alternative date. Under this framework, 

Commerce may consider upon timely 

request of an interested party or at its 

discretion whether such suspension of 

liquidation and application of cash 

deposits, also referred to as retroactive 

suspension, should not be applied to 

certain entries which pre-date the date 

of initiation. In response to a timely 

request from an interested party, 

Commerce will only consider directing 

CBP to begin suspension of liquidation 

and application of cash deposits to 

merchandise entering at an alternative 

date based on a specific argument by the 

interested party supported by evidence 

establishing the appropriateness of that 

alternative date. These provisions are 

further explained below in response to 

comments. New paragraphs (l)(2)(iii) 

and (l)(3)(iii) also retain language from 

the current regulation regarding entries 

entered, or withdrawn from warehouse, 

for consumption, to maintain 

consistency with this long-standing 

language and to avoid confusion. 

Lastly, new paragraph (l)(5) provides 

language to clarify CBP’s authority to 

take related action. Specifically, this 

language clarifies that the revised 

framework established by Commerce in 

§ 351.225 do not affect CBP’s authority 

to take any additional action with 

respect to the suspension of liquidation 

or related measures. As discussed 

above, CBP has independent authority 

to suspend liquidation of entries that 

CBP determines are within the scope of 

an AD or CVD order, and such 

determinations are ‘‘final and 

conclusive’’ unless appealed to 

Commerce through a request for a scope 

ruling.94 Additionally, there may be 

entries of products subject to a scope 

inquiry that CBP has liquidated but for 

which liquidation is not yet final (e.g., 

entries under protest pursuant to 19 

U.S.C. 1514) or for which CBP has 

extended liquidation (e.g., pursuant to 

19 U.S.C. 1504(b)). Consistent with 

current practice and in accordance with 

CBP’s statutory and regulatory 

authorities, Commerce expects that CBP 

may stay its action on these entries 

during the course of the scope inquiry.95

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52327 

protest mechanism—to allow agency consideration 

of issues after an initial liquidation determination— 

and respects the longstanding principle . . . that 

newly governing law, if retroactive to particular 

events, is to be applied to those events in ordinary, 

timely initiated direct-review proceedings.’’ Id. at 

1224. A similar point was recognized in TR 

International, 433 F. Supp. 3d at 1344–46, currently 

on appeal, concerning CBP’s potential application 

of a Commerce scope ruling to entries under 

protest. 

96Homeland Security Investigations (HSI) has the 

authority to investigate criminal violations related 

to illegal evasion of payment of required duties, 

including payment of AD/CVDs. See, e.g., 18 U.S.C. 

542. 

This language also clarifies that any 

instructions issued by Commerce 

directing CBP to ‘‘lift suspension of 

liquidation’’ and assess duties at the 

applicable AD/CVD rate would not limit 

CBP’s ability to: (1) Suspend 

liquidation/assess duties/take any other 

measures pursuant to CBP’s EAPA 

investigation authority under section 

517 of the Act specifically; or (2) 

suspend liquidation/assess duties/take 

any other action within CBP’s or HSI’s 

authority with respect to AD/CVD 

entries.96

There is one clarification to this 

revised regulatory framework as 

referenced above in the DATES section 

regarding the effective date and in the 

Applicability Dates section of this 

preamble. As stated above, amendments 

to § 351.225 apply to scope inquiries for 

which a scope ruling application is 

filed, as well as any scope inquiry selfinitiated by Commerce, on or after the 

effective date for the amendments to 

§ 351.225 identified in the DATES

section. However, Commerce will not 

apply paragraphs (l)(2)(iii) and (l)(3)(iii) 

in a way that would direct CBP to begin 

the suspension of liquidation of 

unliquidated entries not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to this effective 

date. For example, should Commerce 

initiate a scope inquiry and issue a 

preliminary or final scope ruling that 

the product is covered by the scope of 

an order: 

• Commerce will instruct CBP to 

begin the suspension of liquidation and 

application of cash deposits for any 

unliquidated entries not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption, on or after the date of 

initiation of the scope inquiry pursuant 

to paragraphs (l)(2)(ii) and (l)(3)(ii); and 

• Commerce normally will instruct 

CBP to begin the suspension of 

liquidation and application of cash 

deposits for any unliquidated entries 

not yet suspended, entered, or 

withdrawn from warehouse, for 

consumption, prior to the date of 

initiation of the scope inquiry, but not 

for such entries prior to the effective 

date identified in the DATES section, 

pursuant to paragraphs (l)(2)(iii) and 

(l)(3)(iii). 

In other words, the furthest 

retroactive suspension directed by 

Commerce that could apply under this 

framework is to unliquidated entries not 

yet suspended, entered, or withdrawn 

from warehouse, for consumption, on or 

after the effective date identified in the 

DATES section. This is consistent with 

the language of paragraphs (l)(2)(iii)(B) 

and (l)(3)(iii)(B) that allows for 

Commerce to alter the date for which 

the suspension of liquidation should 

begin under this provision at its 

discretion. Thus, when applying 

paragraphs (l)(2)(iii) and (l)(3)(iii) in a 

given scope inquiry, Commerce will 

include the appropriate clarifying 

language regarding the effective date 

identified in the DATES section in the 

preliminary and final scope rulings and 

corresponding instructions to CBP. That 

being said, as expressly stated in 

paragraph (l)(5), this framework does 

not affect CBP’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. Nor will this framework 

apply to scope ruling applications filed 

or scope inquiries self-initiated by 

Commerce before the effective date 

identified in the DATES section. 

This application will be limited in 

practice; as detailed in the Proposed 

Rule, CBP normally will liquidate 

entries declared as non-subject to AD/ 

CVDs within one year of entry. 

Therefore, we expect that only within 

the first year after the effective date 

identified in the DATES section will 

there be entries that remain 

unliquidated and not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption, prior to the effective 

date. 

To be clear, entries that are already 

suspended as of the effective date 

identified in the DATES section, will be 

subject to the continued suspension of 

liquidation under paragraph (l)(1), 

which provides that, at the time of 

initiation of a scope inquiry, Commerce 

will instruct CBP to continue the 

suspension of previously suspended 

entries and apply the applicable cash 

deposit rate. Similarly, entries that are 

already suspended as of the effective 

date identified in the DATES section will 

be subject to the continued suspension 

of liquidation under paragraphs (l)(2)(i) 

and (l)(3)(i), which provide that, at the 

time of a preliminary or final scope 

ruling determining that the product is 

covered by the scope of an order, 

Commerce will instruct CBP to continue 

the suspension of previously suspended 

entries and apply the applicable cash 

deposit rate. These entries will retain 

their status quo from before the effective 

date to after the effective date. 

Specifically, current paragraph (l)(1), as 

well as current paragraphs (l)(2) and (3), 

require continued suspension of 

previously suspended entries both at the 

time of initiation of a scope inquiry and 

in the event of a preliminary or final 

scope ruling determining that the 

product is covered by the scope of an 

order. 

As noted above, Commerce received 

numerous comments on paragraph (l). 

Summaries of those comments, and 

responses to those comments, are 

provided below. 

(a) Retroactive Suspension of 

Liquidation 

As described above, among other 

changes, Commerce proposed to 

eliminate the distinction between 

formal and informal scope inquiries in 

the Proposed Rule, so that all scope 

inquiries would be conducted by a 

formal initiation. In addition, Commerce 

proposed that, at the time of a 

preliminary or final scope ruling 

determining that the product is covered 

by the scope of an order, Commerce 

would direct CBP to begin suspension of 

liquidation for any unliquidated entries 

not yet suspended retroactive to the first 

date of suspension under the relevant 

order, and collect applicable cash 

deposits. Therefore, the key distinction 

between the current regulation and what 

was proposed is that the current 

regulation imposes a ‘‘cut-off’’ of the 

initiation date of the scope inquiry—the 

proposed regulation would have 

removed this limitation so that any 

unliquidated entries found within the 

scope of the order would be subject to 

duties, not just those that entered on or 

after the initiation date. 

Several commenters support the 

proposal to apply affirmative scope 

rulings to all unliquidated entries dating 

back to the first date of suspension 

under the order. Certain of these 

commenters agree that by eliminating 

the distinction between formal and 

informal scope inquiries, Commerce 

makes clear that an affirmative scope 

ruling means that the product has 

always been subject to the order. One 

commenter argues that the proposal will 

address serious duty evasion issues and 

will foster uniformity in the 

enforcement of AD/CVD laws no matter 

what type of scope inquiry is 

conducted. This commenter also agrees 

with Commerce’s statement in the 

Proposed Rule that, at the time 

Commerce issues an affirmative 

preliminary or final scope ruling, it is 

unlikely that there will be any 

52328 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

97See Fasteners, 947 F.3d at 800–03. 

98 Id., 947 F.3d at 803. 

99As stated above in the discussion of new 

paragraph (l)(5), consistent with current practice 

and in accordance with CBP’s statutory and 

regulatory authorities, CBP may stay its action on 

entries of products that CBP has liquidated but for 

which liquidation is not yet final pending the 

outcome of a scope inquiry. Additionally, any 

instructions issued by Commerce directing CBP to 

‘‘lift suspension of liquidation’’ and assess duties at 

the applicable AD/CVD rate would not limit CBP’s 

ability to (1) suspend liquidation/assess duties/take 

any other measures pursuant to CBP’s EAPA 

investigation authority under section 517 of the Act 

specifically, or (2) suspend liquidation/assess 

duties/take any other action within CBP’s or HSI’s 

authority with respect to AD/CVD entries. 

unliquidated entries more than one year 

old other than those already suspended. 

Another commenter argues that the 

proposed changes are necessary 

because, while scope rulings do not 

expand the scope of an order, the 

Federal Circuit has foreclosed 

Commerce from applying scope rulings 

to all unliquidated entries in instances 

where Commerce issues a scope ruling 

based on the application under the 

current regulations.97 According to this 

commenter, the proposal results in the 

common-sense proposition that AD/ 

CVDs should be collected on all inscope merchandise regardless of when a 

scope inquiry was initiated. 

Roughly the same number (12) of 

commenters to those above, oppose the 

Proposed Rule regarding retroactive 

suspension in scope inquiries. These 

commenters raise the issue of fairness; 

in particular, they argue that there is a 

significant duty liability risk to 

importers that are genuinely unaware 

their products may be within the scope 

of an order. 

In addition to fairness concerns, 

certain of these commenters raise 

concerns regarding notice and due 

process and argue that assessing duties 

retroactively when the language of an 

order is unclear is a violation of due 

process and creates uncertainty for 

importers. Certain of these commenters 

argue that product scope language 

should be as precise and clear as 

possible from the beginning and that 

clarification of ambiguous scope 

language should be applicable at the 

time of initiation of the scope inquiry 

because, otherwise, retroactive duty 

liability presents an incalculable risk 

and significant uncertainty to parties. 

Certain commenters also argue that 

scope rulings should be published in 

the Federal Register so that all 

interested parties affected have the same 

level of information and can defend 

their interests, or available on 

Commerce’s website. Another of these 

commenters argues that, as held by the 

Federal Circuit, a scope ruling does not 

confirm the scope of an order, but 

clarifies an unclear scope.98 This 

commenter argues that parties should 

not be penalized for relying on scope 

language that does not clearly cover 

merchandise, and also expresses 

support for providing notice of 

initiation of a scope inquiry via the 

Federal Register. Another commenter 

argues that the Proposed Rule would 

encourage ambiguity in scope language 

and prevent importers from making 

appropriate business plans. 

A few commenters also argue that 

Commerce alleges, without citing any 

specific past examples of such activity 

by importers, that the existing approach 

in the current regulations encourages 

gamesmanship, delay, and duty evasion 

based on a view that importers fail to do 

their due diligence, are aware of the 

potential liability, and would not seek a 

scope ruling so as to avoid payment of 

AD/CVDs. These commenters claim that 

the proposal would result in negligent 

importers not seeking a scope ruling at 

all if doing so would imply that all 

unliquidated entries could be subject to 

AD/CVDs. 

Another commenter argues that 

Commerce’s premise in the Proposed 

Rule that the AD/CVD order constitutes 

notice that unspecified products may be 

in-scope is flawed because scope 

language may not be clear, and allowing 

for retroactive suspension would only 

serve to correct the petitioner’s own 

errors or neglect when finalizing scope 

language in the investigation. 

Finally, two commenters oppose the 

proposal to apply affirmative scope 

rulings to all unliquidated entries dating 

back to the first date of suspension 

under the order because it would 

deprive parties of the ability to request 

an administrative review of entries later 

found to be subject to an AD/CVD order. 

One of these commenters notes that, in 

certain scenarios, importers would have 

no ability to request an administrative 

review to lower their liability for entries 

later determined to be subject to an 

order. The other commenter proposes 

that a review would need to be 

conducted outside of the normal 

administrative review process, as often 

the time for requesting such reviews 

will have elapsed by the time Commerce 

issues a final scope ruling. According to 

this commenter, absent such a process, 

the proposal would likely be violative of 

the Excessive Fines clause of the 8th 

Amendment. 

Response: 

As discussed above, after 

consideration of these comments, 

Commerce is adopting a number of key 

changes to paragraph (l). 

First, Commerce is adopting changes 

to paragraphs (l)(2) and (3) to clarify and 

maintain the status quo of the current 

regulation with respect to unliquidated 

entries not yet suspended which entered 

on or after the date of initiation of the 

scope inquiry. Specifically, paragraphs 

(l)(2)(ii) and (l)(3)(ii) provide that, at the 

time of a preliminary or final scope 

ruling determining that the product is 

covered by the scope of an order, 

Commerce will direct CBP to begin the 

suspension of liquidation of any 

unliquidated entries not yet suspended, 

which entered on or after the date of 

initiation of the scope inquiry, and 

collect applicable cash deposits. 

Second, Commerce is adopting 

changes to paragraphs (l)(2) and (3) with 

respect to unliquidated entries not yet 

suspended which entered before the 

date of initiation of the scope inquiry. 

Specifically, paragraphs (l)(2)(iii)(A) and 

(l)(3)(iii)(A) provide that, at the time of 

a preliminary or final scope ruling 

determining that the product is covered 

by the scope of an order, Commerce 

normally will direct CBP to begin the 

suspension of liquidation of 

unliquidated entries not yet suspended, 

which entered before the date of 

initiation of the scope inquiry, and 

collect applicable cash deposits. This 

includes any unliquidated entries back 

to the first date of suspension under the 

order that remain unliquidated at the 

time of the preliminary or final scope 

ruling.99 However, new paragraphs 

(l)(2)(iii)(B) and (l)(3)(iii)(B) provide an 

exception that, if Commerce determines 

it is appropriate to do so, Commerce 

may direct CBP to begin suspension of 

liquidation and application of cash 

deposits to merchandise entering at an 

alternative date. Under this framework, 

Commerce may consider upon a timely 

request of an interested party or at its 

discretion whether such suspension of 

liquidation and application of cash 

deposits, also referred to as retroactive 

suspension, should not be applied to 

certain entries which pre-date the date 

of initiation. In response to a timely 

request from an interested party, 

Commerce will employ a heightened 

standard and will only consider 

directing CBP to begin suspension of 

liquidation and application of cash 

deposits to merchandise entering at an 

alternative date based on a specific 

argument by the interested party 

supported by evidence establishing the 

appropriateness of that alternative date. 

This would require, for instance, 

specific identification of the interested 

parties and entries at issue and the 

circumstances surrounding the 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52329 

100The Federal Circuit has recognized that 

Federal Register notices are treated as legally 

effective notices in a wide range of circumstances. 

See Suntec Indus. Co. v. United States, 857 F.3d 

1363, 1370 (Fed. Cir. 2017) (Suntec). In certain 

cases, the courts have determined that a party that 

did not receive actual notice nonetheless received 

constructive notice of an event through the 

publication of a Federal Register notice. Id. In 

Suntec, the Federal Circuit found that publication 

of a notice of initiation of an administrative review 

in the Federal Register constituted notice to Suntec 

as a matter of law, despite the fact that the domestic 

industry failed to serve Suntec directly with its 

request that Commerce conduct an administrative 

review of Suntec. Id. 

101See Proposed Rule, 85 FR 49472 at 49481. 

102 In such a scenario, CBP may agree not to 

convert the entry to an AD/CVD type entry at that 

time, and instead to extend liquidation for the entry 

while the party seeks a scope ruling from 

Commerce. 

103See Wirth, 5 F. Supp. 2d at 973. 104Proposed Rule, 85 FR 49472 at 49481–84. 

declaration of the entries as non-AD/ 

CVD type entries. Broad, non-specific 

arguments concerning general 

unfairness or lack of notice that are not 

concrete or particular to the interested 

party or entries at issue would not be 

sufficient. In addition, Commerce may 

consult with CBP as necessary under 

this provision. 

As Commerce stated in the Proposed 

Rule, and as set forth in paragraph (a) 

of § 351.225, a scope ruling that a 

product is within the scope of the order 

is a determination that the product has 

always been within the scope of the 

order. Therefore, one of Commerce’s 

objectives in crafting suspension of 

liquidation rules for scope inquiries is 

to ensure that AD/CVDs are applied to 

all unliquidated entries of products 

found within the scope of the order, 

including entries that may pre-date the 

date of initiation of the scope inquiry. 

As a general matter, producers, 

exporters, and importers are already 

notified that their products may be 

covered by the scope of an order 

through the publication in the Federal 

Register of Commerce’s determinations 

and/or order, which provides a 

description of the subject merchandise 

and any associated Harmonized Tariff 

Schedule of the United States (HTSUS) 

categories.100 As discussed in further 

detail below under the discussion of 

§ 351.226(l), importers are generally 

expected to perform their due diligence 

and exercise reasonable care, which 

would include understanding the 

imported product and reviewing prior 

Federal Register notices relevant to the 

product. Furthermore, an importer of a 

product under an HTSUS category that 

is associated with an AD/CVD order 

would be faced with a particular 

responsibility to ensure whether the 

product is subject to an AD/CVD order. 

Additionally, exporters, producers, and 

importers are able to ask Commerce at 

any time for a scope ruling on any 

product that is in actual production 

(regardless of whether it has yet been 

sold or exported to the United States). 

To the extent that a party is unclear as 

to whether a product falls within the 

scope of the order, the onus is on that 

party to request a scope ruling, and to 

seek such a scope ruling in an 

expeditious manner.101

This is particularly the case where a 

party has been alerted by CBP that the 

entries may be subject to an AD/CVD 

order, and advised to seek a scope 

ruling from Commerce.102 Moreover, as 

explained above, ‘‘Commerce, not 

Customs, has authority to clarify the 

scope of AD/CVD orders[ . ]’’ 103

Accordingly, producers, exporters, and 

importers of products found to be 

within the scope of an order generally 

cannot claim ignorance or reliance on 

another agency’s determinations or 

actions to avoid the application of 

Commerce’s scope ruling to their 

merchandise. Thus, establishing a rule 

that normally applies retroactive 

suspension in scope inquiries will 

encourage parties to maintain a 

reasonable awareness of whether the 

product they are producing, exporting, 

or importing is subject to an AD/CVD 

order. 

Further, as discussed in the Proposed 

Rule, and as supported by numerous 

commenters, in crafting its rules 

regarding suspension of liquidation in 

scope inquiries, Commerce is 

particularly concerned with 

gamesmanship, delay, and duty evasion 

if foreign producers and exporters, as 

well as U.S. importers, believe that all 

entries not already suspended prior to 

the date on which Commerce initiates a 

scope inquiry are essentially excused 

from AD/CVDs, even if Commerce finds 

through the scope inquiry that the 

product has always been within the 

scope of the order. Under such a system, 

importers would have an incentive to 

import as much merchandise as possible 

prior to requesting a scope ruling to 

avoid potential AD/CVD liability. If 

Commerce found the product at issue is 

not covered by the order, the importer 

could continue to import it without 

concern of AD/CVDs. On the other 

hand, if Commerce determines that the 

product is, in fact, covered by the order, 

the importer will have avoided AD/CVD 

liability for the imports imported before 

requesting the scope ruling. They would 

essentially avoid the application of the 

scope ruling through timing and 

gamesmanship. We find that such 

manipulation of AD/CVD liability 

undermines the effectiveness and 

remedial purpose of the AD/CVD 

laws.104

That said, Commerce also agrees, in 

part, with some commenters that there 

may be some limited instances in which 

it may be appropriate for Commerce to 

exercise its authority to direct CBP to 

begin the suspension of liquidation and 

collection of cash deposits to entries as 

of an alternative starting point. For 

example, there may be situations in 

which Commerce issues a scope ruling 

that a product is covered by the scope 

of an order, and the affected importers 

have no opportunity, for no reason other 

than the timing of the scope ruling, to 

request an administrative review to 

potentially lower their liability for 

entries that pre-date the date of 

initiation of the scope inquiry. In such 

a situation, Commerce may consider 

specific arguments of the parties that 

retroactive application of the scope 

ruling to certain entries might be 

inappropriate. However, as explained 

above, such a showing would require, 

for instance, specific identification of 

the interested parties and entries at 

issue and the circumstances 

surrounding the declaration of the 

entries as non-AD/CVD type entries. 

Broad, non-specific arguments 

concerning general unfairness or lack of 

notice that are not concrete or particular 

to the interested party or entries at issue 

would not be sufficient. 

This exercise of Commerce’s 

discretion (in the absence of express 

statutory language, as noted above) is 

reasonable and balanced in that it takes 

into account the enforcement objectives 

and concerns about scenarios limiting 

the effectiveness of an order discussed 

in the Proposed Rule, as well as 

comments raised in response to the 

Proposed Rule that suggest that 

Commerce should leave open the 

opportunity for a party to try to 

demonstrate why an exception might be 

appropriate in light of particular facts. 

In addition, in certain instances, it 

would not be an unreasonable exercise 

of Commerce’s discretion to direct CBP 

to liquidate entries that have been 

converted from non-AD/CVD type 

entries to AD/CVD type entries at the 

applicable cash deposit rate, even where 

the party may have missed an 

opportunity to seek individual review of 

its entries. For example, if parties 

engaging in gamesmanship and delay 

tactics later discovered that they missed 

an opportunity to seek an administrative 

review to lower their potential duty 

liability, through a scheme to import 

massive volumes of merchandise, and 

then request a scope ruling, Commerce 

52330 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

105See Id. at 49483; 49473 (discussing under the 

revisions to the new shipper review regulation, 

§ 351.214, the Enforce and Protect Act of 2015 

which highlighted duty evasion concerns). 

106See Sunpreme, 946 F.3d at 1317 and 1321. In 

Fasteners, 947 F.3d 794, the Federal Circuit did not 

disagree with Commerce’s concerns of potential 

‘‘gamesmanship and delay’’ if importers did not 

report their merchandise to CBP as subject 

merchandise. See Fasteners, 947 F.3d at 803 

(finding that ‘‘we do not find that such 

gamesmanship occurred in this case.’’). 

believes that such a missed opportunity 

would be the fault and responsibility of 

the party attempting to avoid AD/CVDs 

in the first instance. 

On the other hand, we agree with 

commenters that, for example, we 

should leave open the possibility for 

limited exceptions where the facts and 

circumstances warrant—e.g., a party 

seeks a scope ruling as early as possible, 

but the time to seek an administrative 

review on certain pre-initiation entries 

has passed. In such instances, 

Commerce may direct CBP to suspend 

liquidation and collect cash deposits 

only for those unliquidated entries not 

already subject to suspension and made 

prior to the initiation of the scope 

inquiry for which an administrative 

review can still be requested. In light of 

these changes, we disagree that a 

revised process for requesting an 

administrative review of such entries is 

necessary. 

Therefore, with respect to comments 

that the Proposed Rule would encourage 

ambiguity in scope language, prevent 

importers from making appropriate 

business plans, and increase 

uncertainty, we believe that the 

framework adopted in this final rule 

described above adequately addresses 

such concerns. In practice, in individual 

scope proceedings, Commerce will have 

to balance its interest in ensuring the 

effectiveness of all AD/CVD orders with 

any case-specific issues that might 

warrant altering the date for which 

suspension of liquidation should begin 

for unliquidated entries not yet 

suspended. Exactly how to strike this 

balance should emerge over time, 

through Commerce’s practice and 

consideration of case-specific issues. 

With respect to comments that the 

publication of an AD/CVD order may 

not be sufficient notice to parties of a 

pending scope inquiry and the potential 

for retroactive suspension of entries not 

previously suspended, Commerce is 

adopting new procedures to publish a 

monthly notice in the Federal Register 

listing scope applications received over 

the past month in § 351.225(d)(2) (see 

discussion above). Such monthly notice 

will give all interested parties an 

opportunity to consider if the scope 

inquiry request is relevant to them and 

their interests and allow them the 

opportunity to participate. 

Another commenter also points out 

that scope rulings are not published and 

are difficult to find and proposes that 

Commerce should put public versions of 

scope rulings on its website. As 

discussed below under § 351.225(o), 

Commerce publishes notice of its final 

scope rulings on a quarterly basis in the 

Federal Register. In addition, all final 

scope rulings since 2012 are available 

on ACCESS, and Commerce 

continuously updates its website with 

past scope rulings, currently available at 

https://www.trade.gov/us-antidumpingand-countervailing-duties. 

Further, we disagree with certain 

comments that Commerce has not 

provided adequate support for its 

concern that the existing approach in 

the current regulations encourages 

gamesmanship, delay, and duty evasion. 

As highlighted not only by Commerce in 

its discussion in the Proposed Rule,105

but also by commenters in favor of the 

Proposed Rule and numerous Federal 

court decisions,106 the agency, as the 

administrator of the AD/CVD laws, has 

a well-founded and significant concern 

that Commerce determinations may not 

be adequately enforced due to 

gamesmanship, delay, and duty evasion. 

If Commerce is able to modify its 

regulations to diminish the possibility 

of evasion of the payment of duties, 

while maintaining procedures that 

assure that its determinations are based 

on record evidence, then it is 

appropriate for Commerce to make such 

changes in this final rule. 

We also disagree with comments that 

the proposal would result in negligent 

importers not seeking a scope ruling at 

all if doing so would imply that all 

unliquidated entries would be subject to 

AD/CVDs. We believe that the 

framework we have set forth will, in 

fact, deter parties from engaging in such 

gamesmanship, and will encourage 

parties to maintain a reasonable 

awareness whether the product they are 

producing, exporting, or importing is 

subject to an AD/CVD order. 

(b) Suspension of Liquidation and Cash 

Deposits at Initiation 

Several commenters generally agree 

with Commerce’s proposal under 

§ 351.225(l)(1) to instruct CBP upon 

initiation of a scope inquiry to continue 

to suspend liquidation of products that 

are already subject to suspension. 

Several of these commenters argue that 

Commerce should instruct CBP to begin 

suspending liquidation of entries not 

already suspended by CBP at an earlier 

stage in a scope inquiry. Specifically, 

these commenters request that 

Commerce instruct CBP upon initiation 

of a scope inquiry to suspend 

liquidation of entries which are not 

already subject to suspension of 

liquidation. Several of these 

commenters propose that cash deposits 

for such entries be collected at the rate 

of zero, which they argue means there 

would be no economic harm to 

importers, while one commenter 

proposes that the cash deposit should be 

at the applicable rate under the order if 

the product at issue were found to be 

covered by the order. These commenters 

argue that suspending liquidation at the 

time a scope inquiry is initiated will 

preserve entries for duty assessment if 

the product at issue is ultimately found 

to be within the scope of an order. 

According to these commenters, waiting 

for an affirmative preliminary scope 

ruling to suspend liquidation means 

that entries made more than one year 

prior to a preliminary scope ruling 

would have already liquidated, which 

would significantly undermine the 

purpose of the proposed changes to 

Commerce’s regulations in this 

rulemaking. These commenters argue 

that suspending liquidation and 

collecting cash deposits upon initiation 

of a scope inquiry helps counter the 

situation where an importer could 

escape liability by importing as much as 

possible prior to requesting a scope 

ruling. These commenters consider that, 

under Commerce’s proposal, an 

importer could escape duty liability by 

filing a scope ruling application at a 

time when an affirmative preliminary or 

final scope ruling would be issued more 

than one year after the date the 

importer’s merchandise enters the 

United States. 

These commenters further argue that 

Commerce’s concerns in the 1997 Final 

Rule with beginning the suspension of 

liquidation of entries at the time of 

initiation of a scope inquiry based on 

nothing more than a mere allegation by 

domestic industries are resolved by the 

proposed regulations because the 

proposed regulations now require 

additional information when filing a 

scope ruling application. These 

commenters argue that, as a practical 

matter, the overwhelming majority of 

scope ruling requests are filed by U.S. 

importers and foreign producers, so any 

purported inconvenience to these 

parties from domestic industries filing 

scope ruling requests apply only to a 

small portion of the importing 

community. 

One commenter opposes the 

requirement under proposed 

§ 351.225(l)(1) to post cash deposits 

from the date Commerce initiates a 

scope inquiry for any unliquidated 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52331 

entries at the time of initiation, arguing 

that this is an overly burdensome 

revision to the regulations and 

prematurely assumes a product is 

within the scope of an order before any 

analysis is conducted. This commenter 

argues that many times parties request 

scope rulings because it is not 

necessarily clear that a product is 

within the scope of an order. This 

commenter argues that requiring the 

posting of cash deposits from initiation 

of a scope inquiry is inconsistent with 

Commerce’s practice with requiring 

cash deposits in similar situations, such 

as when Commerce initiates an 

investigation. 

In rebuttal, several commenters 

expressed support for the argument that, 

upon initiation of a scope inquiry, 

Commerce should instruct CBP to 

suspend liquidation and require cash 

deposits for all unliquidated entries, 

whether the entries are already subject 

to suspension of liquidation and cash 

deposit requirements or not. These 

commenters argue that this would 

preserve the largest amount of entries 

for duty assessment and would help 

prevent foreign producers and 

exporters, and U.S. importers, from 

importing as much merchandise as 

possible before a scope ruling 

application is filed. 

In rebuttal, several commenters 

oppose the proposal to begin 

suspending liquidation and requiring 

cash deposits on all unliquidated entries 

at the time a scope inquiry is initiated. 

One commenter argues that this would 

be contrary to all notions of fairness, 

which Commerce recognized when 

rejecting similar proposals in the 1997 

Final Rule and by not itself proposing 

this change in the proposed regulations. 

One commenter adds that this would 

promote the filing of frivolous scope 

requests, harass U.S. importers, and 

waste Commerce’s resources. 

One commenter argues in rebuttal 

that, regardless of the cash deposit 

requirement and the applicable cash 

deposit rate, there is a significant 

financial impact on importers if 

liquidation is suspended upon initiation 

of a scope inquiry because entries 

would remain open until Commerce 

issues liquidation instructions to CBP 

and an importer’s bond cannot be 

terminated while entries remain open. 

This commenter argues that suspension 

of liquidation also has a significant 

financial impact on an importer’s 

unrelated activity because the collateral 

that sureties typically require for a 

bond, which may be up to the face value 

of the bond, is not released until at least 

six months after all entries have 

liquidated. 

Response: 

We have left unchanged 

§ 351.225(l)(1), which states that, upon 

initiation of a scope inquiry, Commerce 

will direct CBP to continue the 

suspension of liquidation of previously 

suspended entries and to apply the 

applicable cash deposit rate. In 

addition, we have considered the 

proposal by some commenters that 

Commerce should instruct CBP upon 

initiation of a scope inquiry to begin the 

suspension of liquidation of 

unliquidated entries not previously 

suspended and to require cash deposits 

on such entries (either at zero or at the 

rate in effect at the time of entry). We 

have also considered the arguments in 

opposition to this proposal. As noted 

above, the statute does not provide 

direction to Commerce on the 

suspension of liquidation of entries 

subject to a scope inquiry. Therefore, 

after consideration of the parties’ 

arguments and based on current 

practical and administrability concerns, 

we have decided to continue to order 

suspension of liquidation and collection 

of cash deposits for such entries only 

after Commerce’s first (preliminary or 

final) scope ruling that a product is 

covered by the scope of an order. As a 

result, we have not accepted the 

proposal that Commerce instruct CBP to 

begin suspension of liquidation upon 

initiation. 

One reason we do not find it 

appropriate to instruct CBP to begin the 

suspension of liquidation for 

unliquidated entries not previously 

suspended upon initiation of a scope 

inquiry is a consequence of the 

revisions to § 351.225(d)(2). Under those 

revisions, scope ruling applications that 

are not rejected will be deemed 

accepted 31 days after filing and the 

scope inquiry will be deemed initiated. 

In these situations, scope inquiries may 

be deemed initiated without Commerce 

fully analyzing the application 

(including the description of the 

product for which a scope ruling is 

requested) prior to initiation. Once 

initiated, paragraph (l)(1) provides that 

Commerce will direct CBP to continue 

the suspension of liquidation of 

previously suspended entries and to 

apply the applicable cash deposit rate. 

From a practical perspective, under this 

new framework, Commerce is seeking to 

maintain the status quo with respect to 

this group of previously suspended 

entries. Therefore, we find it acceptable 

for Commerce to incorporate the 

description of the product in the 

application ‘‘as is’’ in its instructions to 

CBP, even if Commerce has not had a 

great deal of time to fully analyze the 

product description. 

However, we find that ordering 

suspension for the first time on 

merchandise which was not previously 

suspended, based only on the 

description in the scope ruling 

application, raises practical and 

administrability concerns. Specifically, 

before initiation, Commerce may not 

have adequate time to analyze the 

description to ensure that when such a 

description is provided in CBP 

instructions, CBP is able to administer 

and enforce those instructions without 

difficulty. Commerce does not have the 

same concerns for entries already 

suspended, because, as noted above, for 

those entries Commerce is simply 

seeking to maintain the status quo for 

those entries. On the other hand, after 

initiation, Commerce would have the 

time to receive feedback from interested 

parties and seek clarification from the 

scope ruling applicant as appropriate, 

before settling on the precise 

description of the product to include in 

its instructions to CBP. 

We therefore disagree with 

commenters who argue that Commerce’s 

revised requirements for scope ruling 

applications under revised § 351.225(c) 

would always provide Commerce with 

sufficient information for purposes of 

ordering suspension of liquidation and 

collection of cash deposits upon 

initiating an inquiry for all entries. 

Although Commerce may have more 

information from a scope ruling 

application under revised § 351.225(c) 

than under current practice, at the point 

of initiation, in most cases, it is unlikely 

that Commerce would have had 

sufficient time to analyze the 

description for the purpose of ordering 

CBP to begin suspension of liquidation 

for certain entries as detailed above. 

Notably, there may be instances in 

which Commerce finds that the record 

and product descriptions are sufficient 

and clear enough to warrant combining 

an initiation with a concurrent 

affirmative preliminary scope ruling. 

However, in the cases in which 

Commerce just initiates a scope inquiry, 

Commerce will not have reached any 

sort of determination on the merits that 

the product at issue is covered by, or 

excluded from, the scope of the order. 

Further, we are also concerned with 

the significant administrative burden 

that would result if we were to instruct 

CBP to begin suspension of liquidation 

and collection of cash deposits of all 

entries at initiation, regardless if they 

are determined later to be merchandise 

covered or not covered by an AD or CVD 

order. For example, under one possible 

scenario, such suspension could result 

in a multi-step process of Commerce: (1) 

Directing CBP to convert all non-AD/ 

52332 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

107See Guangdong Wireking, 745 F.3d at 1203 

(noting that the statutory scheme has a ‘‘curative 

purpose’’ and a ‘‘remedial intent’’); and Sunpreme, 

946 F.3d at 1321–22 (noting ‘‘the policy declared 

in the Tariff Act, which instructs the government 

to ‘provide, to the maximum extent practicable, for 

the protection of revenue.’’’) (citing 19 U.S.C. 

1484(a)(2)(C)). 

CVD type entries meeting the 

description of the product at issue in the 

scope ruling application to AD/CVD 

type entries and directing CBP to 

suspend liquidation without any cash 

deposits at the time of initiation; (2) 

directing CBP subsequently, upon the 

event of an affirmative preliminary 

scope ruling, to collect cash deposits at 

the rate to be determined applicable 

retroactively; and (3) directing CBP, in 

the event of a negative final scope 

ruling, to lift suspension and liquidate 

entries without regard to AD/CVDs. This 

is just one sequence of scope inquiry 

proceedings and determinations, among 

several, that reflects the additional 

administrative burden that suspension 

of liquidation of all entries of the 

product described in a scope ruling 

application at initiation would require 

of Commerce and CBP. 

We are cognizant of the concerns 

expressed by some commenters that 

certain entries that entered prior to a 

preliminary scope ruling may liquidate 

without being assessed AD/CVDs, and 

that certain parties may time the filing 

of a scope ruling application in an 

attempt to avoid the payment of AD/ 

CVDs. We have also considered the 

suggestion of some commenters to begin 

the suspension of liquidation of not yet 

liquidated entries at the time of 

initiation, with a cash deposit rate of 

zero, which they argue means there 

would be no economic harm to 

importers. However, Commerce believes 

that this balance between enforcement 

concerns and practical and 

administrability considerations 

described above weighs in favor of 

maintaining its current practice of not 

imposing either suspension of 

liquidation and/or cash deposit 

requirements until after evaluating a 

scope ruling application and making 

either a preliminary or final affirmative 

scope ruling, whichever occurs first. 

That said, although we are not 

adopting the suggestions that we 

suspend liquidation of all entries 

described in scope applications at 

initiation, we note that we have made 

numerous other changes throughout 

these regulations, such as the remedy 

provisions found in § 351.225(m) and 

the certification process addressed in 

§ 351.228, in addition to the changes 

discussed above for paragraph (l), that 

we believe significantly strengthen the 

administration and enforcement of AD/ 

CVD laws, and, overall, these changes 

minimize the opportunities for 

gamesmanship and evasion of AD/CVD 

orders while also mitigating the harm to 

importers that may be acting in good 

faith. 

With respect to the comment that 

Commerce should not require cash 

deposits upon initiation of a scope 

inquiry, it is unclear whether this 

commenter believes that under revised 

§ 351.225(l)(1) Commerce would be 

directing CBP to begin suspension of 

liquidation and require cash deposits of 

all unliquidated entries (including 

entries not previously suspended), or 

whether the commenter disagrees that 

Commerce should inform CBP that it 

has initiated a scope inquiry and direct 

CBP to continue any suspension of 

liquidation and collection of cash 

deposits already in place. As discussed 

above, prior to a scope inquiry, entries 

may be previously suspended for a 

number of reasons, including for 

example, because the importer declared 

the merchandise as subject to the order, 

or CBP directed the importer to refile an 

entry that was previously declared as 

not subject to the order to an entry type 

indicating it is covered by an AD and/ 

or CVD order. Thus, at the time 

Commerce initiates a scope inquiry, 

entries of products subject to the scope 

inquiry may already be suspended. We 

clarify that under revised 

§ 351.225(l)(1), when Commerce 

initiates a scope inquiry, it does not 

intend to direct CBP to suspend 

liquidation and collect cash deposits in 

the first instance. Rather, Commerce 

will inform CBP that it has initiated a 

scope inquiry and direct CBP to 

continue the suspension of liquidation 

of all unliquidated entries of products 

subject to the scope inquiry that have 

already been suspended. In other words, 

under revised § 351.225(l)(1), Commerce 

would direct CBP to continue 

suspending any entries that are already 

suspended and to continue collecting 

cash deposits at the applicable rate for 

such entries. This is consistent with 

current § 351.225(l)(1) in the sense that 

both the current and revised regulation 

require suspension of liquidation to 

continue at the applicable cash deposit 

rate for previously suspended entries 

after initiation of a scope inquiry. 

Although it has not been Commerce’s 

practice under the existing regulations 

to direct CBP upon initiation of a scope 

inquiry to continue the suspension of 

liquidation for entries already subject to 

suspension and collection of cash 

deposits, current § 351.225(l)(1) 

provides that any such suspension will 

continue when Commerce initiates a 

scope inquiry. This revised framework 

is guided by the curative purpose and 

remedial intent of the AD/CVD law, as 

well as to provide for the protection of 

revenue.107 Consistent with that policy, 

Commerce has revised § 351.225(l)(1) to 

require the issuance of instructions to 

ensure that entries previously 

suspended by CBP continue to be 

suspended during the pendency of the 

scope inquiry. 

(c) Action Pursuant to a Negative 

Preliminary Scope Ruling 

Certain commenters oppose 

eliminating the requirement for 

Commerce to notify CBP of a 

preliminary scope ruling determining 

that the product at issue is not covered 

by the scope of the relevant order along 

with instructions to terminate the 

suspension of liquidation for any entries 

previously suspended by CBP and to 

refund cash deposits of estimated 

duties. One of these commenters argues 

that eliminating this requirement 

effectively requires companies to float 

the extra duties under an AD/CVD order 

pending a final scope ruling and 

receiving a reimbursement without 

interest several months later. Other 

commenters argue that the proposal 

would be unfair to importers, especially 

when CBP suspends liquidation and 

requires cash deposits for products that 

are facially out of scope, because 

importers would be forced to wait a full 

year or more than 500 days based on the 

amount of time that it has historically 

taken before liquidation occurs and cash 

deposits are refunded. These same 

commenters argue that, in the context of 

investigations, provisional measures are 

not imposed following a negative 

preliminary determination. 

In rebuttal, several commenters 

responded with arguments supporting 

the proposal to eliminate the 

requirement to notify CBP of a 

preliminary negative scope ruling. Many 

of these commenters argue that duty 

collection is a guiding principle for this 

rulemaking and notifying CBP at the 

time of a final scope ruling ensures that 

any duties collected are preserved in the 

event Commerce reverses its position 

after a preliminary negative scope 

ruling. These same commenters believe 

that this particular aspect of the 

suspension of liquidation rules will 

encourage importers to seek scope 

rulings earlier in the proceeding or risk 

having entries suspended by CBP. 

Another group of commenters agreed 

that the proposal ensures the 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52333 

appropriate application of AD/CVD 

orders in the event of a final scope 

ruling determining that the product in 

question is covered by the scope of an 

order and ensures that affirmative 

rulings are applied to all entries of 

subject merchandise. These commenters 

believe the proposal is consistent with 

the overall objective of addressing 

serious enforcement concerns and the 

very real risk of duty evasion. 

Response: 

We have left unchanged proposed 

§ 351.225(l)(2) with respect to this issue. 

Under the existing regulations, if 

Commerce issues a preliminary scope 

ruling determining that the product at 

issue is not covered by the scope of an 

order, Commerce is required to notify 

CBP and direct CBP to terminate the 

suspension of liquidation for any entries 

previously suspended by CBP with 

refunds of any cash deposits paid as 

estimated duties. The Proposed Rule 

proposed eliminating this requirement 

so that Commerce would no longer issue 

instructions upon issuance of a 

preliminary scope ruling determining 

that the product is not covered by the 

scope of an order. Instead, through the 

elimination of this requirement, any 

entries previously suspended would 

remain suspended pending completion 

of the scope inquiry and a final ruling 

on the matter. We believe that adoption 

of the proposal is necessary to preserve 

the status quo for the duration of the 

scope inquiry and ensure the 

appropriate application of AD/CVDs to 

subject merchandise in the event of a 

final scope ruling determining that the 

product is covered by the scope of an 

order. As we have explained, regardless 

of the preliminary scope ruling, if 

Commerce concludes in the final scope 

ruling that the product at issue is 

covered by the scope of an order, that 

is a determination that the product at 

issue was always covered by the scope 

of an order. Keeping the status quo, 

therefore, helps protect the integrity of 

such a determination and promotes the 

effectiveness and remedial purpose of 

the AD/CVD laws. 

Further, we do not agree with the 

comments that not directing CBP to 

terminate suspension of liquidation 

pursuant to a preliminary determination 

that the product at issue is not covered 

by the scope of an order would be unfair 

to importers, because that may mean 

importers would be forced to wait a full 

year or longer based on how it has 

historically taken before liquidation and 

refunding of cash deposits to occur. The 

revised regulations implement other 

changes that we anticipate will 

streamline and expedite the scope 

inquiry process and will, to a certain 

extent, address that timing issue. 

Therefore, Commerce has revised 

§ 351.225(l)(2) to no longer require 

notifying CBP of negative preliminary 

scope rulings with instructions to 

terminate the suspension of liquidation 

for any entries previously suspended by 

CBP and refund any cash deposits paid 

as estimated duties. 

With respect to the argument that 

provisional measures are not imposed 

following a negative preliminary 

determination in an investigation, 

Commerce will not direct CBP to 

suspend liquidation of entries not 

already suspended by CBP following a 

preliminary negative scope ruling. 

However, any suspension of liquidation 

(for example, suspension of liquidation 

ordered by CBP pursuant to its own 

authority) will be left undisturbed to 

preserve the status quo until the 

conclusion of the scope inquiry. 

Additionally, in response to one 

commenter, we clarify that Commerce 

instructs CBP to pay interest on 

overpayments of cash deposits paid as 

estimated duties following a final scope 

ruling determining that the product at 

issue is not covered by the scope of an 

order, in accordance with section 778 of 

the Act and § 351.212(e) of Commerce’s 

regulations. 

(d) Clarifying the Product at Issue 

One commenter opposes the proposal 

to suspend liquidation of unliquidated 

entries of the ‘‘product at issue’’ without 

any limitation as to when the entries 

occurred. The commenter states that the 

proposed regulations are vague because 

the language does not limit any new 

suspension of liquidation instructions to 

only apply to unliquidated entries made 

on or after the underlying case order’s 

earliest suspension of liquidation. The 

commenter further asserts that language 

must be added to paragraph (l)(2) and 

(3) that restricts the imposition of 

suspension of liquidation and cash 

deposit requirements to the entries of 

the applicable manufacturer or exporter. 

The commenter claims that the United 

States is not entitled to AD/CVDs on 

entries that are not covered by or subject 

to the order. 

Response: 

We have left paragraphs (l)(2) and (3) 

unchanged from how they were 

proposed with respect to this issue. 

First, we agree with the commenter that 

Commerce does not have the authority 

to direct CBP to impose AD/CVDs on 

entries that are not subject to an order 

by virtue of pre-dating the first date of 

suspension associated with that order. 

Accordingly, any retroactive suspension 

of liquidation and collection of cash 

deposits would not be imposed on 

entries that predate the first date of 

suspension in the relevant AD and/or 

CVD proceeding. Second, the reference 

to the ‘‘product at issue’’ in paragraphs 

(l)(2) and (3) refers to the product that 

is the subject of the inquiry and that, for 

purposes of paragraph (l), the 

appropriate scope of products impacted, 

either on a country-wide or companyspecific basis, are discussed under 

revised § 351.225(m), discussed below. 

