[Federal Register Volume 62, Number 157 (Thursday, August 14, 1997)]
[Notices]
[Pages 43504-43513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21583]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-351-820]


Notice of Final Results of Antidumping Duty Administrative 
Review: Ferrosilicon From Brazil

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: On April 8, 1997, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on Ferrosilicon from Brazil. This review covers 
exports of this merchandise to the United States by two manufacturers/
exporters, Companhia Brasileria Carbureto de Calcio (``CBCC'') and 
Companhia Ferroligas Minas Gerais-Minasligas (``Minasligas''), during 
the period March 1, 1995, through February 29, 1996.
    We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received and 
the correction of certain clerical and computer programming errors, we 
have changed our results from those presented in our preliminary 
results, as described below in the comment section of this notice. The 
final results are listed below in the section ``Final Results of 
Review.''

EFFECTIVE DATE: August 14, 1997.

FOR FURTHER INFORMATION CONTACT: Cameron Werker or Sal Tauhidi, AD/CVD 
Enforcement Group II, Office Four, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3874 and (202) 482-4851, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act), by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the

[[Page 43505]]

regulations codified at 19 C.F.R. part 353 (April 1, 1996).
SUPPLEMENTARY INFORMATION:

Background

    On April 8, 1997, the Department of Commerce (the Department) 
published in the Federal Register (67 FR 16763) the preliminary results 
of review of the antidumping duty order on ferrosilicon from Brazil 
(March 14, 1994, 59 FR 11769). On May 8, 1997 and May 15, 1997, we 
received case and rebuttal briefs from the respondents, CBCC and 
Minasligas, and from petitioners, SKW Metals & Alloys, Inc. and Aimcor 
Inc. At the request of both petitioners and respondents, we held a 
hearing on May 22, 1997. In response to questions raised by the 
Department at the hearing, the petitioners submitted additional 
information on June 11, 1997, regarding the Department's product 
concordance program with respect to the distinction between lumps and 
fines. (For more information on lumps and fines, see Comment 1 below.) 
The Department has now completed this administrative review in 
accordance with section 751(a) of the Act.

Scope of Review

    The merchandise subject to this review is ferrosilicon, a ferro 
alloy generally containing, by weight, not less than four percent iron, 
more than eight percent but not more than 96 percent silicon, not more 
than 10 percent chromium, not more than 30 percent manganese, not more 
than three percent phosphorous, less than 2.75 percent magnesium, and 
not more than 10 percent calcium or any other element. Ferrosilicon is 
a ferro alloy produced by combining silicon and iron through smelting 
in a submerged-arc furnace. Ferrosilicon is used primarily as an 
alloying agent in the production of steel and cast iron. It is also 
used in the steel industry as a deoxidizer and a reducing agent, and by 
cast iron producers as an inoculant.
    Ferrosilicon is differentiated by size and by grade. The sizes 
express the maximum and minimum dimensions of the lumps of ferrosilicon 
found in a given shipment. Ferrosilicon grades are defined by the 
percentages by weight of contained silicon and other minor elements. 
Ferrosilicon is most commonly sold to the iron and steel industries in 
standard grades of 75 percent and 50 percent ferrosilicon. Calcium 
silicon, ferrocalcium silicon, and magnesium ferrosilicon are 
specifically excluded from the scope of this review. Calcium silicon is 
an alloy containing, by weight, not more than five percent iron, 60 to 
65 percent silicon, and 28 to 32 percent calcium. Ferrocalcium silicon 
is a ferro alloy containing, by weight, not less than four percent 
iron, 60 to 65 percent silicon, and more than 10 percent calcium. 
Magnesium ferrosilicon is a ferro alloy containing, by weight, not less 
than four percent iron, not more than 55 percent silicon, and not less 
than 2.75 percent magnesium.
    Ferrosilicon is currently classifiable under the following 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000, 
7202.29.0010, and 7202.29.0050. The HTSUS subheadings are provided for 
convenience and customs purposes. Our written description of the scope 
of this review is dispositive. Ferrosilicon in the form of slag is 
included within the scope of this order if it meets, in general, the 
chemical content definition stated above and is capable of being used 
as ferrosilicon. Parties that believe their importations of 
ferrosilicon slag do not meet these definitions should contact the 
Department and request a scope determination.

Product Comparison

    In accordance with section 771(16) of the Act, we considered all 
products produced by CBCC and Minasligas, covered by the description in 
the ``Scope of the Review'' section, above, and sold in the home market 
during the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product based on the following criteria: (1) The grade of ferrosilicon 
(i.e., standard, high purity and low aluminum); (2) the percentage 
range, by weight, of silicon content; and (3) the sieve size.
    Although we have used the sieve size category as a matching 
criterion in past reviews, we reconsidered the matching criteria for 
CBCC and Minasligas in light of additional data on the record in this 
review. Although cost differences among sieve size categories do not 
exist, we considered whether the merchandise was a ``lump'' or a 
``fine'' in making our product comparisons because sales of 
ferrosilicon fines command significantly lower market prices than sales 
of ferrosilicon lumps. In addition, it appears that the two products 
have different end-uses. Lumps are defined as having a minimum 
dimension of equal to or greater than one millimeter and fines as 
having a minimum dimension of less than one millimeter. We did not 
consider any difference in sieve size ranges within the lump or fine 
categories in determining the most appropriate product comparison 
because significant price differences within the lump or fine sieve 
size category did not exist.

Verification

    As provided in section 782(i) if the Act, on February 17 through 
28, 1997, we verified information provided by CBCC and Minasligas by 
using standard verification procedures, including onsite inspection of 
one of the respondent's production facilities (CBCC), the examination 
of relevant sales and financial records, and original documentation 
containing relevant information. The results of those verifications are 
outlined in the public versions of the verification reports dated March 
19, 1997, on file in room B-099 of the main Commerce building.
    Comment 1: Fines and Lumps. The petitioners contend that the 
dimensions used by the Department to define lumps and fines in the 
preliminary results were confusing and left gaps because the Department 
defined lumps and fines based on a minimum and maximum dimension, 
respectively. As a result, the petitioners claim that merchandise with 
one dimension smaller or larger than the established maximum and 
minimum ranges cannot be classified as either lumps or fines. The 
petitioners argue that in the final results, the Department should use 
a distinction that defines lumps and fines based only on a maximum or a 
minimum dimension. Consistent with their argument, petitioners noted at 
the May 22, 1997, hearing, that the Department's use of the minimum 
dimension to define both lumps and fines in the product concordance 
program, was in fact, correct.
    CBCC states that although the criteria chosen by the Department for 
defining fines are not perfect, it agrees that the Department's 
criteria generally makes sense from a market point of view. Citing the 
Department's April 1, 1997 Concurrence Memorandum, CBCC contends that 
because the selling price of ferrosilicon of less than 1mm in diameter 
is lower than ferrosilicon of 1mm higher in diameter, the criteria used 
by the Department in this review appear to be reasonable.
    DOC Position: We agree with the petitioners. While the product 
concordance program developed by the Department in the preliminary 
results defined lumps and fines in terms of minimum dimensions, we 
stated in the Federal Register notice that we used a

