Certain Paper Shopping Bags From the People's Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value and Final Affirmative Critical Circumstances Determination

AGENCY:

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

SUMMARY:

The U.S. Department of Commerce (Commerce) determines that certain paper shopping bags (paper bags) from the People's Republic of China (China) are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is October 1, 2022, through March 31, 2023.

DATES:

Applicable May 24, 2024.

FOR FURTHER INFORMATION CONTACT:

Jinny Ahn or Tyler Weinhold, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0339 or (202) 482-1121, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 3, 2024, Commerce published in the Federal Register its preliminary affirmative determination in the LTFV investigation of paper bags from China, in which we also postponed the final determination until May 17, 2024. We invited parties to comment on the Preliminary Determination.

A summary of the events that occurred since Commerce published the Preliminary Determination, as well as a full discussion of the issues raised by parties for this final determination, may be found in the Issues and Decision Memorandum. The Issues and Decision Memorandum is a public document and is made available to the public via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx.

Scope of the Investigation

The products covered by this investigation are paper bags from China. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

During the course of this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period of time for parties to address scope issues in scope-specific case and rebuttal briefs. We received comments from parties on the Preliminary Scope Decision Memorandum, which we address in the Final Scope Decision Memorandum. We made no changes to the scope of the investigation from the scope published in the Preliminary Determination, as noted in Appendix I to this notice.

Final Affirmative Determination of Critical Circumstances

We continue to find that critical circumstances exist for imports of paper bags from China for Dongzheng Paperbag (DaLian) Factory (Dongzheng), the non-selected separate rate companies, and the China-wide entity pursuant to section 735(a)(3)(B) of Tariff Act of 1930, as amended (the Act), and 19 CFR 351.206, we continue to find that that critical circumstances exist with respect to imports of paper bags exported by the non-selected separate rate companies and the China-wide entity (including Dongzheng). In addition, we continue to find that critical circumstances do not exist for UUPAK Co., Ltd. (UUPAK). For further discussion of this issue, see the Issues and Decision Memorandum.

Verification

Commerce was unable to conduct an on-site verification of the information relied upon in making its final determination. However, from March 4 through 8, 2024, we took additional steps, in lieu of an on-site verification, to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Act, by conducting virtual verification of UUPAK.

Analysis of Comments Received

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

Changes Since the Preliminary Determination

As explained below, we have found Dongzheng to be part of the China-wide entity. Additionally, based on our review and analysis of the comments received from interested parties, we made one change to the margin calculations for UUPAK. For a discussion of this change, see the Issues and Decision Memorandum.

Treatment of Dongzheng Paperbag (DaLian) Factory

In the Preliminary Determination, Commerce granted a separate rate to Dongzheng, as a cooperative mandatory respondent. As explained in further detail in the Issues and Decision Memorandum, Dongzheng notified Commerce that it would not continue to cooperate with this investigation and withdrew its participation from the scheduled verification. Therefore, because we were unable to verify Dongzheng's information, we have found that Dongzheng is part of the China-wide entity.

Application of Total of Adverse Facts Available With Respect to the China-Wide Entity

Consistent with the Preliminary Determination, Commerce continues to find, pursuant to sections 776(a)(1) and (a)(2)(A)-(D) of the Act, that the use of facts available is warranted in determining the rate of the China-wide entity, which includes, as noted above, Dongzheng, as well as Qingdao Deepack Co., Ltd. (Qingdao Deepack), which submitted a separate rate application (SRA) but did not respond adequately to all of our requests for information. Furthermore, we continue to find that an adverse inference is warranted in selecting from the facts otherwise available, pursuant to section 776(b) of the Act and 19 CFR 351.308(a), because the China-wide entity failed to cooperate by not acting to the best of their ability to comply with Commerce's requests for information. For the final determination, consistent with the Preliminary Determination, as adverse facts available, we are applying Dongzheng's highest individual calculated dumping margin, 146.32 percent, to the China-wide entity, because it is a rate derived from information submitted on the record and achieves the right balance between the goal of inducing future cooperation by the uncooperative respondent and the rate not being punitive.

Separate Rates

We preliminarily found the mandatory respondents Dongzheng and UUPAK to be eligible for a separate rate in the Preliminary Determination. No party commented on our preliminary separate rate determination with respect to UUPAK and we have no basis to otherwise reconsider this determination. Accordingly, we continue to find that UUPAK is eligible for a separate rate in the final determination. As explained above, because Dongzheng refused to participate in verification of its SRA, we, have denied Dongzheng separate rate status. In addition, no party commented on our decision in the Preliminary Determination to grant separate status to certain other respondents that we did not select for individual examination or on our preliminary determination to deny a separate rate to Qingdao Deepack, which failed to establish its eligibility for a separate rate by not complying with all of our requests for information. Accordingly, we have continued to treat Qingdao Deepack as a part of the China-wide entity.

Further, generally, Commerce looks to section 735(c)(5)(A) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance when calculating the rate for separate rate respondents which we did not individually examine. The statute further provides that, where all margins are zero, de minimis, or based entirely on facts available under section 776 of the Act, Commerce may use “any reasonable method” for assigning the rate to non-selected respondents. In this final determination, the only participating mandatory respondent ( i.e., UUPAK) has received a weighted-average dumping margin which is not zero, de minimis, or based entirely on facts available. Therefore, in accordance with section 735(c)(5)(A) of the Act, we have assigned UUPAK's calculated weighted-average dumping margin ( i.e., 73.05 percent) to the non-examined separate rate respondents.