Third, we do not disagree that AD/CVDs 

and cash deposits may not be applied 

on entries not covered by or subject to 

the order; however, the commenter’s 

assertion that Commerce must limit the 

imposition of suspension of liquidation 

and cash deposit requirements to the 

entries of the applicable manufacturer 

or exporter is incorrect. If Commerce 

determines that a product is subject to 

the order following an affirmative scope 

ruling, then it has the authority to 

impose AD/CVDs on entries of that 

product. Additionally, as Commerce 

explains below in response to comments 

made on § 351.225(m), Commerce may 

apply a scope ruling to a group of 

products on a country-wide basis, 

regardless of the producer, exporter, or 

importer, or apply its scope ruling on a 

producer-specific, exporter-specific, or 

importer-specific basis, or a 

combination of any of those remedies. 

Therefore, we do not find further 

clarification necessary for purposes of 

describing the product at issue under 

paragraphs (l)(2) and (3). 

(e) Interest on Refunds of Cash Deposits 

One commenter requests that 

Commerce modify paragraph (l)(4) to 

ensure that, in the event Commerce 

issues a final scope ruling that the 

product is not covered by the scope of 

an order, Commerce will instruct CBP to 

include interest on cash deposits that 

are refunded to importers. The 

commenter states that this modification 

would be consistent with § 351.212(e) of 

Commerce’s regulations, which deals 

with interest on overpayments and 

underpayments of estimated duties. The 

commenter alternatively requests that 

Commerce reference § 351.212(e) in 

paragraph (l)(4). We received no rebuttal 

comments in response. 

Response: 

We have left paragraph (l)(4) 

unchanged with respect to this issue. 

Section 778 of the Act requires that CBP 

pay interest on overpayments or assess 

interest on underpayments of cash 

deposits paid as estimated duties on 

merchandise entered, or withdrawn 

from warehouse, for consumption, on 

and after the date of publication of the 

order. The implementing regulation, 

§ 351.212(e), provides that Commerce 

52334 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

108See Lincoln Gen. v. United States, 341 F. 

Supp. 2d 1265 (CIT 2004). 

109See Antidumping and Countervailing Duty 

Proceedings: Documents Submission Procedures; 

APO Procedures, 73 FR 3634, 3635–36 (January 22, 

2008). 

will instruct CBP to calculate interest 

for each entry on or after the publication 

of the order from the date that a cash 

deposit is required to be deposited 

through the date of liquidation. In 

accordance with section 778 of the Act 

and § 351.212(e), following a final scope 

ruling determining that the product at 

issue is not covered by the scope of an 

order, Commerce instructs CBP to pay 

interest on overpayments of estimated 

duties. Given this well-established 

framework, we are not modifying 

paragraph (l)(4) regarding the payment 

of interest on cash deposits paid as 

estimated duties. 

(f) Notification to Sureties 

One commenter requests that sureties 

be notified, either by Commerce or CBP, 

at the time CBP is instructed to begin 

the suspension or continue the 

suspension of liquidation of entries for 

AD/CVD purposes in the context of a 

scope inquiry. This commenter argues 

that the duties demanded from sureties 

may be in amounts which exceed the 

bond and without any prior notice to 

the surety to allow for participation in 

administrative proceedings and 

communication with the bond 

principal, i.e., the importer, to address 

or satisfy AD/CVD requirements. Citing 

to a previous CIT decision,108 this 

commenter argues that sureties have 

standing in AD/CVD proceedings, given 

that sureties stand in the shoes of the 

importer and are jointly and severally 

liable for the duties that an importer is 

liable to pay. Therefore, this commenter 

argues that this rulemaking presents 

Commerce with an opportunity to 

recognize a surety as an ‘‘interested 

party’’ in AD/CVD proceedings. The 

commenter also states that providing 

sureties with information on AD/CVD 

entries in a timely manner will enhance 

the role and ability of sureties to address 

shortfalls in the collection of AD/CVDs. 

No commenter opposes notifying 

sureties of any instruction to CBP to 

suspend or continue to suspend 

liquidation of entries for AD/CVD 

purposes in the context of scope 

inquiries. However, in rebuttal, several 

commenters oppose the inclusion of a 

surety in the regulatory definition of 

‘‘interested party.’’ These commenters 

argue that it would be inconsistent with 

the statute to grant sureties interested 

party status through regulation, because 

a surety is not listed in the statutory 

definition of ‘‘interested party.’’ These 

commenters argue further that the 

surety-importer relationship does not 

involve the extent to which dumping or 

subsidization is occurring or the actual 

importation of unfairly traded imports. 

Response: 

We have not modified paragraph (l) to 

include a requirement to notify the 

involved surety or sureties that 

Commerce has instructed CBP to 

suspend, or to continue to suspend, 

liquidation of entries for AD/CVD 

purposes. However, we recognize and 

appreciate the unique role of sureties in 

the payment and collection of AD/ 

CVDs, and that sureties need timely 

access to information to assess the risk 

that they assume when underwriting 

bonds for imports of merchandise 

subject to AD/CVD orders. As such, in 

response to these comments, Commerce 

intends to consult with CBP and explore 

whether and how sureties may be 

notified of entries that are subject to 

suspension of liquidation for AD/CVD 

purposes in connection with a scope 

inquiry being conducted by Commerce. 

In the interim, we note that, under 

revised § 351.225(d)(2), Commerce will 

publish in the Federal Register a notice 

of a self-initiated scope inquiry and a 

monthly notice that lists recently-filed 

scope applications to provide notice to 

those that are not on the annual inquiry 

service list, as discussed above. 

Separately, we decline to modify the 

regulatory definition of ‘‘interested 

party’’ under § 351.102(b)(29) to include 

a surety because such a change would 

be beyond the scope of this rulemaking. 

Furthermore, section 771(9) of the Act 

provides the list of entities that qualify 

as an ‘‘interested party’’ in AD/CVD 

proceedings, and sureties are not 

expressly included in that list. 

Commerce’s regulations include a 

definition of the term ‘‘interested 

party,’’ but this definition does not 

differ from the statutory definition and 

was promulgated solely for purposes of 

addressing an issue that Commerce 

previously experienced in identifying 

and verifying the interested party status 

of an applicant that seeks access to BPI 

under an APO. As explained in the 2008 

final rule that promulgated the 

regulatory definition of ‘‘interested 

party,’’ Form ITA–367 (Application for 

Administrative Protective Order in 

Antidumping or Countervailing Duty 

Proceeding) requires applicants who are 

not a petitioner or respondent to 

identify the section of Commerce’s 

regulations that defines the applicant’s 

interested party status and this was not 

possible under the regulations as they 

existed at the time because the 

regulations did not provide a definition 

of the term ‘‘interested party.’’ 109

13. Section 351.225(m)—Applicability 

of Scope Rulings; Companion Orders 

Section 351.225(m) addresses the 

universe of products at issue to which 

Commerce may apply its scope rulings. 

In the proposed § 351.225(m)(1), 

Commerce included a sentence which 

stated that if it had previously issued a 

scope ruling for an order with respect to 

a particular product, it might apply that 

scope ruling to all products with the 

identical physical description from the 

same country of origin as the particular 

product at issue, regardless of producer, 

exporter, or importer, without initiating 

or conducting a new scope inquiry 

under this section. One commenter 

requests that Commerce delete much or 

all of that sentence. The commenter’s 

request stems from the requirement of 

proposed § 351.225(c)(2)(ii) for scope 

requestors to submit a concise public 

description of the product. The 

commenter argues that through this 

description, the applicant might 

unintentionally characterize the product 

in such a way publicly that interested 

parties might not realize they have an 

interest in the proceeding and should 

comment on the scope inquiry. The 

result, the commenter argues, would be 

that Commerce either might 

automatically apply its scope ruling to 

either too many or too few products, 

under this provision, without giving 

other parties an adequate opportunity to 

participate. 

More generally, several parties raise 

due process concerns about 

determinations being made under this 

provision without the opportunity for 

meaningful input. 

Finally, in accordance with paragraph 

(m)(2), which applies only to 

companion AD and CVD orders 

covering the same merchandise from the 

same country, one commenter requests 

that Commerce add a provision which 

applies its scope rulings not only to 

companion orders, but also to orders 

with identical scope language across 

multiple countries and multiple 

proceedings. 

Response: 

Upon consideration of the comments 

and further reflection, we have 

determined to remove the last two 

sentences of proposed paragraph (m)(1). 

Commerce agrees with the concerns 

expressed that if Commerce does not 

initiate or conduct a new scope inquiry 

based upon the filing of a scope 

application, but instead automatically 

issues a scope ruling that is applicable 

to all producers, exporter, or importers 

of that merchandise, such a procedure 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52335 

110Proposed Rule, 85 FR 49472 at 49480, n. 51. 

111Commerce has added the word ‘‘relevant’’ to 

this description because it is possible that two 

products may not be completely physically 

identical, but share the physical characteristics 

which Commerce considered in making its scope 

ruling. For example, the products might have 

different coloring or come in different designs or 

different sizes, but none of those factors were 

relevant to Commerce’s determination in the scope 

ruling that the particular product was covered by 

the scope of an order. In that case, even if the 

similar products do not share exactly the same 

physical characteristics, Commerce could still 

apply its scope ruling to entries of those products. 

would not provide potential interested 

parties with adequate procedures to 

protect their interests. 

Nonetheless, we believe a remedy still 

exists that largely addresses previously 

issued scope rulings covering ‘‘identical 

physical’’ products from the ‘‘same 

country of origin,’’ as described in those 

sentences. Specifically, as Commerce 

explained in the preamble to the 

Proposed Rule, Commerce may issue a 

scope clarification, post-order, that 

addresses scope inquiry requests by 

multiple parties made ‘‘over and over 

covering the same or similar scope 

language.’’ 110 For this reason, we have 

determined to codify Commerce’s 

authority to issue scope clarifications in 

a new paragraph, § 351.225(q), which 

we describe in greater detail below. 

With respect to the request of a 

commenter that Commerce add a 

provision to its regulations that 

automatically applies its scope rulings 

across AD and CVD orders from 

different countries, we have determined 

not to include such a provision in our 

regulations. Unlike companion orders 

from the same country, as described in 

§ 351.225(m)(2), parallel orders from 

different countries have different 

records, different interested parties, and 

sometimes different procedural 

histories. Accordingly, such a provision 

would not be administrable or fair to 

those interested parties subject to 

different orders from different countries 

who never had the opportunity to 

comment on the original scope ruling. 

We note, however, that this does not 

mean that Commerce is unable to take 

action based upon a scope ruling 

applicable to an order covering one 

country with the same or similar scope 

language on the record of another order. 

Section 351.225(b) permits Commerce to 

self-initiate a scope inquiry on the 

record of another proceeding where the 

products are similar or identical to that 

of a particular product subject to a scope 

ruling. Furthermore, interested parties 

to both proceedings can do the same by 

filing a scope application, in accordance 

with paragraph (c), and attaching the 

scope ruling at issue. In accordance 

with paragraph (k)(1), if the product at 

issue in the first scope ruling was 

physically identical to the product for 

which a new scope ruling is requested, 

the results of that first scope ruling 

would certainly carry a great deal of 

weight for Commerce in reaching a 

determination. 

Finally, we have determined to 

significantly revise and simplify the first 

sentence of paragraph (m)(1) to clarify 

that Commerce may apply a scope 

ruling on a country-wide basis to all 

products from the same country with 

the same relevant 111 physical 

characteristics (including chemical, 

dimensional, and technical 

characteristics), as the product at issue, 

no matter the identity of the producers, 

exporters, or importers, or apply its 

scope ruling on a producer-specific, 

exporter-specific, or importer-specific 

basis. Furthermore, the new language 

provides that Commerce may determine 

to apply its scope ruling to a 

combination of producers, exporters, 

and importers, depending on the 

remedy which Commerce determines is 

appropriate given the facts of a 

particular case. We believe this 

modified language provides a much 

clearer description of the options which 

Commerce has available to it in 

applying the results of a scope ruling. 

Likewise, we have changed the term 

‘‘merchandise at issue’’ to ‘‘product at 

issue’’ in paragraph (m)(2) to use the 

terminology as that used in paragraph 

(m)(1) and other provisions of these 

regulations. 

14. Section 351.225(n)—Service of 

Scope Ruling Application; Annual 

Inquiry Service List; Entry of 

Appearance 

Section 351.225(n) covers 

Commerce’s creation of a public annual 

inquiry service list and segment-specific 

service lists (both public and APO). As 

we have explained above, Commerce 

has determined to modify its notice 

requirements to publish self-initiations 

of scope inquiries and a monthly list of 

scope applications filed with Commerce 

in the Federal Register notice, as 

described in § 351.225(b) and (d). 

Furthermore, after publication of the 

final rule, Commerce intends to provide 

additional instruction to interested 

parties on the procedures for the annual 

inquiry service list, as appropriate. We 

received many comments on this 

provision. 

(a) Supportive Comments 

We received many comments in 

support of the Proposed Rule. 

Commenters expressed their belief that 

Commerce’s current use of a 

comprehensive service list to notify 

parties has been an ‘‘onerous task.’’ 

Further, they argue that the new 

requirement that parties must 

affirmatively request participation on 

the annual inquiry service list may 

encourage importers to be more alert to 

AD/CVD issues and file scope 

applications when they are uncertain if 

the product they are importing is 

covered by the scope of an order, given 

that importers will be affirmatively 

receiving notifications of new scope 

inquiries throughout the year. Finally, 

they voice their approval that 

Commerce automatically place 

petitioners on the annual inquiry 

service list under this provision, 

because, in every case, the petitioners 

have an interest in the order which does 

not abate until the order is revoked. 

Response: 

We appreciate the support of the 

commenters in this regard and agree 

with each of the points they raised. We 

do not disagree that the use of the 

comprehensive service list has, indeed, 

been an onerous task. Further, we 

believe that this new system of annual 

service lists and segment-specific 

service lists will make interested parties 

more alert to potential scope issues and 

proceedings. In addition, we agree that 

petitioners are uniquely situated in that 

they filed the petition requesting trade 

remedies, and, therefore, have a unique 

continuing interest in AD and CVD 

orders for the life of the orders. 

That being said, upon consideration 

of the comments we received on this 

provision, we have concluded that 

foreign governments are also uniquely 

situated in that their interest in the 

products covered by the scope of AD 

and CVD orders does not diminish as 

foreign producers and exporters come 

and go during the life of an order. 

Accordingly, we have, therefore, 

modified § 351.225(n) to reflect that 

after an initial request and placement on 

the annual inquiry service list, both 

petitioners and foreign governments 

will automatically be placed on the 

annual inquiry service list in the years 

that follow. 

As noted above, Commerce intends to 

provide additional instruction to 

interested parties on the procedures for 

the annual inquiry service list, as 

appropriate, with special instructions 

for petitioners and foreign governments. 

Specifically, once the petitioners and 

foreign governments have submitted 

their initial requests to be added to the 

first annual inquiry service list for a 

given proceeding, it is reasonable to 

automatically add them in each 

subsequent year to the list when the 

annual service list for the proceeding is 

52336 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

112Currently available at: https://www.trade.gov/ 

us-antidumping-and-countervailing-duties. 

updated. To be clear, the first time a 

petitioner or foreign government wishes 

to be included on an annual inquiry 

service list, it will be incumbent upon 

the petitioner or foreign government to 

request Commerce to include them on 

the list. However, after that first time, 

inclusion for them will be automatic. 

Additionally, after initial inclusion on 

the annual inquiry service list, it is also 

incumbent upon the petitioner or 

foreign government to notify Commerce 

of any changes to its information. 

(b) Comments Suggesting Changes 

We also received several comments 

with suggested changes or criticisms of 

Commerce’s proposed § 351.225(n). 

First, one commenter suggests that 

Commerce require scope applicants to 

file notice of their applications on 

foreign governments of countries from 

which the product at issue is exported. 

Second, some commenters request 

that all initiations, preliminary scope 

rulings, and final scope rulings be 

published in the Federal Register. 

Third, certain surety companies 

request that Commerce provide them 

with ‘‘interested party’’ status, so that 

they may receive notification of all 

scope inquiry requests and scope 

rulings. 

Finally, one commenter points out 

that Commerce currently automatically 

places foreign governments on the 

segment of a proceeding that 

commences under a CVD order, but 

under proposed paragraph (m)(2), all 

scope inquiries applicable to companion 

orders will be conducted on the record 

of the AD order. That commenter, 

therefore, requests that Commerce 

modify paragraph (n) to automatically 

place foreign governments on the 

segment of the AD proceeding in which 

the scope inquiry is conducted for both 

companion orders. 

Response: 

First, as noted above, we have 

determined that once a foreign 

government requests to be included on 

the annual inquiry service list for a 

particular AD or CVD order, it will 

automatically be placed on subsequent 

annual inquiry service lists. Once that 

occurs, because scope inquiry 

applicants will be required to file notice 

of their applications on all interested 

parties on the annual inquiry service 

list, the foreign government of the 

country of the order at issue in the 

inquiry will be sent copies of scope 

inquiry applications. For those foreign 

governments which elect not to request 

placement on the annual inquiry service 

list in the first instance, we believe the 

monthly list of scope applications in the 

Federal Register pursuant to paragraph 

(d) nonetheless provides sufficient 

notice in that regard. 

Second, we will not require that all 

initiations, preliminary scope rulings, 

and final scope rulings be published in 

the Federal Register in these 

regulations, as there is no requirement 

in the statute that Commerce take such 

additional actions, and we believe our 

procedures outlined herein provide 

appropriate opportunities for notice to 

interested parties. 

Third, we have not provided sureties 

‘‘interested party’’ status because, as 

discussed above regarding § 351.225(l), 

section 771(9) of the Act lists the parties 

who are ‘‘interested parties’’ under the 

AD and CVD laws, and surety 

companies are not included on that list. 

Nonetheless, as we explained earlier, we 

believe publication in the Federal 

Register of Commerce’s scope selfinitiations and the monthly list of scope 

applications will provide the public, 

including sureties, with notice that a 

scope inquiry may be commencing or 

underway, allowing those companies an 

opportunity to determine if they wish to 

follow and participate in the scope 

inquiry. 

Finally, we disagree with the 

commenter that requested that 

Commerce modify paragraph 225(n) to 

automatically place foreign governments 

on the segment-specific service list of 

the AD proceeding in which the scope 

inquiry is conducted for both 

companion orders. Because we have 

determined to automatically place 

foreign governments on the annual 

inquiry service list following their 

initial request for inclusion, there is no 

additional need to automatically place 

foreign governments automatically on 

segment-specific service lists. As we’ve 

explained, foreign governments on the 

annual inquiry service list will get 

notification of all scope inquiry 

requests. Like petitioners and all other 

interested parties, if the foreign 

government wishes to participate in a 

particular scope inquiry segment of the 

proceeding, that foreign government 

will have an opportunity to timely 

request placement on the segmentspecific service list. 

In addition, in addressing comments 

on paragraph (n)(4), we realized that we 

had not included the self-initiation of 

scope inquiries in the description of 

determinations that lead to the 

establishment of a segment-specific 

service list. Such an exclusion was an 

oversight. Accordingly, we have added 

language to that effect in this final rule. 

15. Section 351.225(o)—Publication of 

List of Final Scope Rulings 

In the Proposed Rule, Commerce 

amended current § 351.225(o) to 

indicate that, in addition to the 

quarterly list of final scope rulings 

published in the Federal Register, 

Commerce may also include complete 

public versions of its scope rulings on 

its website should Commerce determine 

such placement is warranted. Numerous 

commenters encourage Commerce to 

create a single public repository on its 

website for all scope rulings to ensure 

that all parties have notice of all public 

scope rulings. 

Response: 

We agree with those commenters and 

Commerce has endeavored to create 

such a repository in an effort to assist 

interested parties to efficiently obtain 

scope ruling information. However, 

implementation and maintenance of 

such a repository requires resources and 

a significant amount of time. Commerce 

continues to update its website with 

copies of scope rulings that pre-date 

2012, the year in which Commerce’s 

electronic record system, ACCESS, went 

live.112 Additionally, Commerce 

updates the website regularly with the 

scopes of new orders and the ACCESS 

bar codes for newly issued scope rulings 

that can be obtained through ACCESS. 

Accordingly, because we agree that the 

pursuit of such a resource is 

worthwhile, we will continue to 

maintain the language from the 

Proposed Rule in paragraph (o) in that 

regard and work to continue to maintain 

this online repository in the future. 

16. Section 351.225(p)—Suspended 

Investigations; Suspension Agreements 

No comments were filed with respect 

to this paragraph. We have modified the 

provision, however, to clarify that the 

procedures of this regulation may be 

applied in determining whether a 

product at issue is covered by the scope 

of a suspended investigation or 

agreement. 

17. Section 351.225(q)—Scope 

Clarifications 

As noted above, we removed certain 

language from proposed paragraph 

(m)(1), which addressed determinations 

made based on ‘‘previously issued’’ 

scope rulings ‘‘without initiating or 

conducting a new scope inquiry,’’ 

because of due process concerns raised 

by certain commenters. We believe that 

some of the scenarios which we wished 

to address in proposed paragraph (m)(1), 

however, can be addressed through a 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52337 

113Proposed Rule, 85 FR 49472 at 49480–81, n. 

51. 

114See id. 

115Section 351.225(q) addresses scope 

clarifications issued by Commerce following the 

publication of an AD or CVD order. As Commerce 

explained in the Proposed Rule, we continue to also 

have the authority to issue scope clarifications 

during an investigation. See Proposed Rule, 85 FR 

49472 at 49480, at n. 51. Unlike post-order scope 

clarifications, investigation scope clarifications will 

usually not take the form of an interpretive 

footnote, but instead can be issued solely as a 

response to a comment on the record or as part of 

Commerce’s determination of the language of the 

scope of the order itself. 

116See Deacero S.A. de C.V. v. United States, 817 

F.3d 1332, 1337–39 (Fed. Cir. 2016) (Deacero); 

Nippon Steel Corp. v. United States, 219 F.3d 1348, 

1350 (Fed. Cir. 2000); see also Bell Supply, 888 F.3d 

at 1230. 

different proceeding without those same 

due process concerns—scope 

clarifications. We discussed scope 

clarifications in the preamble to the 

Proposed Rule,113 and have concluded 

that in light of the removal of the 

aforementioned language from 

paragraph (m)(1), it would be beneficial 

to codify scope clarifications in the final 

regulations. For example, there are 

scenarios in which Commerce issues a 

scope ruling on a product covered by 

the scope of an order, and then later it 

is called upon again to conduct a scope 

ruling on a product nearly identical to 

that product, and then a third time a 

scope request is filed with the agency to 

address a product which is the same or 

very similar to the prior two products. 

As we explained in the preamble to the 

Proposed Rule, historically Commerce 

has been able to address this situation 

using scope clarifications instead of 

scope rulings. Accordingly, we are 

adding to the final regulations 

paragraph (q) to codify the use of scope 

clarifications in certain scenarios. 

Unlike scope rulings, which require a 

fulsome analysis under these 

regulations, scope clarifications either 

provide an interpretation of specific 

language in the scope of an order or 

address a particular scope matter which 

was already brought to Commerce’s 

attention on a prior occasion. Scope 

clarifications may be issued either in 

underlying investigations or after an 

order has been issued. With respect to 

post-order clarifications, specifically, 

Commerce explained in the preamble to 

the Proposed Rule that ‘‘after an AD/ 

CVD order has been in place for a period 

of time and Commerce has found that 

multiple parties have requested scope 

rulings over and over covering the same 

or similar scope language,’’ Commerce 

has, at times, issued ‘‘a scope 

clarification addressing that particular 

scope language’’ and then memorialized 

‘‘that clarification in the form of an 

interpretive footnote to the scope of the 

order.’’ 114

Post-order scope clarifications need 

not be issued in the context of a scope 

ruling, but can be conducted and 

applied in the course of different 

segments of a proceeding. Because 

Commerce conducts scope clarifications 

in a segment of the proceeding, parties 

to that segment have an opportunity to 

comment on the clarification, unlike the 

procedures set forth in the proposed 

(and now removed) language of 

paragraph (m)(1) of this section. Thus, 

the due process concerns we had with 

the removed paragraph (m)(1) language 

do not exist for scope clarifications. 

Subsequent to the issuance of a scope 

clarification, the resulting interpretive 

footnote will normally accompany the 

text of the scope itself when it is 

published in Commerce’s administrative 

determinations, such as preliminary and 

final results of subsequent segments, 

and instructions to CBP. 

Given the importance of post-order 

scope clarifications, and the fact that we 

have removed certain remedies 

available under proposed paragraph 

(m)(1), we have concluded that it is 

reasonable to add a new regulatory 

provision, § 351.225(q), which codifies 

Commerce’s ability to issue such scope 

clarifications. Specifically, the new 

provision provides that Commerce may 

issue a scope clarification in any 

segment of a proceeding providing an 

interpretation of specific language in the 

scope of an order or addressing whether 

a product is covered or excluded by the 

scope of an order at issue based on 

previous scope determinations covering 

the same or similar products. Further, it 

explains that the scope clarification may 

take the form of an interpretive footnote 

to the scope when the scope is 

published or issued in instructions to 

CBP. We believe codifying post-order 

scope clarifications in Commerce’s 

scope regulations will add clarity to 

Commerce’s scope procedures under the 

factual scenarios set forth in the 

regulation.115

Circumvention—§ 351.226 

Section 351.226 covers procedures in 

which Commerce addresses potential 

circumvention of AD/CVD orders. 

Section 781 of the Act provides the four 

scenarios under which Commerce may 

inquire into alleged circumvention and, 

if it finds circumvention, may determine 

that a particular product should be 

considered subject to an order, even if 

that product would not otherwise be 

covered by the scope of an AD or CVD 

order under § 351.225. We received 

many comments and rebuttal 

submissions on the proposed provisions 

under this regulation. Below, we briefly 

discuss each provision, address any 

comments received, and, where 

appropriate, explain any changes to the 

Proposed Rule in response to comments. 

In addition, we explain additional 

modifications to the Proposed Rule 

where we have determined that such 

amendments brought § 351.226 into 

greater conformity with scope and 

covered merchandise regulations 

§§ 351.225 and 351.227, or otherwise 

provided greater clarity to these 

regulations. 

1. Section 351.226(a)—Introduction 

Section 351.226(a) summarizes the 

general principles of a circumvention 

inquiry under section 781 of the Act. 

Numerous commenters have expressed 

their support for these regulations and 

have requested that Commerce clarify 

that even if it determines that a 

particular product is determined to not 

be covered by the scope of an order 

under § 351.225 of these regulations, 

Commerce may still conduct a 

circumvention inquiry of the product. 

Further, those commenters request that 

Commerce explain that if it concludes 

that the particular product has 

circumvented an order, it may, despite 

the negative scope ruling, find that the 

product should be treated as subject to 

the order. 

An additional commenter also 

expressed its support for Commerce’s 

division of the scope and circumvention 

regulations, citing to Federal Circuit 

holdings in which the Court has 

recognized the differences between the 

two types of proceedings.116

Other commenters are critical of 

Commerce’s proposed circumvention 

regulations in general, arguing that the 

proposed regulations treat parties who 

operate in good faith in the same 

manner as those who operate in bad 

faith, that the regulations would do 

nothing to address bad conduct of 

certain exporters, and that the 

regulations place too great of an 

obligation on importers. 

In rebuttal to those claims, other 

commenters disagree with the portrayal 

of U.S. importers as unknowing and 

unsuspecting with regard to 

circumvention or potential 

circumvention, especially when the 

importer is a subsidiary of a foreign 

producer. They argue that U.S. 

importers are in the best position to 

prevent circumvention because they can 

communicate with the foreign producer 

and, with proper due diligence, can 

request information directly from the 

foreign producer or exporter prior to 

52338 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

117Bell Supply, 888 F.3d at 1230. 

118As noted above with respect to the discussion 

of § 351.225(c), the term ‘‘interested party’’ is 

defined in section 771(9) of the Act, and pertains, 

for example, to ‘‘foreign manufacturers,’’ 

‘‘producers,’’ ‘‘exporters,’’ or ‘‘United States 

importers’’ ‘‘of subject merchandise.’’ However, the 

nature of a circumvention proceeding is to 

determine whether the merchandise produced, 

imported by, or exported by a party is 

circumventing an AD or CVD order. Thus, in many 

cases, the question of whether a party is an 

‘‘interested party’’ depends in part on whether the 

merchandise at issue is subject merchandise. 

Accordingly, for purposes of these circumvention 

regulations, the term ‘‘interested party’’ includes a 

party that would meet the definition of ‘‘interested 

party’’ under section 771(9) of the Act, if the 

importing particular products to 

determine whether the product could be 

circumventing an AD/CVD order. These 

commenters suggest that the nature of 

circumvention typically requires an 

affirmative act by a foreign producer to 

change the location of production/ 

assembly, alter the merchandise in 

minor respects, or develop a new 

product to circumvent the order, and a 

U.S. importer is usually well-situated to 

notice such changes and the risks that 

come with such changes. 

Response: 

We disagree that the new 

circumvention regulation places an 

excessive burden on importers and 

treats good faith importers the same as 

bad faith importers. 

As discussed above, although section 

781 of the Act describes certain 

applicable procedures and standards for 

circumvention determinations, the Act 

does not provide direction to Commerce 

regarding the suspension of liquidation 

for entries subject to a circumvention 

inquiry. In the absence of any such 

statutory guidance, Commerce is 

modifying § 351.226(l) to provide that 

affirmative circumvention 

determinations will normally apply to 

products entered on or after the date of 

initiation of the circumvention inquiry, 

with certain exceptions. With respect to 

issues concerning notice to exporters 

and importers, those issues are 

addressed below in response to 

comments under § 351.225(l)). As 

discussed below, the purpose of the 

proposed modifications is not to 

penalize companies acting in good faith, 

but to ensure that circumvention 

determinations are properly applied to 

merchandise found to be circumventing 

an order. Also, as explained further 

below under § 351.226(l), when an 

importer decides to import merchandise 

from a foreign country, it takes on the 

risk and the responsibility that the 

merchandise it imports might be subject 

to an AD and/or CVD order. If an 

importer is transparent and works with 

its exporters and producers to abide by 

the trade remedy laws, we do not 

believe these regulations will be 

excessively burdensome. 

Furthermore, we disagree that these 

regulations will have no effect on 

foreign exporters’ behavior. An exporter 

which is found to be circumventing an 

order will be faced with customers 

having to pay additional cash deposits 

and duties on those exports when they 

are imported. As a result, an exporter 

may find that demand for its products 

declines in the United States as the cost 

to import its merchandise increases, 

which might, in turn, lead to the 

exporter altering its behavior with 

regard to circumvention. 

Finally, we agree that just because 

Commerce determines that a particular 

product is not covered by the scope of 

an order, pursuant to § 351.225 of these 

regulations, such a determination does 

not preclude Commerce from also 

finding that the product should still be 

covered by the order if the product is 

found to be circumventing the order. 

Indeed, a product can only be 

determined to be circumventing an AD 

or CVD order under section 781 of the 

Act if the product does not fall within 

the description of the subject 

merchandise in the scope of the order in 

the first place. Sometimes, as part of its 

circumvention analysis, Commerce 

must first determine if the product at 

issue is covered by the description of 

subject merchandise in the scope of an 

order, and it is only after it determines 

that the product at issue does not match 

the description of merchandise covered 

by the scope that Commerce can then 

continue with its circumvention 

analysis and reach a determination. If 

Commerce ultimately finds that the 

merchandise is circumventing the order, 

such merchandise will be determined to 

be covered by the scope of the order for 

AD/CVD purposes despite not falling 

within the physical description of the 

subject merchandise of the scope of the 

order. 

2. Section 351.226(b)—Self-Initiation of 

Circumvention 

Section 351.226(b) describes 

Commerce’s authority to self-initiate a 

circumvention inquiry. One commenter 

requests that Commerce make it clear 

that when it determines under § 351.225 

of these regulations that a particular 

product is not covered by the scope of 

an order, the agency may self-initiate a 

circumvention inquiry of that product 

when information derived from the 

scope inquiry suggests that the product 

may be circumventing an AD or CVD 

order. 

Response: 

We agree that a determination that a 

product is not covered by the scope of 

an order does not preclude Commerce 

from conducting a circumvention 

inquiry. We further agree that 

Commerce may self-initiate a 

circumvention inquiry whenever it 

determines from available information 

that an inquiry is warranted into the 

question of whether the elements 

necessary for a circumvention 

determination under section 781 of the 

Act exist. This includes a situation 

where Commerce has reviewed 

information through the course of a 

scope inquiry that indicates that 

although the product is not covered by 

the scope of the order, circumvention of 

the order may, nonetheless, be taking 

place. In fact, the Federal Circuit 

explained this very scenario in Bell 

Supply, in which the court held that ‘‘if 

Commerce applies the substantial 

transformation test and concludes that 

the imported article has a country of 

origin different from the country 

identified in an AD or CVD order’’ (and 

is, therefore, not covered by the scope 

of the order) ‘‘then Commerce can 

include such merchandise within the 

scope of an AD and CVD order only if 

it finds circumvention under [section 

781(b) of the Act].’’ 117 We have 

accounted for various related scenarios 

in both §§ 351.225 and 351.226, which 

allow Commerce, for example, to issue 

a negative scope ruling on a product 

while a circumvention inquiry is 

pending (see § 351.225(l)(4)), or to 

address scope issues in the context of a 

circumvention inquiry (see 

§ 351.225(i)(1)). 

We note, however, that although 

Commerce may conduct a 

circumvention inquiry following the 

completion of a scope inquiry, such an 

analysis is not required by statute or 

Commerce’s practice. Furthermore, in 

certain situations, self-initiating a 

circumvention inquiry at the conclusion 

of a scope inquiry may not be 

warranted, because, for example, 

Commerce does not have information 

concerning the elements necessary for a 

circumvention determination under 

section 781 of the Act. For these 

reasons, we are not codifying a process 

for automatic self-initiation of a 

circumvention inquiry following a 

negative scope determination. A 

determination to self-initiate a 

circumvention ruling is fact-based and, 

therefore, should be decided by 

Commerce on a case-by-case basis. 

3. Section 351.226(c)—Circumvention 

Inquiry Request 

Section 351.226(c) sets forth the 

requirements for an interested party 118

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52339 

merchandise at issue in the circumvention inquiry 

is in fact circumventing. 

to request a circumvention inquiry. In 

many respects, they parallel much of the 

information required of a party filing a 

scope ruling application, pursuant to 

§ 351.225(c). Where we have modified 

the parallel language in § 351.225(c), we 

have, therefore, incorporated the same 

modifications into § 351.226(c). 

Accordingly, we have made the 

following modifications for the same 

reasons we made to those modifications 

in the scope regulations: (1) We focused 

on the physical characteristics of the 

product, which include the chemical, 

dimensional, or technical characteristics 

of the particular product in 

§ 351.226(c)(2)(i)(A); (2) we added the 

requirement that a requester identify the 

country or countries where the product 

is produced, the country from where the 

product is exported, and the declared 

country of origin in § 351.226(c)(2)(i)(B); 

(3) we added the requirement that 

Customs rulings relevant to the 

product’s tariff classifications be 

included in § 351.226(c)(2)(i)(C); (4) we 

identified the information that a 

requester must include in its concise 

public summary of the product’s 

description in § 351.226(c)(2)(ii); (5) we 

removed the name and addresses of 

producers, exporters, and importers of 

the product from the public summary, 

and included that data request, instead, 

in the overall circumvention inquiry 

request in § 351.226(c)(2)(iii); and (6) we 

removed the language that stated that 

the concise public description was not 

intended to restrict the inclusion of BPI, 

as that provision was not proposed for 

the scope regulations, and is 

unnecessary now that Commerce has 

listed the factors required for the public 

summary. 

Several commenters express concern 

with the provisions that require ‘‘clear 

and legible photographs, schematic 

drawings, specifications, standards, 

marketing materials, and any other 

exemplars providing a visual depiction 

of the product’’ and ‘‘a description of 

parts, materials, and the production 

process employed in the production of 

the product,’’ because they argue that 

domestic producers will frequently not 

have access to such information. They 

worry that such requirements would 

discourage petitioners from requesting 

circumvention inquiries due to lack of 

access to that data, and additional 

commenters filed rebuttal comments 

arguing that Commerce should 

eliminate those provisions on the exact 

same basis. 

Other commenters, in rebuttal to 

those claims, disagree with that request, 

stating that removing the proposed 

requirements would lower the bar too 

much. Those commenters claim that 

circumvention requests are a new 

‘‘petition light’’ weapon for domestic 

industries, allowing them to avoid an 

expensive investigation process while 

basing their requests on vague, baseless, 

specious, and unsubstantiated 

allegations of circumvention. Instead, 

these commenters argue that Commerce 

should require even more robust 

information from parties filing a 

circumvention request under 

§ 351.226(c) than that put forward in the 

Proposed Rule. 

Another commenter requests that 

parties requesting a circumvention 

inquiry be required to serve the request 

upon all producers, exporters, and 

importers of the product, arguing that 

such service is necessary to provide 

adequate notice. 

Finally, one commenter suggests 

Commerce include a question under 

§ 351.226(c) that asks the requester 

whether, based on information available 

to the requestor at the time of the 

request, the circumvention inquiry, if 

initiated, should be conducted on a 

country-wide basis. 

Response: 

We recognize that some of the 

information requested of a party 

requesting a circumvention inquiry 

might not be reasonably available, 

which is why we have included the 

restricting phrase ‘‘to the extent 

reasonably available’’ in § 351.226(c)(2). 

We believe, however, that where the 

information, such as clear and legible 

photographs, schematic drawings, and 

the description of the parts and 

production process employed in 

producing the particular product, is 

available, that information should be 

provided and is important to 

Commerce’s analysis. We, therefore, 

reject the request to remove this 

information request from our list of 

necessary information under 

§ 351.226(c)(2). However, if a party can 

explain why certain information is not 

reasonably available to it, we will take 

that explanation into consideration in 

determining whether or not to reject a 

circumvention inquiry request, or 

initiate on the data submitted on the 

record. 

With respect to the argument that 

Commerce should require requestors to 

serve their circumvention inquiry 

request on all known producers, 

exporters, and importers of the product 

at issue, we disagree that such actions 

are necessary. As provided for under 

§ 351.226(c) and (n), the requestor is 

required to serve parties on the annual 

inquiry service list. Therefore, parties 

wishing to be served with such requests 

must follow Commerce’s procedures as 

detailed in §§ 351.225(n) and 351.226(n) 

to be added to the list. Additionally, if 

Commerce determines to initiate a 

circumvention inquiry, it will publish 

that initiation in the Federal Register 

and the public will be made aware of 

the circumvention inquiry. Such 

notification will then allow parties to 

file a notice of appearance and 

participate in the circumvention 

inquiry, if they wish to do so, in 

accordance with § 351.226(n). 

Finally, a finding that a 

circumvention determination should be 

addressed through a company-specific 

or country-wide application, or some 

combination thereof, pursuant to the 

remedies outlined in § 351.225(m), is a 

determination that Commerce will make 

based on the case-specific facts. In 

general, though, Commerce will 

consider the description of the product 

and any named companies in the 

circumvention request in issuing the 

initiation notice in the Federal Register. 

Absent evidence on the record of the 

inquiry that would lead the agency to 

apply its determination differently, this 

notice will indicate the scope of 

Commerce’s inquiry, which will 

normally be tied to the remedy 

ultimately determined, if any, under 

§ 351.226(m). Therefore, although we 

will not require that a requestor provide 

a suggested remedy under § 351.225(m), 

we expect that requestors likely will 

include a suggested remedy in their 

arguments in support of their request. 

4. Section 351.226(d)—Initiation of 

Circumvention Inquiry and Other 

Actions Based on a Request 

Section 351.226(d) provides the 

deadline by which Commerce must 

reject or accept a request for a 

circumvention inquiry. One commenter 

argues that the 20-day deadline set forth 

in the Proposed Rule was too short a 

period of time to allow parties to correct 

any deficiencies in their submissions. 

Several other commenters argue in 

both comments and rebuttal comments 

that Commerce should automatically 

initiate a circumvention inquiry after 

the deadline for accepting the 

circumvention inquiry request, similar 

to the automatic initiation of a scope 

inquiry described in § 351.225(d), or at 

least set a hard deadline in which 

Commerce must initiate following the 

receipt of a circumvention inquiry 

request to make certain that Commerce 

addresses circumvention in a timely 

fashion. Those commenters express 

frustration with Commerce’s procedures 

under the current regulations in which 

Commerce has extended its decision to 

52340 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

initiate a circumvention inquiry at times 

by over one hundred days. 

Other commenters disagree that 

Commerce should automatically initiate 

circumvention inquiries because there 

will inevitably be cases in which a 

request to conduct a circumvention 

inquiry does not contain adequate 

information to warrant such initiation. 

Those commenters argue that automatic 

initiation based on circumvention 

inquiries which are meritless would 

force importers, exporters, and 

producers to participate in unnecessary 

proceedings, force them to 

unnecessarily pay cash deposits on their 

entries, and would undermine the 

necessity of the information required 

under § 351.226(c). Those same 

commenters state that they approve of 

Commerce’s proposed § 351.226(d)(1), 

which describes Commerce’s authority 

to reject an incomplete or otherwise 

unacceptable circumvention inquiry 

request. 

Finally, one commenter argues that 

Commerce should publish notification 

of the receipt of all circumvention 

inquiry requests in the Federal Register. 

Response: 

With respect to the argument that 20 

days is too short a period of time in 

which Commerce must decide to accept 

or reject a circumvention inquiry 

request, we find that it would be 

reasonable to increase the deadline from 

20 days to 30 days. As set forth in the 

text in the regulation, that deadline may 

be extended by Commerce by 15 days, 

making the maximum period 45 days in 

which Commerce must decide to accept 

or reject a circumvention inquiry. The 

unextended 30-day period also brings 

this provision more in alignment with 

the 30-day deadline for accepting or 

rejecting a scope application found in 

§ 351.225(d). 

We believe that this new deadline 

will better enable Commerce to 

determine whether the circumvention 

request properly alleges that the 

elements necessary for a circumvention 

determination under section 781 of the 

Act exist and is accompanied by 

information reasonably available to the 

requestor supporting these allegations. 

Within this timeframe, Commerce may 

also send questionnaires to the 

requestor and gather additional 

information, if necessary. As provided 

for under § 351.226(d), Commerce may 

ultimately determine to reject the 

request and provide the requestor with 

the reasons for the rejection so that the 

requestor may cure the request and 

refile at a later date. In addition, 

Commerce may determine that the 

request is best addressed either by 

conducting a scope inquiry in the first 

instance or in another segment of the 

proceeding. 

To the extent certain commenters 

argue that Commerce should 

automatically accept requests for 

circumvention inquiries without 

seeking additional information that 

would otherwise be necessary, or that 

Commerce must initiate a 

circumvention inquiry by a hard 

deadline, even if it does not have the 

necessary information by that deadline 

to satisfy initiation standards, we 

disagree. In determining to accept a 

request and initiate a circumvention 

inquiry, it is vital that Commerce 

conclude that the request satisfies the 

standard for initiation of an inquiry and 

is supported by reasonably available 

information. If Commerce were to 

initiate a circumvention inquiry without 

having made such a determination, we 

agree with the commenters who argue 

that such an exercise would result in a 

waste of time and resources for both 

Commerce and the interested parties. It 

is imperative that Commerce have all 

the information which it needs to 

initiate a circumvention inquiry before 

it initiates. We recognize that this differs 

in some respects from the initiation 

procedures set forth in § 351.225, but 

the information necessary to initiate a 

scope inquiry is different from that 

needed to initiate a circumvention 

inquiry. 

Further, we disagree that Commerce 

should publish notification of the 

receipt of circumvention inquiry 

requests in the Federal Register. Section 

351.226(n) requires that those 

requesting a circumvention inquiry 

must serve a copy of the circumvention 

inquiry request on all persons on the 

annual inquiry service list. Furthermore, 

when Commerce determines to initiate 

a circumvention inquiry, § 351.226(d)(3) 

requires that Commerce publish notice 

of initiation in the Federal Register. We 

believe that the initial service on 

persons on the annual inquiry service 

list, combined with the publication of 

initiation in the Federal Register, will 

provide more than enough notice to all 

interested parties that a circumvention 

inquiry has commenced. 

We have also made some additional 

revisions to paragraph (d) from that 

proposed in the Proposed Rule. 

Specifically, we have concluded that 

there may be situations in which, after 

a request for a circumvention inquiry 

has been filed, Commerce determines 

that the circumvention issue should be 

addressed in an ongoing segment of the 

proceeding, such as a covered 

merchandise inquiry under § 351.227. In 

that case, Commerce will inform the 

requestor of its intent to not initiate the 

circumvention inquiry, but instead to 

address the issue in that other segment. 

5. Section 351.226(e)—Deadlines for 

Circumvention Determinations 

Section 351.226(e) sets deadlines of 

150 days from the date of publication of 

the initiation notice for a preliminary 

circumvention determination and 300 

days, to the maximum extent 

practicable, for the final circumvention 

determination. However, if Commerce 

determines that a circumvention inquiry 

is extraordinarily complicated, it may 

extend the 300-day deadline, but by no 

more than 65 days (for a fully-extended 

total of 365 days). Commerce received 

praise from commenters on these new 

regulatory deadlines, with commenters 

stating that such time limits will 

provide all interested parties with a 

better and more predictable 

understanding of the duration of a 

circumvention inquiry. 

We have, however, made some 

changes to this section. We have revised 

the heading of this section to ‘‘Deadlines 

for circumvention determinations’’ from 

‘‘Time limits,’’ to better reflect the 

provisions covered by this section of the 

regulation, and we have moved the 

provision allowing for alignment of 

scope rulings with other segments of a 

proceeding from proposed paragraph 

(f)(7) to this section to clarify that all of 

the deadlines described in this section 

may be inapplicable or extended if the 

circumvention determination is aligned 

with another segment. 

6. Section 351.226(f)—Circumvention 

Inquiry Procedures 

Section 351.226(f) sets forth 

Commerce’s procedure for 

circumvention inquiries. Commerce 

received a number of comments for 

scope and circumvention that argued 

that the deadlines set forth in both sets 

of regulations were too short. 

In addition, one commenter expressed 

its concerns with the language in 

§ 351.226(f)(3) which states that 

Commerce may limit issuance of 

questionnaires to a reasonable number 

of respondents. The commenter states 

that Commerce does not set forth any 

standards as to how it would select 

respondents for this exercise and 

expresses concern for the due process 

rights of those respondents not selected. 