[[Page 43506]]

maximum dimension to define fines and a minimum dimension to define 
lumps (see Notice of Preliminary Results of Antidumping Duty 
Administrative Review: Ferrosilicon from Brazil, 62 FR 16763 (April 8, 
1997)). We agree that this inconsistency in the parameters defining 
lumps and fines was confusing, and that we should use the same 
parameters in the narrative definition and the product concordance 
program. Since none of the parties dispute that our product concordance 
program accurately matched lumps and fines to the appropriate 
comparison products, we have revised the language in the ``Product 
Comparisons'' section of this notice rather than alter the concordance 
program. See the ``Product Comparisons'' section, above.
    Comment 2: The Sales Below Cost Test. Minasligas and CBCC contend 
that the Department overstated the quantity of home market sales below 
cost by comparing a domestic price that was exclusive of value added 
taxes (VAT) to a cost of production (COP) which was inclusive of VAT. 
Minasligas and CBCC argue that such a comparison results in an 
inequitable comparison and creates below cost sales where none would 
have otherwise existed. Minasligas and CBCC further maintain that in 
order to produce a fair comparison, it is the Department's practice to 
compare COP and the domestic price on the same basis. To support their 
claim, Minasligas and CBCC cite the Department's practice of comparing 
the net COP and the net home-market prices on the same basis in 
Ferrosilicon from Brazil: Final Results of Administrative Review, 61 FR 
59407, 59410 (November 22, 1996) (Ferrosilicon from Brazil 96). 
Minasligas and CBCC further contend that the Department's Import Policy 
Bulletin at 94.6 states that ``both the net COP and the net home market 
prices should be on the same basis.''
    Petitioners agree that if the Department excludes VAT from the home 
market net prices that are compared to COP, it is proper to exclude VAT 
paid on material inputs from COP in order to make an ``apples-to-
apples'' comparison. However, petitioners contend that the Department 
should include in COP the amounts for PIS (Program Intergracao Social) 
and COFINS (Social Contributions on Gross Sales) taxes that CBCC 
excluded from the direct materials costs that the Department used for 
the preliminary results calculations. Citing Silicon Metal from Brazil: 
Final Results of Antidumping Duty Administrative Review and 
Determination Not to Revoke in Part, 62 FR 1976 (January 14, 1997) 
(Silicon Metal from Brazil 97), the petitioners contend that the 
Department determined that PIS and COFINS taxes are gross revenue taxes 
and, therefore, are not taxes that a buyer pays directly when 
purchasing materials. In order for the COP to reflect the full purchase 
price of the materials, petitioners claim that the Department's policy 
is to add to CBCC's reported material costs the hypothetical values 
that CBCC reported as PIS and COFINS taxes on its material inputs.
    For these reasons, the petitioners contend that for the final 
results, the Department should exclude VAT from the cost of manufacture 
(COM) used to calculate COP, but should include PIS and COFINS taxes. 
In addition, petitioners maintain that PIS and COFINS taxes should be 
included in the calculation of constructed value (CV) for the same 
reasons explained above.
    DOC Position: We agree with petitioners and respondents that we 
incorrectly compared COPs inclusive of VAT to VAT-exclusive home market 
prices for purposes of the preliminary results. Therefore, for purposes 
of the final results, we excluded VAT (ICMS and IPI) taxes from the 
calculation of COP for purposes of performing the sales below cost 
test, as we excluded these taxes from the home market prices.
    In addition, for reasons fully explained in Comments 8 and 26 of 
Silicon Metal from Brazil: Final Results of Antidumping Duty Review 61 
FR 4673, 46764 (September 5,1996) (Silicon Metal from Brazil 96) and 
also in  Comment 4 below, we agree with the petitioners that the 
Department should not reduce materials costs in COP and CV by amounts 
for PIS and COFINS taxes claimed by CBCC and Minasligas. As stated in 
Silicon Metal from Brazil 96, ``PIS and COFINS taxes are gross revenue 
taxes, and therefore are not taxes that a buyer pays directly when 
purchasing materials. For this reason, in order for COP to reflect the 
complete cost of materials, the costs the Department uses in its 
calculation of COP must not be net of any hypothetical tax amounts that 
are presumably imbedded within the purchase price of the materials.'' 
Furthermore, we note that PIS and COFINS are internal taxes. In this 
review, these taxes are paid by the supplier on the revenue generated 
from the sale of material inputs. As such, in order for the COP to 
reflect the full purchase price of the materials, we must add to its 
reported material costs the hypothetical values that CBCC reported as 
PIS and COFINS taxes on its material inputs. Thus, in accordance with 
our determination in Silicon Metal from Brazil 96, we determine that 
these taxes are not imposed directly upon the merchandise or components 
thereof, and as a result have no statutory basis to deduct them from 
the cost of manufacture used to calculate COP and CV. (See also Silicon 
Metal from Argentina, Final Determination of Sales at Less Than Fair 
Value, 56 FR 37891, 37893 (August 9, 1991) (Silicon Metal from 
Argentina 91)).
    However, we disagree with petitioners that CBCC excluded PIS and 
COFINS taxes from its direct materials cost. Although CBCC provided 
these taxes separately in its questionnaire response, we found at 
verification that the direct material costs reported by CBCC included 
both PIS and COFINS taxes. Similarly, Minasligas also reported, and we 
verified, that its direct material costs were inclusive of PIS and 
COFINS. Therefore, for purposes of the preliminary results, the COP for 
both respondents was calculated inclusive of PIS and COFINS. We have 
made no changes in the final results for PIS and COFINS taxes.
     Comment 3: Advance Exchange Contracts (ACCs) on U.S. Sales. 
Minasligas claims that by using ACCs to finance its export sales, the 
company obtains payment prior to shipment. Minasligas argues that in 
the final results the Department should recognize the economic benefit 
arising from prepayment and allow Minasligas to offset its imputed 
credit expenses with negative imputed credit expenses or credit revenue 
resulting from prepayment. Specifically, Minasligas contends the 
following:
    (1) The ACCs are directly related to U.S. sales. Minasligas 
maintains that the Department was able to identify exactly which ACCs 
were associated with each U.S. sale and the product is fixed at the 
time the ACC is signed and cannot be changed. Therefore, Minasligas 
asserts that the ACCs are secured in advance for export sales of 
ferrosilicon;
    (2) The Department found that bank charges incurred between the 
date Minasligas receives an ACC and the date the merchandise is shipped 
from the plant were directly related to the U.S. sales and subsequently 
used these expenses to calculate imputed credit costs in the 
preliminary results. Minasligas argues that this demonstrates a direct 
relationship between the ``credit revenue'' reported by Minasligas and 
the U.S. sales;
    (3) The Department's rejection of Minasligas' negative imputed 
credit expense contradicts the Department's regulations which state 
that the Department will make a circumstance-of-sale (COS) adjustment 
for selling expenses ``which bear a direct