Combination Rates

Consistent with the Initiation Notice, Preliminary Determination, and Policy Bulletin 05.1, Commerce calculated combination rates for the sole respondent that is eligible for a separate rate in this investigation.

Final Determination

The final estimated weighted-average dumping margins are as follows:

Disclosure

We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice in the Federal Register in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

In accordance with section 735(c)(4) of the Act, because Commerce continues to find that critical circumstances exist for the non-selected separate rate companies and the China-wide entity, we will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of subject merchandise, as described in Appendix I of this notice, entered, or withdrawn from warehouse, for consumption, on or after October 5, 2023, which is 90 days prior to the date of the date of publication of the affirmative Preliminary Determination in the Federal Register . For UUPAK, in accordance with section 735(c)(1)(B) of the Act, we will instruct CBP to continue to suspend liquidation of all entries of certain paper bags from China, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse for consumption on or after January 3, 2024, the date of publication in the Federal Register of the Preliminary Determination.

To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of domestic subsidy pass-through and export subsidies determined in a companion countervailing duty (CVD) proceeding when CVD provisional measures are in effect. Accordingly, where Commerce makes an affirmative determination for domestic subsidy pass-through or export subsidies, Commerce offsets the calculated estimated weighted-average dumping margin by the appropriate rates. Commerce has continued to adjust the cash deposit rate for the China-wide entity for export subsidies in the companion CVD investigation by the appropriate export subsidy rate as indicated in the above chart. However, suspension of liquidation of provisional measures in the companion CVD case has been discontinued; therefore, we are not instructing CBP to collect cash deposits based upon the adjusted estimated weighted-average dumping margin for those export subsidies at this time.

Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the amount by which the normal value exceeds the U.S. price as follows: (1) for the producer/exporter combinations listed in the table above, the cash deposit rate is equal to the estimated weighted-average dumping margin listed for that combination in the table; (2) for all combinations of Chinese producers/exporters of subject merchandise that have not established eligibility for their own separate rates, the cash deposit rate will be equal to the estimated weighted-average dumping margin established for the China-wide entity; and (3) for all third country exporters of subject merchandise not listed in the table above, the cash deposit rate is the cash deposit rate applicable to the Chinese producer/exporter combination (or China-wide entity) that supplied that third-country exporter. These suspension of liquidation instructions will remain in effect until further notice.

U.S. International Trade Commission Notification

In accordance with section 735(d) of the Act, we will notify the U.S. International Trade Commission (ITC) of our final affirmative determination of sales at LTFV. Because the final determination in this proceeding is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of paper bags from China no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded or canceled, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.

Administrative Protective Order

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

Notification to Interested Parties

This determination and this notice are issued and published in accordance with sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).

Appendix I

Scope of the Investigation

The products within the scope of this investigation are paper shopping bags with handles of any type, regardless of whether there is any printing, regardless of how the top edges are finished ( e.g., folded, serrated, or otherwise finished), regardless of color, and regardless of whether the top edges contain adhesive or other material for sealing closed. Subject paper shopping bags have a width of at least 4.5 inches and depth of at least 2.5 inches.

Paper shopping bags typically are made of kraft paper but can be made from any type of cellulose fiber, paperboard, or pressboard with a basis weight less than 300 grams per square meter (GSM).

A non-exhaustive illustrative list of the types of handles on shopping bags covered by the scope include handles made from any materials such as twisted paper, flat paper, yarn, ribbon, rope, string, or plastic, as well as die-cut handles (whether the punchout is fully removed or partially attached as a flap).

Excluded from the scope are:

• Paper sacks or bags that are of a 1-6 or 1-7 barrel size (i.e., 11.5-12.5 inches in width, 6.5-7.5 inches in depth, and 13.5-17.5 inches in height) with flat paper handles or die-cut handles;
• Paper sacks or bags with die-cut handles, a grams per square meter paper weight of less than 86 GSM, and a height of less than 11.5 inches; and
• Paper sacks or bags (i) with non-paper handles made wholly of woven ribbon or other similar woven fabric and (ii) that are finished with folded tops or for which tied knots or t-bar aglets (made of wood, metal, or plastic) are used to secure the handles to the bags.

The above-referenced dimensions are provided for paper bags in the opened position. The height of the bag is the distance from the bottom fold edge to the top edge ( i.e., excluding the height of handles that extend above the top edge). The depth of the bag is the distance from the front of the bag edge to the back of the bag edge (typically measured at the bottom of the bag). The width of the bag is measured from the left to the right edges of the front and back panels (upon which the handles typically are located).

This merchandise is currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 4819.30.0040 and 4819.40.0040. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Application of Facts Available and Use of Adverse Inference

IV. China-Wide Rate

V. Final Affirmative Determination of Critical Circumstances

VI. Changes Since the Preliminary Determination

VII. Discussion of the Issues

Comment 1: Whether To Adjust the China-Wide Rate

Comment 2: Whether To Adjust the Paper Surrogate Value (SV)

Comment 3: Whether To Conduct a Seasonality Analysis as Part of the Critical Circumstances Analysis

VIII. Recommendation