Response: 

Upon consideration of the various 

comments about Commerce’s proposed 

deadlines, as well as consideration of 

our own practice in other 

circumstances, including scope rulings 

under § 351.225(f), we have determined 

to modify our proposed deadlines under 

§ 351.226(f) accordingly, to allow 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52341 

119See section 777A(c)(2)(B) of the Act. 

interested parties additional time to 

provide responses and new factual 

information as follows: 

• Under § 351.226(f)(1) parties will 

have 30 days, rather than 20 days, to 

submit comments and factual 

information after Commerce selfinitiates a circumvention inquiry; 

• Under § 351.226(f)(1) parties will 

have 14 days, rather than 10 days, to 

submit comments and factual 

information to rebut, clarify, or correct 

factual information submitted by the 

other parties; 

• Under § 351.226(f)(2) parties will 

have 30 days, rather than 20 days, to 

submit comments and factual 

information in response to the request 

after Commerce initiates a 

circumvention inquiry; 

• Under § 351.226(f)(2), the requestor 

will have 14 days, rather than 10 days, 

to submit comments and factual 

information to rebut, clarify, or correct 

factual information submitted by the 

interested parties; 

• Under § 351.226(f)(3), interested 

parties will have 14 days, rather than 10 

days, to submit comments and factual 

information to rebut, clarify, or correct 

factual information contained in a 

questionnaire response; 

• Under § 351.226(f)(3), the original 

submitter will have 7 days, rather than 

5 days, to submit comments and factual 

information to rebut, clarify, or correct 

factual information submitted in the 

interested party’s rebuttal, clarification 

or correction; 

• Under § 351.226(f)(4), interested 

parties will have 14 days, rather than 10 

days, after the preliminary 

circumvention determination to submit 

comments; and 

• Under § 351.226(f)(4), interested 

parties will have 7 days, rather than 5 

days, to submit rebuttal comments 

thereafter. 

With respect to the argument about 

Commerce’s ability to limit 

questionnaires, we do not disagree with 

the commenter that it would be 

preferable if Commerce could issue 

questionnaires to all potential 

respondents in all circumvention 

inquiries. However, in reality, 

Commerce normally conducts its 

administrative proceedings with limited 

resources and under specific time 

constraints. Accordingly, in 

consideration of Commerce’s authority 

to limit respondents under section 

777A(c)(2) of the Act, we continue to 

believe that it is appropriate to retain 

the language in our regulations that 

explains that we may limit the issuance 

of questionnaires to a reasonable 

number of respondents, if the record of 

the circumvention inquiry warrants 

such a limitation. In accordance with 

that provision, it is Commerce’s normal 

practice to select the ‘‘exporters and 

producers accounting for the largest 

volume of the’’ particular product 

subject to the circumvention inquiry 

‘‘from the exporting country that can be 

reasonably examined.’’ 119

In addition, we have made some 

modifications to § 351.226(f)(6) and (7), 

however, to provide clarity to this 

provision which are not directly 

responsive to comments. First, we 

explain that if Commerce determines it 

appropriate to do so, Commerce may 

rescind a circumvention inquiry, in 

whole or in part, and we explain that 

the list provided in the proposed 

regulations is not exhaustive, but merely 

contains examples of situations in 

which rescission might be warranted. 

Second, we have removed a reference 

to Commerce’s ability to ‘‘forgo’’ a 

circumvention inquiry, as that scenario 

is now set forth in paragraph (d) of this 

section. 

Furthermore, we have added a fourth 

example in which a covered 

merchandise inquiry under § 351.227 

has been initiated, and Commerce 

concludes that an inquiry into whether 

the elements necessary for a 

circumvention determination exist can 

be addressed in that segment of the 

proceeding instead. 

In addition, we have noted that if we 

rescind a circumvention inquiry, we 

will notify interested parties. We also 

have clarified that Commerce can both 

alter and extend time limits under this 

section, if it determines it appropriate to 

do so. 

Finally, we have moved proposed 

§ 351.226(m)(2), which addresses 

actions Commerce may take during the 

pendency of a circumvention inquiry or 

upon issuance of a final circumvention 

determination, to § 351.226(f)(9). Not 

only does this change better conform 

with the structure of the scope and 

covered merchandise referral 

regulations, but it also logically fits 

more appropriately under the section 

labeled ‘‘Circumvention inquiry 

procedures.’’ 

7. Section 351.226 (g)—Circumvention 

Determinations 

We received no comments on this 

provision. 

8. Section 351.226(h)—Products 

Completed or Assembled in the United 

States 

Section 351.226(h) addresses the 

situation in which an entity 

circumvents an order through further 

processing or assembly of its 

merchandise in the United States. 

Commerce’s regulation provides that in 

determining the value of parts or 

components, or the value of processing, 

of the particular product under inquiry, 

Commerce may determine the value of 

the part or component on the basis of 

the cost of producing the part or 

component under section 773(e) of the 

Act—or, in the case of a nonmarket 

economy, through the use of surrogate 

values and the nonmarket economy 

methodology, as set forth in section 

773(c) of the Act. One commenter 

expressed its support for this 

clarification, stating that it agreed with 

Commerce’s revised regulation, and 

stating that Commerce’s use of a 

constructed value or nonmarket 

economy methodology to value those 

parts or components in its 

circumvention analysis, as proposed, 

will improve the accuracy of its further 

processing or assembly circumvention 

methodology and analysis. We agree 

and have made no revisions to 

§ 351.226(h). 

9. Section 351.226(i)—Products 

Completed or Assembled in Foreign 

Countries 

Section 351.226(i) addresses the 

situation in which an entity 

circumvents an order through further 

processing or assembly in a third 

country under section 781(b) of the Act. 

One commenter argues that Commerce 

should remove the country of origin 

provision, at § 351.225(j), from the scope 

regulations and conduct its substantial 

transformation analysis in a 

circumvention inquiry under this 

provision, or, in the alternative, provide 

greater explanation as to the similarities 

and differences between the two 

provisions. We have addressed some of 

these arguments above in response to 

comments specific to § 351.225(j). 

However, with respect to the 

commenter’s confusion over the 

situations in which Commerce will 

apply the substantial transformation 

factors set out in § 351.225(j) and the 

situations in which Commerce will 

apply its third country processing and 

assembly analysis using the factors set 

out in § 351.226(i), we respond below. 

The commenter argues that the factors 

which Commerce considers in both 

provisions are similar, but not exactly 

the same, and those differences may 

lead to confusion and impair 

predictability. The commenter, 

therefore, argues that Commerce should 

explain with greater specificity which 

factors apply in each situation. 

Response: 

52342 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

120See Certain Cold-Rolled Steel Flat Products 

from the Republic of Korea: Affirmative Final 

Determinations of Circumvention of the 

Antidumping Duty and Countervailing Duty Orders, 

84 FR 70934 (Dec. 26, 2019) and accompanying 

Issues and Decision Memorandum (IDM) at 

Comment 9; Certain Corrosion-Resistant Steel 

Products from the People’s Republic of China: 

Affirmative Final Determination of Circumvention 

of the Antidumping Duty and Countervailing Duty 

Orders, 83 FR 23895 (May 23, 2018), and 

accompanying IDM at Comment 1 and 2; Certain 

Cold-Rolled Steel Flat Products from the People’s 

Republic of China: Affirmative Final Determination 

of Circumvention of the Antidumping Duty and 

Countervailing Duty Orders, 83 FR 23891 (May 23, 

2018), and accompanying IDM at Comment 1 and 

2. 

121See Bell Supply, 888 F.3d at 1230 (‘‘Although 

substantial transformation and circumvention 

inquiries are similar, they are not identical.’’). 

122See Bell Supply Co., LLC v. United States, 179 

F. Supp. 3d 1082, 1091 (CIT 2016); see also 

Sunpower Corp. v. United States, 179 F. Supp 3d 

1286, 1298 (CIT 2016) (Sunpower). 

123See Sunpower, 179 F. Supp. 3d at 1298; see 

also Final Determination of Sales at Less Than Fair 

Value: 3.5’’ Microdisks and Coated Media Thereof 

from Japan, 54 FR 6433, 6435 (February 10, 1989). 

124See, e.g., Notice of Final Determination of 

Sales at Less Than Fair Value: Glycine from India, 

73 FR 16640 (March 28, 2008), and accompanying 

IDM at Comment 5; see also Stainless Steel Plate 

in Coils from Belgium: Final Results of 

Antidumping Duty Administrative Review, 69 FR 

74495 (December 14, 2004) (Plate Belgium Final), 

and accompanying IDM at Comment 4; see also 

Canadian Solar, 918 F.3d at 918–20 (affirming 

Commerce’s discretion to use other tests beyond the 

substantial transformation test when reasonable). 

125See Bell Supply, 888 F.3d at 1230 (quotations 

and citations omitted). 

126See Ugine and Alz Belgium N.V. v. United 

States, 571 F. Supp. 2d 1333, 1337 n.5 (CIT 2007) 

(quoting Notice of Final Determination of Sales at 

Less Than Fair Value: Certain Cold-Rolled Carbon 

Steel Flat Products from Argentina, 58 FR 37065 

(July 9, 1993) (Steel Argentina Final)). 

127See Laminated Woven Sacks from the People’s 

Republic of China: Final Results of First 

Antidumping Duty Administrative Review, 76 FR 

14906 (March 18, 2011) (Sacks China Final), and 

accompanying IDM at Comment 1b. 

128See sections 781(b)(C)–(E) of the Act. 

129See section 781(b)(3) of the Act. 

130See Bell Supply, 888 F.3d at 1229. 

Commerce’s substantial 

transformation analysis under 

§ 351.225(j) and the test for determining 

whether a product was completed or 

assembled in other foreign countries 

under § 351.226(i) (and section 781(b) of 

the Act) are two distinct analyses used 

for different purposes, and there is no 

basis for Commerce to modify either the 

scope regulations or the circumvention 

regulations in response to this comment. 

Commerce has explained this 

distinction before in certain 

circumvention determinations, noting 

that its substantial transformation test is 

used in scope rulings and other 

proceedings to determine a particular 

product’s country-of-origin, while the 

factors it considers to determine 

whether merchandise is being 

completed or assembled into a product 

in a third country are specific to a 

circumvention analysis under section 

781 of the Act to determine if the 

product is circumventing an AD or CVD 

order.120 Because these analyses are 

distinct and serve different purposes, 

Commerce’s application of a substantial 

transformation analysis does not 

preclude Commerce from also applying 

an analysis based on statutory criteria 

established in section 781(b) of the 

Act.121

In determining whether merchandise 

is subject to an AD and/or CVD order, 

Commerce considers whether the 

merchandise is: (1) The type of 

merchandise described in the order; and 

(2) from the particular country the order 

covers.122 Thus, Commerce’s 

determination on whether merchandise 

meets these parameters involves two 

separate inquiries, i.e., whether the 

product is of the type described in the 

order, and whether the country of origin 

of the product is that of the subject 

country.123 In determining the country 

of origin of a product, Commerce’s usual 

practice has been to conduct a 

substantial transformation analysis.124

The substantial transformation analysis 

asks, essentially, ‘‘whether, as a result of 

the manufacturing or processing, the 

product loses its identity and is 

transformed into a new product having 

a new name, character, and use’’ 125 and 

whether ‘‘[t]hrough that transformation, 

the new article becomes a product of the 

country in which it was processed or 

manufactured.’’ 126 Commerce may 

examine a number of factors when 

conducting its substantial 

transformation analysis, and the weight 

of any one factor can vary from case to 

case and depends on the particular 

circumstances unique to the products at 

issue.127

Section 781(b) of the Act provides 

that Commerce may include 

merchandise completed or assembled in 

foreign countries within the scope of an 

order if the ‘‘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, and such 

merchandise ‘‘is completed or 

assembled . . . from merchandise 

which . . . is produced in the foreign 

country with respect to which such 

order [ ] applies. . . .’’ To include such 

merchandise within the scope of an AD 

or CVD order, Commerce must 

determine and assess whether: The 

process of assembly or completion in 

the foreign country is minor or 

insignificant; the value of the 

merchandise produced in the country 

subject to the AD or CVD order is a 

significant portion of the merchandise 

exported to the United States; and, the 

action is appropriate to prevent evasion 

of such order or finding.128 As part of 

this analysis, Commerce also considers 

additional factors such as: Patterns of 

trade, including sourcing patterns; 

whether the manufacturer or exporter of 

the parts or components in the country 

of the order is affiliated with the person 

who assembles or completes the 

merchandise sold in the United States 

and, whether imports of the parts or 

components produced in such foreign 

country into the country in which they 

are assembled or completed have 

increased after the initiation of the 

investigation which resulted in the 

issuance of such order or finding.129 As 

such, the purpose of this circumvention 

inquiry under section 781(b) of the Act 

is to determine whether merchandise 

from the country subject to the AD and/ 

or CVD orders that is processed, i.e., 

completed or assembled into a finished 

product, in a third country into a 

merchandise of the type subject to the 

AD and/or CVD order should be 

considered within the scope of the AD 

and/or CVD order at issue. 

Although an AD or CVD order would 

not normally cover merchandise that 

has a country of origin other than the 

country subject to the order, the Act 

expressly provides an exception to the 

general rule in the cases of 

circumvention because, in general, with 

regard to third country or U.S. further 

processing, ‘‘[c]ircumvention can only 

occur if the articles are from a country 

not covered by the relevant AD or CVD 

orders.’’ 130

An interpretation of section 781(b) of 

the Act that requires the imported 

merchandise have the same country of 

origin as the merchandise subject to the 

AD/CVD order at issue would severely 

undermine section 781(b) of the Act 

because the merchandise would already 

be subject to the order and there would 

be no need to engage in a circumvention 

analysis. Accordingly, Commerce 

interprets the requirement in section 

781(b) of the Act that the merchandise 

imported into the United States be of 

‘‘the same class or kind’’ as the 

merchandise that is subject to the AD 

and/or CVD order to mean that the 

imported merchandise must be the same 

type of product as the subject 

merchandise. In other words, the 

imported merchandise meets the 

physical description of the subject 

merchandise and is only distinct 

because of its different country-of-origin 

designation. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52343 

131See id. at 1231. 

132S. Rep. No. 100–71, at 101. 

133See H.R. Rep. No. 100–576, at 603 (1988) 

(Conference Report accompanying the Omnibus 

Trade and Competitiveness Act of 1988, Pub. L. 

100–418, 102 Stat. 1107 (1988)) (emphasis added). 

134See SAA at 893. 

135 Id. at 844 (emphasis added). 

136See Deacero, 817 F.3d at 1338 (emphasis 

added). 

137 Id. 

138See section 781(b) of the Act. The other three 

articles are: (1) Merchandise completed or 

assembled in other foreign countries with respect to 

which the AD or CVD order applies; (2) 

merchandise altered in form or appearance in minor 

respects . . . whether or not included in the same 

tariff classification; and (3) later-developed 

merchandise. See section 781(a), (c)–(d) of the Act. 

139See Bell Supply, 888 F.3d at 1230. 

140See id. 

141See SAA at 893. 

142 Id. (‘‘Another serious problem is that the 

existing statute does not deal adequately with the 

so-called third country parts problem. In the case 

of certain products, particularly electronic products 

that rely on many off the shelf components, it is 

relatively easy for a foreign exporter to circumvent 

an antidumping duty order by establishing a 

screwdriver operation in the United States that 

purchases as many parts as possible from a third 

country.’’). 

With regard to the circumvention 

statute established by Congress, the 

language provided in the SAA supports 

Commerce’s decision to not apply the 

substantial transformation test in thirdcountry circumvention proceedings. 

The Federal Circuit has affirmed that 

‘‘[t]the legislative history indicates that 

[section 781 of the Act] can capture 

merchandise that is substantially 

transformed in third countries, which 

further implies that [section 781 of the 

Act] and the substantial transformation 

analysis are not coextensive.’’ 131 When 

Congress passed the Omnibus and Trade 

Competitiveness Act in 1988, it 

explained that section 781 of the Act 

‘‘addresses situations where ‘parts and 

components . . . are sent from the 

country subject to the order to the third 

country for assembly and 

completion.’’ 132 Congress also stated 

that ‘‘[t]he third country assembly 

situation will typically involve the same 

class or kind of merchandise, where 

Commerce has found that the de facto 

country of origin of merchandise 

completed or assembled in a third 

country is the country subject to the 

antidumping or countervailing duty 

order.’’ 133 Thus, Congress contemplated 

that where Commerce had made an 

affirmative circumvention 

determination, the imported 

merchandise found to be circumventing 

would be within the AD or CVD order 

at issue and would be treated as having 

the same country of origin as the 

country subject to the order. 

Subsequently, when implementing the 

URAA in 1994, Congress further 

recognized in the SAA the problem 

arising from foreign exporters 

attempting to ‘‘circumvent an [ ] order 

by purchasing as many parts as possible 

from a third country’’ and assembling 

them in a different country, such as the 

United States.134 Similarly, the SAA 

demonstrates that Congress was aware 

of Commerce’s substantial 

transformation analysis and the 

potential interplay of such an analysis 

with a circumvention finding under 

section 781 of the Act. Further, as 

Congress noted in the SAA, ‘‘outside of 

a situation involving circumvention of 

an antidumping duty order, a 

substantial transformation of a good in 

an intermediate country would render 

the resulting merchandise a product of 

the intermediate country rather than the 

original country of production.’’ 135 In 

sum, it is evident from the above that 

Congress anticipated that circumvention 

could result in a situation where, 

despite the merchandise undergoing 

some change that resulted in a new 

country of origin pursuant to a 

substantial transformation analysis, the 

merchandise could still be considered to 

be within the AD or CVD order at issue, 

if, pursuant to section 781(b) of the Act, 

Commerce determined the existence of 

circumvention. As such, Congress has 

already contemplated that substantial 

transformation did not preclude a 

finding of circumvention under the Act. 

Moreover, the Federal Circuit has 

stated that ‘‘[i]n order to effectively 

combat circumvention of antidumping 

duty orders, Commerce may determine 

that certain types of articles are within 

the scope of a duty order, even when the 

articles do not fall within the order’s 

literal scope.’’ 136 The Act ‘‘identifies 

four articles that may fall within the 

scope of a duty order without 

unlawfully expanding the order’s 

reach,’’ 137 including inter alia 

merchandise completed or assembled in 

foreign countries using merchandise 

produced in the country with respect to 

which the AD or CVD order applies.138

Similarly, the Federal Circuit has 

explained that ‘‘if Commerce applies the 

substantial transformation test and 

concludes that the imported article has 

a country of origin different from the 

country identified in an AD or CVD 

order, then Commerce can include such 

merchandise within the scope of an AD 

and CVD order only if it finds 

circumvention under [section 781(b) of 

the Act].’’ 139

In short, the two analyses have 

distinct purposes. The substantial 

transformation test is focused on 

whether the input product loses its 

identity and is transformed into a new 

product having a new name, character, 

and use, and thus a new country of 

origin. On the other hand, section 781(b) 

of the Act focuses on the extent of 

processing applied to subject 

merchandise in a third country and 

whether such processing is minor or 

insignificant in comparison to the entire 

production process of the finished 

subject merchandise. Under section 

781(b) of the Act, we also examine 

whether the processing in a third 

country has resulted in ‘‘evasion’’ of the 

order, and, therefore, whether ‘‘action is 

appropriate’’ to prevent further evasion 

in the future. Thus, there is nothing 

contradictory in finding an input to be 

substantially transformed into a finished 

product, in terms of its physical 

characteristics and uses, while also 

finding the process of effecting that 

transformation to be minor vis-a`-vis the 

manufacturing process of producing a 

finished product. Further, as the Federal 

Circuit has explained, ‘‘even if a 

product assumed a new identity, the 

process of ‘assembly or completion’ may 

still be minor or insignificant, and 

undertaken for the purpose of evading 

an AD or CVD order.’’ 140 The SAA 

illustrates this possibility in its 

discussion of the circumvention 

provisions of the Act through its 

references to ‘‘parts’’ and finished 

products.141 It is evident from this 

discussion that the ‘‘parts’’ and the 

finished goods assembled are two 

different products. Nevertheless, the 

process of assembling such parts into a 

final product may be minor.142

Furthermore, section 781(b) of the Act 

requires that we examine other factors, 

e.g., patterns of trade including sourcing 

patterns, and whether imports into the 

third country have increased after 

initiation of the relevant AD or CVD 

investigation. These additional factors 

further emphasize the different 

purposes of the substantial 

transformation test and the analysis 

conducted under section 781(b) of the 

Act and § 351.226(i). 

For these reasons, Commerce has 

neither removed the country of origin 

section from 351.225(j) nor modified the 

requirement as set forth in the newly 

created 351.226(i). 

10. Section 351.226(j)—Minor 

Alterations of Merchandise 

Section 351.226(j) addresses the 

situation in which a particular product 

has been altered in form or appearance 

in minor respects before being exported 

to the United States. In the proposed 

modifications to the current regulation, 

Commerce included certain criteria 

52344 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

143See Proposed Rule, 85 FR 49472 at 49487 

(referencing S. Rep. No. 100–71, at 100). 

144 Id. at 49487–88. 

145 Id. 

146The phrase ‘‘until appropriate liquidation 

instructions are issued’’ from the Proposed Rule is 

removed in paragraph (l)(1) (which refers to 

continued suspension of liquidation) as such 

language is unnecessary and redundant. The 

relevant language is retained in paragraph (l)(3) as 

discussed below. 

described in the legislative history of 

the provision to determine whether 

alterations are properly considered 

‘‘minor.’’ 143 One commenter states that 

it was pleased Commerce had included 

those factors in its revised regulation, as 

those factors are important to 

Commerce’s minor alterations analysis. 

Response: 

Commerce appreciates the comment 

and agrees that the inclusion of the 

factors from the legislative history in the 

regulation will provide greater clarity to 

Commerce’s analysis of a minor 

alteration allegation in a circumvention 

inquiry. 

Upon further consideration of this 

provision, we have made one minor 

edit, clarifying that physical 

characteristics include chemical, 

dimensional, and technical 

characteristics, to bring that term into 

conformity with other provisions of the 

regulation. Otherwise, we have made no 

further changes from the provision as it 

appeared in the Proposed Rule. 

11. Section 351.226(k)—LaterDeveloped Merchandise 

There were no comments on this 

provision. 

12. Section 351.226(l)—Suspension of 

Liquidation 

As discussed in the Proposed Rule, in 

the context of a circumvention inquiry, 

current § 351.225(l) allows for 

Commerce to direct CBP to begin the 

suspension of liquidation of 

unliquidated entries not yet suspended 

which entered on or after the date of 

initiation of the inquiry, and collect 

applicable cash deposits, at the time of 

a preliminary or final affirmative 

determination, whichever is applicable. 

The current regulation does not address 

unliquidated entries not yet suspended 

which pre-date the date of initiation of 

a circumvention inquiry.144

Furthermore, the Act does not provide 

direction to Commerce regarding the 

suspension of liquidation for entries 

subject to a circumvention inquiry. 

Under § 351.226(l) in the Proposed 

Rule, Commerce proposed that, at the 

time of a preliminary or final affirmative 

circumvention determination, 

Commerce would direct CBP to begin 

suspension of liquidation for any 

unliquidated entries not yet suspended 

and collect applicable cash deposits.145

After consideration of comments on the 

Proposed Rule and corresponding 

changes to similar language in 

§ 351.225(l), Commerce is adopting 

certain changes to § 351.226(l) in this 

final rule both in response to comments 

and on its own initiative. For clarity, we 

describe all revisions made to 

§ 351.226(l) in these introductory 

paragraphs before summarizing and 

addressing comments below. Also 

discussed herein are the specific 

applicability dates for § 351.226(l) as 

referenced in the Applicability Dates 

section of this preamble. 

Paragraph (l)(1), which describes 

Commerce’s actions at the time of 

initiation of a circumvention inquiry, is 

slightly revised from the Proposed Rule 

and mirrors changes in § 351.225(l)(1), 

which are described above in that 

section. Additionally, because 

§ 351.226(l)(2) and (3) concerning 

Commerce’s actions at the time of a 

preliminary or final circumvention 

determination largely mirror similar 

provisions in §§ 351.225, with a few 

exceptions described below, we are 

adopting the same changes to 

paragraphs (l)(2) and (3) that are being 

made to § 351.225(l)(2) and (3). 

Paragraph (l)(4), which we touch on 

briefly below, describes Commerce’s 

actions in the event of a negative final 

circumvention determination, remains 

unchanged from the Proposed Rule. 

Lastly, Commerce is adding a new 

provision, paragraph (l)(5), to include 

specific reference to CBP’s authority. 

Minor revisions have been made to 

paragraphs (l)(1), (l)(2)(i), and (l)(3)(i) 

from the Proposed Rule. Specifically, as 

explained above in the discussion of 

similar language in § 351.226(l), 

paragraph (l)(2)(i) provides that, at the 

time of an affirmative preliminary 

circumvention determination, 

Commerce will direct CBP to continue 

the suspension of liquidation of 

previously suspended entries, but 

removes express reference to entries 

previously suspended ‘‘as directed 

under’’ paragraph (l)(1). Under 

paragraph (l)(1), Commerce does not 

direct CBP to suspend liquidation at the 

time of initiation of the circumvention 

inquiry; rather, under paragraph (l)(1), 

Commerce directs CBP to continue the 

suspension of liquidation of entries 

subject to the inquiry (if any) that were 

already subject to the suspension of 

liquidation and to collect the applicable 

cash deposits.146 As noted above in the 

discussion of § 351.225(l), CBP has 

independent authority to suspend 

liquidation, and, therefore, prior to a 

circumvention inquiry, it is possible 

that entries may be previously 

suspended for a number of reasons. 

Therefore, to avoid any unintended 

confusion regarding the underlying 

basis for suspension of liquidation of 

previously suspended entries, the 

reference to paragraph (l)(1) is removed 

from paragraph (l)(2)(i). 

Similar edits have been made to 

paragraph (l)(3)(i) by removing a 

reference to entries previously 

suspended ‘‘as directed under’’ (l)(1) 

and/or (l)(2). Under paragraph (l)(2)(ii) 

(as further discussed below), if 

Commerce issues a preliminary 

affirmative circumvention 

determination, Commerce will direct 

CBP to begin the suspension of 

liquidation of certain entries. Therefore, 

at the time of a final circumvention 

determination, entries may be 

previously suspended as described 

above, or because of Commerce’s 

instruction to CBP to begin the 

suspension of liquidation of certain 

entries at the time of the preliminary 

affirmative circumvention 

determination. To avoid confusion 

regarding the underlying basis for 

suspension of liquidation of previously 

suspended entries, the reference to 

paragraph (l)(1) and/or (l)(2) is removed 

from paragraph (l)(3)(i). 

Revised paragraph (l)(3)(i) also 

eliminates potentially confusing 

language regarding entries subject to 

suspension of liquidation as a result of 

another segment of a proceeding, and 

revised paragraphs (l)(3)(i) and (ii) 

eliminate reference to liquidation 

instructions issued pursuant to 

§§ 351.212 and 351.213. There may be a 

number of reasons why entries remain 

subject to suspension of liquidation in 

any given circumvention inquiry in 

which Commerce issues an affirmative 

final circumvention determination, and 

Commerce cannot immediately instruct 

CBP to lift suspension of liquidation 

and assess final duties. This includes, 

for example, an ongoing administrative 

review. Therefore, we find that a simple 

reference to the continued suspension 

until appropriate liquidation 

instructions are issued in paragraph 

(l)(3) will account for various scenarios. 

In addition, the language in new 

paragraph (l)(5) will provide added 

clarification regarding CBP’s authority 

in relation to the framework established 

by Commerce under paragraph (l). 

Commerce intends to provide more 

details, as needed, in its individual 

instructions to CBP for a given case. 

On the other hand, we note that we 

have retained language in paragraph 

(l)(4) to provide that when Commerce 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52345 

issues a final negative circumvention 

determination, entries subject to 

suspension of liquidation as a result of 

another segment of a proceeding, if any, 

will remain suspended until that other 

segment of the proceeding has 

concluded. Although perhaps less 

common in the circumvention context, 

it is possible that there could be a 

scenario in which it would not be 

appropriate to immediately direct CBP 

to liquidate entries without regard to 

duties. Therefore, to avoid confusion in 

this particular scenario, this language is 

retained in paragraph (l)(4). 

Paragraphs (l)(2)(ii) and (l)(3)(ii) 

clarify and maintain the status quo of 

the current regulation to provide that, at 

the time of a preliminary or final 

affirmative circumvention 

determination, Commerce will direct 

CBP to begin the suspension of 

liquidation of any unliquidated entries 

not yet suspended, which entered on or 

after the date of initiation of the inquiry, 

and collect applicable cash deposits. 

Paragraphs (l)(2)(ii) and (l)(3)(ii) also 

retain language from the current 

regulation regarding entries entered, or 

withdrawn from warehouse, for 

consumption, to maintain consistency 

with this long-standing language and to 

avoid confusion. Additionally, this 

language also clarifies that the relevant 

date is the date of publication of the 

notice of initiation in the Federal 

Register. 

New paragraphs (l)(2)(iii)(A) and 

(l)(3)(iii)(A) provide that, at the time of 

a preliminary or final affirmative 

circumvention determination, if 

Commerce determines that it is 

appropriate to do so, Commerce may 

direct CBP to begin the suspension of 

liquidation of certain unliquidated 

entries not previously suspended, 

which entered before the date of 

publication of notice of initiation of the 

inquiry, and collect applicable cash 

deposits. Under this framework, 

Commerce may consider upon timely 

request of an interested party or at its 

own discretion whether such 

suspension of liquidation and 

application of cash deposits, also 

referred to as retroactive suspension, 

should be applied to certain entries 

which pre-date the date of initiation, 

i.e., to a specific alternative retroactive 

suspension date. In response to a timely 

request from an interested party, 

Commerce will only consider an 

alternative date based on a specific 

argument supported by evidence 

establishing the appropriateness of that 

alternative date. These provisions are 

further explained below in response to 

comments. Additionally, new 

paragraphs (l)(2)(iii)(B) and (l)(3)(iii)(B) 

provide an exception that, if Commerce 

has determined to address a covered 

merchandise referral under § 351.227 in 

a circumvention inquiry, the rules of 

§ 351.227(l)(2)(iii) and (l)(3)(iii) will 

apply. This provision is explained 

below under the discussion of 

§ 351.227(l). New paragraphs (l)(2)(iii) 

and (l)(3)(iii) also retain language from 

the current regulation regarding entries 

entered, or withdrawn from warehouse, 

for consumption, to maintain 

consistency with this long-standing 

language and avoid confusion. 

Additionally, this language also clarifies 

that the relevant date is the date of 

publication of the notice of initiation in 

the Federal Register. 

Lastly, new paragraph (l)(5) provides 

language to clarify CBP’s authority to 

take related action. Specifically, this 

language clarifies that the revised 

framework established by Commerce in 

§ 351.226 do not affect CBP’s authority 

to take any additional action with 

respect to the suspension of liquidation 

or related measures. This is identical 

language to the language for 

§ 351.225(l), which is explained above 

and not repeated here. 

There is one clarification to this 

revised regulatory framework, as noted 

in the DATES section and in the 

Applicability Dates section of this 

preamble, and as discussed in detail 

above regarding § 351.225(l)(2)(iii) and 

(l)(3)(iii) for scope inquiries, regarding 

the effective date and applicability 

dates. As stated above, amendments to 

§ 351.225 apply to scope inquiries for 

which a scope ruling application is 

filed, as well as any scope inquiry selfinitiated by Commerce, on or after the 

effective date for the amendments to 

§ 351.225 identified in the DATES

section. Likewise, amendments to 

§ 351.226 apply to circumvention 

inquiries for which a circumvention 

request is filed, as well as any 

circumvention inquiry self-initiated by 

Commerce, or after the effective date for 

the amendments to § 351.226 identified 

in the DATES section. However, for 

§ 351.226(l), like for § 351.225(l), 

Commerce will not apply paragraphs 

(l)(2)(iii) and (l)(3)(iii) in a way that 

would direct CBP to begin the 

suspension of liquidation of 

unliquidated entries not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption, prior to this effective 

date. These issues are fully described 

above for § 351.225(l) and are not 

repeated here. In addition, we clarify 

that as expressly stated in paragraph 

(l)(5), this revised framework does not 

affect CBP’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. Nor will this framework 

apply to circumvention requests filed or 

circumvention inquiries self-initiated by 

Commerce before the effective date 

identified in the DATES section. 

As noted above, Commerce received 

numerous comments on paragraph (l). 

Summaries of those comments, and 

responses to those comments, are 

provided below. 

(a) Retroactive Suspension of 

Liquidation 

As described above, in the Proposed 

Rule, among other changes, Commerce 

proposed that, at the time of a 

preliminary or final affirmative 

circumvention determination, 

Commerce would direct CBP to begin 

suspension of liquidation for any 

unliquidated entries not yet suspended 

and collect applicable cash deposits. 

Therefore, the key distinction between 

the current regulation and what was 

proposed is that the current regulation 

imposes a ‘‘cut-off’’ of the initiation date 

of the inquiry. The proposed regulation 

would have removed this limitation so 

that the affirmative circumvention 

determination would apply to any 

unliquidated entries of the product at 

issue, not just those that entered after 

the initiation date. 

Thirteen commenters support the 

proposal to apply affirmative 

circumvention determinations to all 

unliquidated entries dating back to the 

first date of suspension under the order. 

A few of these commenters generally 

support the adoption of proposed new 

§ 351.226, with no comments specific to 

paragraph (l). Another group of these 

commenters discuss their first-hand 

experiences in dealing with 

circumvention and explain that such 

practices undermine the import relief 

granted to the domestic industry. In 

their view, companies engaging in 

circumvention contravene the remedial 

purpose of the AD/CVD law, and 

Commerce’s experience over the past 20 

years has made it evident that strong 

enforcement of the trade remedy laws is 

necessary to level the playing field, 

prevent circumvention, and eliminate 

opportunities to elude the payment of 

AD/CVDs. 

Several of these commenters disagree 

that imports that circumvent an AD/ 

CVD order can enter without the 

payment of duties unless and until a 

domestic interested party alerts 

Commerce that circumvention is 

occurring. These commenters argue that 

importers should be exercising due 

diligence (as part of the concept of 

shared responsibility and the statutory 

duty to exercise reasonable care when 

entering merchandise) and it is 

52346 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

147See Guangdong Wireking, 745 F.3d at 1203; 

and Sunpreme, 946 F.3d at 1321–22. 

148See Fasteners, 947 F.3d at 803. 

149See Sunpreme, 946 F.3d at 1316–18. 

150As stated above in the discussion of new 

paragraph (l)(5), consistent with current practice 

and in accordance with CBP’s statutory and 

regulatory authorities, CBP may stay its action on 

entries of products that CBP has liquidated but for 

which liquidation is not yet final pending the 

outcome of a circumvention inquiry. Additionally, 

any instructions issued by Commerce directing CBP 

to ‘‘lift suspension of liquidation’’ and assess duties 

at the applicable AD/CVD rate would not limit 

CBP’s ability to (1) suspend liquidation/assess 

duties/take any other measures pursuant to CBP’s 

EAPA investigation authority under section 517 of 

the Act specifically, or (2) suspend liquidation/ 

assess duties/take any other action within CBP’s or 

HSI’s authority with respect to AD/CVD entries. 

incumbent upon them to take proactive 

measures to reduce any duty risk 

exposure. One of these commenters 

notes that the Federal Circuit has also 

recognized the risk of duty evasion and 

the declared policy in the Act to protect 

AD/CVD revenue to the maximum 

extent practicable, which is consistent 

with the curative purpose and remedial 

intent of the statute.147

Eleven commenters oppose the 

proposal to apply affirmative 

circumvention determinations to all 

unliquidated entries dating back to the 

first date of suspension under the order. 

These commenters argue that by 

applying suspension of liquidation to 

the earliest date of suspension, the 

Proposed Rule unfairly expands the 

scope of an order prior to making a 

circumvention determination. In 

particular, they argue that there is a 

significant duty liability risk to 

importers that are genuinely unaware 

their products may be covered by the 

scope of an order. They state that, as 

Commerce acknowledges, these 

products do not fall within the literal 

scope language; thus, it is impossible for 

importers to predict what products may 

be circumventing an order when they 

are not covered by the literal scope 

language. Certain of these commenters 

also argue that attaching duty liability 

when the language of the orders does 

not cover the product is a violation of 

due process and the fair notice doctrine. 

They note that a circumvention request 

is the first time an importer has notice 

of a potential circumvention inquiry; 

retroactively applying orders to 

unliquidated entries does not constitute 

fair notice to importers. 

Additional commenters oppose the 

Proposed Rule and raise notice and due 

process issues. In particular, they argue 

that the proposal requires notification to 

those on the annual inquiry service list, 

but does not clearly establish how 

producers and importers will be 

informed if circumvention is taking 

place via third countries. One of these 

commenters proposes that 

circumvention inquiries be published in 

the Federal Register so that all 

interested parties affected have the same 

level of information and can defend 

their interests. Another commenter also 

expressed support for providing notice 

via the Federal Register, either at the 

time of the circumvention allegation or 

the time of the initiation. This 

commenter also notes that the Proposed 

Rule implicates due process issues, 

stating that importers should not be 

held responsible for duties on entries 

that pre-date any notice of the extension 

of the order to cover the merchandise. 

Another group of commenters argues 

that Commerce has expressly recognized 

in the 1997 Final Rule that notice and 

fairness are key factors in a 

circumvention case. These commenters 

argue that the issue regarding the 

apparent unfairness associated with 

retroactively imposing duties on 

merchandise prior to initiation of an 

inquiry was expressly addressed in 

Fasteners, where the Federal Circuit 

held that Commerce exceeded its 

regulatory authority.148 The 

commenters also argue that the court’s 

reasoning was based on the 1997 Final 

Rule and Commerce has failed to 

provide an adequate explanation as to 

why it is no longer extremely unfair to 

respondents to subject entries to duty 

assessment with no prior notice based 

on nothing more than a domestic party’s 

allegation. Further, these commenters 

argue that the Federal Circuit’s decision 

in Sunpreme cannot justify retroactive 

assessment because that case concerned 

CBP’s suspension authority, not 

Commerce’s authority to reach all 

unliquidated entries prior to the 

initiation of a circumvention inquiry.149

Finally, they state that the proposal is 

even more blatantly unfair in the 

circumvention context with third 

country completion, where there has 

been no AD/CVD investigation, no 

injury finding, no suspension, and no 

notice of findings in the Federal 

Register. They also state that it is 

unreasonable to assume importers can 

make a prediction concerning 

merchandise produced in a separate 

country. 

Response: 

As discussed above, after 

consideration of these comments, 

Commerce is adopting a revised 

framework under paragraph (l) with 

respect to entries that pre-date the date 

of initiation of a circumvention inquiry. 

First, under paragraph (l)(1), Commerce 

is clarifying that, at the time of initiation 

of a circumvention inquiry, Commerce 

will direct CBP to continue the 

suspension of liquidation of entries 

subject to the inquiry (if any) that were 

already subject to the suspension of 

liquidation and to collect the applicable 

cash deposits. Second, Commerce is 

clarifying its treatment of unliquidated 

entries not yet suspended which entered 

before the date of initiation of the 

inquiry. Specifically, paragraphs 

(l)(2)(iii)(A) and (l)(3)(iii)(A) provide 

that, at the time of a preliminary or final 

affirmative circumvention 

determination, if Commerce determines 

that it is appropriate to do so, 

Commerce may direct CBP to begin the 

suspension of liquidation of certain 

unliquidated entries not previously 

suspended, which entered before the 

date of publication of notice of initiation 

of the inquiry, and collect the applicable 

cash deposits. This includes any 

unliquidated entries back to the first 

date of suspension under the order that 

remain unliquidated at the time of the 

preliminary or final circumvention 

determination.150 Under this 

framework, Commerce may consider 

upon timely request of an interested 

party or at its own discretion whether 

such suspension of liquidation and 

application of cash deposits, also 

referred to as retroactive suspension, 

should be applied to certain entries 

which pre-date the date of initiation, 

i.e., to a specific alternative retroactive 

suspension date. In response to a timely 

request from an interested party, 

Commerce will only consider an 

alternative date based on a specific 

argument supported by evidence 

establishing the appropriateness of that 

alternative date. In addition, as 

explained further below, because this is 

a determination separate from a 

determination as to whether the 

elements for circumvention exist, the 

evidence required to support retroactive 

suspension must go beyond the 

evidence required to establish 

circumvention of the order under the 

relevant criteria. Further, Commerce 

may consult with CBP as necessary 

under this provision to determine if 

suspension of liquidation should fall on 

the date of initiation or to entries 

preceding that date. 

In establishing this framework, which 

differs from the scope framework 

applied under § 351.225(l), we recognize 

that neither section 781 of the Act nor 

any other provision of the Act contains 

specific guidance regarding when 

merchandise found to be circumventing 

an AD and/or CVD order should be 

subject to suspension of liquidation and 

cash deposit requirements. When 

Congress passed the Omnibus and Trade 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52347 

151See S. Rep. No. 100–71, at 101. 

152 Id. 

153See generally section 781 of the Act; SAA at 

892–95; Tung Mung, 219 F. Supp. 2d at 1343 

(‘‘Commerce has a duty to avoid the evasion of 

antidumping duties. [Commerce] ‘has been vested 

with authority to administer the antidumping laws 

in accordance with the legislative intent. To this 

end, [Commerce] has a certain amount of discretion 

[to act] . . . with the purpose in mind of preventing 

the intentional evasion or circumvention of the 

antidumping duty law.’ ’’) (quoting Mitsubishi I, 700 

F. Supp. at 555; see also Torrington Co. v. United 

States, 745 F. Supp. 718, 721 (CIT 1990), aff’d 938 

F.2d 1276 (Fed. Cir. 1991). 

154See Deacero, 817 F.3d at 1337–38 (‘‘In order 

to effectively combat circumvention of antidumping 

duty orders, Commerce may determine that certain 

types of articles are within the scope of a duty 

order, even when the articles do not fall within the 

order’s literal scope. The Tariff Act identifies four 

articles that may fall within the scope of a duty 

order without unlawfully expanding the order’s 

reach[.]’’ (internal citations omitted)). 

155Suntec, 857 F.3d at 1370. 156 Id. 157For example, importers of steel products are 

required to obtain a steel import license through 

Commerce’s Steel Import Monitoring and Analysis 

(SIMA) online license system. See 19 CFR part 360. 

In their license application, importers are required 

to report, among other requirements, the country of 

origin of the product, along with the country where 

the steel used in the mill product is melted and 

poured (which may differ from the claimed country 

of origin). Steel importers must also furnish steel 

mill test certificates that provide detailed 

information regarding the imported steel product. 

See Steel Import Monitoring Analysis System, 85 FR 

56162 (Sept. 11, 2020). 

Competitiveness Act of 1988, it 

explained that the purpose of the 

circumvention statute ‘‘is to authorize 

the Commerce Department to apply 

antidumping and countervailing duty 

orders in such a way as to prevent 

circumvention and diversion of U.S. 

law.’’ 151 Congress also recognized that 

‘‘aggressive implementation of [the 

circumvention statute] by the Commerce 

Department can foreclose these 

practices.’’ 152

In light of this language, we are 

cognizant of the purpose of the AD/CVD 

law generally and the circumvention 

provisions, in particular, to prevent 

parties from undermining the 

effectiveness of these trade remedies 

through circumvention measures. 

Congress, and the courts, have long 

recognized that Commerce has the 

vested authority to administer the trade 

remedy laws in accordance with their 

intent, and has the discretion to take 

appropriate enforcement measures to 

ensure the effectiveness of its AD/CVD 

orders by preventing duty evasion and 

circumvention.153 Weighing in favor of 

retroactive suspension are Commerce’s 

objectives to promote the effectiveness 

and remedial purpose of AD/CVD 

orders; to provide the requisite relief to 

domestic industries suffering from 

attempts by others to undermine that 

relief; to deter parties from engaging in 

the circumvention practices in the first 

instance; and to encourage parties to 

maintain a reasonable awareness 

whether the product they are producing, 

exporting, or importing is subject to an 

AD/CVD order, and also to scrutinize 

the parties with which they do business 

(for example, to determine whether a 

supplier is a respondent in a U.S. AD/ 

CVD proceeding, which could indicate 

possible circumvention activity 

depending on the circumstances). 

Therefore, based on these objectives, we 

agree, to an extent, with commenters in 

favor of the Proposed Rule. 

On the other hand, we also agree to 

some degree with arguments raised by 

the commenters opposed to the 

Proposed Rule that retroactive 

application of circumvention 

determinations may not be appropriate 

in all instances. Depending on the 

circumstances of a given case, prior to 

the notice of initiation of the 

circumvention inquiry, certain 

exporters, producers, and/or importers 

of products alleged to be circumventing 

may not be aware that Commerce could 

apply AD/CVDs to such products— 

which ‘‘do not fall within the order’s 

literal scope’’ 154—through an 

affirmative circumvention 

determination. 

In light of the concerns raised by 

those opposed to the Proposed Rule, 

and the need to effectively administer 

and enforce the circumvention laws 

under section 781 of the Act, we have 

therefore modified paragraphs 

(l)(2)(iii)(A) and (l)(3)(iii)(A) as 

described above. In determining 

whether to suspend liquidation of 

entries preceding initiation, Commerce 

will consider its objectives described 

above (e.g., to promote the effectiveness 

and remedial purpose of AD/CVD 

orders; to provide the requisite relief to 

domestic industries; to deter parties 

from engaging in circumvention; and to 

encourage parties to maintain a 

reasonable awareness of their business 

activities) in light of the circumstances 

set forth on the administrative record. 

This framework recognizes that 

although merchandise may not fall 

within the literal terms of the order, this 

does not mean, depending on the 

circumstances, that parties are 

completely unaware of an existing order 

or previous circumvention 

determinations relevant to their 

product, or even unaware that their 

products are or may be circumventing 

the order. Thus, in certain instances, we 

disagree that it would be unfair to all 

parties or that all parties would have 

‘‘no notice’’ or lack due process in every 

case before potential duty liability 

attaches to entries that pre-date the date 

of initiation of the inquiry pursuant to 

an affirmative circumvention 

determination. In fact, we believe that 

there are scenarios in which parties will 

certainly have notice before potential 

duty liability attaches to entries that 

pre-date the date of initiation. 

Therefore, the appropriateness of 

applying duty liability to pre-initiation 

entries pursuant to an affirmative 

circumvention determination must be 

determined by Commerce on a case-bycase basis. 

For example, Commerce has 

published hundreds of AD/CVD orders 

on numerous types of products covering 

multiple countries and issued numerous 

circumvention determinations. The 

Federal Circuit has recognized that 

Federal Register documents are treated 

as legally effective notices in a wide 

range of circumstances.155 In certain 

cases, the courts have determined that a 

party that did not receive actual notice 

nonetheless received constructive notice 

of an event through the publication of 

a Federal Register document.156 These 

published documents and 

accompanying memoranda would put 

parties on notice that circumvention 

occurred in previous instances under 

the same order by the same or different 

companies, or that the same pattern of 

circumvention occurred in previous 

instances involving the same product 

for a different country. This type of 

evidence could serve as the evidence 

needed to consider retroactive 

suspension appropriate under 

paragraphs (l)(2)(iii) and (l)(3)(iii), 

because, as noted above, such evidence 

would go beyond the evidence required 

to establish circumvention of the order 

under the relevant criteria. 

Allowing for retroactive suspension in 

such instances would encourage parties 

to maintain a reasonable awareness of 

whether the product they are producing, 

exporting, or importing is subject to an 

AD/CVD order, and also to scrutinize 

the parties with whom they do business 

(as stated above). As a general matter, 

importers are expected to perform their 

due diligence and exercise reasonable 

care in conducting their business. 