[[Page 43507]]

relationship to the sales compared.'' Minasligas contends that the 
negative credit expenses are a direct result of a specific U.S. sale of 
ferrosilicon because without a U.S. sale there would be no credit 
revenue; and
     (4) The Department's treatment of ACCs is contrary to its 
treatment of identical credit expenses in prior and parallel 
proceedings involving Minasligas.
    Minasligas and CBCC argue that in the event the Department 
determines not to use the negative credit expenses or credit revenue 
reported by the companies for its imputed U.S. credit calculation, the 
credit calculation used by the Department in the preliminary results 
contains several errors:
    First, Minasligas and CBCC argue that the bank charges overstate 
the credit period. Specifically, Minasligas and CBCC claim that the 
bank charges represent the interest expense incurred between the date a 
company receives an advance under an ACC and the date of payment by the 
U.S. customer. Because the date of receipt of the advance can predate 
the date of shipment from the plant, Minasligas and CBCC contend that 
the bank charges overstate the imputed credit expense (an expense which 
is intended to capture the cost of extending credit between the date 
the merchandise is shipped to the customer and the date the respondent 
receives payment from the customer). Minasligas and CBCC contend that 
the Department should calculate imputed credit expenses using the 
actual period between the date of shipment and the date of payment. 
Furthermore, Minasligas asserts that in its preliminary results the 
Department inadvertently double-counted the bank charges in the 
calculation of normal value (NV). The bank charges were added both as 
part of the reported direct selling expenses and as the imputed credit 
expense. Finally, Minasligas argues that the Department erred by 
calculating credit expenses based on a U.S. price which was inclusive 
of VAT. Minasligas contends that it is the Department's practice to 
calculate credit expenses on a price exclusive of VAT.
    Petitioners agree with the Department's decision in the preliminary 
results to disregard Minasligas' reported imputed credit revenue based 
on the finding that ACCs are not directly tied to specific export 
sales. The petitioners argue that the Department's preliminary finding 
was correct because: (1) The export value of the sale was not fixed on 
the date the ACC was signed; (2) the ACCs were obtained prior to the 
U.S. date of sale for all of CBCC's U.S. sales and certain sales made 
by Minasligas, and thus not directly tied to a specific U.S. sale for 
future unspecified shipments; (3) the amount borrowed under certain 
ACCs did not correspond exactly with the value of the U.S. sale which 
was later shipped; (4) in certain cases, more than one ACC was used to 
finance a single U.S. transaction; and (5) certain ACCs were used to 
finance more than one U.S. export.
    Moreover, the petitioners agree with Minasligas and CBCC that the 
Department's practice to use the interest and bank charges Minasligas 
paid for the ACCs to determine U.S. imputed credit expenses for each 
U.S. sale is inconsistent with the Department's determination that ACCs 
are not directly related to U.S. sales. For this reason, petitioners 
argue that the Department should calculate U.S. imputed credit expenses 
for Minasligas and CBCC in accordance with its established practice 
(i.e., based on the period from the date of shipment from Minasligas's 
plant to the date of payment by the U.S. customer).
    DOC Position: We agree with petitioners that ACCs are not directly 
tied to specific export sales at the time the ACC is opened, and 
therefore, we determine that the advance resulting from the ACC does 
not represent prepayment for an export sale. In fact, all parties agree 
that, as of the date an ACC is opened with a bank, no tie exists 
between an ACC and specific export sales. The link between ACC and sale 
does not occur until the respondents present the issuing bank with the 
export documentation for a given sale. Until that time, each respondent 
is able to use the money from the ACC to finance any export sale of 
ferrosilicon to any export market.
    This fact pattern is similar to that of the Final Determination of 
Sales at Less Than Fair Value: Industrial Nitrocellulose from Brazil, 
55 FR 23,120 (June 6, 1990) (``Nitrocellulose''). (Upheld by the CIT, 
March 2, 1995.) In Nitrocellulose, the Department disallowed a negative 
credit expense adjustment because the respondent ``borrowed money which 
was to be repaid with the proceeds from future unspecified export 
sales'' and the Department found ``that the U.S. sales were not paid 
for in advance.'' Therefore, for purposes of the final results, the 
Department finds that the ACC bank loans are not directly related to 
the U.S. sales. We have therefore continued to disallow the claimed 
negative credit expenses and/or interest revenue.
    Regarding the calculation of imputed credit expenses, we agree with 
all parties that by using the reported bank charges, we calculated 
credit using a period longer than that period normally captured by our 
imputed credit calculation (i.e., the period between the date of 
shipment from the plant and the date of payment from the customer). 
Therefore, for purposes of the final results, we have calculated 
imputed credit based on a credit period between the date of shipment 
from the plant and the date of payment from the customer. In addition, 
we have used the average ACC interest rates derived from the ACCs 
examined at verification for each of the respondents. These interest 
rates represent the actual interest rates received by each respondent 
for U.S. dollar-denominated short-term loans. (See the Sales 
Calculation Memorandums from Cameron Werker to the File for both CBCC 
and Minasligas, each dated August 6, 1997, for further discussion of 
the calculations of credit periods and interest rates.)
    We also agree with CBCC and Minasligas that we double-counted bank 
charges in the preliminary results. It is inappropriate to use bank 
charges as a surrogate for credit expenses for specific U.S. sales 
having determined that there is no direct link between an ACC and a 
sale at the time the sale is made. In addition, the money received from 
opening an ACC is used by each of the respondents as working capital to 
finance future, unspecified export sales. As a result, each respondent 
is then responsible for paying the bank interest on the loan. It is 
reasonable to assume that these interest payments are captured by each 
respondent in their respective ``Interest'' accounts. Therefore, the 
Department has already captured these expenses as part of our interest 
calculation, and thus, we have made no further adjustments for these 
expenses (i.e., we did not include them as direct selling expenses).
    Finally, regarding Minasligas contention that the Department 
calculated credit expenses based on U.S. prices inclusive of VAT, we 
note that at verification Minasligas was unable to substantiate its 
claim that VAT charges are passed along to U.S. customers and are 
included in the reported prices. Therefore, we have not made a 
deduction from U.S. price for VAT.
    Comment 4: Treatment of Taxes in the Calculation of Normal 
Value(NV). A. PIS/OFINS Taxes. Minasligas and CBCC contend that the 
Department's failure to deduct the PIS and COFINS taxes from NV for 
price-to-price comparisons in accordance with 19 U.S.C. 1677b 
(a)(6)(C)(iii) led to an unfair comparison since these taxes are paid 
on home market sales but not on U.S. sales.