Certain importers are also required to 

provide or maintain relevant 

information for their product; and, 

depending on the type of product, more 

detailed information may be mandated 

based on requirements established by 

CBP, Commerce, or other Federal 

agencies.157 In light of these existing 

obligations and requirements, a 

reasonable importer may be expected to 

know, at a minimum, the identity of 

52348 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

158We note that the AD/CVD statute on the 

whole, as well as the circumvention provisions in 

particular, do not contain intent elements. See, e.g., 

Nippon Steel Corp. v. United States, 337 F.3d 1373, 

1382 (Fed. Cir. 2003) (explaining that, in the 

context of an adverse facts available determination 

under section 776(b) of the Act, [w]hile intentional 

conduct, such as deliberate concealment or 

inaccurate reporting, surely evinces a failure to 

cooperate, the statute does not contain an intent 

element.’’). However, evidence demonstrating 

intentional conduct may support retroactive 

suspension because such evidence could indicate 

that there was no lack of notice about the order or 

the fact that the particular product might be 

circumventing the order before the date of 

initiation, thereby undermining arguments 

regarding fairness, notice, and due process in a 

given case. 

159See GPX International Tire Corporation v. 

United States, 893 F. Supp. 2d 1296, 1313 (CIT 

2013) (‘‘[T]he court notes that customs duties are to 

an extent unique from other government 

assessments in that there is no right to import, and 

where unfair trade remedies apply, those with 

goods that may be imported rarely can predict with 

accuracy what the duty will be.’’) (citing Norwegian 

Nitrogen Prods. Co. v. United States, 288 U.S. 294, 

318 (1933) (recognizing that as with tax rates ‘[n]o 

one has a legal right to the maintenance of an 

existing rate or duty.’)). 

certain parties in the transaction chain, 

understand the imported product, 

including where it was made, how it 

was made, and the components of the 

product (and, in some instances, the 

source of those components). 

Furthermore, an importer of a product 

under an HTSUS category that is 

associated with an AD/CVD order 

would be faced with a particular 

responsibility to ensure whether the 

product is subject to an AD/CVD order. 

And, as described above, an importer 

would generally be charged with 

reviewing prior Federal Register notices 

relevant to its product and to the 

producers and exporters of its products. 

Moreover, in determining whether to 

apply retroactive suspension, certain 

evidence, apart from the evidence 

required to establish circumvention of 

the order under the relevant criteria, 

may be considered in light of 

Commerce’s objective to deter parties 

from engaging in the circumvention 

practices in the first instance.158 Just as 

there is no right to import,159 there is no 

right to circumvent the order with 

impunity until or unless a party gets 

caught in the circumvention scheme. In 

practice, in individual circumvention 

inquiries, Commerce will have to 

balance its various objectives in 

ensuring the effectiveness of all AD/ 

CVD orders, along with case-specific 

considerations. For example, Commerce 

must consider its objective to deter 

parties from engaging in the 

circumvention practices in the first 

instance in light of the facts surrounding 

an importer’s classification of an entry 

as not subject to AD/CVDs. Exactly how 

to strike this balance should emerge 

over time, through Commerce’s practice 

and consideration of case-specific 

issues. 

Lastly, to the extent parties argue that 

it is unfair to apply AD/CVDs 

retroactively to merchandise which may 

not fall within the literal terms of the 

order without adequate notice, this final 

rule provides additional notice to 

parties that AD/CVDs may be applied 

retroactively because of a subsequent 

affirmative circumvention 

determination, depending on the 

circumstances described above. 

In response to arguments regarding 

notice of circumvention inquiries, we 

note that, as provided under 

§ 351.226(b) or (d), Commerce publishes 

notice of initiation of a circumvention 

inquiry in the Federal Register. In 

addition, Commerce publishes notice of 

its preliminary and final circumvention 

determinations as well, as provided 

under § 351.226(g)(1) and (2). 

In light of the above, Commerce may 

consider whether retroactive suspension 

should be applied to entries prior to the 

date of initiation, based upon available 

information on the record, at the time of 

the first affirmative (preliminary or 

final) circumvention determination. In 

exercising its discretion under this 

provision, Commerce will consider 

whether there is information on the 

record supporting retroactive 

suspension, which goes beyond the 

evidence required to establish 

circumvention of the order under the 

relevant criteria. 

(b) Suspension of Liquidation and Cash 

Deposits at Initiation 

Several commenters generally agree 

with Commerce’s proposal under 

§ 351.226(l)(1) to instruct CBP upon 

initiation of a circumvention inquiry to 

continue to suspend liquidation of 

products that are already subject to 

suspension. Some commenters oppose 

Commerce’s proposal under 

§ 351.226(l)(1) to require cash deposits 

at the time of initiation of a 

circumvention inquiry, arguing that it is 

contrary to statute, unreasonable, and 

unfair. These commenters argue that, 

under current practice, cash deposits are 

not required until Commerce makes a 

preliminary determination of 

circumvention. 

As with proposed § 351.225(l)(1), in 

the context of circumvention, several 

commenters argue Commerce should 

instruct CBP to begin suspending 

liquidation of entries not already 

suspended by CBP at an earlier stage in 

a circumvention inquiry. Specifically, 

these commenters request that 

Commerce instruct CBP upon initiation 

of a circumvention inquiry to suspend 

liquidation of entries which are not 

already subject to suspension of 

liquidation, and to require cash 

deposits. Likewise, we received similar 

comments and rebuttal comments to 

those described above regarding 

§ 351.225(l)(1), both supporting and 

opposing this proposal, which we 

incorporate herein. 

In the context of circumvention, 

several commenters further argue that 

unless CBP suspends liquidation under 

its own authority, in most cases 

products subject to a circumvention 

inquiry will not have liquidation 

suspended when Commerce initiates a 

circumvention inquiry, and thus, certain 

circumventing products will liquidate 

without duty liability. These 

commenters argue that waiting until a 

preliminary determination of 

circumvention to begin suspension of 

liquidation undermines the relief to the 

domestic industries, and that 

suspending liquidation and requiring 

cash deposits upon initiation of a 

circumvention inquiry is consistent 

with Congress’s intent to aggressively 

implement the circumvention statute. 

These commenters argue that 

Commerce’s concerns in the 1997 Final 

Rule do not apply in circumvention 

because the proposed regulations clearly 

outline the factors necessary to allege a 

prima facie case of circumvention. 

These commenters further argue that 

circumvention typically requires an 

affirmative act by foreign producers, so 

it is unlikely foreign producers will be 

unaware that their actions potentially 

circumvent an order. Additionally, 

these commenters argue there is no 

economic harm when entries are 

suspended at initiation and cash 

deposits are set to zero, but that doing 

so preserves potentially circumventing 

entries for duty assessment. 

As noted above, in rebuttal, certain 

commenters oppose the proposal that 

Commerce direct CBP, upon initiation 

of a circumvention inquiry, to suspend 

liquidation of unliquidated entries not 

previously suspended and to require 

cash deposits. In addition to rebuttal 

comments described under 

§ 351.225(l)(1), one commenter points 

out that petitioning parties have 

inconsistently argued that Commerce 

should lower the threshold for initiating 

a circumvention inquiry while also 

arguing that these same criteria establish 

a prima facie case of circumvention and 

support their proposal that suspension 

of liquidation for entries not already 

suspended should begin upon initiation 

of a circumvention inquiry. 

Response: 

We have left unchanged 

§ 351.226(l)(1), which states that, upon 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52349 

initiation of a circumvention inquiry, 

Commerce will direct CBP to continue 

the suspension of liquidation (if any) of 

previously suspended entries and to 

apply the applicable cash deposit rate. 

In addition, we have considered the 

proposal by some commenters that 

Commerce should instruct CBP upon 

initiation of a circumvention inquiry to 

begin the suspension of liquidation of 

unliquidated entries not previously 

suspended and to require cash deposits 

on such entries (either at zero or at the 

rate in effect at the time of entry). We 

have also considered the arguments in 

opposition to this proposal. As noted 

above, the statute does not provide 

direction to Commerce on the 

suspension of liquidation of entries 

subject to a circumvention inquiry. 

Therefore, after consideration of the 

parties’ arguments and based on current 

practical and administrability concerns, 

we have decided to continue to order 

suspension of liquidation and collection 

of cash deposits for such entries only 

after Commerce’s first (preliminary or 

final) affirmative circumvention 

determination. As a result, and for many 

of the same reasons described in detail 

above under the discussion of 

§ 351.225(l), we have not accepted the 

proposal. 

In particular, during the 45-day 

period in which Commerce has to 

decide whether to initiate an inquiry 

based on a circumvention request, 

Commerce must consider whether the 

request alleges the elements necessary 

for a circumvention determination 

under section 781 of the Act and is 

accompanied by information reasonably 

available to the interested party 

supporting these allegations. During this 

time, Commerce may receive comments 

from other interested parties, and may 

issue questionnaires to the requestor to 

seek clarification or additional 

information. Although Commerce may 

seek clarification of the description of 

the product at issue, it would likely be 

difficult for Commerce to fully analyze 

the description of the product at issue, 

such that it would be appropriate to 

direct CBP to begin suspension of 

liquidation for entries not previously 

suspended. We recognize that once 

initiated, paragraph (l)(1) provides that 

Commerce will direct CBP to continue 

the suspension of liquidation of 

previously suspended entries and to 

apply the applicable cash deposit rate. 

However, for the reasons discussed 

above under § 351.225(l), we find it 

acceptable for Commerce to incorporate 

the description of the product in the 

circumvention request ‘‘as is’’ in such 

instructions to CBP, even if Commerce 

has not had a great deal of time to fully 

analyze the description, because 

Commerce is seeking to maintain the 

status quo with respect to this group of 

previously suspended entries. 

On the other hand, we find that 

ordering suspension for the first time on 

merchandise which was not previously 

suspended, based only on the 

description of the product at issue in the 

circumvention request, raises practical 

and administrability concerns. 

Specifically, before initiation, 

Commerce may not have adequate time 

to analyze the description of the product 

at issue to ensure that when such a 

description is provided in CBP 

instructions, CBP is able to administer 

and enforce those instructions without 

difficulty. Notably, there may be 

instances in which Commerce finds that 

the record and product descriptions are 

sufficient and clear enough to warrant 

combining initiation with a concurrent 

affirmative preliminary circumvention 

determination. However, in the cases in 

which Commerce just initiates a scope 

inquiry, Commerce will not have 

reached any sort of determination on the 

merits that the product at issue is 

circumventing the order. 

Further, we are also concerned with 

the significant administrative burden 

that would result if we were to instruct 

CBP to begin suspension of liquidation 

and collection of cash deposits of all 

entries at initiation, regardless if they 

are determined later to be 

circumventing an AD/CVD order. For 

example, under one possible scenario, 

such suspension could result in a multistep process of Commerce: (1) Directing 

CBP to convert all non-AD/CVD type 

entries meeting the description of the 

product at issue to AD/CVD type entries 

and directing CBP to suspend 

liquidation without any cash deposits at 

the time of initiation; (2) directing CBP 

subsequently, upon the event of an 

affirmative preliminary determination, 

to collect cash deposits at the rate to be 

determined applicable retroactively; and 

(3) directing CBP, in the event of a 

negative final determination, to lift 

suspension and liquidate entries 

without regard to AD/CVDs. This is just 

one sequence of circumvention inquiry 

proceedings and determinations, among 

several, that reflects the additional 

administrative burden that suspension 

of liquidation of all entries of the 

product described in a circumvention 

request at initiation would require of 

Commerce and CBP. 

We are cognizant of the concerns 

expressed by some commenters that 

certain entries that entered prior to an 

affirmative preliminary determination 

may liquidate without being assessed 

AD/CVDs, and that parties later found to 

be circumventing the order may benefit 

from this arrangement. We have also 

considered the suggestion of some 

commenters to begin the suspension of 

liquidation of not yet liquidated entries 

at the time of initiation, with a cash 

deposit rate of zero, which they argue 

means there would be no economic 

harm to importers. However, Commerce 

believes that this balance between 

enforcement concerns and practical and 

administrability considerations 

described above weighs in favor of 

maintaining its current practice of not 

imposing either suspension of 

liquidation and/or cash deposit 

requirements until making either an 

affirmative preliminary or final 

affirmative determination, whichever 

occurs first. 

That said, although we are not 

adopting the suggestions that we 

suspend liquidation of all entries 

described in circumvention requests at 

initiation, we note that we have made 

numerous other changes throughout 

these regulations, such as the remedy 

provisions found in § 351.226(m) and 

the certification process addressed in 

§ 351.228, in addition to the changes 

discussed above for paragraph (l), that 

we believe significantly strengthen the 

administration and enforcement of AD/ 

CVD laws, and, overall, these changes 

minimize the opportunities for 

gamesmanship and evasion of AD/CVD 

orders while also mitigating the harm to 

importers that may be acting in good 

faith. 

With respect to the comment that 

Commerce should not require cash 

deposits upon initiation of a 

circumvention inquiry, it is unclear 

whether these commenters believe that 

under § 351.226(l)(1), Commerce would 

be directing CBP to begin suspension of 

liquidation and require cash deposits of 

all unliquidated entries (including 

entries not previously suspended by 

CBP), or whether the commenter 

disagrees that Commerce should inform 

CBP that it has initiated a 

circumvention inquiry and direct CBP 

to continue any suspension of 

liquidation and collection of cash 

deposits already in place. As noted in 

response to a similar comment regarding 

§ 351.225(l), CBP has independent 

authority to suspend liquidation. Thus, 

at the time Commerce initiates a 

circumvention inquiry, although 

perhaps less common in the 

circumvention context, CBP may have 

already suspended liquidation for 

entries of products subject to the 

circumvention inquiry. We clarify that, 

under § 351.226(l)(1), when Commerce 

initiates a circumvention inquiry, it 

52350 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

160See Guangdong Wireking, 745 F.3d at 1203; 

and Sunpreme, 946 F.3d at 1321–22. 161 Id. 

does not intend to direct CBP to 

suspend liquidation and collect cash 

deposits in the first instance. Rather, 

Commerce will inform CBP that it has 

initiated a circumvention inquiry and 

direct CBP to continue the suspension 

of liquidation of any unliquidated 

entries of products subject to the 

circumvention inquiry that have already 

been suspended by CBP. This is 

consistent with current § 351.225(l)(1), 

the existing regulation governing 

suspension of liquidation in 

circumvention inquiries, in the sense 

that both the current and revised 

regulation require suspension of 

liquidation to continue at the applicable 

cash deposit rate for previously 

suspended entries after initiation of a 

circumvention inquiry. Although it has 

not been Commerce’s practice under the 

existing regulations to direct CBP upon 

initiation of a circumvention inquiry to 

continue any suspension of liquidation 

already subject to suspension and 

collect cash deposits, current 

§ 351.225(l)(1) provides that any such 

suspension by CBP will continue when 

Commerce initiates a circumvention 

inquiry. Consistent with the noted 

policy objectives of the AD/CVD law 

(including the protection of revenue),160

Commerce has revised § 351.226(l)(1) to 

require the issuance of instructions to 

ensure that entries previously 

suspended by CBP continue to be 

suspended during the pendency of the 

circumvention inquiry. 

(c) Action Pursuant to a Negative 

Preliminary Circumvention 

Determination 

Certain commenters oppose the 

proposal not to include a requirement 

for Commerce to notify CBP of a 

negative preliminary circumvention 

determination that the product at issue 

is not circumventing the relevant order 

along with instructions to terminate the 

suspension of liquidation for any entries 

previously suspended by CBP and to 

refund cash deposits of estimated 

duties. These commenters argue that the 

proposal is contrary to the statute and 

would be manifestly unfair to importers 

because entries for which liquidation 

has already been suspended by CBP 

may have been in error or based on a 

misunderstanding of the scope. 

According to these commenters, to 

continue to collect cash deposits 

following a negative preliminary 

circumvention determination is 

unlawful, especially where the product 

is entering from a country different from 

the country to which an order applies 

and for which no injury determination 

has been made. These commenters also 

argue that, in the context of 

investigations, provisional measures are 

not imposed following a negative 

preliminary determination. 

In rebuttal, several commenters 

responded with arguments supporting 

the proposal not to include a 

requirement for Commerce to notify 

CBP of a negative preliminary 

circumvention determination. Many of 

these commenters argue that duty 

collection is a guiding principle for this 

rulemaking and notifying CBP at the 

time of a final circumvention 

determination ensures that any duties 

collected are preserved in the event 

Commerce reverses its position after a 

negative preliminary circumvention 

determination. These same commenters 

believe that this particular aspect of the 

suspension of liquidation rules 

applicable to circumvention inquiries 

will encourage importers to seek scope 

rulings earlier in the proceeding or risk 

having entries suspended by CBP. 

Another group of commenters agreed 

that the proposal ensures the 

appropriate application of AD/CVD 

orders in the event of an affirmative 

final circumvention determination. 

These commenters believe the proposal 

is consistent with the overall objective 

of addressing serious enforcement 

concerns and the very real risk of duty 

evasion. 

Response: 

We have left unchanged proposed 

§ 351.226(l)(2) with respect to this issue. 

Under the existing regulations, if 

Commerce issues a preliminary 

circumvention determination that the 

product at issue is not circumventing 

the order, Commerce is required to 

notify CBP and direct CBP to terminate 

the suspension of liquidation for any 

entries previously suspended by CBP 

with refunds of any cash deposits paid 

as estimated duties. In the Proposed 

Rule, Commerce proposed not to 

include this requirement so that 

Commerce would no longer issue 

instructions to CBP at the time of a 

negative preliminary circumvention 

determination. Instead, by not including 

this requirement, any entries previously 

suspended by CBP pursuant to its own 

authority would remain suspended 

pending completion of the 

circumvention inquiry and a final 

determination on the matter. We believe 

that adoption of the proposal is 

necessary to preserve the status quo for 

the duration of the circumvention 

inquiry and ensure the appropriate 

application of AD/CVDs in the event of 

an affirmative final circumvention 

determination. Consistent with the 

aforementioned underlying policy 

objectives of the Act, including the 

protection of the revenue,161 Commerce 

has decided that it is not appropriate to 

require notifying CBP of negative 

preliminary circumvention 

determinations with instructions to 

terminate the suspension of liquidation 

for any entries previously suspended by 

CBP and to refund any cash deposits 

paid as estimated duties. 

With respect to the argument that 

provisional measures are not imposed 

following a negative preliminary 

determination in an investigation, 

Commerce will not direct CBP to 

suspend liquidation of entries not 

already suspended by CBP following a 

negative preliminary circumvention 

determination. However, any 

suspension of liquidation ordered by 

CBP pursuant to its own authority will 

be left undisturbed to preserve the 

status quo until the conclusion of the 

circumvention inquiry. We disagree 

with the commenters that argue the 

proposal is contrary to the statute. As 

discussed above, Congress enacted 

section 781 of the Act to combat certain 

forms of circumvention of AD/CVD 

orders; however, neither section 781 of 

the Act nor any other provision of the 

Act contains specific guidance regarding 

suspension of liquidation and cash 

deposit requirements in the context of 

circumvention inquiries. The rules 

adopted herein are a reasonable exercise 

of Commerce’s discretion in light of the 

statutory aims to prevent circumvention 

and evasion. Moreover, Commerce’s 

final circumvention determination and 

any subsequent instructions to CBP will 

clarify the appropriate status of such 

entries. 

Consistent with Congress’s intent 

when enacting the circumvention 

statute, the proposal not to require 

Commerce to notify CBP of a negative 

preliminary circumvention 

determination will help prevent 

companies from eluding the payment of 

duties if Commerce ultimately 

concludes in a final determination that 

the merchandise is circumventing an 

order. 

(d) Clarifying the Product at Issue 

One commenter opposes the proposal 

to suspend liquidation of unliquidated 

entries of the ‘‘product at issue’’ without 

any limitation as to when the entries 

occurred. The commenter states that the 

proposed regulations are vague because 

the language does not limit any new 

suspension of liquidation instructions to 

only apply to unliquidated entries made 

on or after the underlying case order’s 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52351 

earliest suspension of liquidation. The 

commenter asserts that language must 

be added to §§ 351.226(l)(2) and (3) that 

restricts the imposition of suspension of 

liquidation and cash deposit 

requirements to the entries of the 

applicable manufacturer or exporter. 

The commenter claims that the United 

States is not entitled to AD/CVDs on 

entries that are not covered by or subject 

to the order. 

Response: 

We have left paragraphs (l)(2) and (3) 

unchanged from how they were 

proposed with respect to this issue. 

First, we agree with the commenter that 

Commerce does have the authority to 

direct CBP to impose AD/CVDs on 

entries that are not subject to an order 

by virtue of pre-dating the first date of 

suspension associated with that order. 

Accordingly, such retroactive 

suspension of liquidation and collection 

of cash deposits would not be imposed 

on entries that predate the first date of 

suspension in the relevant AD and/or 

CVD proceeding. Second, the reference 

to the ‘‘product at issue’’ in paragraphs 

(l)(2) and (3) refers to the product that 

is the subject of the inquiry, and that for 

purposes of (l), the appropriate scope of 

products impacted, either on a countrywide or company-specific basis, are 

discussed under revised § 351.226(m), 

discussed below. Third, we do not 

disagree that AD/CVDs or cash deposits 

may not be applied on entries not 

covered by or subject to the order; 

however, the commenter’s assertion that 

Commerce must limit the imposition of 

suspension of liquidation and cash 

deposit requirements to the entries of 

the applicable manufacturer or exporter 

is incorrect. If Commerce determines 

that a product is subject to the order 

following an affirmative circumvention 

determination, then it has the authority 

to impose antidumping and/or 

countervailing duties to entries of that 

product. Additionally, as Commerce 

explains below in response to comments 

made on § 351.226(m), Commerce has 

the ability to apply a remedy which is 

producer-specific, exporter-specific, 

importer-specific, or a combination of 

any of those remedies Commerce also 

has the ability to apply its 

circumvention determination on a 

country-wide basis to all products from 

the same country as the particular 

product at issue and with the same 

relevant physical characteristics, and 

even to apply its circumvention 

determination to physically similar 

products as well (i.e., not physically 

identical in all relevant characteristics). 

Therefore, Commerce need not limit its 

ability to suspend liquidation for 

imports of merchandise found to be 

circumventing an AD/CVD order under 

§ 351.226(l)(2) and (3). 

(e) Notification to Sureties 

One commenter requests that sureties 

be notified, either by Commerce or CBP, 

at the time CBP is instructed to begin 

the suspension or continue the 

suspension of liquidation of entries for 

AD/CVD purposes in the context of a 

circumvention inquiry. This commenter 

argues that the duties demanded from 

sureties may be in amounts which 

exceed the bond and without any prior 

notice to the surety to allow for 

participation in administrative 

proceedings and communication with 

the bond principal, i.e., the importer, to 

address or satisfy AD/CVD 

requirements. This commenter believes 

providing notice of any suspension of 

liquidation ordered in the context of 

circumvention inquiries will help 

sureties manage risk. 

Response: 

For the reasons discussed above 

regarding § 351.225(l), comment 12(f), in 

the context of scope, we have not 

modified paragraph (l) in § 351.226 to 

include a requirement to notify the 

involved surety or sureties that 

Commerce has instructed CBP to 

suspend or to continue to suspend 

liquidation of entries for AD/CVD 

purposes. However, we note that, under 

§ 351.226(b) and (d)(3), sureties will be 

notified of Commerce’s self-initiation of 

a circumvention inquiry or initiation of 

a circumvention inquiry based on a 

request through publication in the 

Federal Register. 

13. Section 351.226(m)—Applicability 

of Circumvention Determinations; 

Companion Orders 

Section 351.226(m) is the provision 

through which Commerce applies 

circumvention determinations. 

Commerce received several comments 

on this proposal, with some commenters 

expressing satisfaction that Commerce 

indicated under the proposed 

§ 351.226(m)(1) that it would consider, 

based on the available record evidence, 

whether the circumvention 

determination should be applied on a 

country-wide basis, while others 

expressed concern with that language. 

For those commenters advocating a 

country-wide application, they 

emphasize that a such an analysis 

avoids repeated requests for 

circumvention inquiries on the same 

product against exporters from the same 

country, thereby conserving Commerce 

resources and ensuring the effectiveness 

of trade remedies. They further suggest 

that Commerce take the additional step 

in the final regulations of making a 

country-wide application the default 

remedy for most circumvention 

determinations, with an exception only 

in rare cases for the application of a 

company-specific remedy. 

Other commenters express concerns 

over the use of the country-wide 

remedy, asking Commerce to clarify the 

bases or criteria it would use to 

determine when the use of a countrywide remedy versus when a companyspecific remedy is appropriate. Some 

commenters even oppose it outright, 

arguing that the country-wide remedy is 

too harsh when the majority of 

producers in a foreign country have not 

sought to circumvent the United States’ 

AD and CVD orders. Those commenters 

argue that a company-specific remedy is 

more balanced, targeting only those 

participating in bad behavior. 

Still other commenters suggest that 

Commerce limit a country-wide 

circumvention remedy to cases of 

repeated action and not apply the 

country-wide remedy to circumvention 

determinations in the first instance. 

They emphasize that the facts 

surrounding most circumvention 

allegations and findings are often 

exporter-specific, and only in rare cases 

do they involve repeated activity. 

In addition, some commenters suggest 

that if Commerce does make a countrywide remedy the default remedy, that it 

also create a mechanism by which 

exporters may request exemption from 

that remedy. In rebuttal, other 

commenters agree with this suggestion 

and emphasize that because many 

exporters of the same merchandise have 

not engaged in any circumventing 

activities, the creation of an exemption 

mechanism would be a practical 

alternative when Commerce cannot 

individually analyze all companies 

willing to participate in circumvention 

proceedings or make a circumvention 

determination on a company-specific 

basis. 

Several other commenters argue that 

Commerce should, in fact, expand the 

remedies available to it in § 351.226(m) 

to include not only country-wide 

remedies, company-specific remedies, 

and the use of certifications, as 

described in greater detail in § 351.228 

of these regulations, but also a remedy 

which takes into consideration the 

possibility of future circumvention and 

is applied to imports of products similar 

to, but not the same as, the particular 

product subject to the circumvention 

inquiry. Specifically, those commenters 

cite to the remedy Commerce applied in 

52352 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

162Carbon and Certain Alloy Steel Wire Rod from 

Mexico: Final Affirmative Determination of 

Circumvention of the Antidumping Duty Order, 84 

FR 9089 (Mar. 13, 2019), and accompanying Issues 

and Decision Memorandum (Wire Rod from 

Mexico); see also Carbon and Certain Alloy Steel 

Wire Rod from Mexico: Preliminary Affirmative 

Determination of Circumvention of the 

Antidumping Duty Order, 83 FR 53030 (Oct. 19, 

2018), and accompanying Preliminary Decision 

Memorandum (Wire Rod from Mexico Preliminary 

Memorandum). 

163 In other words, two products with the same 

height or width might be considered the ‘‘same,’’ 

despite different colors or weights, if those 

additional physical characteristics are not relevant 

to Commerce’s circumvention determination. 

164See Carbon and Certain Alloy Steel Wire Rod 

from Mexico: Affirmative Final Determination of 

Circumvention of the Antidumping Duty Order, 77 

FR 59892 (Oct. 1, 2012), and accompanying Issues 

and Decision Memorandum. 

Wire Rod from Mexico.162 In that case, 

Commerce determined that to prevent 

the repeated circumvention by a 

company of the AD order, it found that 

all wire rod under 4.75 mm in diameter, 

including wire rod with a diameter less 

than 4.4. mm, produced and/or exported 

by that company, to be merchandise 

altered in minor respects and within the 

class or kind of merchandise subject to 

the order. The commenters argue that 

because discovering circumvention 

normally requires significant resources 

and time, Commerce should not have to 

wait for a company to circumvent an 

order in the same general manner again, 

as that could result in the repetitive 

undermining of U.S. trade remedy laws. 

They argue that Commerce should be 

able to foreclose predictable, potential 

circumvention schemes by applying a 

country-wide remedy that applies not 

only to identical products, but similar 

products, as well. Furthermore, they 

rebut the claims that Commerce should 

have any ‘‘default’’ remedy under 

§ 351.225(m), because the 

appropriateness of a remedy should be 

one that is determined on a case-by-case 

basis. 

Another commenter rebuts the 

arguments from some commenters that 

country-wide remedies should be 

applied only to parties who have 

repeatedly been found to circumvent an 

order. It notes that producer-specific 

circumvention findings are often 

ineffective because parties merely 

rearrange and shift operations to 

continue circumventing after Commerce 

has issued a circumvention finding. It 

highlights the importance of countrywide remedies to ensure relief from 

circumvention, when record evidence 

supports such an application. 

Finally, one commenter expresses its 

support for Commerce’s ability in 

§ 351.226(m)(2) to request information 

concerning the product that is the 

subject of the circumvention inquiry for 

purposes of an administrative review 

under § 351.213. 

Response: 

Upon consideration of the various 

arguments on this provision, we have 

determined to revise § 351.226(m)(1). 

We agree with the commenters that 

Commerce has multiple potential 

remedies available to it upon an 

affirmative finding of circumvention, 

each of those listed in the final rule 

which may be combined with certain 

others listed if the facts warrant such an 

application. There may be other options 

for remedies, as well, so it is important 

to emphasize that this list is not 

exhaustive. Further, although the rule 

applies to products ‘‘from the same 

country,’’ this language is not meant to 

delineate only the country of export. It 

could mean the country of export, but 

it could also mean the country of 

production or country of further 

processing, depending on the product at 

issue and the facts in a given case. It is 

not uncommon for products produced 

or further processed in one country to 

be transshipped and exported to the 

United States through another country. 

In that scenario, regardless of the 

reported country of export to the United 

States, if a product at issue was found 

to be circumventing an AD and/or CVD 

order, that merchandise could be 

considered ‘‘from’’ the country of 

production or further processing, and 

remedies under this provision could 

apply to those imported products. 

Commerce has the ability to apply a 

remedy which is producer-specific, 

exporter-specific, importer-specific, or a 

combination of any of those remedies, 

such as applying a circumvention 

determination to merchandise produced 

and exported by a particular company, 

or merchandise produced by one 

company, exported by a second, and 

imported by a third. We have, therefore, 

included all of these options in the 

regulation. 

Furthermore, Commerce has the 

ability to apply its circumvention 

determination on a country-wide basis 

to all products from the same country as 

the product at issue and with the same 

relevant physical characteristics. When 

Commerce uses the term ‘‘relevant’’ 

here, it means that if Commerce’s 

circumvention determination focused 

on particular physical characteristics, 

such as the height and width of the 

particular product, then those are the 

physical characteristics which are the 

‘‘same’’ and ‘‘relevant’’ for purposes of 

a country-wide application, regardless 

of producer, exporter, or importer.163

We agree with commenters who argue 

that Commerce has an additional 

practice, as reflected in Wire Rod from 

Mexico, where it may determine that 

based on record evidence and to prevent 

future evasion concerns, the appropriate 

remedy should include products which 

are similar to the circumventing 

merchandise. We have incorporated that 

option into the regulation as 

§ 351.226(m)(1)(iii), and also provided 

that Commerce may apply that option 

on a country-wide basis. 

Commerce frequently uses 

certifications in conjunction with other 

remedies in response to affirmative 

circumvention determinations. Thus, 

we have added reference to that remedy 

as well in § 351.226(m)(1). Further, we 

have used the conjunction ‘‘and’’ 

between these remedies, rather than 

‘‘or,’’ because Commerce also has the 

authority to apply a remedy which is a 

combination of two or more of these 

remedies, such as, for example, the use 

of certifications under § 351.228 and the 

country-wide remedy under 

§ 351.226(m)(1)(i). 

Additionally, Commerce has 

determined not to make any of these 

options a ‘‘default’’ option. We agree 

with the commenters who argue that 

Commerce should maintain flexibility 

in applying remedies to address its 

circumvention determinations on a 

case-by-case basis. For example, there 

may be cases in which Commerce finds 

that the circumvention of an order by a 

particular product was unique to a 

particular exporter, producer, or 

importer, and that it is unlikely that 

other producers or exporters would or 

could engage in the same or similar 

forms of circumvention in the future. In 

that situation, Commerce might 

determine that the most appropriate 

remedy to apply in that case is a 

company-specific application. On the 

other hand, Commerce might conclude 

that the observed circumvention could 

be replicated by other producers, 

exporters, or importers of the same 

product, and, therefore, determine that 

the application of a country-wide 

remedy is appropriate. 

The remedy which Commerce may 

apply with potentially the greatest 

impact, however, is that of the remedy 

used in Wire Rod from Mexico. In that 

case, Commerce had initially 

determined in an earlier circumvention 

determination that a producer and 

exporter had circumvented the Wire 

Rod from Mexico order through its 

production and export of wire rod with 

actual diameters between 4.75 mm and 

5.00 mm.164 Commerce, therefore, 

expanded the scope of the order through 

its circumvention determination to 

cover those products. Subsequently, the 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52353 

165See Wire Rod from Mexico Preliminary 

Memorandum (emphasis in original). 

166 Id. (citing S. Rep. No. 100–71, at 101 and H.R. 

Rep. No. 100–576, at 600). Commerce also noted 

that in the SAA, Congress recognized that 

‘‘aggressive implementation of [the circumvention 

statute] by the Commerce Department can foreclose 

these practices.’’ See id. (citing the SAA at 892–95). 

167See id. (citing Tung Mung, 219 F. Supp. 2d at 

1343 (quoting Mitsubishi I, 700 F. Supp. at 555), 

aff’d in Mitsubishi II, 898 F.2d at 1583). 

168See id. (citing to Affirmative Final 

Determination of Circumvention of the 

Antidumping Duty Order on Certain Cut-to-Length 

Carbon Steel Plate from the People’s Republic of 

China, 76 FR 50996, 50997 (August 17, 2011), 

which was an affirmative circumvention that was 

applied to all producers in the subject country 

where circumvention occurred repeatedly by 

multiple parties producing and importing different 

specifications of cut-to-length plate that used 

boron). 

169 Id. (citing also to Appleton Papers, Inc. v. 

United States, 929 F. Supp. 2d 1329, 1337 (CIT 

2013) (‘‘Commerce has a certain amount of 

discretion to act in order to ‘prevent [] the 

intentional evasion or circumvention’ of the Act. To 

that end, Commerce may impose measures . . . 

where it believes they will be effective in 

preventing future circumvention of its orders.’’) 

(internal citations omitted)). 

same company produced and exported 

wire rod with a 4.4 mm diameter, which 

Commerce found was a minor alteration 

to circumvent, yet again, the Wire Rod 

from Mexico order. In determining the 

appropriate remedy, Commerce 

considered the fact that the producer/ 

exporter had now been determined 

twice to have circumvented the Wire 

Rod from Mexico order, engaging in 

efforts to evade the payment of AD 

duties. Further, there was evidence on 

the record that at least one other 

producer made wire rod with a diameter 

less than 4.4 mm. Commerce concluded 

that the record reflected that a remedy 

was necessary to ensure that the 

exporter/producer at issue in that case 

would not engage in further 

circumvention of the Wire Rod from 

Mexico order in the future. Thus, 

Commerce concluded that the ‘‘history 

of the proceeding’’ indicated that 

‘‘limiting’’ the ‘‘affirmative 

circumvention finding in this inquiry to 

wire rod with a diameter greater than or 

equal to 4.4 mm and less than 4.75 mm 

could allow for further circumvention of 

the Order’’ if the exporter/producer 

were permitted ‘‘to again make another 

marginal change to the diameter of its 

wire rod.’’ 165

In reaching that decision, Commerce 

explained the legal basis for its 

determination that it should apply this 

particular remedy under these specific 

facts. Citing to the legislative history 

accompanying the Omnibus and Trade 

Competitiveness Act in 1988, Commerce 

explained that Congress was concerned 

about preventing ‘‘circumvention and 

diversion’’ of United States trade laws, 

and the undermining of the 

effectiveness of trade remedies through 

‘‘’loopholes,’ i.e., foreign companies 

evading orders by making slight changes 

in their method of production, because 

such scenarios ‘‘seriously undermine 

the effectiveness of the remedies 

provided by the antidumping and 

countervailing duty proceedings. 

. . .’’ 166 Accordingly, Commerce 

explained that as the agency ‘‘vested 

with authority to administer the 

antidumping laws in accordance with 

the legislative intent’’ and, it ‘‘has a 

certain amount of discretion [to act] ... 

with the purpose in mind of preventing 

the intentional evasion or 

circumvention of the antidumping duty 

law.’’ 167

Furthermore, Commerce explained 

that in ‘‘enacting the circumvention 

provisions, Congress did not intend to 

allow foreign companies to avoid 

antidumping duties by advantageously 

modifying their manufacturing process 

to produce merchandise altered in 

minor respects in form or appearance 

from that which is covered by the order. 

In similar circumstances, Commerce has 

found it appropriate to implement 

measures necessary to prevent future 

circumvention.’’ 168 Commerce, 

therefore, concluded that the 

‘‘circumstances of this proceeding 

require Commerce to exercise its 

discretionary authority under the 

antidumping duty law in a manner that 

is tailored to prevent future evasion or 

circumvention of the Order by’’ the 

producer/exporter at issue.169

In drafting the remedies listed in 

paragraph (m), we have determined that 

there may be situations in which 

Commerce applies its circumvention 

determinations to similar products not 

only on an exporter/producer basis, as 

it did in Wire Rod from Mexico, but also 

on country-wide basis. For example, if 

Commerce determines that more than 

one producer or exporter has 

consistently altered merchandise related 

to a single case, such a conclusion might 

lead Commerce to apply a ‘‘similar 

product’’ remedy to the country as a 

whole, regardless of producers, 

exporters, or importers. Likewise, 

Commerce might decide to apply a 

certification requirement under 

§ 351.228 alongside a country-wide 

determination that covers the same 

products or a country-wide 

determination that covers similar 

products. As we have indicated, the 

most important factor is that Commerce 

has the flexibility to apply a remedy in 

accordance with a circumvention 

determination on a case-by-case basis 

which it finds to be appropriate given 

the facts on the record and its policies 

and practices. 

In light of these changes to our 

regulations, we have not adopted the 

suggestion by multiple parties to create 

a new procedure by which to review 

additional exporters or producers to 

determine if parties that have not 

engaged in any circumventing activities 

should be exempt from country-wide 

determinations. Still, we recognize that, 

in some circumstances, Commerce uses 

the certification program, as described 

in § 351.228 of these regulations, to 

allow parties who have not engaged in 

the practices which Commerce 

determined were circumventing an 

order to certify that they did not 

participate in such conduct. 

Additionally, as discussed below under 

§ 351.228, parties can seek a changed 

circumstances review or raise issues 

regarding ongoing certification 

requirements in the context of an 

administrative review, as appropriate. 

Finally, we have changed the term 

‘‘merchandise at issue’’ to ‘‘product at 

issue’’ in paragraph (m)(2) to use the 

same terminology as that used in 

§ 351.226(m)(1) and other provisions of 

these regulations. 

14. Section 351.226(n)—Service of 

Circumvention Inquiry Request; Annual 

Inquiry Service List; Entry of 

Appearance 

Section 351.226(n) Provides the 

service procedures for the 

circumvention regulation. We received 

two comments on this provision. 

First, one commenter requests that 

Commerce provide sureties ‘‘interested 

party’’ status and allow them to receive 

notice under this provision. 

Second, another commenter points 

out that currently, Commerce 

automatically places foreign 

governments on the segment of a 

proceeding that commences under a 

CVD order, but under proposed 

§ 351.226(m), all circumvention 

determinations applicable to companion 

orders will be conducted on the record 

of the AD order. That commenter, 

therefore, requests that Commerce 

modify § 351.226(n) to automatically 

place foreign governments on the 

segment of the AD proceeding in which 

the circumvention inquiry is conducted 

for both companion orders. 

Response: 

In response to the surety issue, as 

discussed in response to this same 

commenter under § 351.225(l) and (n) 

and other provisions, we have not 

provided sureties with ‘‘interested 

party’’ status because, among other 

52354 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

170See Proposed Rule, 85 FR 49472 at 49489. 

171 Id. at 49489–91. 

172 Id. at 49489–90. 

173See section 517(b)(4)(A)(i) of the Act 

(providing that, upon referral from CBP, Commerce 

shall ‘‘. . . determine whether the merchandise is 

covered merchandise pursuant to the authority of 

[Commerce] under subtitle IV [of the Act.]’’). 

174As explained in the Proposed Rule, in 

determining whether a covered merchandise 

referral is sufficient, Commerce may consider, 

among other things, whether the referral has 

provided the name and contact information of the 

parties to CBP’s EAPA investigation, including the 

name and contact information of any known 

representative acting on behalf of such parties; an 

adequate description of the alleged covered 

merchandise; identification of the applicable AD 

and/or CVD orders; and any necessary information 

reasonably available to CBP regarding whether the 

merchandise at issue is covered merchandise. See 

Proposed Rule, 85 FR 49472 at 49490. 

175See Proposed Rule, 85 FR 49472 at 49489. 

reasons, section 771(9) of the Act lists 

the parties who are ‘‘interested parties’’ 

under the AD and CVD laws, and surety 

companies are not included on that list. 

On the other hand, as we explained 

above, we have modified § 351.225(n) to 

automatically include foreign 

governments on the annual inquiry 

service list for AD or CVD proceedings 

after the foreign governments’ first 

request to be on that list; meaning that 

if they are on that list they will receive 

copies of all circumvention inquiry 

requests. In light of the fact that foreign 

governments will get notification of all 

such requests, we disagree that they 

should also automatically be placed on 

the service list of particular segments of 

AD or CVD proceedings. Like 

petitioners and all other interested 

parties, if they decide to participate in 

the circumvention inquiry segment of 

the proceeding, foreign governments 

will have an opportunity to timely 

request placement on a segment-specific 

service list. 

In addition, in addressing comments 

on proposed § 351.226(n)(2), we realized 

that we had not included the selfinitiation of circumvention inquiries in 

the description of determinations which 

lead to the establishment of a segmentspecific service list in the Proposed 

Rule. Such an exclusion was an 

oversight. Accordingly, we have added 

language to that provision to that effect 

in these final regulations. 

15. Section 351.226(o)—Suspended 

Investigations; Suspension Agreements 

Commerce received no comments on 

this provision. We have made minor 

modifications to this paragraph, 

however, to bring it into conformity 

with the similar provisions of 

§§ 351.225(p) and 351.227(o). 

Covered Merchandise Referrals— 

§ 351.227 

Section 351.227 addresses procedures 

when Commerce receives a covered 

merchandise referral from CBP under 

section 517 of the Act. As explained in 

the Proposed Rule,170 Commerce and 

CBP each have their own independent 

authorities under the AD/CVD statutory 

framework to address the circumvention 

and evasion of AD/CVD orders. Section 

517 of the Act establishes a formal 

process for CBP to investigate potential 

duty evasion of AD/CVD orders. During 

an EAPA investigation, if CBP is unable 

to determine whether the merchandise 

at issue is ‘‘covered merchandise’’ 

within the meaning of section 517(a)(3) 

of the Act, pursuant to section 

517(b)(4)(A) of the Act, CBP shall refer 

the matter to Commerce to make a 

covered merchandise determination 

(covered merchandise referral). In the 

Proposed Rule, Commerce proposed 

adopting new § 351.227 to address 

procedures and standards specific to 

covered merchandise referrals that 

Commerce receives from CBP in 

connection with an EAPA 

investigation.171 To summarize, in 

proposing this new regulation, 

Commerce took into account 

considerations relating to flexibility in 

requesting the information that 

Commerce needs in making a covered 

merchandise determination, the 

timeliness of Commerce’s covered 

merchandise determination in response 

to a CBP referral, and the need to afford 

parties opportunities to submit evidence 

and argument for Commerce’s 

consideration and allow Commerce 

sufficient time to consider such 

evidence and argument for purposes of 

reaching a well-reasoned 

determination.172

The Proposed Rule also explained 

that there is a potential significant 

overlap between the inquiry that 

Commerce undertakes in response to a 

covered merchandise referral through a 

covered merchandise inquiry, a scope 

inquiry conducted under § 351.225, and 

a circumvention inquiry conducted 

under § 351.226. Congress has directed 

Commerce to make covered 

merchandise determinations pursuant to 

its existing authority under the Act,173

and, thus, Commerce has utilized its 

authority and procedures for issuing 

scope and circumvention 

determinations to determine whether a 

product is ‘‘covered merchandise.’’ 

Accordingly, many provisions in 

§ 351.227 were crafted to mirror the 

corresponding provisions in §§ 351.225 

and 351.226, which have been further 

revised in this final rule. 

We received numerous comments and 

rebuttal submissions on the proposed 

adoption of § 351.227, some in favor and 

some in opposition. Below, we briefly 

discuss each provision, address any 

comments received, and, where 

appropriate, explain any changes to the 

Proposed Rule in response to comments. 

In addition, we explain additional 

modifications to the Proposed Rule 

where we have determined that such 

amendments brought § 351.227 into 

greater conformity with scope and 

circumvention regulations §§ 351.225 

and 351.226, or otherwise provided 

greater clarity to these regulations. 

1. Section 351.227(a)—Introduction 

Paragraph (a) is an introductory 

provision to § 351.227, which briefly 

describes the framework of CBP’s EAPA 

investigations and covered merchandise 

referrals under section 517 of the Act 

and the procedures for Commerce’s 

covered merchandise inquiries and 

determinations. We received no 

comments on § 351.227(a) and no 

changes are being made to this 

provision in this final rule. 

2. Section 351.227(b)—Actions With 

Respect to Covered Merchandise 

Referral 

Under § 351.227(b) of the Proposed 

Rule, Commerce proposed taking one of 

the following three actions within 15 

days after receiving a covered 

merchandise referral that Commerce 

determines to be sufficient:174 (1) 

Initiate a covered merchandise inquiry; 

(2) self-initiate a circumvention inquiry 

in accordance with § 351.226(b); or (3) 

address the referral in an ongoing 

segment of a proceeding (e.g., a scope 

inquiry under § 351.225 or a 

circumvention inquiry under § 351.226). 

After consideration of comments on the 

Proposed Rule, Commerce is adopting 

certain changes to § 351.227(b) in this 

final rule. 

First, upon further consideration, we 

find it reasonable to increase the time 

period during which Commerce must 

decide what action to take upon receipt 

of a sufficient covered merchandise 

referral from 15 days to 20 days. In the 

Proposed Rule, we explained that, 

although the EAPA does not prescribe 

timing requirements for Commerce, we 

took timeliness into account in drafting 

the proposed deadlines and procedures 

in § 351.227.175 While timeliness 

continues to be a significant 

consideration in drafting this final rule, 

increasing the proposed 15-day deadline 

to 20 days will give Commerce the time 

it needs at this initial stage while also 

ensuring that Commerce takes swift 

action after receiving a sufficient 

covered merchandise referral. This 20- 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52355 

176This is because, for example, the information 

CBP provides with its referral may pertain only to 

a single company, may rely heavily on BPI, or may 

not provide the kind of detail Commerce might 

need to self-initiate a circumvention inquiry. 

day deadline remains shorter than the 

deadlines at similar stages in scope 

inquiries under § 351.225(d) (30 days 

with an inquiry deemed initiated on day 

31) and circumvention inquiries under 

§ 351.226(d) (30 days with the 

possibility of a 15-day extension). 

Second, we are removing one of the 

three actions in § 351.227 that 

Commerce proposed to take upon 

receiving a sufficient covered 

merchandise referral—paragraph (b)(2) 

that had provided that Commerce may 

self-initiate a circumvention inquiry in 

accordance with § 351.226(b). To be 

clear, Commerce retains the authority 

and discretion to self-initiate a 

circumvention inquiry pursuant to 

§ 351.226(b) if it determines from 

available information that an inquiry is 

warranted. However, we are adopting an 

approach which will allow Commerce 

to immediately initiate a covered 

merchandise inquiry within 20 days of 

receipt of a sufficient referral and 

conduct a circumvention analysis in 

reaching a covered merchandise 

determination. Specifically, under 

§ 351.227(b)(1), when read in 

conjunction with paragraph (f), 

Commerce may initiate a covered 

merchandise inquiry and rely on either 

the scope analysis described under 

§ 351.225(j) or (k), or the circumvention 

criteria under section 781 of the Act (as 

reflected in paragraphs (h), (i), (j), and 

(k) of § 351.226), in issuing a covered 

merchandise determination. 

Importantly, initiation of a covered 

merchandise inquiry simply allows 

Commerce to begin its inquiry into the 

appropriate analysis to use for its 

covered merchandise determination. In 

other words, Commerce does not need 

to have identified, at this early stage of 

the proceeding, before the benefit of 

evidence and argument presented by 

interested parties, whether to conduct a 

scope or circumvention analysis. Rather, 

Commerce will consider the appropriate 

analysis on a case-by-case basis. 

This framework, coupled with the 

expedited deadlines for completion of a 

covered merchandise inquiry under 

§ 351.227(c) (a maximum deadline of 

270 days, rather than a maximum 

deadline of 365 days under § 351.226(e) 

for completion of a circumvention 

inquiry), means that Commerce can still 

apply the same analysis and reach the 

same determination it would if it selfinitiated a circumvention inquiry, but 

on an expedited basis. An additional 

consideration informing this approach 

is that, although a covered merchandise 

referral may be found sufficient for 

purposes of initiating a covered 

merchandise inquiry, a referral likely 

will not have all the information needed 

regarding the elements necessary for a 

circumvention determination under 

section 781 of the Act, as required for 

self-initiation of a circumvention 

inquiry under § 351.226(b).176 Thus, 

under this preferred approach described 

in § 351.227(b)(1), Commerce can 

initiate its covered merchandise inquiry, 

collect information and arguments from 

interested parties regarding either a 

scope analysis or the elements necessary 

for a circumvention determination (or 

both), and issue a determination on an 

expedited basis. For these reasons, we 

have removed reference to § 351.226(b) 

in § 351.227(b). 

The one alternative to § 351.227(b)(1) 

is provided in § 351.227(b)(2) 

(paragraph (b)(3) in the Proposed Rule). 

Under this alternative, Commerce 

envisions that a scope or circumvention 

inquiry may already be underway at the 

time Commerce receives a sufficient 

covered merchandise referral. In this 

scenario, Commerce may elect to 

address the referral in an ongoing 

segment of the proceeding, rather than 

starting at the beginning of a new 

inquiry. Under such a scenario, as 

provided under § 351.227(e)(3), 

Commerce would transmit a copy of the 

final action in that segment to CBP in 

accordance with section 517(b)(4)(B) of 

the Act. 

These changes simplify the 

procedures for covered merchandise 

referrals and still provide for the 

flexibility that Commerce endeavored to 

create in the Proposed Rule. The 

remaining changes to § 351.227(b) 

consist of minor revisions to the text of 

the two remaining subparagraphs and 

conforming changes required after 

removal of proposed § 351.227(b)(2). 

(a) Authority To Self-Initiate a 

Circumvention Inquiry and To Integrate 

Covered Merchandise Referrals Into 

Other Segments 

One commenter asserts that 

Commerce is not authorized to use 

scope or circumvention tools to address 

covered merchandise referrals. This 

commenter opposes the covered 

merchandise regulations on the basis 

that CBP’s EAPA investigations are 

largely conducted in secret and these 

investigations do not conform to 

Commerce’s unfair trade practice or the 

AD Agreement. This commenter appears 

to argue that Commerce should not 

pursue any additional fact-finding 

inquiries in addition to CBP’s own 

inquiry, claiming that the legislative 

history of section 517 of the Act has 

made it clear that either Commerce or 

CBP was intended to conduct 

investigations of evasion, but not both. 

This commenter argues that Commerce’s 

own factual inquiry is a waste of 

resources and a burden on the parties in 

an EAPA investigation. This commenter 

further argues that EAPA-covered 

merchandise referrals should not be 

intertwined with a circumvention 

inquiry or any other ongoing segment of 

a proceeding. In the alternative, this 

commenter argues that Commerce 

should not be permitted to self-initiate 

a circumvention inquiry unless it can 

meet the requirements set forth under 

proposed § 351.226(c)(2). This 

commenter also argues that Commerce 

should refrain from conducting a 

circumvention inquiry within the 

framework of an EAPA investigation 

because of the harsh consequences of 

EAPA investigations. The commenter 

claims that the proposed regulatory 

provision requiring that Commerce 

merely believe that an inquiry is 

‘‘warranted’’ to initiate invites an abuse 

of Commerce’s self-given authority to 

self-initiate a circumvention inquiry. 

The commenter asserts that if 

Commerce cannot resolve the scope 

issue that is the basis of CBP’s covered 

merchandise referral within a 

reasonable time, then CBP’s EAPA 

investigation should be concluded with 

no finding of evasion. After such a 

conclusion, Commerce could then 

conduct its circumvention inquiry 

within the framework of its own 

statutory authority. This commenter 

also made general comments about the 

differences between CBP’s and 

Commerce’s authority and claimed that 

Commerce does not have the authority 

to intertwine EAPA-covered 

merchandise referrals and AD/CVD 

proceedings. 

A few commenters assert that the 

Proposed Rule does not explain why a 

referral from CBP should be treated 

differently, nor does the Proposed Rule 

justify Commerce’s authority to do so. 

Another commenter argued that 

Commerce needs to distinguish between 

its different proceedings, including 

scope, circumvention, and covered 

merchandise inquiries, in order to 

ensure predictability and legal certainty 

for stakeholders. This commenter 

requested clarification on the 

implication that, in its response to CBP 

on covered merchandise referrals, 

Commerce may rely on varying analyses 

regarding country of origin, scope 

rulings, or circumvention. 

Several commenters rebut the 

assertion that Commerce cannot selfinitiate a circumvention inquiry or 

52356 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

177See Proposed Rule, 85 FR 49472 at 49489. 

178 Id. at 49475, 49484; see also section 701(a) of 

the Act; section 706(a)(2) of the Act; section 731(a) 

of the Act; section 736(a)(2) of the Act; and section 

771(25) of the Act. 

179Commerce has addressed covered 

merchandise referrals using both scope and 

circumvention analyses. See, e.g., Wooden Bedroom 

Furniture From the People’s Republic of China: 

Notice of Covered Merchandise Referral, 83 FR 9272 

(March 5, 2018) (Wooden Bedroom Furniture); 

Hydrofluorocarbon Blends From the People’s 

Republic of China: Notice of Covered Merchandise 

Referral, 83 FR 9277 (March 5, 2018) (HFC Blends); 

and Diamond Sawblades and Parts Thereof From 

the People’s Republic of China: Notice of Covered 

Merchandise Referral, 83 FR 9280 (March 5, 2018) 

(Diamond Sawblades). 

integrate covered merchandise referrals 

into other segments of the proceeding. 

They argue that Congress authorized 

CBP to make a covered merchandise 

referral to Commerce so that Commerce 

may determine whether the products are 

covered by the scope of an order. They 

note that nothing precludes Commerce 

from relying on information from an 

EAPA investigation to initiate an 

inquiry under its own authority. They 

state that U.S. government agencies 

must take a coordinated approach to 

enforce trade laws and protect domestic 

industries. They also state that 

arguments that EAPA investigations and 

Commerce’s proceedings should never 

be intertwined are irrelevant, legally 

flawed, and should be dismissed. 

Response: 

We disagree with the commenters that 

argue Commerce should not conduct a 

covered merchandise inquiry in 

response to a covered merchandise 

referral from CBP. As explained in the 

Proposed Rule,177 pursuant to section 

421 of the TFTEA/EAPA, section 517 

was added to the Act and establishes a 

formal process for CBP to conduct an 

EAPA investigation. If CBP is unable to 

determine whether the merchandise at 

issue is covered merchandise within the 

meaning of section 517(a)(3) of the Act, 

then section 517(b)(4) of the Act 

requires CBP to make a covered 

merchandise referral to Commerce. 

Pursuant to section 517(b)(4)(A)(i) of the 

Act, Commerce determines whether 

merchandise is covered by the scope of 

an order ‘‘pursuant to the authority of 

the administering authority under title 

VII.’’ Title VII of the Act provides the 

basis for Commerce’s authority to 

administer the AD/CVD laws, including 

making class or kind determinations.178

Thus, Congress expressly provided that, 

in answering a covered merchandise 

referral, Commerce should use its 

existing authority to determine whether 

the merchandise at issue is covered by 

the scope of the order. In doing so, 

Congress did not limit Commerce in the 

procedures that it may use to determine 

whether the merchandise at issue is 

covered by the scope of an order. 

The commenter’s arguments regarding 

the legislative history and whether 

Commerce should be pursuing any factfinding inquiry in relation to a covered 

merchandise referral from CBP are 

contrary to Congress’s intent as 

expressed in the language of section 517 

of the Act. When CBP submits its 

referral to Commerce, Commerce is 

charged with determining if the 

merchandise at issue is subject to the 

scope of an order. If Commerce could 

not request information from parties, 

and conduct its own fact-finding 

inquiry, then it would be unable to 

perform its function under the statute to 

answer CBP’s referral. Commerce’s 

existing authority allows it to conduct 

its own fact-finding inquiry to make a 

class or kind determination and, as 

explained in the Proposed Rule, 

§ 351.227 allows for flexibility in relying 

on the standards for scope issues under 

§ 351.225 or circumvention issues under 

§ 351.226, as appropriate, in issuing a 

covered merchandise determination. 

While Commerce has only received a 

limited number of these referrals to 

date, analyzing a covered merchandise 

referral under these criteria is consistent 

with how Commerce has answered 

covered merchandise referrals.179 For 

further clarity, as provided in adopted 

§ 351.227(b)(2), Commerce may also 

address a covered merchandise referral 

in the context of an ongoing segment of 

the proceeding. Furthermore, as 

discussed below under 

§ 351.227(d)(5)(ii), Commerce may also 

rescind a covered merchandise inquiry 

and address a covered merchandise 

referral in another segment of the 

proceeding, as appropriate. 

Nor do we agree with commenters’ 

argument that Commerce does not have 

the authority to self-initiate a 

circumvention inquiry in the context of 

a covered merchandise referral. As 

explained above, Congress authorized 

Commerce to determine whether the 

merchandise at issue is covered by the 

scope of an order, and Congress did not 

limit Commerce’s discretion in 

determining the appropriate procedures 

to make a covered merchandise 

determination. In any event, as 

explained above, Commerce has 

removed the express reference to selfinitiation of a circumvention inquiry 

under § 351.227(b) for purposes of 

streamlining its procedures because a 

circumvention analysis can be 

performed, on an expedited basis, in a 

covered merchandise inquiry as 

provided for under § 351.227(b) and (f). 

Nor do we find persuasive the argument 

that Commerce must refrain from 

conducting a circumvention inquiry 

within the framework of an EAPA 

investigation because of the ‘‘harsh 

consequences’’ of an EAPA 

investigation. Notably, while 

Commerce’s and CBP’s duties and 

responsibilities under the AD/CVD 

statutory framework are often related, 

Commerce and CBP are U.S. 

government agencies that operate 

independently and pursuant to distinct 

statutory mandates and authorities. 

CBP’s EAPA investigation and 

Commerce’s segment answering a 

covered merchandise referral are two 

separate proceedings and each 

proceeding addresses different issues. 

CBP’s EAPA investigation addresses 

evasion concerns as outlined under 

section 517 of the Act. This is distinct 

from, but aided by, Commerce’s covered 

merchandise inquiry (or another 

segment of the proceeding used to 

address a covered merchandise referral), 

which determines whether merchandise 

is subject to the scope of an order. 

Additionally, the adoption of 

§ 351.227 is intended to fit into the 

current statutory scheme and the 

revised regulatory framework adopted 

in this final rule, under which 

Commerce may already request 

participation of interested parties and 

issue a substantive determination 

whether certain merchandise is covered 

by the scope of an AD/CVD order. 

We also disagree with a commenter’s 

argument that if Commerce cannot 

resolve the scope issue that is the basis 

of CBP’s referral within a reasonable 

time, then CBP’s EAPA investigation 

should be concluded with no finding of 

evasion, and that Commerce can then 

examine whether the merchandise is 

circumventing an order. First, as 

Commerce noted in the Proposed Rule, 

Congress did not prescribe timing 

requirements for Commerce to reach its 

covered merchandise determination. As 

contemplated in the Proposed Rule, 

there may be a need for Commerce to 

seek further information to establish a 

more detailed description of the 

merchandise at issue, or engage in a 

complex analysis, before determining 

whether the merchandise is covered 

merchandise. Commerce is mindful that 

section 517(b)(4)(B) of the Act instructs 

Commerce to promptly transmit its 

determination to CBP, and that CBP’s 

deadlines to complete its EAPA 

investigation will be stayed pending 

completion of Commerce’s covered 

merchandise determination. At the same 

time, as explained further below in 

response to comments on proposed 

paragraph (c), Commerce requires 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52357 

180See Proposed Rule, 85 FR 49472 at 49475, 

49484; see also section 701(a) of the Act; section 

706(a)(2) of the Act; section 731(a) of the Act; 

section 736(a)(2) of the Act; and section 771(25) of 

the Act. 

181See section 782(g) of the Act (‘‘Information 

that is submitted on a timely basis to the 

administering authority . . . during the course of a 

proceeding under this title shall be subject to 

comment by other parties to the proceeding within 

such reasonable time as the administering authority 

. . . shall provide.’’); see also Mid Continent Nail 

Corp. v. United States, 712 F. Supp. 2d 1370, 1375 

(CIT 2010) (‘‘Congress has provided a fair process 

for commenting within the statutory language of 

[section 782(g) of the Act].’’). 

sufficient time to request necessary 

information, allow parties an 

opportunity to comment and submit 

factual information, analyze the issues 

and record evidence, and to issue a 

covered merchandise determination. 

The deadlines established in paragraph 

(c) ensure that Commerce will issue a 

covered merchandise determination 

within a reasonable timeframe and are 

more expedient than the deadlines 

established for scope and circumvention 

inquiries. 

Second, this commenter’s argument 

conflates the two different proceedings. 

Under section 517(b)(4)(A)(i) of the Act, 

Commerce is tasked with determining 

whether the merchandise at issue is 

covered by the scope of the order, not 

determining whether covered 

merchandise has entered the United 

States through evasion. 

Finally, as noted above, Commerce is 

not precluded from conducting a 

covered merchandise referral in a 

circumvention inquiry as a means to 

address CBP’s covered merchandise 

referral. The commenter’s argument to 

the contrary suffers from the 

misconception that unliquidated entries 

of products that circumvent an AD/CVD 

order and enter without the payment of 

duties are beyond the reach of trade 

remedies unless and until a domestic 

interested party alerts Commerce that 

circumvention is occurring and 

Commerce actually initiates a 

circumvention inquiry. Congress 

enacted section 781 of the Act to combat 

certain forms of circumvention of AD 

and CVD orders; however, neither 

section 781 of the Act nor any other 

provision of the Act contains specific 

guidance regarding when merchandise 

found to be circumventing an AD 

and/or CVD order should be subject to 

the order. As discussed in great detail 

above in our analysis under § 351.226(l), 

merchandise not covered by the literal 

terms of an order may, under certain 

factual scenarios, be subject to the 

imposition of AD/CVDs prior to the date 

a circumvention inquiry is initiated. 

Moreover, Commerce’s regulations do 

not address CBP’s independent 

authority to suspend liquidation for 

purposes of its EAPA investigation 

under section 517 of the Act. 

(b) Participation of Interested Parties 

and Opportunity to Comment Prior to 

Initiation 

We received a few comments on 

proposed § 351.227(b) requesting 

clarification on the participation of 

interested parties in the segment of the 

proceeding used to address a covered 

merchandise referral, as well as whether 

parties will have an opportunity to 

comment on a covered merchandise 

referral prior to Commerce initiating a 

covered merchandise inquiry. One 

commenter noted that in the Proposed 

Rule, Commerce stated it will decide 

whether to initiate an inquiry in 

response to a covered merchandise 

referral from CBP within 15 days. This 

commenter requested that Commerce 

modify proposed § 351.227(b) to notify 

interested parties on the annual inquiry 

service list of the referral from CBP 

within 7 days of receipt of the referral. 

This commenter also requested that 

Commerce provide parties an 

opportunity to comment on the referral 

prior to initiating a covered 

merchandise inquiry. 

Another commenter rebutted the 

request to provide notice to petitioners 

and other interested parties on the 

annual inquiry service list when 

Commerce receives a covered 

merchandise referral from CBP. This 

commenter requested that we not allow 

these parties an opportunity to comment 

on the covered merchandise referral 

prior to initiating a covered 

merchandise referral. 

Response: 

Commerce is not adopting the 

recommendation to notify interested 

parties on the annual inquiry service list 

when Commerce receives a covered 

merchandise referral from CBP. Nor is 

Commerce adopting the 

recommendation to allow parties to 

comment on the covered merchandise 

referral prior to initiating a covered 

merchandise inquiry. As explained 

above, Congress authorized CBP to 

investigate evasion of AD/CVD orders. If 

CBP cannot determine whether the 

merchandise at issue is covered 

merchandise, then it is required to refer 

the inquiry to Commerce and Commerce 

is required to make a covered 

merchandise determination. Given this 

statutory directive, Commerce will not 

notify parties or allow parties the 

opportunity to comment on the covered 

merchandise referral prior to taking 

action in response to a referral. Instead, 

Commerce will publish notice of its 

intent to address the covered 

merchandise referral pursuant to 

§ 351.227(b) in the Federal Register, 

allow parties the opportunity to enter an 

appearance on the segment-specific 

service list, submit an APO application, 

and review and comment on the referral 

in accordance with its outlined 

procedures. 

Additionally, Commerce disagrees 

with one commenter’s claim that it 

cannot allow any party that is not an 

interested party in CBP’s EAPA 

investigation to participate in a covered 

merchandise inquiry. As explained 

above, pursuant to section 

517(b)(4)(A)(i) of the Act, Commerce 

determines whether merchandise is 

covered by the scope of an order 

‘‘pursuant to the authority of the 

administering authority under title VII.’’ 

Title VII of the Act provides the basis 

for Commerce’s authority to administer 

the AD/CVD laws, including making 

class or kind determinations.180 Thus, 

Congress expressly provided that 

Commerce should use its existing 

authority in responding to a covered 

merchandise referral from CBP. By 

statute, Commerce provides interested 

parties the opportunity to comment and 

participate in AD/CVD proceedings.181

Commerce has provided additional 

explanation below under proposed 

§ 351.227(n) in response to this 

comment regarding interested party 

participation in Commerce’s segment of 

the proceeding addressing a covered 

merchandise referral. 

3. Section 351.227(c)—Deadlines for 

Covered Merchandise Determinations 

Section 351.227(c) of the Proposed 

Rule provided the deadline for 

Commerce to conduct covered 

merchandise inquiries and also set forth 

that Commerce could only extend the 

deadline if it determines that the 

inquiry is extraordinarily complicated. 

After consideration of the comments on 

the Proposed Rule, detailed below, and 

in light of changes to §§ 351.225 and 

351.226, Commerce is adopting certain 

changes to § 351.227(c) in this final rule. 

For clarity, we first describe the 

revisions to § 351.227(c) in these 

introductory paragraphs, before 

discussing comments and responses to 

comments below. 

To conform with similar provisions in 

§§ 351.225 and 351.226, we have 

revised the heading of proposed 

§ 351.227(c) from ‘‘Time limits’’ to 

‘‘Deadlines for covered merchandise 

determinations,’’ which better reflects 

the nature of this. Similarly, as with 

§§ 351.225 and 351.226, we have moved 

and made minor revisions to the 

provision allowing for alignment of the 

deadlines for a covered merchandise 

52358 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

182See section 781(f) of the Act. 183See Proposed Rule, 85 FR 49472 at 49489–90. 

determination with the deadlines in 

another segment of a proceeding from 

proposed § 351.227(d)(6) to 

§ 351.227(c)(3). Placing the alignment 

provision within § 351.227(c) clarifies 

that the deadline for a covered 

merchandise determination will no 

longer apply if the deadline for the 

covered merchandise inquiry is aligned 

with the deadlines of another segment 

of the proceeding. 

While we are adopting § 351.227(c)(1) 

and the initial 120-day deadline for a 

covered merchandise determination as 

proposed in the Proposed Rule, as 

further explained below, we are 

changing § 351.227(c)(2) in this final 

rule to increase the number of days that 

Commerce may extend the deadlines for 

issuing a final covered merchandise 

determination from an additional 60 

days to up to an additional 150 days (for 

a fully-extended total of 270 days). 

Additionally, we are changing the 

standard for an extension under 

§ 351.227(c)(2) from ‘‘extraordinarily 

complicated’’ to ‘‘good cause,’’ and have 

provided examples of situations in 

which good cause exists to warrant an 

extension. One example of good cause 

specific to covered merchandise 

inquiries that we have added in 

§ 351.227(c)(2)(iii) refers to a situation 

where Commerce has determined to 

address a scope or circumvention issue 

from another segment of the proceeding 

(such as a scope or circumvention 

inquiry) involving the same or similar 

products in the covered merchandise 

inquiry. These changes provide 

Commerce with flexibility as it 

continues to gain experience in this new 

area of the law, establish procedures 

that remain more expedient than those 

provided for scope inquiries under 

§ 351.225 and circumvention inquiries 

under § 351.226, and ensure that 

Commerce will have sufficient time to 

consider all evidence and arguments 

submitted and reach a well-reasoned 

determination that may be subject to 

judicial review. 

As noted above, Commerce received 

numerous comments on § 351.227(c). 

Summaries of those comments, and 

responses to those comments, are 

provided below. 

(a) Clarification of Applicable Deadlines 

We received several comments asking 

for clarification of the applicable 

deadlines when Commerce receives a 

covered merchandise referral, or 

otherwise proposing alternative 

deadlines. Several commenters 

generally request that Commerce 

complete covered merchandise inquiries 

on an expedited basis. One group of 

commenters proposes that Commerce 

complete a covered merchandise 

inquiry within 45 days of the initiation 

notice publication date, with an 

extension possibility of an additional 45 

days if the covered merchandise inquiry 

is extraordinarily complicated. This 

group of commenters argues that an 

expedited timeframe is appropriate and 

fair because parties have already 

participated in the EAPA investigation 

for up to 360 days. Two other 

commenters propose that the expedited 

timeframes in proposed § 351.227(c) 

should apply to circumvention inquiries 

self-initiated under proposed 

§ 351.227(b)(2). One commenter 

requests clarification of what time limits 

apply when Commerce addresses a 

covered merchandise referral in an 

ongoing segment under proposed 

§ 351.227(b)(3). Another commenter 

proposes that Commerce revise 

proposed § 351.227(b)(3) to state that 

Commerce will address a covered 

merchandise referral in an ongoing 

segment only if Commerce determines it 

can do so ‘‘without undue delay.’’ 

Response: 

We have not adopted the proposed 

modifications to further expedite the 

deadlines in Commerce’s covered 

merchandise inquiries. As explained 

further below, we have made changes to 

§ 351.227(c) to maintain flexibility and 

to provide Commerce additional time to 

complete a covered merchandise 

inquiry. Specifically, although we are 

adopting the initial 120-day period 

under § 351.227(c)(1), we are increasing 

the number of days that Commerce may 

extend the deadlines for issuing a final 

covered merchandise determination 

under paragraph (c)(2) from an 

additional 60 days to up to an 

additional 150 days (for a fullyextended total of 270 days). 

Additionally, we are changing the 

standard for an extension from 

‘‘extraordinarily complicated’’ to ‘‘good 

cause,’’ and have provided examples of 

situations in which good cause exists to 

warrant an extension. We believe an 

‘‘extraordinarily complicated’’ standard 

would unduly restrict Commerce’s 

ability to extend the deadline and, 

although the same standard is provided 

under new § 351.226(e)(2), that 

heightened standard applies only to an 

extension that goes beyond the 300-day 

deadline referenced in the statute for a 

final circumvention determination.182

We believe that applying the same 

standard in covered merchandise 

inquiries at the 120-day mark is 

unworkable and fails to recognize that 

covered merchandise referrals will often 

present complex scope and 

circumvention issues. 

As we stated in the Proposed Rule, in 

proposing § 351.227, Commerce has 

taken into account considerations 

relating to flexibility in Commerce’s 

ability to request information necessary 

for its analysis in reaching a covered 

merchandise determination, timeliness, 

and scheduling that allows Commerce 

sufficient time to analyze the issues and 

the record evidence and issue a 

determination that may be subject to 

judicial review.183 Although the EAPA 

does not prescribe timing requirements 

for Commerce to reach its covered 

merchandise determinations, Commerce 

is mindful that section 517(b)(4)(B) of 

the Act instructs Commerce to promptly 

transmit its determination to CBP, and 

that CBP’s deadlines to complete its 

EAPA investigation will be stayed 

pending completion of Commerce’s 

covered merchandise determination. 

Upon further consideration, Commerce 

believes additional time may be 

necessary to allow Commerce sufficient 

time to request necessary information, 

allow parties an opportunity to 

comment and submit factual 

information, analyze the issues and 

record evidence, and to issue a covered 

merchandise determination. As 

explained below in our discussion of 

§ 351.227(d), we have increased the time 

periods for parties to comment and 

submit factual information. While these 

increases provide interested parties with 

additional time to comment and submit 

factual information to Commerce, they 

further shorten the time Commerce has 

to consider and analyze such 

information, and to subsequently issue 

a timely and well-reasoned covered 

merchandise determination that may be 

subject to judicial review. 

Additionally, Commerce is cognizant 

that covered merchandise inquiries are 

a new type of segment, and, to date, the 

limited number of covered merchandise 

referrals Commerce has received have 

presented novel or complex issues. 

Thus, Commerce believes it is important 

to maintain flexibility to ensure 

sufficient time for Commerce to 

complete a covered merchandise 

determination. Nonetheless, Commerce 

continues to be mindful of timeliness 

considerations and notes that even with 

the additional extension days, the 

deadline to complete a fully extended 

covered merchandise inquiry under 

§ 351.227(b)(1) is shorter than the 

deadlines to complete a fully extended 

scope or circumvention inquiry under 

§§ 351.225 and 351.226. Moreover, it is 

not necessarily the case that Commerce 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52359 

will always extend the deadline for a 

covered merchandise inquiry, especially 

when the inquiry is fairly simple, 

straightforward, and/or uncontested. In 

such cases, Commerce might issue a 

covered merchandise determination 

within the initial 120-day period 

provided under § 351.227(c)(1). Nor is it 

necessarily the case that Commerce will 

extend the deadline of a covered 

merchandise inquiry the full 150 days 

allowed under § 351.227(c)(2) if 

Commerce is able to issue a covered 

merchandise determination within a 

shorter timeframe. 

In response to the comment that the 

expedited time frames in § 351.227(c) 

should apply to circumvention inquiries 

self-initiated under proposed 

§ 351.227(b)(2), as discussed above, we 

have removed this proposed 

subparagraph. However, to be clear, 

Commerce maintains its authority to 

self-initiate a circumvention inquiry 

under § 351.226(b) if it determines from 

available information that an inquiry is 

warranted. If Commerce self-initiates a 

circumvention inquiry, § 351.226 would 

govern and the deadlines under 

§ 351.226(e) would apply. 

In response to the comment asking for 

clarification of what deadlines apply 

when Commerce addresses a covered 

merchandise referral in an ongoing 

segment of the proceeding, we clarify 

that, in that situation, the deadlines in 

the ongoing segment would continue to 

apply. By contrast, if Commerce 

initiates a covered merchandise inquiry 

under § 351.227(b)(1), the expedited 

deadlines of § 351.227(c) apply. 

In response to the comment that 

Commerce should only address a 

covered merchandise referral in an 

ongoing segment if it determines it can 

do so ‘‘without undue delay,’’ we 

disagree that it is necessary to revise the 

regulation to include this language. As 

noted above, however, Commerce is 

mindful of timeliness considerations 

and will continue to take these 

considerations into account when it 

receives a covered merchandise referral 

from CBP. 

(b) Deadline for Issuance of Preliminary 

Covered Merchandise Determinations 

One commenter argues that 

Commerce should also have a deadline 

for preliminary covered merchandise 

determinations when not issued 

concurrently with the initiation of a 

covered merchandise inquiry. 

According to this commenter, this 

would allow for greater certainty and 

clarity because interested parties would 

know when to expect a preliminary 

covered merchandise determination. 

Response: 

We have not adopted changes 

establishing a deadline for preliminary 

covered merchandise determinations. 

As with scope inquiries, Commerce is 

not required to issue a preliminary 

covered merchandise determination in 

every case. When Commerce determines 

that a preliminary covered merchandise 

determination is warranted, we do not 

believe Commerce should be restricted 

by a specific deadline in the regulations. 

Instead, we believe that Commerce 

should have the flexibility to determine 

whether to issue a preliminary covered 

merchandise determination. 

Furthermore, it would be unreasonable 

to require Commerce to issue a 

preliminary covered merchandise 

determination when the facts on the 

record are simple enough for Commerce 

to issue a final covered merchandise 

determination on or before 120 days 

after the date of notice of initiation of a 

covered merchandise inquiry is 

published in the Federal Register. 

Therefore, we have not modified the 

deadlines in § 351.227(c) to mandate the 

issuance of a preliminary covered 

merchandise determination. 

4. Section 351.227(d)—Covered 

Merchandise Inquiry Procedures 

Section 351.227(d) of the Proposed 

Rule provides the procedures for 

covered merchandise inquiries, 

including the deadlines for comments 

and the submission of factual 

information, in the event such an 

inquiry is initiated pursuant to 

paragraph (b)(1). Much of this provision 

tracks the procedures provided for 

scope inquiries under § 351.225(f) and 

circumvention inquiries under 

§ 351.226(f). As discussed above, we 

have considered the comments 

submitted regarding these procedures 

and have determined to modify the 

proposed deadlines to allow interested 

parties additional time to submit 

comments and factual information from 

20 to 30 days under § 351.227(d)(1), 

from 10 to 14 days under § 351.227(d)(1) 

through (3), and from five to seven days 

under § 351.227(d)(2) and (3). This 

follows the same modifications to the 

deadlines for comments and factual 

information in scope and circumvention 

inquiries under §§ 351.225 and 351.226. 

We have also made a minor revision to 

the text of § 351.227(d)(3) to add 

language that was inadvertently omitted 

in the Proposed Rule. Within proposed 

§ 351.227(d)(4), one commenter 

identified an incorrect reference to 

‘‘paragraphs (e)(1) through (3),’’ which 

we are correcting to make reference to 

‘‘paragraphs (d)(1) through (3)’’ as 

intended in the Proposed Rule. 

Additionally, in line with the changes 

to similar provisions in §§ 351.225 and 

351.226, we have made changes to 

§ 351.227(d)(5) to provide clarity and to 

establish more streamlined procedures 

in covered merchandise inquiries. 

Specifically, we have limited this 

provision to provide that Commerce 

may rescind a covered merchandise 

inquiry in a variety of situations and 

removed language indicating that 

Commerce may ‘‘forgo’’ such an inquiry. 

As established under § 351.227(b)(2), 

Commerce may determine not to initiate 

a covered merchandise inquiry if it 

determines to address the issue in 

another segment of the proceeding. With 

respect to rescission, § 351.227(d)(5) 

provides that, if Commerce determines 

it appropriate to do so, Commerce may 

rescind, in whole or in part, a covered 

merchandise inquiry. We have also 

included an express requirement for 

Commerce to notify interested parties 

when a covered merchandise inquiry 

has been rescinded. 

Proposed § 351.227(d)(5) further 

provided a non-exhaustive list of three 

situations in which Commerce may 

rescind a covered merchandise inquiry. 

In this final rule, we have adopted the 

first situation listed in § 351.227(d)(5)(i) 

(i.e., rescission when CBP withdraws its 

covered merchandise referral). We have 

removed proposed § 351.227(d)(5)(ii) 

and (iii), which, upon reflection, may 

have led to some confusion about the 

interplay between covered merchandise 

inquiries and other segments of a 

proceeding. Therefore, we are adopting 

a new § 351.227(d)(5)(ii) to describe a 

situation where, after initiation of a 

covered merchandise inquiry, 

Commerce may rescind the inquiry if it 

determines that it can address the 

covered merchandise referral in an 

ongoing scope or circumvention 

inquiry. Under such a scenario, as 

provided under § 351.227(e)(3), 

Commerce would transmit a copy of the 

final action in that segment to CBP in 

accordance with section 517(b)(4)(B) of 

the Act. These changes also reflect that 

we do not consider it appropriate to rely 

on a prior scope or circumvention 

determination to serve as the basis for 

a covered merchandise determination 

without conducting an inquiry (whether 

a covered merchandise inquiry or an 

ongoing scope or circumvention 

inquiry) and affording interested parties 

an opportunity to participate. 

Lastly, we have made modifications to 

proposed § 351.227(d)(6) to conform to 

the changes being made to similar 

provisions in §§ 351.225 and 351.226 

discussed above. In addition to minor 

revisions to the text of proposed 

§ 351.227(d)(6), we have moved and 

52360 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

184 Id. at 49490. 

185See section 517(b)(4)(A)(i) of the Act. 

186See section 782(g) of the Act. 

187See Proposed Rule, 85 FR 49472 at 49490. 

188Although final scope rulings are not published 

in the Federal Register, under § 351.225(o)), on a 

quarterly basis, Commerce publishes in the Federal 

Register a list of final scope rulings issued within 

the previous three months. Under § 351.225(o), 

Commerce may also include complete public 

versions of scope rulings on its website should it 

determine such placement is warranted. 

made minor revisions to the provision 

allowing for alignment of the deadlines 

for a covered merchandise 

determination with the deadlines in 

another segment of a proceeding from 

proposed § 351.227(d)(6) to 

§ 351.227(c)(3), as explained above. We 

have also moved the provision 

explaining that Commerce may request 

information concerning the product that 

is the subject of a covered merchandise 

inquiry with respect to another segment 

of the proceeding, such as an 

administrative review, from proposed 

§ 351.227(m)(2) to § 351.227(d)(7). The 

changes we have made are reflected in 

the regulatory text adopted in this final 

rule. 

Several commenters propose that 

Commerce allow interested parties an 

opportunity to comment and provide 

factual information prior to any decision 

to rescind a covered merchandise 

inquiry under proposed § 351.227(d)(5). 

These commenters indicate that there 

may be instances where Commerce 

decides to address its covered 

merchandise determination in a 

separate segment of the proceeding, but 

an interested party believes that the 

separate segment does not cover the 

product that is the subject of the 

referral. These commenters suggest that 

Commerce provide a period for 

interested parties to comment and 

provide factual information on a 

decision that a determination in another 

segment negates the need to conduct a 

covered merchandise inquiry, and 

further claim that this would serve as a 

procedural safeguard before rescission. 

One commenter submitted rebuttal 

comments generally arguing that EAPA 

covered merchandise referrals and 

Commerce’s AD/CVD proceedings 

should be kept separate, and that 

Commerce should not allow parties that 

are not a party to CBP’s EAPA 

investigation to participate in covered 

merchandise inquires whatsoever. 

Response: 

Commerce is not adopting the 

proposal to allow interested parties an 

opportunity to comment and provide 

factual information prior to a decision to 

rescind a covered merchandise inquiry 

under § 351.227(d)(5). As stated in the 

Proposed Rule, Commerce recognizes 

the potential significant overlap 

between a covered merchandise inquiry, 

scope inquiry, circumvention inquiry, 

and any other segments of a proceeding 

that may address scope issues.184 There 

may be situatiIns in which it may not be 

apparent that Commerce can address a 

covered merchandise referral in another 

segment of a proceeding until after 

Commerce initiates a covered 

merchandise inquiry under 

§ 351.227(b)(1). Additionally, there may 

be situations in which CBP withdraws 

its request for a covered merchandise 

inquiry. In such situations, Commerce 

maintains its flexibility to rescind the 

covered merchandise inquiry. Although 

Commerce appreciates the concern that 

interested parties may not agree with a 

decision to rescind a covered 

merchandise inquiry, Commerce 

disagrees that it should provide a period 

for comment and submission of factual 

information in these instances. 

Commerce notes that it already provides 

interested parties multiple opportunities 

to comment and provide factual 

information under § 351.227(d), 

including after initiation of a covered 

merchandise inquiry. To the extent 

interested parties believe that 

Commerce should proceed with a 

covered merchandise inquiry after 

initiation, parties may provide 

comments to that effect at that time. 

We disagree with the comment that 

Commerce should not allow parties that 

are not a party to CBP’s EAPA 

investigation to participate in covered 

merchandise inquiries whatsoever. As 

also explained in response to similar 

comments submitted regarding 

proposed § 351.227(b) and (n), section 

517 of the Act provides that Commerce 

should use its existing authority to 

determine whether the merchandise at 

issue is covered merchandise in 

responding to a covered merchandise 

referral from CBP.185 By statute, 

Commerce provides interested parties 

the opportunity to comment and 

participate in AD/CVD proceedings.186

Commerce believes that this authority 

equally applies when it makes covered 

merchandise determinations, which 

may apply more broadly to merchandise 

that is produced, exported, or imported 

by interested parties that are not a party 

to CBP’s EAPA investigation itself. 

Thus, Commerce disagrees that it 

should not allow parties that are not a 

party to CBP’s EAPA investigation to 

participate in Commerce’s covered 

merchandise inquiries. 

5. Section 351.227(e)—Covered 

Merchandise Determinations 

Section 351.227(e) addresses covered 

merchandise determinations issued by 

Commerce either in connection with a 

covered merchandise inquiry or another 

segment of the proceeding under which 

Commerce addresses a covered 

merchandise referral. Apart from a 

minor revision to the text in 

§ 351.227(e)(3), no changes are being 

made to this provision in this final rule. 

One commenter notes that in 

proposed § 351.227(e)(2) and (3), 

Commerce specifies that a final 

determination as to whether 

merchandise is covered by the scope of 

an order shall be ‘‘promptly’’ 

transmitted to Commerce. This 

commenter requests that the term 

‘‘promptly’’ be expressly defined to 

mean no later than seven days after 

publication of a final determination in 

the Federal Register. This commenter 

notes that defining ‘‘promptly’’ will 

provide additional clarity and 

consistency, and support transparency. 

Response: 

We are not adopting the proposal to 

define ‘‘promptly’’ in § 351.227(e)(2) 

and (3) to mean no later than seven days 

after publication of a final 

determination. As Commerce stated in 

the Proposed Rule, the term ‘‘promptly’’ 

is not defined in section 517(b)(4)(B) of 

the Act.187 However, consistent with the 

use of the same term in revised 

§§ 351.225 and 351.226, it is 

Commerce’s expectation that prompt 

conveyance and transmittal of a copy of 

the final covered merchandise 

determination to CBP normally would 

occur no more than five business days 

from the publication of the 

determination in the Federal Register. 

We further clarify that to the extent 

Commerce’s covered merchandise 

determination is addressed through an 

ongoing scope inquiry, which would not 

generally result in a final scope ruling 

that is published in the Federal 

Register,188 we expect that prompt 

conveyance and transmittal of the 

covered merchandise determination 

would normally occur no more than five 

business days from the date of issuance 

of the final scope ruling. 

6. Section 351.227(f)—Basis for Covered 

Merchandise Determination 

Section 351.227(f) in the Proposed 

Rule provided that Commerce may rely 

on the standards under § 351.227(j) and 

(k) of § 351.225, or the provisions of 

section 781 of the Act (paragraphs (h), 

(i), (j), or (k) of § 351.226), in reaching 

a covered merchandise determination. 

We have made minor revisions to clarify 

that Commerce may utilize the analyses 

described in any of the aforementioned 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52361 

provisions when conducting a covered 

merchandise inquiry. 

(a) Circumvention Analysis To Address 

Covered Merchandise Referrals 

One commenter argues that 

Commerce should refrain from 

conducting a circumvention inquiry 

within the framework of an EAPA 

investigation because of the harsh 

consequences parties may face in EAPA 

investigations. The commenter asserts 

that if Commerce cannot resolve the 

scope issue that is the basis of CBP’s 

covered merchandise referral within a 

reasonable time, then CBP’s EAPA 

investigation should be concluded with 

no finding of evasion. After such a 

conclusion, Commerce could then 

conduct its circumvention inquiry 

within the framework of its own 

statutory authority. 

Response: 

We disagree with this commenter. We 

have already addressed this 

commenter’s arguments on proposed 

§ 351.227(b) in relation to Commerce’s 

authority to address a covered 

merchandise referral in another segment 

of the proceeding (i.e., an ongoing 

circumvention inquiry), and incorporate 

our response herein. However, we are 

also addressing this commenter’s 

arguments in our analysis of § 351.227(f) 

to the extent the commenter objects to 

Commerce’s ability to use the 

circumvention criteria under section 

781 of the Act (paragraphs (h), (i), (j), or 

(k) under § 351.226) when conducting a 

covered merchandise inquiry. 

Consistent with our analysis of 

comments under § 351.227(b) above, we 

believe that we have the authority to 

conduct an analysis for circumvention 

under section 781 of the Act and 

§ 351.226, as appropriate, in the context 

of a covered merchandise inquiry. 

Congress expressly provided that 

Commerce should use its existing 

authority in responding to a covered 

merchandise referral from CBP. This 

includes the authority to bring 

circumventing merchandise within the 

scope of an AD/CVD order. Finally, as 

noted above, Commerce is not limited 

from examining a covered merchandise 

referral in the context of a 

circumvention proceeding, as 

appropriate. 

(b) Application of Facts Available and 

Facts Available With an Adverse 

Inference in Covered Merchandise 

Inquiries 

One commenter requests that, as 

Commerce stated with regard to 

§ 351.225 in the Proposed Rule, 

Commerce should clarify that it may 

apply facts available or facts available 

with an adverse inference, pursuant to 

section 776 of the Act, where a party 

fails to provide information requested in 

a covered merchandise inquiry, or in a 

circumvention inquiry or other segment 

of the proceeding that Commerce uses to 

address a covered merchandise referral. 

This commenter states that this change 

is necessary to align § 351.227 with 

§ 351.225, and to avoid adverse 

decisions based on the view that the two 

provisions are not parallel and must 

mean different things. 

Response: 

We agree and clarify herein that, just 

as with a scope ruling under § 351.225 

and a circumvention determination 

under § 351.226, Commerce has the 

authority to apply facts available, 

including facts available with an 

adverse inference, pursuant to section 

776 of the Act, to covered merchandise 

inquiries under § 351.227. 

7. Sections 351.227(g)–(k) 

As explained in the Proposed Rule, 

proposed §§ 351.227(g) through (k) in 

§ 351.227 have been reserved to 

maintain consistency with §§ 351.225 

and 351.226. 

8. Section 351.227(l)—Suspension of 

Liquidation 

Section 351.227(l) provides the rules 

for the suspension of liquidation and 

the requirement of cash deposits for 

entries of the product at issue in 

covered merchandise inquiries. The Act 

does not provide direction to Commerce 

regarding the suspension of liquidation 

for entries subject to a covered 

merchandise inquiry. Under § 351.227(l) 

in the Proposed Rule, Commerce 

proposed that, at the time of an 

affirmative preliminary or final covered 

merchandise determination, Commerce 

would direct CBP to begin the 

suspension of liquidation for any 

unliquidated entries not yet suspended 

and collect applicable cash deposits. 

Commerce received numerous 

comments on § 351.227(l) for §§ 351.225 

and 351.226 but received only one 

comment on proposed § 351.227(l) 

concerning notice to sureties, which has 

already been addressed elsewhere in 

this final rule (see discussion regarding 

§ 351.225(l)). After consideration of 

corresponding changes to similar 

language in §§ 351.225(l) and 351.226(l), 

Commerce is adopting certain changes 

to § 351.227(l) in this final rule, which 

are briefly described below. Also 

discussed herein are the specific 

applicability dates for § 351.227(l) as 

referenced in the Applicability Dates 

section of this preamble. 

Section 351.227(l)(1), which describes 

Commerce’s actions at the time of 

initiation of a covered merchandise 

inquiry, is slightly revised from the 

Proposed Rule to mirror changes in 

§§ 351.225(l)(1) and 351.226(l)(1), which 

are described above. Additionally, 

because § 351.227(l)(2) and (3) 

concerning Commerce’s actions in the 

event of an affirmative preliminary or 

final covered merchandise 

determination largely mirror similar 

provisions in §§ 351.225 and 351.226, 

with a few exceptions described below, 

we are adopting the same changes to 

paragraphs (l)(2) and (l)(3) in § 351.227 

that are being made to the paragraphs 

(l)(2) and (l)(3) in §§ 351.225 and 

351.226. Section 351.227(l)(4), which 

we touch on briefly below, describes 

Commerce’s actions in the event of a 

negative final covered merchandise 

determination, remains unchanged from 

the Proposed Rule. Lastly, Commerce is 

adding a new provision, paragraph 

(l)(5), to include specific reference to 

CBP’s authority, described below. 

New § 351.227(l)(2)(iii) and (l)(3)(iii) 

provide that, at the time of an 

affirmative preliminary or final covered 

merchandise determination, Commerce 

normally will direct CBP to begin the 

suspension of liquidation of certain 

unliquidated entries not previously 

suspended, which entered before the 

date of publication of the notice of 

initiation of the inquiry, and apply the 

applicable cash deposit rate. Under this 

framework, Commerce maintains the 

flexibility in covered merchandise 

inquiries to apply, depending on the 

nature of the product at issue in the 

covered merchandise referral, rules for 

the suspension of liquidation and cash 

deposits in a manner appropriate to the 

situation. This includes establishing a 

specific alternative retroactive 

suspension date. If Commerce considers 

an alternative date for not yet 

suspended entries pre-dating the date of 

initiation, Commerce may consult with 

CBP. 