[[Page 43508]]

Minasligas and CBCC assert that these taxes are directly related to 
home market sales since they are generated directly by sales of 
ferrosilicon in the home market. Minasligas and CBCC further assert 
that the Department should account for these taxes in the final results 
by making a circumstance of sale (COS) adjustment as directed by 19 
U.S.C. 1677b(a)(6)(C)(iii), or an adjustment to NV under 19 U.S.C. 
1677b (a)(6)(B)(iii).
    Petitioners contend that the Department was correct in using a NV 
that was not reduced by PIS and COFINS taxes. Citing section 773(a) 
(6)(B)(iii) of the Act, the petitioners argue that NV may only be 
reduced by taxes imposed directly upon the foreign like product or 
components thereof. The petitioners further contend that this language 
is identical to that of section 772(d)(1)(C), the parallel provision in 
effect prior to the enactment of the URAA, which they claim provided 
for an upward adjustment to the U.S. price.
    To support their argument, petitioners cite Silicon Metal from 
Argentina 91. In that case, petitioners contend that the Department 
determined that taxes similar to the PIS and COFINS taxes were not 
taxes directly imposed upon the merchandise or components thereof and, 
therefore, did not qualify for an adjustment to U.S. price. As in 
Silicon Metal from Argentina 91, petitioners maintain that the taxes at 
issue in this case do not qualify for a COS adjustment pursuant to 
773(a)(6)(C)(iii) of the Act for the same reason that they do not 
qualify for an adjustment to NV. Petitioners state that the 
Department's regulations specify that the Department will limit 
allowances for differences in the circumstances of sales ``to those 
circumstances which bear a direct relationship to the sales compared'' 
(see 19 CFR section 353.56(a)(1)). In this instance, petitioners argue 
that the PIS and COFINS taxes are not imposed on ferrosilicon sales 
transactions, but instead, are assessed on gross receipts from 
operations, including sales and other revenues, but excluding revenues 
from export sales. Consistent with the Department's determinations in 
the 1993-1994 and 1994-1995 administrative reviews on silicon metal 
from Brazil, petitioners maintain that PIS and COFINS are not directly 
related to specific sales and do not qualify for a COS adjustment. For 
these reasons and for the similar reasons presented in  Comment 2, the 
petitioners argue that the Department was correct not to adjust NV or 
U.S. price by PIS and COFINS taxes.
    DOC Position: We agree with petitioners. As stated in Comment 2 
above, information on the record demonstrates that the PIS and COFINS 
taxes are taxes on gross revenue exclusive of export revenue. Thus, 
these taxes are not imposed on the merchandise or components thereof. 
Therefore, because these taxes cannot be tied directly to ferrosilicon 
sales, we have no statutory basis to deduct them from NV. This position 
is consistent with our practice in Silicon Metal from Argentina 91 at 
Comment 8 and Comment 26. We also agree with petitioners that because 
the PIS and COFINS taxes are gross revenue taxes, they do not bear a 
direct relationship to home market sales and, therefore, do not qualify 
for a COS adjustment. Therefore, for the purposes of these final 
results, we have not made an adjustment to NV for PIS and COFINS taxes.
    B. VAT Incurred on Material Inputs. CBCC argues that the Department 
improperly included VAT (ICMS and IPI) in the calculation of CV. CBCC 
maintains that CV inclusive of VAT incurred on the purchase of material 
inputs led to an unfair comparison in the preliminary results. CBCC 
contends that in a tax scheme such as Brazil's, a respondent may be 
able to show that VAT on inputs did not in fact constitute a cost of 
materials for the exported product within the meaning of 19 U.S.C. 
1677b(e)(1)(A). Citing Silicon Metal from Brazil 96, CBCC contends that 
Article VI of the GATT and Article 2 of the Tokyo Round Antidumping 
Code requires that dumping assessments be tax neutral and that this 
requirement has continued under the Agreement on Implementation of 
Article VI of the GATT. CBCC further contends that the above-referenced 
cite states that the URAA explicitly amended the antidumping law to 
remove consumption taxes from the home market price and eliminated the 
addition of taxes to U.S. price, so that no consumption tax is included 
in the price in either market. CBCC also contends that the Statement of 
Administrative Action states that this amendment was intended to result 
in tax neutrality which is the Department's guiding principle for 
dealing with VAT. For these reasons, CBCC asserts that it is improper 
for the Department to compare CV inclusive of VAT to a U.S. price 
exclusive of VAT, without first determining whether the VAT paid on the 
material inputs is a cost of materials for the exported product.
    The petitioners argue that the Department was correct in including 
VAT (ICMS and IPI) paid on ferrosilicon material inputs in CV. 
Petitioners contend that the source of the language on tax neutrality 
that CBCC refers to in Silicon Metal from Brazil 96 only addresses 
adjustments for taxes paid on sales of the final product in price-based 
margin calculations but does not address taxes paid on inputs and the 
treatment of those taxes in CV-based margin calculations. Rather, 
petitioners contend that the Department's treatment of taxes on inputs 
used to produce exported merchandise in calculating CV is directly 
governed by the statute. Petitioners state that section 773(e)(1) of 
the Act provides that the CV of imported merchandise shall be an amount 
equal to the sum of the cost of materials. Furthermore, petitioners 
argue that section 773(e) provides that ``* * * that the cost of 
materials shall be determined without regard to an internal tax in the 
exporting country imposed on such materials or their disposition which 
are remitted or refunded upon exportation of the subject merchandises 
produced from such materials.''
    Therefore, petitioners contend, the plain language of the statute 
states that a home market tax that is directly applicable to materials 
used in the manufacture of merchandise exported to the United States 
constitutes an actual cost of producing the exported merchandise 
unless, and only if, the tax is remitted or refunded upon the 
subsequent exportation of that merchandise. Petitioners argue that it 
is undisputed that CBCC paid ICMS and IPI taxes on inputs it used to 
produce exported ferrosilicon and that these taxes were not remitted or 
refunded upon exportation. As a result, petitioners maintain that the 
Department followed its established practice (see Silicon Metal from 
Brazil 96) of including ICMS and IPI taxes in CV.
    The petitioners further assert that CBCC's claim that the 
Department must determine whether CBCC paid more VAT on inputs used to 
produce exported ferrosilicon than it collected on home market sales of 
ferrosilicon has already been rejected by the Department. Again citing 
Silicon Metal from Brazil 96, petitioners argue that the Department, in 
accordance with section 773(e) of the Tariff Act, did not account for 
the reimbursement to the respondents of ICMS and IPI taxes by means of 
home market sales of silicon metal.
    DOC Position: We made only price-to-price comparisons for purposes 
of these final results. Therefore, since we did not resort to the use 
of CV, it was not necessary to address the above issue.
    Comment 5: Home Market Credit Expenses. Minasligas argues that 
because Minasligas did not have short-