These rules differ in significant ways 

from the scope and circumvention 

suspension of liquidation rules under 

§§ 351.225 and 351.226, which reflects 

the unique nature of a covered 

merchandise inquiry. Specifically, in 

contrast to scope and circumvention 

inquiries, covered merchandise 

inquiries are a new type of proceeding 

and stem from a referral from CBP 

concerning potential evasion. Therefore, 

we find it appropriate to exercise our 

discretion on a case-by-case basis and 

may consult with CBP on whether to 

adopt an alternative date in light of the 

facts of a given case, including the 

circumstances which led to the referral. 

This will allow our practice to develop 

on a case-by-case basis, rather than 

52362 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

189See Proposed Rule, 85 FR 49472 at 49491. 

adopt more detailed procedures in this 

final rule. 

With respect to § 351.227(l)(4), we 

have retained language to provide that 

when Commerce issues a final negative 

covered merchandise determination, 

entries subject to suspension of 

liquidation as a result of another 

segment of a proceeding, if any, will 

remain suspended until the other 

segment of the proceeding has 

concluded. Although perhaps less 

common in this context, it is possible 

that there could be a scenario in which 

it would not be appropriate to 

immediately direct CBP to liquidate 

entries without regard to duties. 

Therefore, to avoid confusion in this 

particular scenario, this language is 

retained in § 351.227(l)(4). 

Lastly, new § 351.227(l)(5) provides 

language to clarify CBP’s authority to 

take related action. Specifically, this 

language clarifies that the rules 

established by Commerce in § 351.227 

do not affect CBP’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. This is identical language to 

the language for §§ 351.225(l) and 

351.226(l), which is explained above 

and not repeated here. 

Finally, there is one clarification to 

this revised framework, as noted in the 

DATES section and the Applicability 

Dates section of this preamble, and as 

discussed in great detail above regarding 

§ 351.225(l)(2)(iii) and (l)(3)(iii) for 

scope inquiries and § 351.226(l)(2)(iii) 

and (l)(3)(iii) for circumvention 

inquiries, regarding the effective date 

and applicability dates. For the reasons 

explained above, Commerce will not 

apply paragraphs (l)(2)(iii) and (l)(3)(iii) 

of § 351.227 in a way that would direct 

CBP to begin the suspension of 

liquidation of unliquidated entries not 

yet suspended, entered, or withdrawn 

from warehouse, for consumption, prior 

to the effective date identified in the 

DATES section. However, as discussed 

above, the framework established in 

§ 351.227 does not affect CBP’s 

authority to take any additional action 

with respect to the suspension of 

liquidation or related measures. 

9. Section 351.227(m)—Applicability of 

Covered Merchandise Determination; 

Companion Orders 

Section 351.227(m) addresses the 

effect and application of covered 

merchandise determinations. We 

received no comments on proposed 

§ 351.227(m). However, because certain 

changes are being made to §§ 351.225 

and 351.226, as discussed above, we 

have made conforming changes to 

paragraph (m) in § 351.227, as reflected 

in the regulatory text adopted in this 

final rule. 

10. Section 351.227(n)—Service List 

Section 351.227(n) provides the 

service procedures for covered 

merchandise inquiries. Given the 

unique nature of a covered merchandise 

referral, which originates from another 

agency, and is placed on the record of 

the relevant segment by Commerce once 

deemed sufficient, there is no need to 

adopt similar language from 

§§ 351.225(n) and 351.226(n) 

concerning the annual inquiry service 

list. Rather, as provided under 

§ 351.227(b), once Commerce 

determines the referral is sufficient, 

Commerce will publish notice of its 

intent to address the covered 

merchandise referral in either a covered 

merchandise inquiry or another segment 

of a proceeding in the Federal Register, 

allow parties the opportunity to enter an 

appearance on the segment-specific 

service list, submit an APO application, 

and review and comment on the referral 

in accordance with its outlined 

procedures. 

Several commenters generally support 

interested party participation in 

Commerce’s segment of the proceeding 

used to address a covered merchandise 

referral, while a few commenters argue 

that Commerce should not allow a party 

that is not a party in CBP’s EAPA 

investigation to participate in 

Commerce’s segment of the proceeding, 

raising the same arguments raised 

regarding other provisions under 

§ 351.227. 

Response: 

For the reasons discussed above, we 

disagree that Commerce should not 

allow a party that is not a party in CBP’s 

EAPA investigation to participate in a 

segment of the proceeding used to 

address a covered merchandise referral. 

Consistent with the statute and 

Commerce’s practice, parties that may 

have an interest in a determination of 

whether a product is covered by the 

scope of an order will have the 

opportunity to participate in that 

segment of the proceeding to address a 

covered merchandise referral. 

11. Section 351.227(o)—Suspended 

Investigations; Suspension Agreements 

Section 351.227(o) allows the covered 

merchandise referral procedures set 

forth in § 351.227 to apply to suspended 

investigations and suspension 

agreements. We received no comments 

on proposed § 351.227(o). However, we 

have made minor revisions to reflect 

that Commerce may, in general, use the 

procedures under § 351.227 in 

determining whether the product at 

issue is covered merchandise with 

respect to a suspended investigation or 

a suspension agreement. 

Certifications—§ 351.228 

Section 351.228, a new provision 

proposed in the Proposed Rule, sets out 

procedures for complying with 

certification requirements that 

Commerce may impose on interested 

parties in the context of AD and CVD 

proceedings.189 It also sets out 

consequences for a party’s failure to 

satisfy certification requirements. We 

received comments from various parties 

regarding § 351.228. After consideration 

of comments, we are adopting § 351.228 

as proposed in the Proposed Rule with 

clarifying edits. Specifically, we are 

modifying § 351.228 to reflect updated 

paragraph numbering and to mirror 

similar language regarding the 

suspension of liquidation, application of 

cash deposits, and assessment of AD/ 

CVDs in other parts of Commerce’s 

regulations. 

1. General Comments 

Several commenters generally support 

adopting § 351.228, because it codifies 

Commerce’s existing practice to require 

certifications, for various reasons, in 

certain proceedings. Particularly, these 

commenters referred to certifications in 

Commerce’s circumvention 

determinations, such as where 

Commerce has required parties to certify 

that the importer did not import, and 

the exporter did not ship, merchandise 

from a third country to the United States 

that originates from the country that is 

subject to the AD and/or CVD order. 

One party also explained that such 

certification requirements will allow 

Commerce to target merchandise 

circumventing an order with ‘‘greater 

precision’’ and finely tune scope 

language to correspond with a scope’s 

intent. Another commenter expressed 

approval of Commerce’s imposition of 

cash deposits if certifications are not 

provided or are false or fraudulent. 

Other commenters generally oppose 

§ 351.228. Several commenters contend 

that additional certifications, such as 

those proposed in § 351.228, have little 

benefit towards Commerce’s AD/CVD 

goals, are unnecessary, and are 

burdensome. 

Response: 

Commerce agrees with the comments 

supporting § 351.228. As discussed in 

the Proposed Rule, § 351.228 is a 

codification of existing practice, 

although it may also be applicable in 

contexts where it has not yet been 

applied, as well. For this reason, 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52363 

190See, e.g., Carbon Steel Butt-Weld Pipe Fittings 

from the People’s Republic of China: Final 

Affirmative Determination of Circumvention of the 

Antidumping Duty Order, 84 FR 29164 (June 21, 

2019) (Butt-Weld Pipe from China Final) (where 

Commerce instituted a certification requirement for 

parties to certify that their merchandise was not 

circumventing an existing order); and Steel 

Concrete Reinforcing Bar from Mexico: Final 

Affirmative Determination of Circumvention of the 

Antidumping Duty Order, 85 FR 34705, 34706 (June 

8, 2020) (where Commerce required certifications 

from importers to exclude a category of 

merchandise produced for an identified 

construction project and produced according to an 

engineer’s structural design consistent with an 

industry standard). 

191See, e.g., Sugar from Mexico: Suspension of 

Countervailing Duty Investigation, 79 FR 78044 

(December 29, 2014) (where Commerce required 

importers, exporters, and producers to certify 

certain requirements with respect to entries of 

subject merchandise subject to the agreement. 

192See, e.g., Butt-Weld Pipe from China Final; 

Carbon Steel Butt-Weld Pipe Fittings from the 

People’s Republic of China: Preliminary Affirmative 

Determination of Circumvention of the 

Antidumping Duty Order, 83 FR 35205 (July 25, 

2018). In both, its preliminary and final Federal 

Register notices in some circumvention cases, 

Commerce has provided certification language as an 

appendix. 

193According to the commenter, importers that 

improperly declare goods face penalties under 19 

Continued 

because § 351.228 merely codifies 

existing practice, we disagree with 

comments in opposition. 

Section 351.228 itself does not impose 

any additional requirements on parties. 

Instead, this provision adopts existing 

practice and enhances that practice to 

clarify the consequences for failure to 

provide certifications to all parties 

subject to any current or future 

certifications. To the extent that parties 

are faced with any additional burdens 

pursuant to such certifications, such 

potential burdens are directly related to 

the proceeding itself in which 

Commerce adopted the certification and 

relevant requirements. Furthermore, as 

detailed below, Commerce considers the 

benefit that certifications afford the 

agency as well as CBP, including the 

flexibility to create certification 

processes in various proceedings for 

various reasons, to outweigh the burden 

on the parties. Specifically, 

certifications strengthen Commerce’s 

enforcement of the AD/CVD laws, 

including taking steps to prevent 

evasion and circumvention of AD and 

CVD orders by producers, exporters, and 

importers. 

In a given case, Commerce considers 

the burden on parties to complete the 

certification requirements while also 

taking into consideration the 

information that Commerce and CBP 

need in their respective roles in 

administering and enforcing AD/CVD 

orders. Furthermore, each certification 

is narrowly tailored to the particular 

situation—for example, allowing 

Commerce to target merchandise 

circumventing an order with ‘‘greater 

precision’’ and finely tune scope 

language to correspond with a scope’s 

intent. 

Additionally, the certifications and 

related requirements currently in effect 

and codified pursuant to § 351.228 serve 

a different purpose from CBP’s existing 

requirements for importers regarding the 

‘‘reasonable care’’ standard. As 

explained below, certifications are an 

additional tool for Commerce and CBP 

to evaluate whether entries should be 

filed as either not subject to an AD and/ 

or CVD order (e.g., Type 01) or subject 

to an AD/CVD order (e.g., Type 03), 

beyond current requirements. In 

instances in which certifications are 

required, parties would not be able to 

file an entry as not subject to an AD 

and/or CVD order without having the 

information or knowledge required of 

the certification, in light of Commerce’s 

determination at issue. Although this 

information and knowledge may be 

inherent in a party’s entry summary 

paperwork, the benefit of the 

certification is to ensure the party 

exercises reasonable care when 

determining the proper entry type. 

2. Administrability and Vagueness 

One commenter believes that 

§ 351.228 is vague and not 

administrable. Specifically, the 

commenter requests that Commerce 

provide a list of proceedings in which 

certifications will be required and 

propose language that parties must use 

to certify their merchandise. Other 

commenters contend that Commerce 

requires flexibility in identifying 

proceedings where certification is 

appropriate. These commenters identify 

that Commerce has used certifications 

in circumvention inquiries, scope 

inquiries, and changed circumstances 

reviews, and Commerce should not 

limit its certification practice to specific 

proceedings because doing so would 

undermine its ability to address evasion. 

One commenter also contends that 

§ 351.228 is unclear regarding to whom 

interested parties must transmit 

electronic certifications or how a party 

may demonstrate that it has complied. 

Response: 

Commerce is not providing an 

exhaustive list of every proceeding in 

which it intends to impose a 

certification requirement consistent 

with § 351.228. Rather, Commerce 

intends to evaluate proceedings on a 

case-by-case basis and determine 

whether a certification requirement 

under § 351.228 is necessary due to the 

specific circumstances of an individual 

proceeding. As explained above, 

Commerce has implemented a 

certification requirement as a result of 

circumvention determinations,190 but it 

has also instituted certification 

requirements to carry out the terms of 

certain suspension agreements and for 

various AD and CVD orders.191

Further, because Commerce intends to 

evaluate the circumstances of each case 

individually and determine whether a 

certification requirement is appropriate, 

it has provided several methods by 

which a party may be required to satisfy 

a certification requirement under 

§ 351.228. For example, under 

§ 351.228(a)(1), Commerce may require 

an interested party to maintain a 

completed certification, and, under 

§ 351.228(a)(2), provide a certification 

electronically at the time of entry or 

entry summary. Additionally, under 

§ 351.228(a)(3), where Commerce 

requires a party to maintain a completed 

certification, it may require the party to 

provide the certification, to whatever 

agency inquires, upon request. Section 

351.228 also states that Commerce may 

require a party to otherwise demonstrate 

compliance with a certification 

requirement. Because Commerce is 

implementing certification requirements 

under § 351.228 on a case-by-case basis, 

it intends to issue specific instructions, 

if necessary, in the context of each 

proceeding where it implements 

certification requirements. Finally, 

Commerce is not providing certification 

language generally applicable in all 

relevant cases, but as it has done in the 

past, if necessary, Commerce intends to 

issue the relevant certification language 

in the context of specific 

proceedings.192

3. Relationship to CBP Measures 

Several commenters claim that, 

because CBP already has measures in 

place requiring parties to properly 

classify entries and mechanisms to 

address missing or fraudulent 

certifications, § 351.228 is redundant or 

infringes CBP’s existing authority. One 

commenter affirms that CBP already 

requires importers to exercise 

reasonable care in filing entries as Type 

01 (e.g., not subject to an AD/CVD 

order), or Type 03 (e.g., subject to an 

AD/CVD order), and § 351.228 is, 

therefore, redundant. Several 

commenters take issue with the 

language in § 351.228 pertaining to 

missing certifications, or false or 

fraudulent certifications, asserting that 

there are already procedures in place for 

CBP to address missing and fraudulent 

certifications.193 Additionally, some 

52364 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

U.S.C. 1592, 31 U.S.C. 3729, and they are also 

subject to EAPA, under 19 U.S.C. 1517. 

194The commenter cites to 19 U.S.C. 1509 and 19 

CFR 151.11, regarding CBP’s authority to collect 

missing certifications, and 19 CFR 101.9(b), 

regarding CBP’s procedure for parties to file post 

summary correction. Commenters also cite to 19 

U.S.C. 1592, which prohibits importation, or 

attempted importation by false documents or 

material omission, and 19 CFR 171, Appendix B, 

which provide CBP with a mechanism to determine 

whether fraud has occurred. 

195For example, in the circumvention inquiry on 

certain corrosion-resistant steel products (CORE) 

from Vietnam, Commerce explained that CBP could 

not identify whether an entry of a CORE product 

from Vietnam contained substrate from China based 

on physical inspection. In addition, Commerce 

explained that ‘‘sales documentation provided 

along with the entry package may not be helpful, 

as the source of the substrate may not be apparent 

from invoices, bills of lading, etc., especially for 

steel that has passed through multiple hands 

(producer, exporter, trading company) obscuring 

the source of the substrate.’’ See Certain CorrosionResistant Steel Products from the People’s Republic 

of China: Affirmative Final Determination of AntiCircumvention Inquiries on the Antidumping Duty 

and Countervailing Duty Orders, 83 FR 23895 (May 

23, 2018) and accompanying IDM at 27–28. 

196Additionally, HSI has the authority to 

investigate criminal violations related to illegal 

evasion of payment of required duties, including 

payment of AD/CVDs. See, e.g., 18 U.S.C. 542. 

commenters claim that § 351.228 

infringes on CBP’s authority to enforce 

collection of import documents and 

address fraud.194 The same parties also 

raised the possibility that, where both 

CBP and Commerce investigate 

certifications, under § 351.228, both 

agencies could reach opposing or 

contradictory conclusions. 

Response: 

We disagree. Although CBP may 

already require parties to exercise 

reasonable care in filing their entries as 

not subject to an AD and/or CVD order 

(e.g., Type 01) or subject to an AD and/ 

or CVD order (e.g., Type 03), the 

certifications and related requirements 

currently in effect and adopted pursuant 

to § 351.228 serve a different purpose, 

and, furthermore, are intended to 

complement, not supplant, CBP’s 

existing authority. We note that 

Commerce frequently imposes 

certifications in instances in which CBP 

may not be able to ascertain certain 

identifying details relevant to the 

product’s classification as either subject 

to or not subject to an AD and/or CVD 

proceeding through physical inspection 

or the relevant sales documentation 

accompanying the entry summary, and, 

thus, could not confirm through these 

means alone whether a particular entry 

has been properly designated as, for 

example, Type 01.195 In such instances, 

both CBP and Commerce would rely on 

the certifications as an additional tool to 

ascertain whether the entry correctly 

was filed as an entry type not subject to 

an AD and/or CVD proceeding. 

Additionally, as stated in the 

Proposed Rule, Commerce recognizes 

that CBP has its own independent 

authority to address import 

documentation related to negligence, 

gross negligence, or fraud.196 However, 

enforcement of the AD/CVD laws, 

including taking steps to prevent 

evasion and circumvention of AD and 

CVD orders by producers, exporters, and 

importers, is well within Commerce’s 

authority and is of paramount 

importance to Commerce. The addition 

of a certification requirement, where 

necessary based on a given case, 

strengthens the administration and 

enforcement of the AD and CVD orders 

by reducing the possibility that entries 

may be inaccurately filed by importers. 

Given the complex supply chains that 

may be involved with certain types of 

subject merchandise (which may 

involve input producers, intermediate 

processors, producers, exporters, trading 

companies, importers, etc.), 

certifications provide additional 

assurance that the producer, exporter, 

and/or importer sought adequate 

information regarding the relevant 

product in order to accurately certify a 

particular entry as not subject to an 

order. 

Furthermore, as stated in the 

Proposed Rule, § 351.228 is not 

intended to supplant CBP’s authority, 

nor is a formal finding by CBP required 

for Commerce to determine, within its 

own authority, that the certification is 

deficient and unreliable. Whether a 

certification contains ‘‘material’’ or 

‘‘fraudulent’’ information is a 

determination that would be made by 

Commerce pursuant to its own authority 

and consideration of the normal 

meaning of those terms (although 

determinations by other agencies may 

be informative). As noted, CBP has its 

own individual authority and would 

continue to exercise that authority as 

appropriate, as well. 

In sum, certifications are imposed on 

a case-specific basis in numerous 

contexts; such certifications do not 

infringe on CBP’s authority and operate 

in a manner that is consistent with the 

broader framework pertaining to CBP’s 

requirements for importers. 

4. Certification in Entry Summaries 

Several commenters suggested that 

certifications could be a recordkeeping 

requirement, submitted with a party’s 

entry summary, or some other means to 

implement the certification scheme. 

Parties requested that Commerce require 

certifications as part of the entry 

summary processes, as opposed to a 

recordkeeping requirement. These 

parties argued that certification at entry 

would be relevant where certification is 

tied to end-use. 

Response: 

Commerce disagrees with the 

commenters that Commerce should 

restrict its discretion in this manner. 

Generally, Commerce’s current 

certifications impose a recordkeeping 

requirement. The regulation as drafted 

provides Commerce the flexibility, on a 

case-by-case basis, to determine whether 

a recordkeeping requirement, filing 

upon entry summary, or some other 

means is an appropriate mechanism to 

enforce the certification scheme. 

5. Other Comments 

Numerous commenters recommended 

various additional changes to § 351.228. 

First, one commenter noted that 

certification requirements should not be 

unduly burdensome on importers/ 

foreign producers and should not limit 

legitimate market access. Second, other 

commenters proposed that Commerce 

review certifications as a ‘‘meaningful 

and regular part’’ of annual reviews 

and/or implement an appeal process to 

allow for revisions to the certification 

scheme. Third, one commenter also 

proposes that Commerce articulate a 

notice requirement in the form of 

specific instructions to CBP, which 

would be available to all parties 

handling the entry to ensure that they 

are aware of the certification 

requirement. Fourth, one commenter 

requests that notice should be provided 

to an importer’s surety when the 

importer has not properly certified its 

entries and CBP has begun suspending 

and collecting cash deposits on the 

entries. This commenter argues that this 

will help the surety manage its risk and 

protect the revenue and integrity of the 

AD/CVD process. Fifth, one commenter 

also points to Commerce’s existing 

requirement to provide an annual nonreimbursement statement for goods 

covered by AD/CVD orders and states 

that Commerce has not explained the 

benefit of requiring additional 

certifications or an estimate for the cost 

of the additional paperwork burden. 

Sixth, one commenter requested that 

Commerce require parties to 

affirmatively state a product’s country of 

origin, or if applicable country/ 

countries of processing in its 

certification. 

Response: 

First, in Commerce’s view, the 

regulations as drafted are necessary and 

do not limit legitimate market access. 

Second, Commerce already provides 

parties with a mechanism whereby it 

may reconsider a determination 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52365 

197See, e.g., Butt-Weld Pipe from China Final; see 

also Glycine from the People’s Republic of China: 

Final Partial Affirmative Determination of 

Circumvention of the Antidumping Duty Order, 77 

FR 73426 (December 10, 2012). 

198See, e.g., Certain Cold-Rolled Steel Flats 

Products from the People’s Republic of China: 

Affirmative Preliminary Determination of AntiCircumvention Inquiries on the Antidumping Duty 

and Countervailing Duty Orders, 82 FR 58178 

(December 11, 2017); see also Certain Cold-Rolled 

Steel Flat Products from the People’s Republic of 

China: Affirmative Final Determination of 

Circumvention of the Antidumping Duty and 

Countervailing Duty Orders, 83 FR 23891 (May 23, 

2018). 

199See, e.g., Butt-Weld Pipe from China Final; 

and Certain Cold-Rolled Steel Flat Products from 

the People’s Republic of China: Affirmative Final 

Determination of Circumvention of the 

Antidumping Duty and Countervailing Duty Orders, 

83 FR 23891 (May 23, 2018). 

200See Proposed Rule, 85 FR at 49472 at 49491– 

92. 

underlying a certification requirement 

as part of a changed circumstances or 

administrative review.197 This process 

also allows Commerce flexibility to 

meaningfully review certifications and 

does not preclude Commerce from 

reviewing an existing certification in the 

context of an administrative review. 

However, Commerce intends to 

continue evaluating how it may 

incorporate a review of certifications in 

additional proceedings if it determines 

that such action is necessary and 

feasible. 

Third, generally, where relevant, 

Commerce has provided notice in its 

preliminary and final determinations, as 

well as providing certification language 

in its customs instructions.198

Commerce, therefore, intends to 

determine whether notice is relevant on 

a case-by-case basis and does not find it 

necessary to add a notice requirement to 

the existing language of § 351.228. 

Fourth, as discussed above regarding 

§ 351.225(l), (comment 12(f)), in the 

context of scope, we recognize and 

appreciate the unique role of sureties in 

the payment and collection of AD/ 

CVDs, and that sureties need timely 

access to information to assess the risk 

that they assume when underwriting 

bonds for imports of merchandise 

subject to AD/CVD orders. As such, in 

response to these comments, Commerce 

intends to consult with CBP and explore 

whether and how sureties may be 

notified with respect to any certification 

requirement. 

Fifth, we disagree with the 

commenter regarding the existing 

reimbursement certification for 

importers and additional burden to 

parties. The certification proposed in 

§ 351.228 serves a different purpose 

from Commerce’s importer 

reimbursement certification 

requirement. Whereas importer 

reimbursement certifications, described 

in § 351.402(f)(2), certify whether an 

importer was reimbursed AD or CVD 

duties by an exporter/producer, 

certifications under § 351.228 generally 

serve specialized purposes and are 

unrelated to reimbursement. For 

instance, Commerce has, upon making 

an affirmative determination of 

circumvention on a country-wide basis, 

permitted importers and exporters to 

certify that the importer did not import, 

and the exporter did not ship, 

merchandise from a third country to the 

United States that originates from the 

country that is subject to the AD and/ 

or CVD order.199 Additionally, with 

respect to any additional arguments 

regarding the potential cost and burden 

on parties, see the Classifications 

section in this final rule for further 

discussion. 

Sixth, and finally, Commerce will 

consider the commenter’s suggestion to 

require parties to affirmatively state a 

product’s country of origin in its 

certification on a case-by-case basis. We 

do not believe such language needs to 

be adopted in the regulation itself at this 

time. 

Importer Reimbursement 

Certification—§ 351.402(f)(2) 

Section 351.402(f)(2) provides the 

requirement that importers certify with 

CBP prior to liquidation whether the 

importer has or has not entered into an 

agreement for the payment or 

reimbursement of AD/CVDs by the 

exporter or producer. In the Proposed 

Rule, Commerce proposed to modify 

this provision to better conform with 

CBP’s procedures in collecting 

electronic, rather than paper, 

certifications and to clarify that, 

although the certification is required 

prior to liquidation, CBP could also 

accept the reimbursement certification 

in accordance with its protest 

procedures.200 We received several 

comments both in support of, and in 

opposition to, the Proposed Rule, and 

no rebuttal comments. 

After review of proposed 

§ 351.402(f)(2) and the comments 

submitted pertaining to that section, we 

are modifying § 351.402(f)(2) in certain 

respects. Specifically, § 351.402(f)(2)(i), 

which does not require specific 

certification language, and, instead, 

allows for importers to certify to the 

substance of the certification prior to 

liquidation, now provides that the 

certification must contain the 

information necessary to link the 

certification to the relevant entry or 

entry line number(s). We are also 

adopting clarifying edits to reflect that 

§ 351.402(f)(2)(iii) is an exception to 

§ 351.402(f)(2)(i) in allowing for 

certifications to be filed during CBP’s 

protest proceedings. In addition, we are 

modifying § 351.402(f)(2)(iii) to indicate 

that CBP may accept the certification in 

accordance with its protest procedures 

under 19 U.S.C. 1514, unless otherwise 

directed. We have left unchanged 

proposed § 351.402(f)(2)(ii), which 

allows the certification to be filed either 

electronically or in paper form in 

accordance with CBP’s requirements, as 

applicable. We are also adopting minor 

clarifying edits to § 351.402(f)(2)(iii), 

which describes the entries subject to 

the certification requirement. 

1. Streamlining Certification 

Requirements 

A few commenters generally support 

the proposal to streamline the importer 

reimbursement certification process and 

make it more efficient and user-friendly. 

Several commenters object to the 

removal of express certification 

language. Some of these commenters 

argue that Commerce should reconsider 

and retain the current, specific language 

to prevent foreign producers and 

exporters from responding to the 

certification in a self-serving and nonspecific manner. These commenters 

argue that any relaxation of these 

requirements appears to be inconsistent 

with Commerce’s goals to improve 

enforcement of the AD/CVD laws, as 

well as prevent evasion of current trade 

remedies. 

Response: 

We disagree with comments objecting 

to the streamlining of the certification 

language and procedures. However, in 

reviewing comments, Commerce is 

modifying § 351.402(f)(2)(i) to provide 

some additional specificity and clarify 

that the certification must contain the 

information necessary to link the 

certification to the relevant entry or 

entry line number(s). As discussed in 

the Proposed Rule, under CBP’s current 

requirements, parties may certify to the 

substance of the current regulatory 

certification language through a variety 

of electronic means. Commerce is 

aligning its regulation with these 

requirements, which allow for better 

tracking, tracing, and matching of 

entries, by entry or entry line number, 

to the certification (either a blanket or 

individual certification). This also 

allows for easier retrieval of certification 

information directly from CBP’s 

Automated Commercial Environment 

(ACE) system. Therefore, we find that 

this is a significant improvement upon 

the previous requirement for paper 

certifications and remains consistent 

52366 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

with our goal of stronger enforcement 

while also improving administrability. 

2. Acceptance of Certifications During 

Protest Proceedings 

Several commenters object to 

proposed § 351.402(f)(2)(iii), which 

allows for missing certifications to be 

filed during CBP’s protest proceedings 

under 19 U.S.C. 1514. These 

commenters argue that the proposal to 

allow a belated certificate runs contrary 

to the strong enforcement of trade 

remedy laws and is inconsistent with 

proposed § 351.402(f)(i)’s requirement 

that the importer must certify prior to 

liquidation. These commenters further 

argue that the Proposed Rule 

acknowledges this conflict but offers no 

rationale, and that to the extent 

administrability concerns exist, those 

are best addressed by CBP’s regulations. 

Certain commenters also argue that in 

past cases Commerce has asserted its 

authority not only to assess double AD 

duties, but to also establish cash deposit 

rates reflecting the reimbursement of 

duties prior to assessment during the 

administrative review process. They 

also argue that the proposed revisions 

state that the requirement to file a 

certificate prior to liquidation remains 

obligatory; but allows CBP, at its 

discretion, to accept certificates in 

accordance with its protest procedures. 

According to these commenters, this 

would seem to allow importers to raise 

arguments with a separate agency that 

the adjustment should not be applied 

because the importer has provided the 

certificate during the protest 

proceeding, and this might otherwise 

undermine an established agency 

practice in addressing circumstances 

where Commerce has already 

determined that reimbursement has 

taken place and imposed double cash 

deposits accordingly. 

Commenters also argue that 

Commerce should make clear that, 

under § 351.402(f)(3), if the certification 

has not been filed by the time of the 

administrative review, Commerce may 

presume that the failure to have filed 

the certification by that date is due to 

the payment or reimbursement of duties 

by the exporter or producer. These 

commenters argue that the proposed 

regulation allows for parties to file the 

certification during the protest phase, 

after the review process has ended and 

liquidation has occurred, and, therefore, 

Commerce cannot properly complete 

the review without the certification. 

Response: 

In light of these comments, Commerce 

is modifying § 351.402(f)(2)(i) and (iii) 

in certain respects to clarify and better 

explain that acceptance of a certification 

during the protest phase is an exception 

to the general rule that certifications are 

due prior to liquidation. However, 

contrary to certain comments, we do not 

see this as setting up a potential abuse 

of the process, because: (1) Commerce 

has included this relevant language in 

CBP instructions for almost a decade, 

and we are merely codifying that 

language in the regulation; (2) we have 

not seen evidence of any abuse of this 

exception; and (3) nor have we heard 

any complaints from petitioners or CBP 

that there has been any abuse of this 

exception. Indeed, commenters were 

only able to point to three examples 

over the past 25 years where there has 

been a reimbursement scheme 

uncovered during the administrative 

review process, and those examples do 

not point to the unreasonableness of our 

policy choice in the Proposed Rule. 

Moreover, not all liquidations result in 

protests, and not all protests deal with 

importer reimbursement issues, so this 

issue has limited practical applicability. 

Further, many of the comments at 

issue were focused more on a request to 

alter the deadline so that parties must 

submit their certification prior to the 

start of the administrative review (even 

earlier than the current deadline of prior 

to liquidation). In practice, most, if not 

all, companies filing certifications will 

do so upon entry summary—well before 

the start of the review. Additionally, 

during the course of the review, 

Commerce asks respondents directly if 

they have reimbursed or entered into 

any agreement to reimburse the 

importer—it is this information that we 

rely upon in conducting our AD 

calculations. If we discover there has 

been such reimbursement or agreement, 

we take that into account either by: (1) 

Making a deduction to export price or 

constructed export price pursuant to 

§ 351.402(f)(1)(i): Or (2) when 

appropriate, applying facts available 

with an adverse inference pursuant to 

section 776(a)–(b) of the Act if the party 

has, for example, failed verification or 

otherwise failed to cooperate in this 

respect. The resulting assessment rate 

and cash deposit rate will then reflect 

the appropriate adjustment. If need be, 

in a given case, Commerce can explain 

in its CBP instructions that CBP should 

not accept certifications from a given 

importer during any protest proceeding 

based on any decisions made with 

respect to this issue in the 

administrative review. Therefore, in 

light of the above, Commerce is 

modifying § 351.402(f)(2)(iii) to indicate 

that CBP may accept the certification in 

accordance with its protest procedures 

under 19 U.S.C. 1514, unless otherwise 

directed. 

3. Additional Notification 

One commenter requests that 

Commerce and CBP provide additional 

notification to sureties through the 

Automated Surety Interface (ASI) with 

respect to any certification which will 

allow the sureties to more effectively 

secure and underwrite the duty 

obligations under AD and CVD laws. 

Response: 

For the reasons discussed above 

regarding § 351.225(l), (comment 12(f)), 

in the context of scope, and numerous 

other provisions, we recognize and 

appreciate the unique role of sureties in 

the payment and collection of AD/CVD 

cash deposits and duties, and that 

sureties need timely access to 

information to assess the risk that they 

assume when underwriting bonds for 

imports of merchandise subject to AD/ 

CVD orders. As such, in response to 

these comments, Commerce intends to 

consult with CBP and explore whether 

and how sureties may be notified with 

respect to any importer reimbursement 

certification. 

Procedural Amendments— 

§§ 351.103(d) Introductory Text and 

(d)(1) and 351.305(d) 

1. Sections 351.103(d) Introductory Text 

and (d)(1)—Central Records Unit and 

Administrative Protective Order and 

Dockets Unit 

To implement the substantive changes 

pertaining to scope inquiries 

(§ 351.225), circumvention inquiries 

(§ 351.226), and covered merchandise 

inquiries (§ 351.227), Commerce 

proposed to modify § 351.103(d)(1) to 

reflect that an interested party filing a 

scope ruling application or a 

circumvention request, as well as any 

publicly identified parties in a covered 

merchandise referral from CBP, under 

section 517 of the Act, need not file an 

entry of appearance. We received many 

positive comments in support of this 

provision. However, one commenter 

argued that Commerce should revisit 

§ 351.103(d)(1) and remove the 

allowance of the entry of appearance to 

be filed as a cover letter to an 

application for APO access, to bring it 

into conformity with requirements for 

notices of appearances in other 

circumstances. 

Response: 

We note that the allowance for a cover 

letter/entry of appearance for APO 

filings already existed in the regulations 

before Commerce proposed amending 

them, so the comment is, in fact, not on 

revisions Commerce has made, but on 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52367 

201See, e.g., Silicon Metal From the People’s 

Republic of China: Final Results of Antidumping 

Duty Administrative Review; 2017–2018, 84 FR 

69361 (Dec. 18, 2019); see also, e.g., Certain Pasta 

From Turkey: Final Results and Rescission of 

Antidumping Duty Administrative Review; 2015– 

2016, 83 FR 6516 (Feb. 14, 2018). 

202See Hebei New Donghua Amino Acid Co., Ltd. 

v. United States, 374 F. Supp. 2d 1333, 1339–40 

(CIT 2005). 

its existing regulations. That being said, 

the ability for parties to file their entry 

of appearance in their APO cover letter 

is intended to save time and resources 

and is not mandatory for filers. We see 

no reason to make this change, and, in 

fact, if we were to remove this option for 

APO filers, we find that it would only 

further burden the parties and 

Commerce’s APO system with 

unnecessary additional paperwork. 

In addition, Commerce is making two 

minor clarification and correction 

revisions to § 351.103(d) introductory 

text and (d)(1) unrelated to the 

comments raised. First, in paragraph (d) 

introductory text, Commerce is adding 

reference to the annual inquiry service 

list which must be used for requests for 

circumvention inquiries under 

§ 351.226(n), to mirror the existing 

reference to the annual inquiry service 

list for scope ruling applications under 

§ 351.225(n). Second, in paragraph 

(d)(1), Commerce is amending a 

typographical error following the phrase 

‘‘in a covered merchandise referral to’’ 

with a citation to § 351.227, rather than 

the incorrect reference to § 351.226 as 

appeared in the Proposed Rule. 

2. Section 351.305(d)—Access to 

Business Proprietary Information 

Section 351.305(d) provides for 

additional importer filing requirements 

with Commerce, differing from the filing 

requirements of exporters, producers, or 

domestic producers, to obtain access to 

BPI through an APO application. In the 

Proposed Rule, Commerce proposed to 

amend § 351.305(d) to add reference to 

importers in circumvention inquiries 

and to exempt importers identified by 

CBP in a covered merchandise referral 

from these specific filing requirements. 

Commerce received only support from 

commenters on changes made to this 

provision and has not made any changes 

from the Proposed Rule. 

Other Comments 

In addition to the comments 

discussed above, Commerce also 

received some comments that did not 

relate to a particular provision in the 

Proposed Rule. Instead, they relate to 

§§ 351.213, 351.302, and 351.303, or 

pertain to our general rulemaking 

process or matters outside of the 

regulatory framework. For the following 

reasons, we are not making the 

requested changes to our regulations. 

1. Amend Regulation on Administrative 

Reviews To Include the Enumerated 

Factor for Bona Fide Sales 

One commenter argues that 

§ 351.214(b)(2)(v)(D) through (E) and 

(f)(3) should be reproduced in § 351.213 

so that the bona fide sales analysis 

proposed for new shipper reviews 

would also apply to annual 

administrative reviews of AD/CVD 

orders, especially when such reviews 

involve few or singular sales or entries. 

The commenter requests that the final 

rule should reproduce in § 351.213 

governing administrative reviews the 

specific proposed § 351.214(b)(2)(v)(D) 

through (E) and (f)(3), which outline a 

number of documents a new shipper is 

required to include with a review 

request, and to mirror the factors listed 

in section 751(a)(2)(B)(iv)(I)–(VI) of the 

Act that pertain to new shipper reviews. 

In effect, the commenter proposes that 

a request for an annual administrative 

review include documentation 

concerning business activities and 

establishing the circumstances 

surrounding sales including prices, 

expenses, whether sales were resold for 

profit in the United States, and whether 

such sales were made at arm’s-length 

prices. Additionally, the commenter 

argues that an annual administrative 

review could be rescinded if the 

information necessary to conduct a bona 

fide sales analysis is not on the 

administrative record. The commenter’s 

rationale is that administrative reviews 

are more common and numerous than 

new shipper reviews. Applied to annual 

administrative reviews which involve 

few or singular sales or entries, the 

commenter claims that the bona fide 

sales analysis requirements would 

discourage meritless claims and 

conserve Commerce’s resources in 

conducting reviews. 

Another commenter responded, 

stating that Commerce should reject the 

commenter’s suggestion that Commerce 

perform a bona fides analysis on the 

sales of exporters participating in 

administrative reviews. This commenter 

argues that Commerce should not erect 

artificial barriers to respondents’ efforts 

and that such barriers would only work 

to create an unfair advantage for 

petitioners and could never create a 

level playing field, as the AD/CVD laws 

are intended. Additionally, several 

commenters proposed in rebuttal 

comments that Commerce analyze new 

shipper reviews within the 

administrative review process under 

§ 352.213. 

Response: 

We have left unchanged § 351.213 

governing administrative reviews. 

As explained in the Proposed Rule, 

Commerce is amending § 351.214 

pertaining to new shipper reviews to 

conform with changes to section 

751(a)(2)(B) of the Act made by 

Congress with the enactment of section 

433 of EAPA to address circumvention 

by new shippers in the context of new 

shipper reviews. While Commerce 

remains cognizant of the potential for 

misuse of administrative review 

processes in AD and CVD proceedings, 

amendments to § 351.213, which 

governs administrative review of orders 

and suspension agreements, is beyond 

the scope of the Proposed Rule and 

section 433 of EAPA. The Proposed 

Rule did not propose changes to this 

regulatory provision. Accordingly, any 

consideration or implementation of 

such proposals would require a notice 

and comment proceeding, which did 

not occur in this rulemaking with 

respect to § 351.213. Therefore, we find 

that these proposals are beyond the 

scope of the Proposed Rule and section 

433 of EAPA. 

Importantly, we agree that the bona 

fide sales analysis constitutes an 

important check on the misuse of 

administrative review processes to 

circumvent duty orders or obtain a 

contrived dumping margin. Commerce 

has a well-established practice of 

conducting a bona fide sales analysis in 

administrative reviews, where 

warranted.201 The CIT has stated that 

Commerce’s practice clearly 

demonstrates that Commerce is ‘‘highly 

likely to examine objective, verifiable 

factors’’ to confirm that a sale is not 

being made to circumvent or evade an 

antidumping duty order.202 Therefore, 

while the documents necessary to 

perform a bona fide sales analysis are 

not required in a request for an annual 

administrative review, Commerce 

retains its well-established practice of 

conducting a bona fide sales analysis in 

such administrative reviews, where 

warranted, to address efforts to evade or 

dilute the effectiveness of its AD/CVD 

orders through the use of non-bona fide 

sales. Lastly, we have not adopted the 

commenters’ rebuttal proposal that 

Commerce analyze new shipper reviews 

within the administrative review 

process under § 351.213. This 

commenters’ proposal is also beyond 

the scope of this final rule, as such an 

amendment would require a notice and 

comment proceeding pertaining to 

§ 351.213 governing administrative 

reviews. Moreover, such an amendment 

would be contrary to section 

751(a)(2)(B) of the Act which provides 

52368 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

new shippers a review process apart 

from the administrative review process 

to obtain an AD margin or CVD rate 

based on bona fide sales. 

2. Section 351.302(c) and (d)—Requests 

for Extension 

Several commenters suggest that 

Commerce modify § 351.302 to limit the 

number of days of extensions of time to 

complete questionnaire responses, for 

both initial and supplemental 

questionnaire responses, to a total of 30 

calendar days. These commenters argue 

that by shortening the number of days 

available for extensions, Commerce will 

have more time to consider arguments 

and will have greater certainty 

concerning when filings will be made, 

alleviating stress over overlapping 

submissions across multiple cases. 

Several other commenters also argue 

that respondents have repeatedly 

requested extensions for questionnaire 

responses as a method of delaying the 

proceeding and limiting the time 

available for Commerce to conduct its 

investigation or review, and that 

Commerce should address this issue by 

limiting the extension of time for 

questionnaire responses to 30 days. 

Other commenters challenge the 

above arguments, stating that Commerce 

already has complete control of the 

number and length of extensions it 

grants, and further argue that Commerce 

allows for such extensions because it is 

fully aware of the fact that first-time 

foreign respondents do not maintain 

their books and records in anticipation 

of the initiation of an AD or CVD 

investigation against their subject 

exports. These commenters also argue 

that the proposal of limiting extension 

requests should be rejected because the 

comments proposing this limit are not 

responsive to any provision in the 

Proposed Rule, establishing such a limit 

would be in violation of the 

requirements set forth in the 

Administrative Procedures Act, and 

establishing such a limitation in the 

regulation would deny Commerce the 

flexibility required to work with 

respondents to ensure accuracy and 

fairness in its decisions. They point out 

that each proceeding before Commerce 

and each company under review is 

unique, and, thus, the information that 

Commerce may seek in a particular 

proceeding can vary wildly, pointing to 

different administrative cases as 

examples of how great a variance there 

can be in the amount of information 

sought by Commerce in a given 

proceeding. 

In addition, they argue that making 

such a change would contravene the 

United States’ international obligations 

to provide parties with ample 

opportunity to present all evidence that 

they consider relevant in respect of the 

investigation under Article 6.1 of the 

AD Agreement and Article 12.1 of the 

SCM Agreement. 

Finally, one commenter argues that 

adopting such a short, arbitrary limit on 

time would create significant risk of due 

process violations by denying parties 

the time required to gather and present 

information necessary to defend their 

interests. 

Response: 

Commerce has not adopted this 

proposal and will not be modifying 

§ 351.302 at this time. The Proposed 

Rule did not cover or address this 

regulatory provision, and such an 

argument is outside the scope of the 

modifications and additions to 

regulations that we have proposed and 

upon which we have invited 

commentary. Any consideration or 

implementation of such a requirement 

would require a notice and comment, 

which did not occur in this rulemaking 

with respect to § 351.302. 

Additionally, as mentioned by some 

of the other commenters, Commerce is 

already in full control of the number 

and length of extensions it grants, and 

there has been no evidence of the 

extension process being manipulated to 

prevent Commerce from having enough 

time to properly conduct its 

investigations or reviews. Given 

Commerce’s current discretion to 

determine whether to grant an extension 

request, placing a maximum limit on the 

number of days that can be granted 

would only serve to limit Commerce’s 

discretion in how it handles such 

requests, and further restrict 

Commerce’s ability to ensure the 

accuracy and fairness of its decisions. 

3. Section 351.303(g)—Certification of 

Documents 

One commenter argues that 

Commerce’s regulations in § 351.303(g), 

which require a company representative 

to certify as to the accuracy of 

information that does not belong to the 

company and that the company did not 

develop, has created an unnecessary 

burden on petitioners and petitioners’ 

counsel. They suggest changes to 

§ 351.303(g) restricting the certification 

requirement to requiring a certification 

from the company or government 

representative only when the factual 

information was provided by the 

company or government representative 

in question or by a company or 

government that is not represented by 

legal counsel. 

Response: 

Commerce has not adopted this 

proposal and is not modifying 

§ 351.303(g) at this time. The Proposed 

Rule did not cover or address this 

regulatory provision, and such an 

argument is outside the scope of the 

modifications and additions to 

regulations that we have proposed and 

upon which we have invited 

commentary. Any consideration or 

implementation of such a requirement 

would require notice and comment, 

which did not occur in this rulemaking 

with respect to § 351.303. 

4. Comments on Overall Drafting 

Approach 

In general, many commenters 

commended Commerce on the updates 

and additions to its regulations, 

claiming that such changes were a long 

time coming and warranted. In 

particular, several commenters 

expressed general support and 

appreciation for Commerce’s 

commitment and efforts to effectively 

administer the AD/CVD laws, and state 

that the proposed regulations are 

intended to close several loopholes that 

currently weaken the efficacy of the U.S. 

trade laws with reasonable, fair, and 

equitable modifications that strengthen 

its current regulations. 

However, Commerce received 

criticism as well. One commenter, 

although complimentary of the 

Proposed Rule, argued that sureties 

should be treated as interested parties 

and was critical that the revised and 

new regulations do not provide for 

notifications to sureties of filings and 

determinations. 

A few commenters expressed concern 

about the 30-day deadline for initial 

comments on the Proposed Rule and 

requested a rebuttal period, as well. In 

response, Commerce provided a 14-dayperiod for parties to file rebuttal 

comments, but did not provide 

extensions for the initial party 

comments. The commenters argued that 

30 days for parties to file comments did 

not allow an adequate period of time for 

outside parties to consider the effects of 

the regulatory changes on importers. 

One commenter argued that because the 

regulatory changes were submitted 

during a national pandemic, when most 

offices are operating remotely, it made 

it difficult to review, absorb, and 

discuss the potential impact of these 

regulations with their clients in a 30-day 

time span. Furthermore, they pointed 

out that when Commerce revised its 

(comprehensive) regulations in 1996 

and 1997, it allowed parties more time 

to provide comments. 

Some commenters generally opposed 

the changes to the regulations, arguing 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52369 

203For example, in response to the comment that 

Commerce should revise its Proposed Rule to focus 

primarily on foreign exporters with related 

importers in addressing circumvention and evasion, 

as discussed above under § 351.226(l), Commerce is 

modifying this provision to take into account such 

potential concerns. 

that they place too much responsibility 

and cost on the shoulders of importers 

and not enough responsibility on the 

shoulders of exporters and producers. 

They argue that Commerce should 

revise its Proposed Rule to focus 

primarily on foreign exporters with 

related importers, the parties that would 

be aware of schemes to circumvent and 

evade the AD and CVD laws, and not on 

unrelated importers with little to no 

knowledge of such schemes. 

Finally, one commenter argues that 

the benefits of the proposed regulations 

in stopping companies from 

intentionally circumventing or evading 

AD or CVD orders would be outweighed 

by the negative impact the Proposed 

Rule would have on conscientious 

importers, particularly smaller 

companies, through the assignment and 

collection of retroactive AD/CVDs. The 

commenter points out that many 

sureties will not guarantee a bond 

associated with a product that has been 

subject to a circumvention inquiry or 

covered by the scope of an AD or CVD 

order, which creates a burden for small 

companies who simply cannot afford 

the additional costs resulting from a 

circumvention determination. 

Commerce’s Response: 

First, Commerce disagrees with the 

argument made by commenters that 30 

days is insufficient for parties to 

consider and respond to the changes 

made in the proposed regulations. 

Under 5 U.S.C. 553, which lays out the 

procedural requirements for revising 

federal regulations, 30 days is the 

standard that must be met by any 

agency when proposing changes to their 

regulations. Over the past 20 years of 

administering and enforcing the current 

iteration of the regulations, Commerce 

has discovered some inefficiencies and 

burdens that applied equally to our 

procedures for all interested parties— 

domestic producers, U.S. importers, and 

foreign exporters, alike. Over the years, 

we have heard complaints about those 

inefficiencies and burdens, but could do 

nothing about them without modifying 

our regulations. Furthermore, we have 

built a practice in some regards, like 

Commerce’s substantial transformation 

test, which should be codified in the 

regulations, but are not. In addition, we 

have discovered that our regulations do 

not adequately address some matters, 

such as the problem of circumvention of 

our orders. In short, none of these 

problems or concerns should be new to 

those who practice AD and CVD law 

before Commerce. 

Furthermore, comparing these 

regulations, which address new shipper 

reviews, scope rulings, circumvention 

determinations, and a few other matters, 

with the 1997 Final Rule which revised 

nearly all of Commerce’s regulations 

covering most of Commerce’s AD and 

procedural practice is an unreasonable 

comparison. These are important 

regulations, but they are still limited in 

the areas to which they apply. Thus, we 

do not find the time limits Commerce 

provided to outside parties for 

comments on those regulations to be 

comparable to the time limits parties 

needed to comment on these 

regulations. We continue to believe that 

a 30-day period for parties to prepare 

and file initial comments on the 

Proposed Rule was sufficient. 

That being said, Commerce 

recognized in response to early 

comments which it received from 

outside parties that the agency had not 

initially provided parties with an 

opportunity to file rebuttal comments, 

and that both Commerce and the public 

as a whole could benefit if parties had 

time to file rebuttal comments. 

Accordingly, Commerce granted 14 days 

after the close of the initial comment 

period for parties to file rebuttal 

comments, and the agency received 

many rebuttal comments, which we 

found to be helpful to our analysis. 

Thus, we extended the period in which 

parties could provide meaningful 

insight and commentary, and as noted, 

many took the agency up on its offer to 

prepare and file rebuttal comments. We 

consider that additional time for 

commentary further evidence that we 

met the statutory requirements of 5 

U.S.C. 553. 

Second, the changes and additions 

found in these final regulations are 

consistent with the requirements of the 

Act and are narrowly tailored to address 

Commerce’s concerns. Commerce 

recognizes the issues expressed by 

several commenters regarding the 

potential effect the regulatory changes 

may have on various interested parties. 

As explained herein, in response to 

many of those comments, we have made 

modifications from the Proposed Rule to 

these final regulations.203 That being 

said, we disagree with the commenters 

who argued that we should retain the 

current regulations unchanged, and 

forgo these updates and changes. These 

changes are necessary and will improve 

both the administration and 

enforcement of the various areas of AD 

and CVD law which they cover. 

Finally, we disagree that these 

improvements to our regulations will 

create an outsized burden for small 

importers, and in fact, we believe we 

have appropriately balanced the 

interests of all affected parties with the 

U.S. Government’s statutory mandate 

and Commerce’s policy to prevent 

circumvention and evasion of the 

application of AD and CVD orders. 

5. Additional Unrelated Comments 

Several commenters made comments 

unrelated to the regulations and their 

purpose, and as such these comments 

will not be summarized or addressed 

herein. 

Classifications 

Executive Order 12866 

OMB has determined that this final 

rule is significant for purposes of 

Executive Order 12866. 

Paperwork Reduction Act 

This proposed rule contains no 

collection of information subject to the 

Paperwork Reduction Act, 44 U.S.C. 

Chapter 35. 

Executive Order 13132 

This proposed rule does not contain 

policies with federalism implications as 

that term is defined in section 1(a) of 

Executive Order 13132, dated August 4, 

1999 (64 FR 43255 (August 10, 1999)). 

Regulatory Flexibility Act 

The Chief Counsel for Regulation of 

the Department of Commerce certified 

to the Chief Counsel for Advocacy of the 

Small Business Administration at the 

proposed rule stage that this rule, if 

adopted, would not have a significant 

economic impact on a substantial 

number of small entities as that term is 

defined in the Regulatory Flexibility 

Act, 5 U.S.C. 601 et seq. For that reason, 

no Initial Regulatory Flexibility 

Analysis was required. A summary of 

the need for, objectives of, and legal 

basis for this rule is provided in the 

preamble in this final rule and the 

preamble to the Proposed Rule and is 

not repeated here. The factual basis for 

the certification is found in the 

Proposed Rule and is repeated below. 

Commerce did receive comments on 

the certification. For the reasons 

discussed below, Commerce states that 

the certification stands because the final 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

The entities upon which this 

rulemaking could have an impact 

include foreign governments, foreign 

exporters and producers, some of whom 

are affiliated with U.S. companies, and 

52370 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

204See section 782(c) of the Act. 

U.S. importers. Commerce currently 

does not have information on the 

number of entities that would be 

considered small under the Small 

Business Administration’s size 

standards for small businesses in the 

relevant industries. However, some of 

these entities may be considered small 

entities under the appropriate industry 

size standards. Although this rule may 

indirectly impact small entities that are 

parties to individual AD and CVD 

proceedings, it will not have a 

significant economic impact on any 

such entities; the rule applies to 

administrative enforcement actions, and 

only clarifies and establishes 

streamlined procedures. It does not 

impose any significant costs on 

regulated entities. Therefore, the rule 

would not have a significant economic 

impact on a substantial number of small 

business entities. 

Commerce received two comments in 

response to its determination not to 

prepare an Initial Regulatory Flexibility 

Analysis. One commenter argues that 

the rule will incur new additional costs 

to affected U.S. importers in terms of the 

paperwork burden for additional 

certifications under § 351.228, costs 

associated with the rebuilding of supply 

chains to address country-wide 

circumvention determinations under 

§ 351.226, and the retroactive 

application of scope rulings under 

§ 351.225. This commenter further 

argues that, contrary to Commerce’s 

certification statement in the Proposed 

Rule, these are not enforcement actions 

but rather are new requirements or 

changed procedures that would directly 

impact U.S. importers. For these 

reasons, the commenter argues that 

Commerce should prepare a regulatory 

impact analysis inclusive of these costs 

to ensure that the rule does not impose 

significant costs on small entities. 

In response to this comment, a second 

commenter agrees that Commerce 

should be required to prepare a 

regulatory flexibility analysis. This 

commenter points to comments from 

several other parties in arguing that a 

substantial number of small business 

will be directly adversely affected, not 

indirectly impacted as stated in 

Commerce’s certification statement in 

the Proposed Rule. This commenter 

argues that, with respect to the proposed 

comment period for industry support 

comments in response to a petition 

under § 351.203(g), small and medium 

enterprises would have difficulty 

meeting such deadlines because these 

entities do not have the compliance or 

government relations expertise to 

monitor Commerce’s electronic docket 

on ACCESS. Additionally, this 

commenter reiterates arguments from 

the first commenter regarding the 

retroactive effect of scope ruling and 

circumvention determinations under 

proposed §§ 351.225 and 351.226 and 

the impact on a substantial number of 

small entities. 

Response: 

As stated in the certification 

statement in the Proposed Rule, the 

proposed regulations, as further revised 

and adopted in this final rule, will not 

have a significant economic impact on 

a substantial number of small entities. 

Regarding the number of small 

entities that may be indirectly impacted, 

as stated in the Proposed Rule, the 

entities upon which this rulemaking 

could have an impact include foreign 

governments, foreign exporters and 

producers, some of whom are affiliated 

with U.S. companies, and U.S. 

importers. Commerce currently does not 

have information on the number of 

entities that would be considered small 

under the Small Business 

Administration’s size standards for 

small businesses in the relevant 

industries. However, some of these 

entities may be considered small 

entities under the appropriate industry 

size standards. Additionally, based on 

Commerce’s experience in AD and CVD 

proceedings, Commerce estimates that 

the number of small entities impacted 

by these revised regulations will not be 

substantial. 

Regarding the potential for a 

significant economic impact, although 

these revised regulations may indirectly 

impact small entities that are parties to 

individual AD and CVD proceedings, 

those impacts will not have a significant 

economic impact on any such entities. 

Moreover, as a general matter, 

Commerce’s proceedings, including 

each of the types of proceedings 

discussed in this rule (AD and CVD 

investigations, new shipper reviews, 

administrative reviews, scope inquiries, 

circumvention inquiries, and covered 

merchandise inquiries), afford fair 

notice and due process to all parties, 

including small businesses. Commerce 

will ensure that any small business that 

is potentially prejudiced by proceedings 

conducted in accordance with these 

regulations will receive appropriate 

legal notice, as well as a full and fair 

opportunity to present relevant 

information and arguments to 

Commerce, before a determination is 

made that may have some impact on 

such entity. We also note that, under the 

governing statute and in practice, 

Commerce will consider any difficulties 

experienced by interested parties, 

particularly small companies or those 

not represented by counsel, in 

supplying any information requested, 

and provide any assistance to such 

parties that is practicable.204

As summarized above, two 

commenters raised arguments regarding 

the impact on small entities arising from 

the certification requirements under 

§ 351.228, country-wide circumvention 

determinations and retroactive 

application under § 351.226, the 

retroactive application of scope rulings 

under § 351.225, and the comment 

deadline for industry support under 

§ 351.203(g). 

First, as explained above in response 

to a similar comment pertaining to 

§ 351.228, the regulation itself does not 

impose any burden; a determination of 

whether to implement a certification 

requirement is made on the record of an 

individual case—the regulation merely 

codifies existing practice. Further, any 

burden related to Commerce’s 

determination, in a given case, to 

impose a certification requirement on 

importers is narrowly tailored to the 

facts of its determination and is 

otherwise a minimal burden. Moreover, 

any such burden resulting from a 

certification requirement is outweighed 

by its benefits. For example, companies 

that export or import under a 

certification scheme will potentially 

have less duty liability than other 

similarly situated importers or 

exporters. 

Second, with respect to any 

rebuilding of supply chains to address 

country-wide circumvention 

determinations, Commerce’s role by 

statute, and the purpose of the AD/CVD 

law, is not to manage the business 

operations of domestic importers, but to 

enforce the trade remedy laws and 

ensure that those laws will not be 

circumvented. In accordance with this 

framework, producers, exporters, and 

importers must determine how best to 

comply with an AD/CVD order pursuant 

to any number of business decisions, in 

light of the order and in response to a 

scope ruling, circumvention 

determination, or covered merchandise 

determination. 

Third, as explained above, Commerce 

has revised its suspension of liquidation 

provisions under §§ 351.225(l) and 

351.226(l) for scope and circumvention 

inquiries in light of comments from 

several parties. Commerce will now 

consider additional information under 

certain scenarios in scope inquiries to 

determine if the application of 

retroactive suspension is appropriate. 

Furthermore, Commerce will only apply 

its circumvention determinations to 

entries that precede the date of 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52371 

initiation of the circumvention inquiry 

when it determines the facts on the 

record warrant such an application. 

Additionally, these revisions to 

Commerce’s regulations will not impact 

any imports of entries that pre-date the 

effective date of the final rule, as 

explained in the DATES section and the 

Applicability Dates section of the 

preamble of this final rule, and in more 

detail under §§ 351.225(l) and 

351.226(l). Through these revisions to 

the Proposed Rule, Commerce has 

reduced any impact on U.S. importers, 

which may include small entities, and 

further reduced the number of small 

entities that may be impacted. 

Therefore, the final rule will not have a 

direct, significant economic impact on a 

substantial number of small entities. 

Fourth, and finally, with respect to 

the argument that the comment period 

for industry support would significantly 

impact a substantial number of small 

entities, we disagree. Under 

§ 351.203(g), Commerce is establishing a 

deadline for comments on the issue of 

domestic industry support of an AD or 

CVD petition no later than five business 

days before the scheduled date of 

initiation, and rebuttal comments no 

later than two calendar days thereafter. 

Currently, there is no established 

comment period, meaning parties can 

comment up until the day of 

Commerce’s decision. As stated in the 

certification statement, this is a 

clarification of Commerce’s procedures 

and does not impose any direct cost, let 

alone a significant cost, on small 

entities. Further, the parties that 

normally comment on industry support 

include domestic producers of like 

products that may be considered small 

entities under the appropriate SBA 

small business size standard. Although 

Commerce is unable to estimate the 

number of producers that may be 

considered small entities, Commerce 

does not anticipate that the number 

affected by the proposed rule will be 

substantial. Typically, domestic 

producers that bring a petition or 

participate actively in an AD or CVD 

proceeding account for a large amount 

of the domestic production within an 

industry, so it is unlikely that many of 

these domestic producers will be small 

entities. Therefore, the proposed 

regulation, as adopted in this final rule, 

will not have a significant economic 

impact on a substantial number of small 

entities. 

In sum, Commerce does not dispute 

that these new and revised regulations 

will have an impact on U.S. importers. 

However, the current regulations and 

Commerce’s AD and CVD proceedings 

already have an impact on those 

entities. Thus, the question for purposes 

of a regulatory impact analysis is 

whether these revisions and additions 

are such that the changes will have an 

economic impact which is significant on 

a substantial number of small entities. 

They will not. 

For these reasons, we continue to find 

that neither an Initial Regulatory 

Flexibility Analysis nor a Final 

Regulatory Flexibility Analysis is 

required and none has been prepared. 

Therefore, Commerce certified that the 

final rule will not have a significant 

impact on a substantial number of small 

business entities. 

List of Subjects in 19 CFR Part 351 

Administrative practice and 

procedure, Antidumping, Business and 

industry, Cheese, Confidential business 

information, Countervailing duties, 

Freedom of information, Investigations, 

Reporting and recordkeeping 

requirements. 

Dated: August 16, 2021. 

Christian Marsh, 

Acting Assistant Secretary for Enforcement 

and Compliance. 

For the reasons stated in the 

preamble, the Department of Commerce 

amends 19 CFR part 351 as follows: 

PART 351—ANTIDUMPING AND 

COUNTERVAILING DUTIES 

■ 1. The authority citation for part 351 

continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 1202 

note; 19 U.S.C. 1303 note; 19 U.S.C. 1671 et 

seq.; and 19 U.S.C. 3538. 

■ 2. In § 351.103, effective November 4, 

2021, revise paragraphs (d) introductory 

text and (d)(1) to read as follows: 

§ 351.103 Central Records Unit and 

Administrative Protective Order and 

Dockets Unit. 

* * * * * 

(d) The APO/Dockets Unit will 

maintain and make available a public 

service list for each segment of a 

proceeding. The service list for an 

application for a scope ruling is 

described in § 351.225(n). The service 

list for a request for a circumvention 

inquiry is described in § 351.226(n). 

(1) With the exception of a petitioner 

filing a petition in an investigation 

pursuant to § 351.202, an interested 

party filing a scope ruling application 

pursuant to § 351.225(c), an interested 

party filing a request for a 

circumvention inquiry pursuant to 

§ 351.226(c), and those relevant parties 

identified by the Customs Service in a 

covered merchandise referral pursuant 

to § 351.227, all persons wishing to 

participate in a segment of a proceeding 

must file an entry of appearance. The 

entry of appearance must identify the 

name of the interested party, how that 

party qualifies as an interested party 

under § 351.102(b)(29) and section 

771(9) of the Act, and the name of the 

firm, if any, representing the interested 

party in that particular segment of the 

proceeding. All persons who file an 

entry of appearance and qualify as an 

interested party will be included in the 

public service list for the segment of the 

proceeding in which the entry of 

appearance is submitted. The entry of 

appearance may be filed as a cover letter 

to an application for APO access. If the 

representative of the interested party is 

not requesting access to business 

proprietary information under APO, the 

entry of appearance must be filed 

separately from any other document 

filed with the Department. If the 

interested party is a coalition or 

association as defined in subparagraph 

(A), (E), (F) or (G) of section 771(9) of 

the Act, the entry of appearance must 

identify all of the members of the 

coalition or association. 

* * * * * 

■ 3. In § 351.203, effective October 20, 

2021, add paragraph (g) to read as 

follows: 

§ 351.203 Determination of sufficiency of 

petition. 

* * * * * 

(g) Time limits for filing interested 

party comments on industry support. 

For purposes of sections 702(c)(4)(E) 

and 732(c)(4)(E) of the Act, the Secretary 

will consider comments or information 

on the issue of industry support 

submitted no later than 5 business days 

before the date referenced in paragraph 

(b)(1) of this section by any interested 

party under section 771(9) of the Act. 

The Secretary will consider rebuttal 

comments or information to rebut, 

clarify, or correct such information on 

industry support submitted by any 

interested party no later than two 

calendar days from the time limit for 

filing comments. 

■ 4. Effective October 20, 2021, revise 

§ 351.214 to read as follows: 

§ 351.214 New shipper reviews under 

section 751(a)(2)(B) of the Act. 

(a) Introduction. Section 751(a)(2)(B) 

of the Act provides a procedure by 

which so-called ‘‘new shippers’’ can 

obtain their own individual dumping 

margin or countervailable subsidy rate 

on an expedited basis. In general, a new 

shipper is an exporter or producer that 

did not export, and is not affiliated with 

an exporter or producer that did export, 

to the United States during the period 

of investigation. Furthermore, section 

52372 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

751(a)(2)(B)(iv) requires that the 

Secretary make a determination of 

whether the sales under review are bona 

fide. This section contains rules 

regarding requests for new shipper 

reviews and procedures for conducting 

such reviews, as well as requirements 

for determining whether sales are bona 

fide under section 751(a)(2)(B)(iv) of the 

Act. In addition, this section contains 

rules regarding requests for expedited 

reviews by non-investigated exporters in 

certain countervailing duty proceedings 

and procedures for conducting such 

reviews. 

(b) Request for new shipper review— 

(1) Requirement of sale or export. 

Subject to the requirements of section 

751(a)(2)(B) of the Act and this section, 

an exporter or producer may request a 

new shipper review if it has exported, 

or sold for export, subject merchandise 

to the United States and can 

demonstrate the existence of a bona fide 

sale. 

(2) Contents of request. A request for 

a new shipper review must contain the 

following: 

(i) If the person requesting the review 

is both the exporter and producer of the 

merchandise, a certification that the 

person requesting the review did not 

export subject merchandise to the 

United States (or, in the case of a 

regional industry, did not export the 

subject merchandise for sale in the 

region concerned) during the period of 

investigation; 

(ii) If the person requesting the review 

is the exporter, but not the producer, of 

the subject merchandise: 

(A) The certification described in 

paragraph (b)(2)(i) of this section; and 

(B) A certification from the person 

that produced or supplied the subject 

merchandise to the person requesting 

the review that that producer or 

supplier did not export the subject 

merchandise to the United States (or, in 

the case of a regional industry, did not 

export the subject merchandise for sale 

in the region concerned) during the 

period of investigation; 

(iii)(A) A certification that, since the 

investigation was initiated, such 

exporter or producer has never been 

affiliated with any exporter or producer 

who exported the subject merchandise 

to the United States (or in the case of a 

regional industry, who exported the 

subject merchandise for sale in the 

region concerned) during the period of 

investigation, including those not 

individually examined during the 

investigation; and 

(B) In an antidumping proceeding 

involving imports from a nonmarket 

economy country, a certification that the 

export activities of such exporter or 

producer are not controlled by the 

central government; 

(iv) Certain information regarding the 

unaffiliated customer: 

(A) A certification from the exporter 

or producer that it will provide, to the 

fullest extent possible, necessary 

information related to the unaffiliated 

customer in the United States during the 

new shipper review; and 

(B) A certification by the unaffiliated 

customer of its willingness to 

participate in the new shipper review 

and provide information relevant to the 

new shipper review, if such information 

is requested by the Secretary, or an 

explanation by the producer/exporter of 

why such certification from the 

unaffiliated customer cannot be 

provided. 

(v) Documentation establishing: 

(A) The date on which subject 

merchandise of the exporter or producer 

making the request was first entered, or 

withdrawn from warehouse, for 

consumption, or, if the exporter or 

producer cannot establish the date of 

first entry, the date on which the 

exporter or producer first shipped the 

subject merchandise for export to the 

United States; 

(B) The volume of that shipment and 

any subsequent shipments, including 

whether such shipments were made in 

commercial quantities; 

(C) The date of the first sale, and any 

subsequent sales, to an unaffiliated 

customer in the United States; 

(D) The circumstances surrounding 

such sale(s), including but not limited 

to: 

(1) The price of such sales; 

(2) Any expenses arising from such 

sales; 

(3) Whether the subject merchandise 

involved in such sales was resold in the 

United States at a profit; 

(4) Whether such sales were made on 

an arms-length basis; and 

(E) Additional documentation 

regarding the business activities of the 

producer or exporter, including but not 

limited to: 

(1) The producer or exporter’s offers 

to sell merchandise in the United States; 

(2) An identification of the complete 

circumstance surrounding the producer 

or exporter’s sales to the United States, 

as well as any home market or third 

country sales; 

(3) In the case of a non-producing 

exporter, an explanation of the 

exporter’s relationship with its 

producer/supplier; and 

(4) An identification of the producer’s 

or exporter’s relationship to the first 

unaffiliated U.S. purchaser; 

(vi) In the case of a review of a 

countervailing duty order, a certification 

that the exporter or producer has 

informed the government of the 

exporting country that the government 

will be required to provide a full 

response to the Department’s 

questionnaire. 

(c) Deadline for requesting review. An 

exporter or producer may request a new 

shipper review within one year of the 

date referred to in paragraph (b)(2)(v)(A) 

of this section. 

(d) Initiation of new shipper review— 

(1) In general. If the requirements for a 

request for new shipper review under 

paragraph (b) of this section are 

satisfied, the Secretary will initiate a 

new shipper review under this section 

in the calendar month immediately 

following the anniversary month or the 

semiannual anniversary month if the 

request for the review is made during 

the 6–month period ending with the end 

of the anniversary month or the 

semiannual anniversary month 

(whichever is applicable). 

(2) Semiannual anniversary month. 

The semiannual anniversary month is 

the calendar month that is 6 months 

after the anniversary month. 

(3) Example. An order is published in 

January. The anniversary month would 

be January, and the semiannual 

anniversary month would be July. If the 

Secretary received a request for a new 

shipper review at any time during the 

period February–July, the Secretary 

would initiate a new shipper review in 

August. If the Secretary received a 

request for a new shipper review at any 

time during the period August–January, 

the Secretary would initiate a new 

shipper review in February. 

(4) Exception. If the Secretary 

determines that the requirements for a 

request for new shipper review under 

paragraph (b) of this section have not 

been satisfied, the Secretary will reject 

the request and provide a written 

explanation of the reasons for the 

rejection. 

(e) Suspension of liquidation. When 

the Secretary initiates a new shipper 

review under this section, the Secretary 

will direct the Customs Service to 

suspend or continue to suspend 

liquidation of any unliquidated entries 

of the subject merchandise from the 

relevant exporter or producer at the 

applicable cash deposit rate. 

(f) Rescission of new shipper review— 

(1) Withdrawal of request for review. 

The Secretary may rescind a new 

shipper review under this section, in 

whole or in part, if a producer or 

exporter that requested a review 

withdraws its request not later than 60 

days after the date of publication of 

notice of initiation of the requested 

review. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52373 

(2) Absence of entry and sale to an 

unaffiliated customer. The Secretary 

may rescind a new shipper review, in 

whole or in part, if the Secretary 

concludes that: 

(i) As of the end of the normal period 

of review referred to in paragraph (g) of 

this section, there has not been an entry 

and sale to an unaffiliated customer in 

the United States of subject 

merchandise; and 

(ii) An expansion of the normal 

period of review to include an entry and 

sale to an unaffiliated customer in the 

United States of subject merchandise 

would be likely to prevent the 

completion of the review within the 

time limits set forth in paragraph (i) of 

this section; 

(3) Absence of bona fide sale to an 

unaffiliated customer. The Secretary 

may rescind a new shipper review, in 

whole or in part, if the Secretary 

concludes that: 

(i) Information that the Secretary 

considers necessary to conduct a bona 

fide sale analysis is not on the record; 

or 

(ii) The producer or exporter seeking 

a new shipper review has failed to 

demonstrate to the satisfaction of the 

Secretary the existence of a bona fide 

sale to an unaffiliated customer. 

(4) Notice of rescission. If the 

Secretary rescinds a new shipper review 

(in whole or in part), the Secretary will 

publish in the Federal Register notice of 

‘‘Rescission of Antidumping 

(Countervailing Duty) New Shipper 

Review’’ or, if appropriate, ‘‘Partial 

Rescission of Antidumping 

(Countervailing Duty) New Shipper 

Review.’’ 

(g) Period of review—(1) Antidumping 

proceeding—(i) In general. Except as 

provided in paragraph (g)(1)(ii) of this 

section, in an antidumping proceeding, 

a new shipper review under this section 

normally will cover, as appropriate, 

entries, exports, or sales during the 

following time periods: 

(A) If the new shipper review was 

initiated in the month immediately 

following the anniversary month, the 

twelve-month period immediately 

preceding the anniversary month; or 

(B) If the new shipper review was 

initiated in the month immediately 

following the semiannual anniversary 

month, the period of review will be the 

six-month period immediately 

preceding the semiannual anniversary 

month. 

(ii) Exceptions. (A) If the Secretary 

initiates a new shipper review under 

this section in the month immediately 

following the first anniversary month, 

the review normally will cover, as 

appropriate, entries, exports, or sales 

during the period from the date of 

suspension of liquidation under this 

part to the end of the month 

immediately preceding the first 

anniversary month. 

(B) If the Secretary initiates a new 

shipper review under this section in the 

month immediately following the first 

semiannual anniversary month, the 

review normally will cover, as 

appropriate, entries, exports, or sales 

during the period from the date of 

suspension of liquidation under this 

part to the end of the month 

immediately preceding the first 

semiannual anniversary month. 

(2) Countervailing duty proceeding. In 

a countervailing duty proceeding, the 

period of review for a new shipper 

review under this section will be the 

same period as that specified in 

§ 351.213(e)(2) for an administrative 

review. 

(h) Procedures. The Secretary will 

conduct a new shipper review under 

this section in accordance with 

§ 351.221. 

(i) Time limits—(1) In general. Unless 

the time limit is waived under 

paragraph (j)(3) of this section, the 

Secretary will issue preliminary results 

of review (see § 351.221(b)(4)) within 

180 days after the date on which the 

new shipper review was initiated, and 

final results of review (see 

§ 351.221(b)(5)) within 90 days after the 

date on which the preliminary results 

were issued. 

(2) Exception. If the Secretary 

concludes that a new shipper review is 

extraordinarily complicated, the 

Secretary may extend the 180-day 

period to 300 days, and may extend the 

90-day period to 150 days. 

(j) Multiple reviews. Notwithstanding 

any other provision of this subpart, if a 

review (or a request for a review) under 

§ 351.213 (administrative review), 

§ 351.214 (new shipper review), 

§ 351.215 (expedited antidumping 

review), or § 351.216 (changed 

circumstances review) covers 

merchandise of an exporter or producer 

subject to a review (or to a request for 

a review) under this section, the 

Secretary may, after consulting with the 

exporter or producer: 

(1) Rescind, in whole or in part, a 

review in progress under this subpart; 

(2) Decline to initiate, in whole or in 

part, a review under this subpart; or 

(3) Where the requesting producer or 

exporter agrees in writing to waive the 

time limits of paragraph (i) of this 

section, conduct concurrent reviews, in 

which case all other provisions of this 

section will continue to apply with 

respect to the exporter or producer. 

(k) Determinations based on bona fide 

sales. In determining whether the U.S. 

sales of an exporter or producer made 

during the period covered by the review 

are bona fide, the Secretary shall 

consider the factors identified at section 

751(a)(2)(B)(iv) of the Act. In accordance 

with section 751(a)(2)(B)(iv)(VII) of the 

Act, the Secretary shall consider the 

following factors: 

(1) Whether the producer, exporter, or 

customer was established for purposes 

of the sale(s) in question after the 

imposition of the relevant antidumping 

or countervailing duty order; 

(2) Whether the producer, exporter, or 

customer has lines of business unrelated 

to the subject merchandise; 

(3) The quantity of sales; and 

(4) Any other factor that the Secretary 

determines to be relevant with respect 

to the future selling behavior of the 

producer or exporter, including any 

other indicia that the sale was not 

commercially viable. 

(l) Expedited reviews in 

countervailing duty proceedings for 

noninvestigated exporters—(1) Request 

for review. If, in a countervailing duty 

investigation, the Secretary limited the 

number of exporters or producers to be 

individually examined under section 

777A(e)(2)(A) of the Act, an exporter 

that the Secretary did not select for 

individual examination or that the 

Secretary did not accept as a voluntary 

respondent (see § 351.204(d)) may 

request a review under this paragraph 

(l). An exporter must submit a request 

for review within 30 days of the date of 

publication in the Federal Register of 

the countervailing duty order. A request 

must be accompanied by a certification 

that: 

(i) The requester exported the subject 

merchandise to the United States during 

the period of investigation; 

(ii) The requester is not affiliated with 

an exporter or producer that the 

Secretary individually examined in the 

investigation; and 

(iii) The requester has informed the 

government of the exporting country 

that the government will be required to 

provide a full response to the 

Department’s questionnaire. 

(2) Initiation of review—(i) In general. 

The Secretary will initiate a review in 

the month following the month in 

which a request for review is due under 

paragraph (l)(1) of this section. 

(ii) Example. The Secretary publishes 

a countervailing duty order on January 

15. An exporter would have to submit 

a request for a review by February 14. 

The Secretary would initiate a review in 

March. 

(3) Conduct of review. The Secretary 

will conduct a review under this 

52374 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

paragraph (l) in accordance with the 

provisions of this section applicable to 

new shipper reviews, subject to the 

following exceptions: 

(i) The period of review will be the 

period of investigation used by the 

Secretary in the investigation that 

resulted in the publication of the 

countervailing duty order (see 

§ 351.204(b)(2)); 

(ii) The final results of a review under 

this paragraph (l) will not be the basis 

for the assessment of countervailing 

duties; and 

(iii) The Secretary may exclude from 

the countervailing duty order in 

question any exporter for which the 

Secretary determines an individual net 

countervailable subsidy rate of zero or 

de minimis (see § 351.204(e)(1)), 

provided that the Secretary has verified 

the information on which the exclusion 

is based. 

(m) Exception from assessment in 

regional industry cases. For procedures 

relating to a request for the exception 

from the assessment of antidumping or 

countervailing duties in a regional 

industry case, see § 351.212(f). 

■ 5. Effective November 4, 2021, revise 

§ 351.225 to read as follows: 

§ 351.225 Scope rulings. 

(a) Introduction. Questions sometimes 

arise as to whether a particular product 

is covered by the scope of an 

antidumping or countervailing duty 

order. Such questions may arise for a 

variety of reasons given that the 

description of the merchandise subject 

to the scope is written in general terms. 

The Secretary will initiate and conduct 

a scope inquiry and issue a scope ruling 

to determine whether or not a product 

is covered by the scope of an order at 

the request of an interested party or on 

the Secretary’s initiative. A scope ruling 

that a product is covered by the scope 

of an order is a determination that the 

product has always been covered by the 

scope of that order. This section 

contains rules and procedures regarding 

scope rulings, including scope ruling 

applications, scope inquiries, and 

standards used in determining whether 

a product is covered by the scope of an 

order. Unless otherwise specified, the 

procedures as described in subpart C of 

this part (§§ 351.301 through 351.308 

and §§ 351.312 through 351.313) apply 

to this section. 

(b) Self-initiation of a scope inquiry. 

If the Secretary determines from 

available information that an inquiry is 

warranted to determine whether a 

product is covered by the scope of an 

order, the Secretary may initiate a scope 

inquiry and publish a notice of 

initiation in the Federal Register. 

(c) Scope ruling application—(1) 

Contents. An interested party may 

submit a scope ruling application 

requesting that the Secretary conduct a 

scope inquiry to determine whether a 

product, which is or has been in actual 

production by the time of the filing of 

the application, is covered by the scope 

of an order. The Secretary will make 

available a scope ruling application, 

which the applicant must complete and 

serve in accordance with the 

requirements of paragraph (n) of this 

section. 

(2) Requested information. To the 

extent reasonably available to the 

applicant, the scope ruling application 

must include the following requested 

information and relevant supporting 

documentation. 

(i) A detailed description of the 

product and its uses, as necessary: 

(A) The physical characteristics 

(including chemical, dimensional, and 

technical characteristics) of the product; 

(B) The country(ies) where the 

product is produced, the country from 

where the product is exported, and if 

imported, the declared country of 

origin; 

(C) The product’s tariff classification 

under the Harmonized Tariff Schedule 

of the United States and copies of any 

Customs rulings relevant to the tariff 

classification; 

(D) The uses of the product; 

(E) Clear and legible photographs, 

schematic drawings, specifications, 

standards, marketing materials, and any 

other exemplars providing a visual 

depiction of the product; and 

(F) A description of parts, materials, 

and the production process employed in 

the production of the product; 

(ii) A concise public summary of the 

product’s description under paragraphs 

(c)(2)(i)(A) through (C) of this section. 

(iii) The name and address of the 

producer, exporter, and importer of the 

product. 

(iv) A narrative history of the 

production of the product at issue, 

including a history of earlier versions of 

the product if this is not the first model 

of the product. 

(v) The volume of annual production 

of the product for the most recently 

completed fiscal year. 

(vi) If the product has been imported 

into the United States as of the date of 

the filing of the scope ruling 

application: 

(A) An explanation as to whether an 

entry of the product has been declared 

by an importer, or determined by the 

Customs Service, as subject to an order, 

and 

(B) Relevant documentation, 

including dated copies of the Customs 

Service entry summary forms (or 

electronic entry processing system 

documentation) identifying the product 

upon importation and other related 

commercial documents, including 

invoices and contracts, which reflect the 

details surrounding the sale and 

purchase of that imported product. 

(vii) A statement as to whether the 

product undergoes any additional 

processing in the United States after 

importation, or in a third country before 

importation, and a statement as to the 

relevance of this processing to the scope 

of the order. 

(viii) The applicant’s statement as to 

whether the product is covered by the 

scope of the order, including: 

(A) An explanation with specific 

reference to paragraph (j) and (k) of this 

section, as appropriate; 

(B) Citations to any applicable legal 

authority; and 

(C) Whether there are companion 

orders as described in paragraph (m)(2) 

of this section. 

(ix) Factual information supporting 

the applicant’s position, including full 

copies of prior scope determinations 

and relevant excerpts of other 

documents identified in paragraph (k)(1) 

of this section. 

(d) Initiation of a scope inquiry and 

other actions based on a scope ruling 

application—(1) Initiation of a scope 

inquiry based on a scope ruling 

application. Except as provided under 

paragraph (d)(2) of this section, within 

30 days after the filing of a scope ruling 

application, the Secretary will 

determine whether to accept or reject 

the scope ruling application. 

(i) If the Secretary determines that a 

scope ruling application is incomplete 

or otherwise unacceptable, the Secretary 

may reject the scope ruling application 

and will provide a written explanation 

of the reasons for the rejection. If the 

scope ruling application is rejected, the 

applicant may resubmit the full 

application at any time, with all 

identified deficiencies corrected. 

(ii) If the Secretary does not reject the 

scope ruling application or initiate the 

scope inquiry within 31 days after the 

filing of the application, the application 

will be deemed accepted and the scope 

inquiry will be deemed initiated. 

(2) Addressing the scope issue in 

another segment of the proceeding. 

Within 30 days after the filing of a scope 

ruling application, if the Secretary 

determines upon review of the 

application that the scope issue before 

the Secretary should be addressed in an 

ongoing segment of the proceeding, 

such as a circumvention inquiry under 

§ 351.226 or a covered merchandise 

inquiry under § 351.227, rather than 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52375 

initiating a scope inquiry, the Secretary 

will notify the applicant of its intent to 

address the scope issue in such other 

segment. 

(3) Notice of scope applications. On a 

monthly basis, the Secretary will 

publish a notice in the Federal Register 

listing scope applications filed with the 

Secretary. 

(e) Deadlines for scope rulings—(1) In 

general. The Secretary shall issue a final 

scope ruling within 120 days after the 

date on which the scope inquiry was 

initiated under paragraph (b) or (d) of 

this section. 

(2) Extension. The Secretary may 

extend the deadline in paragraph (e)(1) 

of this section by no more than 180 days 

if the Secretary determines that good 

cause exists to warrant an extension. 

Situations in which good cause has been 

demonstrated may include: 

(i) If the Secretary has issued 

questionnaires to the applicant or other 

interested parties; received responses to 

those questionnaires; and determined 

that an extension is warranted to request 

further information or consider and 

address the parties’ responses on the 

record adequately; or 

(ii) The Secretary has issued a 

preliminary scope ruling (see paragraph 

(g) of this section). 

(3) Alignment with other segments. If 

the Secretary determines it is 

appropriate to do so, the Secretary may 

align the deadlines under this paragraph 

with the deadlines of another segment 

of the proceeding. 

(f) Scope inquiry procedures. (1) 

Within 30 days of the Secretary’s selfinitiation of a scope inquiry under 

paragraph (b) of this section, interested 

parties are permitted one opportunity to 

submit comments and factual 

information addressing the selfinitiation. Within 14 days of the filing 

of such comments, any interested party 

is permitted one opportunity to submit 

comments and factual information to 

rebut, clarify, or correct factual 

information submitted by the other 

interested parties. 

(2) Within 30 days of the initiation of 

a scope inquiry under paragraph (d)(2) 

of this section, an interested party other 

than the applicant is permitted one 

opportunity to submit comments and 

factual information to rebut, clarify, or 

correct factual information contained in 

the scope ruling application. Within 14 

days of the filing of such rebuttal, 

clarification, or correction, the applicant 

is permitted one opportunity to submit 

comments and factual information to 

rebut, clarify, or correct factual 

information submitted in the interested 

party’s rebuttal, clarification or 

correction. 

(3) Following initiation of a scope 

inquiry under paragraph (b) or (d) of 

this section, the Secretary may issue 

questionnaires and verify submissions 

received, where appropriate. The 

Secretary may limit issuance of 

questionnaires to a reasonable number 

of respondents. Questionnaire responses 

are due on the date specified by the 

Secretary. Within 14 days after a 

questionnaire response has been filed 

with the Secretary, an interested party 

other than the original submitter is 

permitted one opportunity to submit 

comments and factual information to 

rebut, clarify, or correct factual 

information contained in the 

questionnaire response. Within seven 

days of the filing of such rebuttal, 

clarification, or correction, the original 

submitter is permitted one opportunity 

to submit comments and factual 

information to rebut, clarify, or correct 

factual information submitted in the 

interested party’s rebuttal, clarification 

or correction. 

(4) If the Secretary issues a 

preliminary scope ruling under 

paragraph (g) of this section, which is 

not issued concurrently with the 

initiation of the scope inquiry, the 

Secretary will establish a schedule for 

the filing of scope comments and 

rebuttal comments. Unless otherwise 

specified, any interested party may 

submit scope comments within 14 days 

after the issuance of the preliminary 

scope ruling, and any interested party 

may submit rebuttal comments within 7 

days thereafter. Unless otherwise 

specified, no new factual information 

will be accepted in the scope or rebuttal 

comments. 

(5) If the Secretary issues a 

preliminary scope ruling concurrently 

with the initiation of a scope inquiry 

under paragraph (g) of this section, 

paragraphs (f)(1) through (4) of this 

section will not apply. In such a 

situation, the Secretary will establish 

appropriate procedures on a casespecific basis. 

(6) If the Secretary determines it is 

appropriate to do so, the Secretary may 

rescind, in whole or in part, a scope 

inquiry under this section and will 

notify interested parties. 

(7) If the Secretary determines it is 

appropriate to do so, the Secretary may 

alter or extend any time limits under 

this paragraph or establish a separate 

schedule for the filing of comments and/ 

or factual information during the scope 

inquiry. 

(g) Preliminary scope ruling. The 

Secretary may issue a preliminary scope 

ruling, based upon the available 

information at the time, as to whether 

there is a reasonable basis to believe or 

suspect that the product subject to a 

scope inquiry is covered by the scope of 

the order. In determining whether to 

issue a preliminary scope ruling, the 

Secretary may consider the complexity 

of the issues and arguments raised in 

the scope inquiry. The Secretary may 

issue a preliminary scope ruling 

concurrently with the initiation of a 

scope inquiry under paragraph (b) or (d) 

of this section. 

(h) Final scope ruling. The Secretary 

will issue a final scope ruling as to 

whether the product that is the subject 

of the scope inquiry is covered by the 

scope of the order, including an 

explanation of the factual and legal 

conclusions on which the final scope 

ruling is based. The Secretary will 

promptly convey a copy of the final 

scope ruling in the manner prescribed 

by section 516A(a)(2)(A)(ii) of the Act to 

all parties to the proceeding (see 

§ 351.102(b)(36)), subject to the notice 

requirements for Governments of an 

FTA country under § 356.6 and § 356.7. 

(i) Other segments of the proceeding. 

(1) Notwithstanding any other provision 

of this section, the Secretary may, but is 

not required to, address scope issues in 

another segment of the proceeding, such 

as an administrative review under 

§ 351.213, a circumvention inquiry 

under § 351.226, or a covered 

merchandise inquiry under § 351.227 

without conducting or completing a 

scope inquiry under this section. For 

example, the Secretary may rescind a 

scope inquiry under paragraph (f)(6) of 

this section and determine whether the 

product at issue is covered by the scope 

of the order in another segment of the 

proceeding (including another scope 

inquiry). 

(2) During the pendency of a scope 

inquiry or upon issuance of a final 

scope ruling under paragraph (h) of this 

section, the Secretary may take any 

further action, as appropriate, with 

respect to another segment of the 

proceeding. For example, if the 

Secretary considers it appropriate, the 

Secretary may request information 

concerning the product that is the 

subject of the scope inquiry for purpose 

of an administrative review under 

§ 351.213. 

(j) Country of origin determinations. 

In considering whether a product is 

covered by the scope of the order at 

issue, the Secretary may need to 

determine the country of origin of the 

product. To make such a determination, 

the Secretary may use any reasonable 

method and is not bound by the 

determinations of any other agency, 

including tariff classification and 

country of origin marking rulings issued 

by the Customs Service. 

52376 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

(1) In determining the country of 

origin, the Secretary may conduct a 

substantial transformation analysis that 

considers relevant factors that arise on 

a case-by-case basis, including: 

(i) Whether the processed 

downstream product is a different class 

or kind of merchandise than the 

upstream product; 

(ii) The physical characteristics 

(including chemical, dimensional, and 

technical characteristics) of the product; 

(iii) The intended end-use of the 

downstream product; 

(iv) The cost of production/value 

added of further processing in the third 

country or countries; 

(v) The nature and sophistication of 

processing in the third country or 

countries; and 

(vi) The level of investment in the 

third country or countries. 

(2) In conducting a country of origin 

determination, the Secretary also may 

consider where the essential component 

of the product is produced or where the 

essential characteristics of the product 

are imparted. 

(k) Scope rulings. (1) In determining 

whether a product is covered by the 

scope of the order at issue, the Secretary 

will consider the language of the scope 

and may make its determination on this 

basis alone if the language of the scope, 

including the descriptions of 

merchandise expressly excluded from 

the scope, is dispositive. 

(i) The following primary interpretive 

sources may be taken into account 

under paragraph (k)(1) introductory text 

of this section, at the discretion of the 

Secretary: 

(A) The descriptions of the 

merchandise contained in the petition 

pertaining to the order at issue; 

(B) The descriptions of the 

merchandise contained in the initial 

investigation pertaining to the order at 

issue; 

(C) Previous or concurrent 

determinations of the Secretary, 

including prior scope rulings, 

memoranda, or clarifications pertaining 

to both the order at issue, as well as 

other orders with same or similar 

language as that of the order at issue; 

and 

(D) Determinations of the Commission 

pertaining to the order at issue, 

including reports issued pursuant to the 

Commission’s initial investigation. 

(ii) The Secretary may also consider 

secondary interpretive sources under 

paragraph (k)(1) introductory text of this 

section, such as any other 

determinations of the Secretary or the 

Commission not identified above, 

Customs rulings or determinations, 

industry usage, dictionaries, and any 

other relevant record evidence. 

However, in the event of a conflict 

between these secondary interpretive 

sources and the primary interpretive 

sources under paragraph (k)(1)(i) of this 

section, the primary interpretive sources 

will normally govern in determining 

whether a product is covered by the 

scope of the order at issue. 

(2)(i) If the Secretary determines that 

the sources under paragraph (k)(1) of 

this section are not dispositive, the 

Secretary will then further consider the 

following factors: 

(A) The physical characteristics 

(including chemical, dimensional, and 

technical characteristics) of the product; 

(B) The expectations of the ultimate 

users; 

(C) The ultimate use of the product; 

(D) The channels of trade in which 

the product is sold; and 

(E) The manner in which the product 

is advertised and displayed. 

(ii) In the event of a conflict between 

the factors under paragraph (k)(2)(i) of 

this section, paragraph (k)(2)(i)(A) will 

normally be allotted greater weight than 

the other factors. 

(3) If merchandise contains or consists 

of two or more components and the 

product at issue in the scope inquiry is 

a component of that merchandise as a 

whole, the Secretary may adopt the 

following analysis: 

(i) The Secretary will analyze the 

scope language under paragraph (k)(1) 

of this section, and, if necessary, the 

factors under paragraph (k)(2) of this 

section, to determine if the component 

product, standing alone, would be 

covered by an order; 

(ii) If the Secretary determines that 

the component product would 

otherwise be covered by the scope of an 

order as a result of the analysis under 

(k)(3)(i) of this section, the Secretary 

will consider the scope language under 

paragraph (k)(1) of this section to 

determine whether the component 

product’s inclusion in the merchandise 

as a whole results in its exclusion from 

the scope of the order; and 

(iii) If the Secretary determines the 

analysis under (k)(3)(ii) of this section 

does not resolve whether the component 

product’s inclusion in the merchandise 

as a whole results in its exclusion from 

the scope of the order, then the 

Secretary will consider, as appropriate, 

the following relevant factors that may 

arise on a product-specific basis: 

(A) The practicability of separating 

the in-scope component for repackaging 

or resale, considering the relative 

difficulty and expense of separating the 

components; 

(B) The measurable value of the inscope component as compared to the 

measurable value of the merchandise as 

a whole; and 

(C) The ultimate use or function of the 

in-scope component relative to the 

ultimate use or function of the 

merchandise as a whole. 