[[Page 43509]]

 term borrowings during the POR, the Department understated the short-
term borrowing rate used to calculate home market credit expenses by 
utilizing the ``taxa referential'' (TR). However, Minasligas contends 
that the TR rate is only a reference rate published by the Brazilian 
Central Bank and that Brazilian companies do not have access to this 
rate. In addition, Minasligas asserts that the TR rate is 
unrealistically low when compared to other short-term rates offered by 
commercial banks during the POR. For the final results, Minasligas 
contends that the Department should calculate home market credit 
expenses using a rate obtained from a commercial lender in effect 
during the POR such as those contained on the record in this 
proceeding. Minasligas contends that this practice is consistent with 
the Department's treatment of home market credit expenses calculated 
for Ferbasa in Ferrosilicon from Brazil 96.
    The petitioners contend that the Department's use of the TR rate to 
calculate home market credit expenses and inventory carrying cost is 
consistent with the Department's previous practice. In this regard, 
petitioners cite Certain Cut-to-Length Carbon Steel Plate from Brazil: 
Final Results of Antidumping Duty Administrative Review (62 FR 18,486, 
18,487 (April 15, 1997)) (Cut-to-Length Plate from Brazil) where the 
Department determined that the TR rate is a benchmark comparable to a 
prime rate published by the Bank of Brazil and, therefore, used the TR 
rate to calculate home market credit expenses. Petitioners further 
claim that Minasligas itself stated that the TR rate was established to 
measure the cost of credit and that it is also the rate most widely 
used by companies in Brazil to determine the interest rate for short-
term borrowing. (See Final Redetermination on Remand: Ferrosilicon from 
Brazil, LFTV Investigation (January 17, 1996) (Final Redetermination on 
Remand).)
    Further, the petitioners argue that under established Department 
practice, ``it is up to a respondent to substantiate and document any 
adjustment or claim to the Department.'' (See Silicon Metal From Brazil 
97.) Petitioners maintain that Minasligas failed to provide the 
Department with any evidence that the alternative interest rates on the 
record constitute ``published commercial bank prime short-term lending 
rates.'' The petitioners contend that Minasligas' submission of the 
monthly short-term borrowing rates of a commercial bank, BEMGE, that 
were in effect during the POR, were in fact only a fax listing 30-day 
interest rates for the period December 1994 through May 1996. 
Petitioners assert that Minasligas failed to provide any evidence that 
the listed rates were published or that they constitute prime rates. 
Similarly, petitioners also contend that no evidence exists to support 
Minasligas' claim that the bank lending rate published by the 
International Monetary Fund (IMF) constitutes prime rates or commercial 
bank interest rates for business loans. Rather, petitioners assert that 
the IMF rate is not a published commercial interest rate for short-term 
business loans, but rather a rate at which banks, not companies, can 
borrow. For these reasons, the petitioners argue that the Department 
properly used the TR rate in calculating Minasligas' home market 
imputed credit expenses.
    DOC Position: We agree with petitioners. Consistent with Cut-to-
Length Plate from Brazil, we determine that the TR rate is a benchmark 
comparable to a prime rate published by the Bank of Brazil. Therefore, 
in the absence of actual home market short-term borrowings and the lack 
of substantiated evidence that Minasligas could have borrowed at the 
interest rates provided at verification, we have used the TR rate as 
the interest rate in the calculation of imputed home market credit. 
Further, in response to Minasligas' argument that the Department did 
not use the TR rate in the preceding review of this case, we note that 
the company in question had actual home market short-term borrowings 
and, therefore, it was not necessary to resort to the use of the TR 
rate.
    Comment 6: Date of Sale. Minasligas submits six arguments on the 
date of sale. First, Minasligas contends that the Department erred when 
it changed the date of sale for one U.S. sale reported as sold prior to 
the POR to within the POR. Minasligas argues that there is no sales 
document on the record justifying the use of a sale date within the POR 
for the sale in question. Moreover, Minasligas asserts that by using 
the date within the POR as the date of sale, the Department incorrectly 
used a date of sale that was subsequent to the date of shipment from 
the plant. Minasligas maintains that, as stated in the questionnaire, 
the date of sale cannot occur after the date of shipment. Therefore, 
Minasligas contends that the sale was improperly included in the 
calculation of export price in the preliminary results.
    Second, Minasligas contends that the Department's position to 
exclude several U.S. sales of merchandise produced by Minasligas from 
the calculation of export price is supported by past Department 
practice. (See Silicon Metal from Brazil 96 and Silicon Metal From 
Brazil 97.)
    Third, Minasligas contends that the issue as to whether to conduct 
a review and what sales to consider within the POR for dumping purposes 
are two different determinations which involve the two different 
concepts of entry and sale. In reviews where a respondent had one or 
more entries during the POR, Minasligas asserts that the Department's 
practice is to review the respondent's sales to determine the 
antidumping duty margin and, in accordance with section 751(a)(2), use 
this margin to assess the entries during the POR. In reviews where the 
respondent had no entries during the POR, Minasligas contends that the 
Department normally conducts a no shipment review.
    Fourth, Minasligas contends that the Department is not required to 
tie sales to entries. (See Silicon Metal from Brazil 96.) Minasligas 
further contends that when the Department reviews all sales to an 
importer during the POR, the Department relies on the date of such 
sales to determine whether they are within the POR. The date of entry 
is of no relevance because the date of sale is the date on which the 
basic terms of the sale, particularly price and quantity, are agreed 
upon by the buyer and the seller. (See Department's 1996 Questionnaire, 
Appendix 1 at 5, Glossary of Terms.)
    Fifth, Minasligas further argues that petitioners' arguments repeat 
that which was already rejected by the Department in the above-
referenced final determinations. Finally, Minasligas also notes that 
all the determinations cited by the petitioners in support of their 
argument predate the determinations cited by Minasligas. For all of 
these reasons, Minasligas asserts that for the final results, the 
Department should determine Minasligas' antidumping duty rate based on 
Minasligas' sales during the POR and exclude from its dumping analysis 
sales which fall outside the POR.
    Petitioners argue that regardless of the date of sale, the statute, 
legislative history, intended purpose of administrative reviews, and 
established Department practice require that the margin calculations in 
administrative reviews be based on entries that were made into the U.S. 
Customs territory during the POR. According to petitioners, the 
quantity, the ship date, and the name of the consignee of at least one 
of the sales in question is identical to the Piers Import/Export 
Reporting Service data indicating that this sale entered the United 
States during the POR. The petitioners, therefore, conclude that the 
Department should