(l) Suspension of liquidation. (1) 

When the Secretary initiates a scope 

inquiry under paragraph (b) or (d) of 

this section, the Secretary will notify the 

Customs Service of the initiation and 

direct the Customs Service to continue 

the suspension of liquidation of entries 

of products subject to the scope inquiry 

that were already subject to the 

suspension of liquidation, and to apply 

the cash deposit rate that would be 

applicable if the product were 

determined to be covered by the scope 

of the order. 

(2) If the Secretary issues a 

preliminary scope ruling under 

paragraph (g) of this section that the 

product at issue is covered by the scope 

of the order, the Secretary will take the 

following actions: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

initiation of the scope inquiry; and 

(iii)(A) In general. Subject to 

paragraph (l)(2)(iii)(B) of this section, 

the Secretary normally will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

initiation of the scope inquiry. 

(B) Exception. If the Secretary 

determines it is appropriate to do so, the 

Secretary may, at the timely request of 

an interested party or at the Secretary’s 

discretion, direct the Customs Service to 

begin the suspension of liquidation and 

apply the applicable cash deposit rate 

under paragraph (l)(2)(iii)(A) of this 

section at an alternative date. In 

response to a timely request from an 

interested party, the Secretary will only 

consider an alternative date based on a 

specific argument supported by 

evidence establishing the 

appropriateness of that alternative date. 

(3) If the Secretary issues a final scope 

ruling under paragraph (h) of this 

section that the product at issue is 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52377 

covered by the scope of the order, the 

Secretary will take the following 

actions: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate until 

appropriate liquidation instructions are 

issued; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

initiation of the scope inquiry until 

appropriate liquidation instructions are 

issued; and 

(iii)(A) In general. Subject to 

paragraph (l)(3)(iii)(B) of this section, 

the Secretary normally will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

initiation of the scope inquiry until 

appropriate liquidation instructions are 

issued. 

(B) Exception. If the Secretary 

determines it is appropriate to do so, the 

Secretary may, at the timely request of 

an interested party or at the Secretary’s 

discretion, direct the Customs Service to 

begin the suspension of liquidation and 

apply the applicable cash deposit rate 

under paragraph (l)(3)(iii)(A) of this 

section at an alternative date until 

appropriate liquidation instructions are 

issued. In response to a timely request 

from an interested party, the Secretary 

will only consider an alternative date 

based on a specific argument supported 

by evidence establishing the 

appropriateness of that alternative date. 

(4) If the Secretary issues a final scope 

ruling under paragraph (h) of this 

section that the product is not covered 

by the scope of the order, and entries of 

the product at issue are not otherwise 

subject to suspension of liquidation as 

a result of another segment of the 

proceeding, such as a circumvention 

inquiry under § 351.226 or a covered 

merchandise inquiry under § 351.227, 

the Secretary will order the Customs 

Service to terminate the suspension of 

liquidation and refund any cash 

deposits for such entries. 

(5) Nothing in this section affects the 

Customs Service’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. 

(m) Applicability of scope rulings; 

companion orders—(1) Applicability of 

scope rulings. In conducting a scope 

inquiry under this section, the Secretary 

shall consider, based on the available 

record evidence, whether the scope 

ruling should be applied: 

(i) On a producer-specific, exporterspecific, importer-specific basis, or 

some combination thereof; or 

(ii) To all products from the same 

country with the same relevant physical 

characteristics, (including chemical, 

dimensional and technical 

characteristics) as the product at issue, 

on a country-wide basis, regardless of 

the producer, exporter or importer of 

those products. 

(2) Companion antidumping and 

countervailing duty orders. If there are 

companion antidumping and 

countervailing duty orders covering the 

same merchandise from the same 

country of origin, the requesting 

interested party under paragraph (c) of 

this section must file the scope ruling 

application pertaining to both orders 

only on the record of the antidumping 

duty proceeding. Should the Secretary 

determine to initiate a scope inquiry 

under paragraph (b) or (d) of this 

section, the Secretary will initiate and 

conduct a single inquiry with respect to 

the product at issue for both orders only 

on the record of the antidumping 

proceeding. Once the Secretary issues a 

final scope ruling on the record of the 

antidumping duty proceeding, the 

Secretary will include a copy of that 

scope ruling on the record of the 

countervailing duty proceeding. 

(n) Service of scope ruling 

application; annual inquiry service list; 

entry of appearance. (1) The 

requirements of § 351.303(f) apply to 

this section, except that an interested 

party that submits a scope ruling 

application under paragraph (c) of this 

section must serve a copy of the 

application on all persons on the annual 

inquiry service list for that order, as 

well as the companion order, if any, as 

described in paragraph (m)(2) of this 

section. If a scope ruling application is 

rejected and resubmitted pursuant to 

paragraph (d)(1) of this section, service 

of the resubmitted application is not 

required under this paragraph, unless 

otherwise specified. 

(2) For purposes of this section, the 

‘‘annual inquiry service list’’ will 

include the petitioner(s) and those 

parties that file a request for inclusion 

on the annual inquiry service list for a 

proceeding, in accordance with the 

Secretary’s established procedures. 

(3) A new ‘‘annual inquiry service 

list’’ will be established on a yearly 

basis. Parties filing a request for 

inclusion on that list must file a request 

during the anniversary month of the 

publication of the antidumping or 

countervailing duty order. Only the 

petitioner and the government of the 

foreign country at issue in an 

antidumping or countervailing duty 

order will be automatically placed on 

the new annual inquiry service list once 

the previous year’s list has been 

replaced. 

(4) Once a scope inquiry has been 

self-initiated or a scope ruling 

application is accepted by the Secretary, 

a segment-specific service list will be 

established and the requirements of 

§ 351.303(f) will apply. Parties other 

than the scope ruling applicant under 

paragraph (c) of this section that wish to 

participate in the scope inquiry must 

file an entry of appearance in 

accordance with § 351.103(d)(1). 

(o) Publication of list of final scope 

rulings. On a quarterly basis, the 

Secretary will publish in the Federal 

Register a list of final scope rulings 

issued within the previous three 

months. This list will include the case 

name, and a brief description of the 

ruling. The Secretary also may include 

complete public versions of its scope 

rulings on its website, should the 

Secretary determine such placement is 

warranted. 

(p) Suspended investigations; 

suspension agreements. The Secretary 

may apply the procedures set forth in 

this section in determining whether a 

product at issue is covered by the scope 

of a suspended investigation or a 

suspension agreement (see § 351.208). 

(q) Scope clarifications. The Secretary 

may issue a scope clarification in any 

segment of a proceeding providing an 

interpretation of specific language in the 

scope of an order or addressing whether 

a product is covered or excluded by the 

scope of an order at issue based on 

previous scope determinations covering 

the same or similar products. Such a 

scope clarification may take the form of 

an interpretive footnote to the scope 

when the scope is published or issued 

in instructions to the Customs Service. 

■ 6. Effective November 4, 2021, add 

§ 351.226 to subpart B to read as 

follows: 

§ 351.226 Circumvention inquiries. 

(a) Introduction. Section 781 of the 

Act addresses the circumvention of 

antidumping and countervailing duty 

orders. This provision recognizes that 

circumvention seriously undermines the 

effectiveness of the remedies provided 

by the antidumping and countervailing 

duty proceedings and frustrates the 

purposes for which these laws were 

enacted. Section 781 of the Act allows 

52378 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

the Secretary to apply antidumping and 

countervailing duty orders in such a 

way as to prevent circumvention by 

including within the scope of the order 

four distinct categories of merchandise. 

The Secretary will initiate and conduct 

a circumvention inquiry at the request 

of an interested party or on the 

Secretary’s initiative, and issue a 

circumvention determination as 

provided for under section 781 of the 

Act and the rules and procedures in this 

section. Unless otherwise specified, the 

procedures as described in subpart C of 

this part (§§ 351.301 through 351.308 

and 351.312 through 351.313) apply to 

this section. 

(b) Self-initiation of circumvention 

inquiry. If the Secretary determines from 

available information that an inquiry is 

warranted into the question of whether 

the elements necessary for a 

circumvention determination under 

section 781 of the Act exist, the 

Secretary may initiate a circumvention 

inquiry and publish a notice of 

initiation in the Federal Register. 

(c) Circumvention inquiry request—(1) 

In general. An interested party may 

submit a request for a circumvention 

inquiry that alleges that the elements 

necessary for a circumvention 

determination under section 781 of the 

Act exist and that is accompanied by 

information reasonably available to the 

interested party supporting these 

allegations. The circumvention inquiry 

request must be served in accordance 

with the requirements of paragraph (n) 

of this section. 

(2) Contents of request. To the extent 

reasonably available to the requestor, a 

circumvention inquiry request must 

include the following requested 

information under paragraph (c)(1) of 

this section and relevant supporting 

documentation: 

(i) A detailed description of the 

merchandise allegedly circumventing 

the antidumping or countervailing duty 

order, including: 

(A) The physical characteristics 

(including chemical, dimensional or 

technical characteristics) of the product; 

(B) The country(ies) where the 

product is produced, the country from 

where it is exported, and the declared 

country of origin; 

(C) The product’s tariff classification 

under the Harmonized Tariff Schedule 

of the United States and copies of any 

Customs rulings relevant to the tariff 

classification; 

(D) The uses of the product; 

(E) Clear and legible photographs, 

schematic drawings, specifications, 

standards, marketing materials, and any 

other exemplars providing a visual 

depiction of the product; and 

(F) A description of parts, materials, 

and the production process employed in 

the production of the product. 

(ii) A concise public summary of the 

product’s description under paragraphs 

(c)(2)(i)(A) through (C) of this section. 

(iii) The name and address of the 

producer, exporter, and importer of the 

product. If the full universe of parties 

allegedly circumventing the order(s) is 

unknown, then examples are sufficient. 

(iv) A statement of the requestor’s 

position as to the nature of the alleged 

circumvention under section 781 of the 

Act, such as a description of the 

procedures, channels of trade, and 

foreign countries involved (including a 

description of the processes occurring in 

each country), as appropriate. 

(v) A statement of the requestor’s 

position as to whether the 

circumvention inquiry, if initiated, 

should be conducted on a country-wide 

basis. 

(vi) Factual information supporting 

this position, including import and 

export data relevant to the merchandise 

allegedly circumventing the 

antidumping or countervailing duty 

order. 

(d) Initiation of a circumvention 

inquiry and other actions based on a 

request—(1) Initiation of a 

circumvention inquiry. Except as 

provided under paragraph (d)(2) of this 

section, within 30 days after the filing 

of a request for a circumvention inquiry, 

the Secretary will determine whether to 

accept or reject the request. If it is not 

practicable to determine whether to 

accept or reject a request within 30 

days, the Secretary may extend that 

deadline by an additional 15 days. 

(i) If the Secretary determines that the 

request is incomplete or otherwise 

unacceptable, the Secretary may reject 

the request, and will provide a written 

explanation of the reasons for the 

rejection. If the request is rejected, the 

requestor may resubmit the full request 

at any time, with all identified 

deficiencies corrected. 

(ii) If the Secretary determines that a 

request for a circumvention inquiry 

satisfies the requirements of paragraph 

(c) of this section, the Secretary will 

accept the request and initiate a 

circumvention inquiry. The Secretary 

will publish a notice of initiation in the 

Federal Register. 

(2) Other actions based on a request 

for a circumvention inquiry. Where 

applicable, the Secretary may take one 

of the following actions within the 

applicable timeline under paragraph 

(d)(1) of this section: 

(i) If the Secretary determines upon 

review of a request for a circumvention 

inquiry that a scope ruling is warranted 

before the Secretary can conduct a 

circumvention analysis, the Secretary 

may either initiate the circumvention 

inquiry under paragraph (d)(1)(ii) of this 

section and address the scope issue in 

the circumvention inquiry (see 

§ 351.225(i)(1)), or defer initiation of the 

circumvention inquiry pending the 

completion of any ongoing or new 

segment of the proceeding addressing 

the scope issue. When initiation is 

deferred pending another segment of the 

proceeding, if the result of that other 

segment is that the product at issue is 

not covered by the scope of the 

antidumping and/or countervailing duty 

order(s) at issue, the Secretary may 

immediately initiate the circumvention 

inquiry upon the issuance of the final 

decision in that other segment; or 

(ii) If the Secretary determines upon 

review of the request for a 

circumvention inquiry that the 

circumvention issue should be 

addressed in an ongoing segment of the 

proceeding, such as a covered 

merchandise inquiry under § 351.227, 

rather than initiating a circumvention 

inquiry, the Secretary will notify the 

requestor of its intent to address the 

circumvention issue in such other 

segment. 

(e) Deadlines for circumvention 

determinations—(1) Preliminary 

determination. The Secretary will issue 

a preliminary determination under 

paragraph (g)(1) of this section no later 

than 150 days from the date of 

publication of the notice of initiation of 

a circumvention inquiry under 

paragraph (b) or (d) of this section. 

(2) Final determination. In accordance 

with section 781(f) of the Act, the 

Secretary shall, to the maximum extent 

practicable, issue a final determination 

under paragraph (g)(2) of this section no 

later than 300 days from the date of 

publication of the notice of initiation of 

a circumvention inquiry under 

paragraph (b) or (d) of this section. If the 

Secretary concludes that the inquiry is 

extraordinarily complicated and 

additional time is necessary to issue a 

final circumvention determination, then 

the Secretary may extend the 300-day 

deadline by no more than 65 days. 

(3) Alignment with other segments. If 

the Secretary determines it is 

appropriate to do so, the Secretary may 

align the deadlines under this paragraph 

with the deadlines of another segment 

of the proceeding. 

(f) Circumvention inquiry procedures. 

(1) Within 30 days of the publication of 

the notice of the Secretary’s selfinitiation of a circumvention inquiry 

under paragraph (b) of this section, 

interested parties are permitted one 

opportunity to submit comments and 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52379 

factual information addressing the selfinitiation. Within 14 days of the filing 

of such comments, any interested party 

is permitted one opportunity to submit 

comments and factual information to 

rebut, clarify, or correct factual 

information submitted by the other 

interested parties. 

(2) Within 30 days of the publication 

of the notice of initiation of a 

circumvention inquiry under paragraph 

(d) of this section, an interested party 

other than the requestor is permitted 

one opportunity to submit comments 

and factual information to rebut, clarify, 

or correct factual information contained 

in the request. Within 14 days of the 

filing of such rebuttal, clarification, or 

correction, the requestor is permitted 

one opportunity to submit comments 

and factual information to rebut, clarify, 

or correct factual information contained 

in the interested party’s rebuttal, 

clarification or correction. 

(3) Following initiation of a 

circumvention inquiry under paragraph 

(b) or (d) of this section, the Secretary 

may issue questionnaires and verify 

submissions received, where 

appropriate. The Secretary may limit 

issuance of questionnaires to a 

reasonable number of respondents. 

Questionnaire responses are due on the 

date specified by the Secretary. Within 

14 days after a questionnaire response 

has been filed with the Secretary, an 

interested party other than the original 

submitter is permitted one opportunity 

to submit comments and factual 

information to rebut, clarify, or correct 

factual information contained in the 

questionnaire response. Within 7 days 

of the filing of such rebuttal, 

clarification, or correction, the original 

submitter is permitted one opportunity 

to submit comments and factual 

information to rebut, clarify, or correct 

factual information contained in the 

interested party’s rebuttal, clarification 

or correction. 

(4) If the Secretary issues a 

preliminary circumvention 

determination under paragraph (g)(1) of 

this section, which is not issued 

concurrently with the initiation of the 

circumvention inquiry, the Secretary 

will establish a schedule for the filing of 

comments and rebuttal comments. 

Unless otherwise specified, any 

interested party may submit comments 

within 14 days after the issuance of the 

preliminary circumvention 

determination, and any interested party 

may submit rebuttal comments within 7 

days thereafter. Unless otherwise 

specified, no new factual information 

will be accepted in the comments or 

rebuttal comments. 

(5) If the Secretary issues a 

preliminary circumvention 

determination concurrently with the 

initiation of the circumvention inquiry 

under paragraph (g)(1) of this section, 

paragraphs (f)(1) through (4) will not 

apply. In such a situation, the Secretary 

will establish appropriate procedures on 

a case-specific basis. 

(6) If the Secretary determines it is 

appropriate to do so, the Secretary may 

rescind, in whole or in part, a 

circumvention inquiry, under this 

section and will notify interested 

parties. Situations in which the 

Secretary may rescind a circumvention 

inquiry include: 

(i) The requestor timely withdraws its 

request for a circumvention inquiry 

under paragraph (c) of this section; 

(ii) The Secretary issues a final 

determination in another segment of a 

proceeding, and has determined that the 

merchandise at issue in the 

circumvention inquiry is covered by the 

scope of the antidumping or 

countervailing duty order; 

(iii) The Secretary has initiated a 

circumvention inquiry under paragraph 

(b) or (d) of this section to examine 

circumvention under two or more 

provisions under paragraph (h), (i), (j), 

or (k) of this section, and determines 

that it is not necessary to issue a final 

circumvention determination with 

respect to one of those paragraphs. For 

example, if the Secretary initiates a 

circumvention inquiry to examine 

whether merchandise is altered in 

minor respects under paragraph (j) of 

this section or later-developed 

merchandise under paragraph (k) of this 

section, the Secretary may rescind the 

inquiry in part to address only one of 

those provisions; or 

(iv) The Secretary has initiated a 

covered merchandise inquiry under 

§ 351.227 and determined that it can 

address the necessary elements for a 

circumvention determination under 

section 781 of the Act in that 

proceeding. 

(7) If the Secretary determines it is 

appropriate to do so, the Secretary may 

alter or extend any time limits under 

this paragraph or establish a separate 

schedule for the filing of comments and/ 

or factual information during the 

circumvention inquiry. 

(8)(i) The Secretary will notify the 

Commission in writing of the proposed 

inclusion of products in an order prior 

to issuing a final determination under 

paragraph (g)(2) of this section based on 

a determination under: 

(A) Section 781(a) of the Act 

(paragraph (h) of this section) with 

respect to merchandise completed or 

assembled in the United States (other 

than minor completion or assembly); 

(B) Section 781(b) of the Act 

(paragraph (i) of this section) with 

respect to merchandise completed or 

assembled in other foreign countries; or 

(C) Section 781(d) of the Act 

(paragraph (k) of this section) with 

respect to later-developed products that 

incorporate a significant technological 

advance or significant alteration of an 

earlier product. 

(ii) If the Secretary notifies the 

Commission under paragraph (f)(8)(i) of 

this section, upon the written request of 

the Commission, the Secretary will 

consult with the Commission regarding 

the proposed inclusion, and any such 

consultation will be completed within 

15 days after the date of such request. 

If, after consultation, the Commission 

believes that a significant injury issue is 

presented by the proposed inclusion of 

a product within an order, the 

Commission may provide written advice 

to the Secretary as to whether the 

inclusion would be inconsistent with 

the affirmative injury determination of 

the Commission on which the order is 

based. 

(9) During the pendency of a 

circumvention inquiry or upon issuance 

of a final circumvention determination 

under paragraph (g)(2) of this section, 

the Secretary may take any further 

action, as appropriate, with respect to 

another segment of the proceeding. For 

example, if the Secretary considers it 

appropriate, the Secretary may request 

information concerning the product that 

is the subject of the circumvention 

inquiry for purposes of an 

administrative review under § 351.213. 

(g) Circumvention determinations— 

(1) Preliminary determination. The 

Secretary will issue a preliminary 

determination, based upon the available 

information at the time, as to whether 

there is a reasonable basis to believe or 

suspect that the elements necessary for 

a circumvention determination under 

section 781 of the Act exist. The 

preliminary determination will be 

published in the Federal Register. The 

Secretary may publish notice of a 

preliminary determination concurrently 

with the notice of initiation of a 

circumvention inquiry under paragraph 

(b) or (d) of this section. 

(2) Final determination. The Secretary 

will issue a final determination as to 

whether the elements necessary for a 

circumvention determination under 

section 781 of the Act exist, in which 

case the merchandise at issue will be 

included within the scope of the order. 

As part of its determination, the 

Secretary will include an explanation of 

the factual and legal conclusions on 

52380 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

which the final determination is based. 

The final determination will be 

published in the Federal Register. 

Promptly after publication, the 

Secretary will convey a copy of the final 

determination in the manner prescribed 

by section 516A(a)(2)(A)(ii) of the Act to 

all parties to the proceeding (see 

§ 351.102(b)(36)). 

(h) Products completed or assembled 

in the United States. Under section 

781(a) of the Act, the Secretary may 

include within the scope of an 

antidumping or countervailing duty 

order imported parts or components 

referred to in section 781(a)(1)(B) of the 

Act that are used in the completion or 

assembly of the merchandise in the 

United States at any time such order is 

in effect. In determining the value of 

parts or components (including such 

purchases from another person) under 

section 781(a)(1)(D) of the Act, or of 

processing performed (including by 

another person) under section 

781(a)(2)(E) of the Act, the Secretary 

may determine the value of the part or 

component on the basis of the cost of 

producing the part or component under 

section 773(e) of the Act—or, in the case 

of nonmarket economies, on the basis of 

section 773(c) of the Act. 

(i) Products completed or assembled 

in other foreign countries. Under section 

781(b) of the Act, the Secretary may 

include within the scope of an 

antidumping or countervailing duty 

order, at any time such order is in effect, 

imported merchandise completed or 

assembled in a foreign country other 

than the country to which the order 

applies. In determining the value of 

parts or components (including such 

purchases from another person) under 

section 781(b)(1)(D) of the Act, or of 

processing performed (including by 

another person) under section 

781(b)(2)(E) of the Act, the Secretary 

may determine the value of the part or 

component on the basis of the cost of 

producing the part or component under 

section 773(e) of the Act—or, in the case 

of nonmarket economies, on the basis of 

section 773(c) of the Act. 

(j) Minor alterations of merchandise. 

Under section 781(c) of the Act, the 

Secretary may include within the scope 

of an antidumping or countervailing 

duty order articles altered in form or 

appearance in minor respects. The 

Secretary may consider such criteria 

including, but not limited to, the overall 

physical characteristics of the 

merchandise, (including chemical, 

dimensional, and technical 

characteristics), the expectations of the 

ultimate users, the use of the 

merchandise, the channels of marketing 

and the cost of any modification relative 

to the total value of the imported 

products. The Secretary also may 

consider the circumstances under which 

the products enter the United States, 

including but not limited to the timing 

of the entries and the quantity of 

merchandise entered during the 

circumvention review period. 

(k) Later-developed merchandise. In 

determining whether later-developed 

merchandise is within the scope of an 

antidumping or countervailing duty 

order, the Secretary will apply section 

781(d) of the Act. In determining 

whether merchandise is ‘‘laterdeveloped’’ the Secretary will examine 

whether the merchandise at issue was 

commercially available at the time of 

the initiation of the underlying 

antidumping or countervailing duty 

investigation. 

(l) Suspension of liquidation. (1) 

When the Secretary publishes a notice 

of initiation of a circumvention inquiry 

under paragraph (b) or (d) of this 

section, the Secretary will notify the 

Customs Service of the initiation and 

direct the Customs Service to continue 

the suspension of liquidation of entries 

of products subject to the circumvention 

inquiry that were already subject to the 

suspension of liquidation, and to apply 

the cash deposit rate that would be 

applicable if the product were 

determined to be covered by the scope 

of the order. 

(2) If the Secretary issues an 

affirmative preliminary determination 

under paragraph (g)(1) of this section 

that the product at issue is covered by 

the scope of the order, the Secretary will 

take the following actions: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

publication of the notice of initiation of 

the inquiry; and 

(iii)(A) In general. Subject to 

paragraph (l)(2)(iii)(B) of this section, if 

the Secretary determines that it is 

appropriate to do so, the Secretary may 

direct the Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

publication of the notice of initiation of 

the inquiry. The Secretary may take 

action under this provision at the timely 

request of an interested party or at the 

Secretary’s discretion. In response to a 

timely request from an interested party, 

the Secretary will only consider an 

alternative date based on a specific 

argument supported by evidence 

establishing the appropriateness of that 

alternative date. 

(B) Exception. If the Secretary has 

determined to address a covered 

merchandise referral (see § 351.227) in a 

circumvention inquiry under § 351.226, 

the rules of § 351.227(l)(2)(iii) will 

apply. 

(3) If the Secretary issues an 

affirmative final determination under 

paragraph (g)(2) of this section that the 

product at issue is covered by the scope 

of the order, the following rules will 

apply: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate until 

appropriate liquidation instructions are 

issued; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

publication of the notice of initiation of 

the inquiry until appropriate liquidation 

instructions are issued; and 

(iii)(A) In general. Subject to 

paragraph (l)(3)(iii)(B) of this section, if 

the Secretary determines that it is 

appropriate to do so, the Secretary may 

direct the Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

publication of the notice of initiation of 

the inquiry until appropriate liquidation 

instructions are issued. The Secretary 

may take action under this provision at 

the timely request of an interested party 

or at the Secretary’s discretion. In 

response to a timely request from an 

interested party, the Secretary will only 

consider an alternative date based on a 

specific argument supported by 

evidence establishing the 

appropriateness of that alternative date. 

(B) Exception. If the Secretary has 

determined to address a covered 

merchandise referral (see § 351.227) in a 

circumvention inquiry under § 351.226, 

the rules of § 351.227(l)(3)(iii) will 

apply. 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52381 

(4) If the Secretary issues a negative 

final determination under paragraph 

(g)(2) of this section, and entries of the 

product are not otherwise subject to 

suspension of liquidation as a result of 

another segment of the proceeding, such 

as a covered merchandise inquiry under 

§ 351.227, the Secretary will order the 

Customs Service to terminate the 

suspension of liquidation and refund 

any cash deposits for such entries. 

(5) Nothing in this section affects the 

Customs Service’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. 

(m) Applicability of circumvention 

determination; companion orders—(1) 

Applicability of circumvention 

determination. In conducting a 

circumvention inquiry under this 

section, the Secretary shall consider, 

based on the available record evidence, 

the appropriate remedy to address 

circumvention and to prevent evasion of 

the order. Such remedies may include: 

(i) The application of the 

determination on a producer-specific, 

exporter-specific, importer-specific 

basis, or some combination thereof; 

(ii) The application of the 

determination on a country-wide basis 

to all products from the same country as 

the product at issue with the same 

relevant physical characteristics, 

(including chemical, dimensional and 

technical characteristics), regardless of 

producer, exporter, or importer of those 

products; 

(iii) The application of the 

determination on a country-wide basis 

to all products from the same country as 

the product at issue with similar 

relevant physical characteristics, 

(including chemical, dimensional and 

technical characteristics), regardless of 

producer, exporter, or importer of those 

products; and 

(iv) The implementation of a 

certification requirement under 19 CFR 

351.228. 

(2) Companion antidumping and 

countervailing duty orders. If there are 

companion antidumping and 

countervailing duty orders covering the 

same merchandise from the same 

country of origin, the requesting 

interested party under paragraph (c) of 

this section must file the request 

pertaining to both orders only on the 

record of the antidumping duty 

proceeding. Should the Secretary 

determine to initiate a circumvention 

inquiry under paragraph (b) or (d) of 

this section, the Secretary will initiate 

and conduct a single inquiry with 

respect to the product at issue for both 

orders only on the record of the 

antidumping proceeding. Once the 

Secretary issues a final circumvention 

determination on the record of the 

antidumping duty proceeding, the 

Secretary will include a copy of that 

determination on the record of the 

countervailing duty proceeding. 

(n) Service of circumvention inquiry 

request; annual inquiry service list; 

entry of appearance. (1) The 

requirements of § 351.303(f) apply to 

this section, except that an interested 

party that submits a circumvention 

inquiry request under paragraph (c) of 

this section must serve a copy of that 

inquiry request on all persons on the 

annual inquiry service list for that order, 

as well as the companion order, if any, 

as described in paragraph (m)(2) of this 

section. The procedures and description 

pertaining to the ‘‘annual inquiry 

service list’’ are set forth in 

§ 351.225(n)(1) through (3). 

(2) Once a circumvention inquiry is 

self-initiated or a circumvention inquiry 

request is accepted by the Secretary, a 

segment-specific service list will be 

established and the requirements of 

§ 351.303(f) will apply. Parties other 

than the interested party requesting a 

circumvention inquiry that wish to 

participate in the circumvention inquiry 

must file an entry of appearance in 

accordance with § 351.103(d)(1). 

(o) Suspended investigations; 

suspension agreements. The Secretary 

may, in accordance with section 781 of 

the Act, apply the procedures set forth 

in this section in determining whether 

the product at issue circumvented a 

suspended investigation or a suspension 

agreement (see § 351.208). 

■ 7. Effective November 4, 2021, add 

§ 351.227 to subpart B to read as 

follows: 

§ 351.227 Covered merchandise referrals. 

(a) Introduction. The Trade 

Facilitation and Trade Enforcement Act 

of 2015 contains Title IV—Prevention of 

Evasion of Antidumping and 

Countervailing Duty Orders (short title 

‘‘Enforce and Protect Act of 2015’’ or 

‘‘EAPA’’) (Pub. L. 114–125, sections 

401, 421, 130 Stat. 122, 155, 161 (2016)). 

The Enforce and Protect Act of 2015 

added section 517 to the Act, which 

established a new framework by which 

the Customs Service can conduct civil 

administrative investigations of 

potential duty evasion of an 

antidumping and/or countervailing duty 

order (referred to herein as an ‘‘EAPA 

investigation’’). Section 517(b)(4)(A)(i) 

of the Act provides a procedure 

whereby if, during the course of an 

EAPA investigation, the Customs 

Service is unable to determine whether 

the merchandise at issue is covered 

merchandise within the meaning of 

section 517(a)(3) of the Act, it shall refer 

the matter to the Secretary to make such 

a determination (referred to herein as a 

‘‘covered merchandise referral’’). 

Section 517(b)(4)(B) of the Act directs 

the Secretary to determine whether the 

merchandise is covered merchandise 

and promptly transmit the 

determination to the Customs Service. 

The Secretary will consider a covered 

merchandise referral and issue a 

covered merchandise determination in 

accordance with the rules and 

procedures in this section. Unless 

otherwise specified, the procedures as 

described in subpart C of this part 

(§§ 351.301 through 351.308 and 

351.312 through 351.313) apply to this 

section. 

(b) Actions with respect to covered 

merchandise referral. Within 20 days 

after receiving a covered merchandise 

referral from the Customs Service 

pursuant to section 517(b)(4)(A)(i) of the 

Act that the Secretary determines to be 

sufficient, the Secretary will take the 

following action. 

(1) Initiate a covered merchandise 

inquiry and publish a notice of 

initiation in the Federal Register; or 

(2) If the Secretary determines upon 

review of the covered merchandise 

referral that the issue can be addressed 

in an ongoing segment of the 

proceeding, such as a scope inquiry 

under § 351.225 or a circumvention 

inquiry under § 351.226, rather than 

initiating the covered merchandise 

inquiry, the Secretary will publish a 

notice of its intent to address the 

covered merchandise referral in such 

other segment in the Federal Register. 

(c) Deadlines for covered merchandise 

determinations—(1) In general. When 

the Secretary initiates a covered 

merchandise inquiry under paragraph 

(b)(1) of this section, the Secretary shall 

issue a final covered merchandise 

determination within 120 days from the 

date of publication of the notice of 

initiation. 

(2) Extension. The Secretary may 

extend the deadline in paragraph (c)(1) 

of this section by no more than 150 days 

if the Secretary determines that good 

cause exists to warrant an extension. 

Situations in which good cause has been 

demonstrated may include: 

(i) If the Secretary has issued 

questionnaires to interested parties; 

received responses to those 

questionnaires; and determined that an 

extension is warranted to request further 

information or consider and address the 

parties’ responses on the record 

adequately; 

(ii) The Secretary has issued a 

preliminary covered merchandise 

52382 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

determination (see paragraph (e)(1) of 

this section); or 

(iii) The Secretary has determined to 

address a scope or circumvention issue 

from another segment of the proceeding 

involving the same or similar products 

in the covered merchandise inquiry, 

pursuant to § 351.225(d)(2) or (i) or 

§ 351.226(f)(6)(iv). 

(3) Alignment with other segments. If 

the Secretary determines it is 

appropriate to do so, the Secretary may 

align the deadlines under this paragraph 

with the deadlines of another segment 

of the proceeding. 

(d) Covered merchandise inquiry 

procedures. (1) Within 30 days of the 

date of publication of the notice of an 

initiation of a covered merchandise 

inquiry under paragraph (b)(1) of this 

section, interested parties are permitted 

one opportunity to submit comment and 

factual information addressing the 

initiation. Within 14 days of the filing 

of such comments, any interested party 

is permitted one opportunity to submit 

comment and factual information to 

rebut, clarify, or correct factual 

information submitted by the other 

interested parties. 

(2) Following initiation of a covered 

merchandise inquiry under paragraph 

(b)(1) of this section, the Secretary may 

issue questionnaires and verify 

submissions received, where 

appropriate. The Secretary may limit 

issuance of questionnaires to a 

reasonable number of respondents. 

Questionnaire responses are due on the 

date specified by the Secretary. Within 

14 days after a questionnaire response 

has been filed with the Secretary, an 

interested party other than the original 

submitter is permitted one opportunity 

to submit comment and factual 

information to rebut, clarify, or correct 

factual information contained in the 

questionnaire response. Within 7 days 

of the filing of such rebuttal, 

clarification, or correction, the original 

submitter is permitted one opportunity 

to submit comment and factual 

information to rebut, clarify, or correct 

factual information submitted in the 

interested party’s rebuttal, clarification 

or correction. 

(3) If the Secretary issues a 

preliminary covered merchandise 

determination under paragraph (e)(1) of 

this section, which is not issued 

concurrently with the initiation of a 

covered merchandise inquiry, the 

Secretary will establish a schedule for 

the filing of comments and rebuttal 

comments. Unless otherwise specified, 

any interested party may submit 

comments within 14 days after the 

issuance of the preliminary covered 

merchandise determination, and any 

interested party may submit rebuttal 

comments within 7 days thereafter. 

Unless otherwise specified, no new 

factual information will be accepted in 

the comments or rebuttal comments. 

(4) If the Secretary issues a 

preliminary covered merchandise 

determination concurrently with the 

initiation of the covered merchandise 

inquiry under paragraph (e)(1) of this 

section, paragraphs (d)(1) through (3) 

will not apply. In such a situation, the 

Secretary will establish appropriate 

procedures on a case-specific basis. 

(5) If the Secretary determines it 

appropriate to do so, the Secretary may 

rescind, in whole or in part, a covered 

merchandise inquiry under this section 

and will notify interested parties. 

Situations in which the Secretary may 

rescind a covered merchandise inquiry 

include: 

(i) The Customs Service withdraws its 

request for a covered merchandise 

inquiry under paragraph (b) of this 

section; or 

(ii) The Secretary has initiated a scope 

inquiry under § 351.225 or a 

circumvention inquiry under § 351.226 

and determines that it can address the 

covered merchandise referral in such 

other segment of the proceeding. 

(6) If the Secretary determines it is 

appropriate to do so, the Secretary may 

alter or extend any time limits under 

this paragraph or establish a separate 

schedule for the filing of comments and/ 

or factual information during the 

covered merchandise inquiry. 

(7) During the pendency of a covered 

merchandise inquiry or upon issuance 

of a final covered merchandise 

determination under paragraph (e)(2) of 

this section, the Secretary may take any 

further action, as appropriate, with 

respect to another segment of the 

proceeding. For example, if the 

Secretary considers it appropriate, the 

Secretary may request information 

concerning the product that is the 

subject of the covered merchandise 

inquiry for purpose of an administrative 

review under § 351.213. 

(e) Covered merchandise 

determinations—(1) Preliminary 

determination. The Secretary may issue 

a preliminary determination, based 

upon the available information at the 

time, as to whether there is a reasonable 

basis to believe or suspect that the 

product that is the subject of the 

covered merchandise inquiry is covered 

by the scope of the order. In 

determining whether to issue a 

preliminary determination, the 

Secretary may consider the complexity 

of the issues and arguments raised in 

the context of the covered merchandise 

inquiry. The preliminary determination 

will be published in the Federal 

Register. The Secretary may publish 

notice of a preliminary determination 

concurrently with the notice of 

initiation of a covered merchandise 

inquiry under paragraph (b)(1) of this 

section. 

(2) Final determination. The Secretary 

will issue a final determination as to 

whether the product that is the subject 

of the covered merchandise inquiry is 

covered by the scope of the order. As 

part of its determination, the Secretary 

will include an explanation of the 

factual and legal conclusions on which 

the final determination is based. The 

final determination will be published in 

the Federal Register. Promptly after 

publication, the Secretary will: 

(i) Convey a copy of the final 

determination in the manner prescribed 

by section 516A(a)(2)(A)(ii) of the Act to 

all parties to the proceeding (see 

§ 351.102(b)(36)); and 

(ii) Transmit a copy of the final 

covered merchandise determination to 

the Customs Service in accordance with 

section 517(b)(4)(B) of the Act. 

(3) Covered merchandise 

determinations in other segments of the 

proceeding. If the Secretary addresses 

the covered merchandise referral in 

another segment of the proceeding as 

provided for under paragraph (b)(2) or 

(d)(5)(ii) of this section, the Secretary 

will promptly transmit a copy of the 

final action in that segment to the 

Customs Service in accordance with 

section 517(b)(4)(B) of the Act. 

(f) Basis for covered merchandise 

determination. In determining whether 

a product is covered by the scope of the 

order under this section, the Secretary 

may utilize the analysis described in 

paragraphs (j) and (k) of § 351.225 or 

any provision under section 781 of the 

Act (paragraph (h), (i), (j), or (k) of 

§ 351.226). 

(g)–(k) [Reserved] 

(l) Suspension of liquidation. (1) 

When the Secretary publishes a notice 

of initiation of a covered merchandise 

inquiry under paragraph (b)(1) of this 

section, the Secretary will notify the 

Customs Service of the initiation and 

direct the Customs Service to continue 

the suspension of liquidation of entries 

of products subject to the covered 

merchandise inquiry that were already 

subject to the suspension of liquidation, 

and to apply the cash deposit rate that 

would be applicable if the product were 

determined to be covered by the scope 

of the order. 

(2) If the Secretary issues an 

affirmative preliminary covered 

merchandise determination under 

paragraph (e)(1) of this section that the 

product at issue is covered by the scope 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52383 

of the order, the Secretary will take the 

following actions: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

publication of the notice of initiation of 

the covered merchandise inquiry; and 

(iii) The Secretary normally will 

direct the Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

publication of the notice of initiation of 

the covered merchandise inquiry. 

(3) If the Secretary issues an 

affirmative final covered merchandise 

determination under paragraph (e)(2) of 

this section that the product at issue is 

covered by the scope of the order, the 

Secretary will take the following 

actions: 

(i) The Secretary will direct the 

Customs Service to continue the 

suspension of liquidation of previously 

suspended entries and apply the 

applicable cash deposit rate until 

appropriate liquidation instructions are 

issued; 

(ii) The Secretary will direct the 

Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption on or after the date of 

publication of the notice of initiation of 

the covered merchandise inquiry until 

appropriate liquidation instructions are 

issued; and 

(iii) The Secretary normally will 

direct the Customs Service to begin the 

suspension of liquidation and require a 

cash deposit of estimated duties, at the 

applicable rate, for each unliquidated 

entry of the product not yet suspended, 

entered, or withdrawn from warehouse, 

for consumption prior to the date of 

publication of the notice of initiation of 

the covered merchandise inquiry until 

appropriate liquidation instructions are 

issued. 

(4) If the Secretary issues a negative 

final covered merchandise 

determination under paragraph (e)(2) of 

this section that the product at issue is 

not covered by the scope of the order, 

and entries of the product at issue are 

not otherwise subject to suspension of 

liquidation as a result of another 

segment of a proceeding, such as a 

circumvention inquiry under § 351.226, 

the Secretary will direct the Customs 

Service to terminate the suspension of 

liquidation and refund any cash 

deposits for such entries. 

(5) Nothing in this section affects the 

Customs Service’s authority to take any 

additional action with respect to the 

suspension of liquidation or related 

measures. 

(m) Applicability of covered 

merchandise determination; companion 

orders—(1) Applicability of covered 

merchandise determination. In 

conducting a covered merchandise 

inquiry under this section, the Secretary 

shall consider, based on the available 

record evidence, whether the covered 

merchandise determination should be 

applied: 

(i) On a producer-specific, exporterspecific, importer-specific basis, or 

some combination thereof; or 

(ii) To all products from the same 

country with the same relevant physical 

characteristics, (including chemical, 

dimensional and technical 

characteristics) as the product at issue, 

on a country-wide basis, regardless of 

the producer, exporter or importer of 

those products. 

(2) Companion antidumping and 

countervailing duty orders. If there are 

companion antidumping and 

countervailing duty orders covering the 

same merchandise from the same 

country of origin, and should the 

Secretary determine to initiate a covered 

merchandise inquiry under paragraph 

(b)(1) of this section, the Secretary will 

initiate and conduct a single inquiry 

with respect to the product at issue only 

on the record of the antidumping duty 

proceeding. Once the Secretary issues a 

final covered merchandise 

determination on the record of the 

antidumping duty proceeding, the 

Secretary will include a copy of that 

determination on the record of the 

countervailing duty proceeding and 

notify the Customs Service in 

accordance with paragraph (l) of this 

section. 

(n) Service list. Once the Secretary 

initiates a covered merchandise inquiry 

under paragraph (b)(1) of this section, a 

segment-specific service list will be 

established and the requirements of 

§ 351.303(f) will apply. Parties other 

than those relevant parties identified by 

the Customs Service in the covered 

merchandise referral that wish to 

participate in the covered merchandise 

inquiry must file an entry of appearance 

in accordance with § 351.103(d)(1). 

(o) Suspended investigations; 

suspension agreements. The Secretary 

may apply the procedures set forth in 

this section in determining whether the 

product at issue is covered merchandise 

with respect to a suspended 

investigation or a suspension agreement 

(see § 351.208). 

■ 8. Effective October 20, 2021, add 

§ 351.228 to subpart B to read as 

follows: 

§ 351.228 Certification by importer or other 

interested party. 

(a) Certification requirements. (1) The 

Secretary may determine in the context 

of an antidumping or countervailing 

duty proceeding that an importer or 

other interested party shall: 

(i) Maintain a certification for entries 

of merchandise into the customs 

territory of the United States; 

(ii) Provide a certification by 

electronic means at the time of entry or 

entry summary; or 

(iii) Otherwise demonstrate 

compliance with a certification 

requirement as determined by the 

Secretary, in consultation with the 

Customs Service. 

(2) Where the certification is required 

to be maintained by the importer or 

other interested party under paragraph 

(a)(1) of this section, the Secretary and/ 

or the Customs Service may require the 

importer or other interested party to 

provide such a certification to the 

requesting agency upon request. 

(b) Consequences for no provision of 

a certificate; provision of a false 

certificate. (1) The Secretary may 

instruct the Customs Service to suspend 

liquidation of entries of the importer or 

entries associated with the other 

interested party and require a cash 

deposit of estimated duties at the 

applicable rate if: 

(i) The importer or other interested 

party has not provided to the Secretary 

or the Customs Service, as appropriate, 

the certification described under 

paragraph (a) of this section either as 

required or upon request for such 

entries; or 

(ii) The importer or other interested 

party provided a certification in 

accordance with paragraph (a) of this 

section for such entries, but the 

certification contained materially false, 

fictitious or fraudulent statements or 

representations, or contained material 

omissions. 

(2) Under paragraph (b)(1)(i) or (ii) of 

this section, the Secretary may also 

instruct the Customs Service to assess 

antidumping or countervailing duties, 

52384 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

as the case may be, at the applicable 

rate. 

■ 9. In § 351.305, effective November 4, 

2021, revise paragraph (d) to read as 

follows: 

§ 351.305 Access to business proprietary 

information. 

* * * * * 

(d) Additional filing requirements for 

importers. If an applicant represents a 

party claiming to be an interested party 

by virtue of being an importer, then the 

applicant shall submit, along with the 

Form ITA–367, documentary evidence 

demonstrating that during the 

applicable period of investigation or 

period of review the interested party 

imported subject merchandise. For a 

scope segment of a proceeding pursuant 

to § 351.225 or a circumvention segment 

of a proceeding pursuant to § 351.226, 

the applicant must present documentary 

evidence that the interested party 

imported subject merchandise, or that it 

has taken steps towards importing the 

merchandise subject to the scope or 

circumvention inquiry. For a covered 

merchandise referral segment of a 

proceeding pursuant to § 351.227, an 

applicant representing an interested 

party that has been identified by the 

Customs Service as the importer in a 

covered merchandise referral is exempt 

from the requirements of providing 

documentary evidence to demonstrate 

that it is an importer for purposes of that 

segment of a proceeding. 

■ 10. In § 351.402, effective October 20, 

2021, revise paragraph (f)(2) to read as 

follows: 

§ 351.402 Calculation of export price and 

constructed export price; reimbursement of 

antidumping and countervailing duties. 

* * * * * 

(f) * * * 

(2) Reimbursement certification. (i) 

The importer must certify with the 

Customs Service prior to liquidation 

(except as provided for in paragraph 

(f)(2)(iii) of this section) whether the 

importer has or has not been reimbursed 

or entered into any agreement or 

understanding for the payment or for 

the refunding to the importer by the 

manufacturer, producer, seller, or 

exporter for all or any part of the 

antidumping and countervailing duties, 

as appropriate. Such certifications 

should identify the commodity and 

country and contain the information 

necessary to link the certification to the 

relevant entry or entry line number(s). 

(ii) The reimbursement certification 

may be filed either electronically or in 

paper in accordance with the Customs 

Service’s requirements, as applicable. 

(iii) If an importer does not provide its 

reimbursement certification prior to 

liquidation, the Customs Service may 

accept the reimbursement certification 

in accordance with its protest 

procedures under 19 U.S.C. 1514, unless 

otherwise directed. 

(iv) Reimbursement certifications are 

required for entries of the relevant 

commodity that have been imported on 

or after the date of publication of the 

antidumping notice in the Federal 

Register that first suspended liquidation 

in that proceeding. 

* * * * * 

[FR Doc. 2021–17861 Filed 9–16–21; 8:45 am] 

BILLING CODE 3510–DS–P