[[Page 43510]]

include the sale in question in the final results margin calculations.
    Morever, the petitioners argue that although these sales had dates 
of sale prior to the POR, these sales entered the U.S. customs 
territory during the POR and should therefore be included in the 
calculation of export price (see e.g., High-Tenacity Rayon Filament 
Yarn from Germany: Final Results of Antidumping Duty Administrative 
Review, 61 FR 51,421, 51,422 (October 2, 1996)). The petitioners argue 
that these entries have never been reviewed and that by excluding these 
sales, Minasligas' dumping margin for the preliminary results was 
understated.
    DOC Position: We agree with Minasligas regarding its first point, 
that the Department erred when it changed the date of sale for one U.S. 
sale reported as sold prior to the POR to within the POR. After 
reviewing the sales documentation for this sale, we found that the 
verification report was incorrect with respect to the actual date of 
sale for this transaction. As a result, we determine that Minasligas 
correctly reported the date of sale for this transaction in its sales 
listing. However, we have included this sale in our final analysis 
based on the fact that this sale was shipped during the POR.
    We agree with petitioners regarding the review of sales entered 
during the POR in export price situations. It has been the Department's 
practice to calculate dumping margins for export price sales based on 
sales entered during the POR. In fact, the antidumping questionnaire 
issued in this review specifically required companies to ``report each 
U.S. sale of merchandise entered for consumption during the POR, 
except: (1) For EP sales, if you do not know the entry dates, report 
each transaction involving merchandise shipped during the POR. * * *'' 
We note that, in response to these questionnaire instructions, 
Minasligas reported certain sales with dates of sale prior to the POR. 
Minasligas appears, therefore, to have complied with the questionnaire 
instructions by reporting sales shipped or entered during the POR 
regardless of whether the date of sale was within the POR. Moreover, 
Minasligas does not deny that these sales were shipped or entered 
during the POR. Therefore, for these final results, we have included 
all such sales in our analysis.
    Comment 7: The Dumping Margin Calculation. CBCC contends that the 
Department incorrectly calculated the dumping margin as a percentage of 
total U.S. sales value based on net U.S. prices, rather than gross unit 
prices. In doing so, CBCC claims that the Department overstated the 
dumping margin.
    Petitioners contend that section 731(2)(B) of the Act requires that 
whenever the Department determines that foreign merchandise is being 
sold in the United States at less than fair value, there shall be 
imposed upon such merchandise an antidumping duty in an amount equal to 
the amount by which the NV exceeds the export price (or constructed 
export price) for the merchandise. Therefore, petitioners assert that 
by using the aggregate export prices for all U.S. sales as the 
denominator in the calculation of the dumping margin, the Department 
calculated CBCC's weighted-average dumping margin in accordance with 
the statute.
    DOC Position: We disagree with CBCC. CBCC's margin was calculated 
in accordance with the Department's standard methodology of using 
aggregate value of net export prices to derive total U.S. sales value. 
(See Notice of Final Determination at LTFV: Certain Steel Concrete 
Reinforcement Bars from Turkey, 62 FR, 9737, (March 4, 1997).) 
Therefore, we have made no change for the final results.
    Comment 8: Calculation of General and Administrative (G&A) and 
Interest Expense. Minasligas contends that the Department overstated 
the G&A used in the calculation of COP in the preliminary results. 
Specifically, Minasligas argues that the Department calculated a G&A 
rate as a percentage of the cost of sales based on the figures reported 
by Minasligas and Delp Enganharia Mecanica S.A. (Delp) in their 
financial statements and then mistakenly applied this rate to a COM 
which included VAT. Minasligas contends that due to the fact that VAT 
is neither an income nor an expense, VAT is not reflected in sales 
revenue or cost of sales on the income statement. To support its 
contention, Minasligas cites the Department's remand proceeding 
relating to the final determination of ferrosilicon from Brazil where 
the Department stated that it was incorrect to apply the calculated 
interest factor and profit percentage to a COM inclusive of VAT. (See 
Memorandum from Peter Scholl, Senior Accountant to Catherine Miller, 
Program Manager, January 17, 1996, Remand of July 20, 1995, 
Consolidated Court 90. 94-03-00182). Minasligas, therefore, contends 
that because VAT was not part of the cost of sales upon which the G&A 
rate was calculated, the Department should apply the G&A rate to a COM 
exclusive of VAT.
    Similarly, CBCC contends that in the preliminary results the 
Department overstated G&A and interest expenses used in the calculation 
of CV. Specifically, CBCC argues that the G&A expenses and interest 
expenses were overstated because the Department applied these ratios on 
a COM that included VAT. Because the countries in which CBCC and its 
parent company are located (i.e., Brazil and Belgium, respectively) are 
countries with a VAT system, CBCC asserts that for the final results 
the Department should deduct ICMS from COM to calculate the G&A and 
interest expense. CBCC provided revised calculations for G&A and 
interest.
    Although petitioners agree with Minasligas and CBCC that the 
Department overstated G&A and interest expenses when it calculated 
those expenses using a COM inclusive of VAT paid on inputs, petitioners 
contend that CBCC's revised percentages are wrong. First, petitioners 
maintain that CBCC failed to include PIS and COFINS taxes in its 
calculations of CV. Second, petitioners argue that CBCC did not use the 
correct ratios for calculating G&A and interest.
    DOC Position: We agree with all parties that it was incorrect to 
apply the calculated ratios for G&A and interest to a COM inclusive of 
VAT in the calculation of COP. However, we note that both respondents 
reported G&A and/or interest expenses based on a COM inclusive of VAT. 
Thus, for purposes of the final results, we calculated the G&A for 
Minasligas and G&A and interest expenses for CBCC used in the 
calculation of COP, based on the COM exclusive of VAT. For the reasons 
stated in Comment 2 above, we have continued to include PIS and COFINS 
taxes in COP (see Cost Calculation Memorandums for Minasligas and CBCC, 
each dated July 28, 1997, for further discussion). Since we made only 
price-to-price comparisons for purposes of these final results, it was 
not necessary to address this issue with respect to CV.
    Comment 9: Calculation of Depreciation Expense for Minasligas. 
Petitioners argue that the Department understated depreciation in its 
COP and CV calculations by using the amount reported by Minasligas 
which understated depreciation in the current period as a result of its 
use of accelerated depreciation in prior years. For the final results, 
petitioners contend that the Department should recalculate depreciation 
for Minasligas, eliminating any prior year's accelerated depreciation.
    Minasligas argues that it has historically used accelerated 
depreciation in its financial records and

[[Page 43511]]

such methodology is consistent with Brazilian GAAP. Minasligas 
maintains that the Department has accepted its use of accelerated 
depreciation in prior proceedings.
    DOC Position: We disagree with petitioners that Minasligas' 
depreciation calculation is unacceptable because it is based on 
accelerated depreciation. Minasligas' methodology of depreciation is 
based on its financial records, which are consistent with Brazilian 
GAAP and do not distort actual costs. In this regard, the Department's 
position is consistent with the decision of the Court of International 
Trade, which supported the Department's calculation of depreciation 
based on a respondent's actual financial records which do not distort 
actual costs. Moreover, in previous silicon metal reviews, we have used 
accelerated depreciation where Minasligas has historically reported 
depreciation on this basis for purposes of its financial statements 
(see Silicon Metal From Brazil 97). Moreover, we have applied this 
practice in other instances (see Final Determination of Sales at Less 
Than Fair Value Foam Extruded PVC and Polystyrene Framing Stock from 
the United Kingdom; 61 FR 51411, 51418 (October 2, 1996)) and Laclede 
Steel Co. v. United States, 18 CIT 965, 975 (1994)). Therefore, for 
purposes of these final results of review, we have continued to use 
Minasligas' reported depreciation in calculating COP and CV.
    Comment 10: Calculation of G&A Expenses. Petitioners claim that the 
Department failed to include amounts for social contributions in the 
reported G&A expense despite the fact that the Department has a 
longstanding practice of including social payments such as severance, 
social security or pension expenses in the G&A expense. Petitioners 
argue that the Department should include provisions for social 
contributions in the calculation of the G&A expense.
    Minasligas argues that petitioners misinterpreted Minasligas' 
financial statements because the social contributions are not a cost of 
producing the merchandise, but a federal tax similar to the income tax 
levied by the government as a percentage of profit. Minasligas further 
argues that the social contributions are not social payments such as 
social security or pension expenses which were properly reported either 
as part of direct labor costs or as part of the G&A expenses for 
administrative employees.
    DOC Position: We agree with Minasligas. The social contributions at 
issue are a type of federal income tax which is deducted from profit. 
All other social charges and fringe benefits were properly accounted 
for either as part of direct labor costs or as part of G&A expenses. 
Accordingly, no adjustment has been made for the final results.
    Comment 11: Calculation of Indirect Selling Expenses. Petitioners 
contend that the Department determined per-unit indirect selling 
expenses for Minasligas by multiplying the gross-unit price for home 
market sales by an indirect selling expense ratio. Petitioners state 
that, in calculating the ratio, the Department divided the sum of the 
monthly company-wide indirect selling expenses by the sum of the 
monthly sales values for all products during the POR. However, the 
petitioners claim that in calculating the monthly values, the 
Department incorrectly added rather than subtracted the value of 
returned merchandise. In doing so, petitioners argue that the 
Department overstated the denominator of the indirect selling expense 
ratio, thus understating the ratio, which in turn understated the 
calculated per-unit indirect selling expenses.
    Regarding CBCC, the petitioners claim that CBCC allocated indirect 
selling expenses among its products to the relative sales volume of 
those products. Petitioners note that the Department's verification 
report in this proceeding states that ``because indirect selling 
expenses are a value-based expense, CBCC should have allocated the 
total commercial department expenses over the value of merchandise sold 
during the POR, not the tonnage sold.'' Petitioners further note that, 
while at verification, the Department did not collect data regarding 
the total value of CBCC's sales of silicon metal and calcium carbide 
during January and February 1996. As a result, it is not possible to 
perform the proper allocation of indirect selling expenses based on 
sales value. Therefore, petitioners argue that the Department should 
request CBCC to provide a worksheet and supporting documentation 
showing the total sales value of the above products for January and 
February 1996.
    DOC Position: We made only price-to-price comparisons for purposes 
of these final results. Therefore, since we did not resort to the use 
of CV, it was not necessary to address the above issues.
    Comment 12: Conversion of U.S. Sales Prices Denominated in U.S. 
Dollars. The petitioners contend that the prices for Minasligas' U.S. 
sales were negotiated in U.S. dollars and paid for in U.S. dollars. 
However, Minasligas reported the gross unit price for its U.S. sales in 
Brazilian reais. Petitioners maintain that the Department used these 
Brazilian-currency prices in its preliminary results margin 
calculations. Petitioners cite Silicon from Brazil 96 and 97, as the 
Department's established practice of using the actual U.S. price in the 
currency in which it was originally denominated on the date of sale, 
and to avoid any unnecessary currency conversion. Therefore, for the 
final results, the petitioners contend that the Department should use 
U.S. dollar-denominated gross prices reported in the sales listing, 
rather than the Brazilian-reais denominated gross unit prices, as the 
starting U.S. price for calculating the dumping margin.
    DOC Position: We agree in part with petitioners. It is established 
Department policy to use the actual U.S. price in the currency in which 
it was originally denominated on the date of sale and to avoid any 
unnecessary currency conversion. (See Ferrosilicon from Brazil, 
(January 14, 1997).) In this case, Minasligas reported its U.S. sales 
in Brazilian currency rather than U.S. dollars. However, at 
verification, we were able to confirm the accuracy of the Brazilian 
currency amounts reported by Minasligas because, in addition to the 
commercial invoice (denominated in U.S. dollars), Minasligas also 
issues a Brazilian-denominated invoice which we examined for selected 
U.S. sales. Further, for purposes of the preliminary results, we did 
convert the U.S. sales prices reported in Brazilian currency to U.S. 
dollars on the date of sale for purposes of calculating Minasligas' 
margin. We have continued this practice for these final results as 
Minasligas' U.S. dollar prices are not on the record.
    Comment 13: Calculation of Depreciation for CBCC. The petitioners 
argue that in its preliminary results, the Department failed to take 
into account idle asset depreciation for a certain number of furnaces. 
The petitioners contend that record evidence indicates that the 
furnaces were idle during a portion of the POR. Therefore, petitioners 
maintain that the Department should include in COP/CV the total 
depreciation expenses for the furnaces for the periods during which 
those furnaces were idle.
    CBCC claims that the furnaces which were idle during the POR are 
fully depreciated since they were built in 1934 and 1947. CBCC states 
that there is no factual justification for allocating depreciation 
expense for idle assets which were fully depreciated.
    DOC Position: We agree with CBCC. At verification, we confirmed 
that the furnaces at issue were fully depreciated long before the POR. 
Accordingly, we determine that the adjustment to COP

[[Page 43512]]

proposed by the petitioners is not warranted here. Since we made only 
price-to-price adjustments or purposes of these final results, it was 
not necessary to address this issue with regards to CV.
    Comment 14: Calculation of Interest Expense. The petitioners argue 
that in the preliminary results the Department incorrectly calculated 
CBCC's financial expenses based on the consolidated financial statement 
of its Belgian parent company, Solvay & Cie. The petitioners claim that 
it was incorrect to use the consolidated financial statements because 
Solvay & Cie's actual financial expense is less than one half of the 
financial expense actually incurred by CBCC. Therefore, the petitioners 
contend that calculating financial expenses using a ratio based on 
Solvay & Cie's consolidated financial statements resulted in a gross 
understatement of the financial expenses actually incurred by CBCC. 
Thus, for the final results, the petitioners assert that the Department 
should calculate financial expenses based on CBCC's financial 
statements.
    DOC Position: We disagree with the petitioner. The Department's 
established policy is to calculate interest expense incurred on behalf 
of the consolidated group of companies to which the respondent belongs, 
based on consolidated financial statements, regardless of whether or 
not the respondent's financial expense is higher than that of the 
controlling entity. This practice recognizes two facts: (1) The 
fungible nature of invested capital resources such as debt and equity 
of the controlling entity within a consolidated group of companies, and 
(2) the controlling entity within a consolidated group has the power to 
determine the capital structure of each member country within its 
group. (See Aramid Fiber Formed of Poly ParaPhneylene Terephthalamide 
From the Netherlands; Final Results of Antidumping Administrative 
Review, 62 FR 136 (July 16, 1997), Silicon Metal From Brazil 97, Final 
Determination at Less Than Fair Value: Ferrosilicon from Brazil: 59 FR 
732, 736 (January 6, 1994) and Cambargo Correa Metais, S.A. v. United 
States, Slip Op. 93-163 (CIT August 13, 1993.) Therefore, for these 
final results, we have calculated CBCC's net interest expense based on 
the consolidated financial statements of its parent company, Solvay & 
Cie.
    Comment 15: Interest Income as an Offset to Interest Expenses. The 
petitioners argue that the Department should not make an adjustment to 
the reported interest expense for the amount of interest income 
reported on CBCC's financial statement. The petitioners claim that it 
is CBCC's responsibility to substantiate and document any adjustment or 
claim to the Department. Since CBCC provided no information in its 
questionnaire response regarding the interest income earned, the 
petitioners assert that the Department should calculate the financial 
expense ratio without any offset for interest income.
    CBCC contends that in its questionnaire response CBCC calculated 
consolidated financial expenses based solely on interest expense 
without any deduction for interest income. CBCC argues that should the 
Department depart from its well-established practice of using 
consolidated financial expenses, CBCC requests the opportunity to 
submit all information needed to support its interest income.
    DOC Position: As explained in our response to Comment 14, we have 
used CBCC's consolidated financial expenses. Therefore, we have made no 
adjustments to the reported consolidated interest for interest income 
as CBCC did not report interest income on a consolidated basis.
    Comment 16: Alleged Errors in the Calculation of CV. Minasligas 
asserts that the Department did not make any price-to-CV comparisons in 
the preliminary results, but in the event that the Department resorts 
to the use of CV in the final results, Minasligas contends the 
following:
    (1) That the Department incorrectly calculated the field CVTAX as 
equal to the greater of the VAT paid on inputs or the VAT collected on 
export sales in the computer margin program. Minasligas argues that the 
statute does not require that VAT collected on export sales be included 
in CV. Minasligas asserts that the Department's position, which is 
currently challenged in the Court of Appeals for the Federal Circuit 
(see Aimcor et al. v. United States, Slip Op. 95-130 (July 20, 1995) at 
20 et seq.), is that only taxes on material inputs which are not 
remitted or refunded upon export are included in CV as a part of the 
cost of material. Minasligas argues that if tax collections on sales 
exceed payments on inputs, the Department should make the required 
adjustments in calculating the foreign unit price in dollars (FUPDOL).
    (2) That the Department failed to deduct home market imputed credit 
expenses from the calculation of CV, resulting in an overstatement of 
the FUPDOL because the COS adjustment only added U.S. credit expenses.
    (3) That the Department erred when it weight-averaged the profit 
rate based on sales quantity rather than sales value. Instead, 
Minasligas contends that the Department should have calculated the 
average home market profit using its normal methodology (i.e., the sum 
of the total profit for each transaction divided by the total COP value 
for all the transactions). Morever, Minasligas argues that under its 
normal methodology, the Department calculates an overall profit rate 
for the transactions weighted on value rather than quantity.
    With respect to the first issue, petitioners contend that the 
Department's margin calculations demonstrate that the Department 
included VAT paid on inputs in CV, not ICMS tax collected on export 
sales. Further, the petitioners claim that the Department properly 
included those taxes in CV because they are a cost of materials for the 
reasons presented in Comment 4 (B).
    With respect to the third issue, the petitioners contend that a 
review of the profit margin calculation shows that the Department did 
not do what Minasligas claims the Department did and, in fact, did what 
Minasligas claims the Department should have done. The petitioners 
argue that the Department first determined the aggregate value of net 
home market prices for all of the above-cost sales and the aggregate 
COP for those sales. The Department then subtracted the aggregate COP 
from the aggregate value of net home market prices for above-cost 
sales, thereby determining the aggregate amount of profit for those 
sales. This aggregate profit amount was then divided by the aggregate 
COP to arrive at a profit ratio. Thus the petitioners assert that, 
contrary to Minasligas's claims, the Department properly calculated the 
profit ratio.
    DOC Position: We made only price-to-price comparisons for purposes 
of these final results. Therefore, since we did not resort to the use 
of CV, it was not necessary to address the above issues.

Final Results of Review

    As a result of our analysis of the comments received, we determine 
that the following margins exist for the period March 1, 1995 through 
February 29, 1997:

------------------------------------------------------------------------
                                                                 Percent
                    Manufacturer/exporter                        margin 
------------------------------------------------------------------------
CBCC.........................................................       0.00
Minasligas...................................................       3.51
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. For assessment 
purposes, we have calculated importer-specific ad valorem duty 
assessment rates for the merchandise based on the ratio of the

[[Page 43513]]

total amount of antidumping duties calculated for the examined sales 
during the POR to the total quantity of sales examined during the POR. 
This method has been upheld by the courts. (See e.g., Antifriction 
Bearings (Other Than Tapered Roller Bearings) from France, Germany, 
Italy, Japan, Singapore, and the United Kingdom; Final Results of 
Antidumping Duty Administrative Reviews, 61 FR 2081, 2083 (January 15, 
1997); FAG Kugelfischer Georg Schafer KgaAv. United States, No. 92-07-
00487, 1995 Ct. Int'l Trade LEXIS 209, at CIT*10 (September 14, 1995), 
aff'd. No. 96-1074 1996 U.S. App. Lexis 11544 (Fed. Cir. May 1996).
    The Department will issue appraisement instructions directly to the 
Customs Service. Individual differences between United States price and 
NV may vary from the percentages stated above. Furthermore, the 
following deposit requirements will be effective upon publication of 
these final results of review for all shipments of ferrosilicon from 
Brazil entered, or withdrawn from warehouse, for consumption on or 
after the publication date, as provided by section 751(a)(1) of the 
Act, and will remain in effect until publication of the final results 
of the next administrative review: (1) The cash deposit rates for the 
reviewed companies will be those rates listed above except for CBCC, 
which had a de minimis margin, and whose cash deposit rate is therefore 
zero; (2) for previously reviewed or investigated companies not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period; (3) if the exporter is not a 
firm covered in this review, a prior review, or the original LTFV 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (4) if neither the exporter nor the manufacturer 
is a firm covered in this or any previous review or in the LTFV 
investigation conducted by the Department, the cash deposit rate will 
be 91.06 percent, the ``all others'' rate established in the LTFV 
investigation.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
the return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. Sec. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: August 6, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-21583 Filed 8-13-97; 8:45am]
BILLING CODE 3510-DS-P