Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5613

1For a complete discussion of the Department’s

reasoning for using 1994 data in calculating G&A

expenses, see Redetermination on Remand; Final

Determination of Sales at Less Than Fair Value: Oil

Country Tubular Goods from Mexico (October 25,

1996).

1American Alloys Inc., American Silicon

Technologies, ELKEM Metals Company, Globe

Metallurgical Inc., and SKW Metals & Alloys Inc.

Subsequent to the antidumping duty

order, Tubos de Acero de Mexico, S.A.

(TAMSA), the sole respondent,

challenged the Department’s findings

and requested that the Panel review the

final determination. Thereafter, the

Panel remanded the Department’s final

determination with respect to two

issues. Specifically, the Panel directed

the Department to (1) substitute a

weighted-average factor for the adverse

factor used in the calculation of

nonstandard costs for certain products

and (2) provide a complete explanation

of its reasoning for its use of 1994 data

in calculating general and

administrative (G&A) expense. In the

Matter of: Oil Country Tubular Goods

from Mexico; Final Determination of

Sales at Less Than Fair Value, USA–95–

1904–04 (July 31, 1996).

The Department recalculated the

nonstandard costs using a weightedaverage factor and provided an

explanation of our use of 1994 data in

calculating G&A expenses.1 The

Department submitted its remand

determination on October 25, 1996.

On December 2, 1996, the Panel

affirmed the remand determination of

the Department. In the Matter of: Oil

Country Tubular Goods from Mexico;

Final Determination of Sales at Less

Than Fair Value, USA–95–1904–04

(July 31, 1996) (Final Panel Order). As

a result, the margin for TAMSA and all

other producers/exporters was reduced

from 23.79 percent to 21.70 percent.

Suspension of Liquidation

The Department will instruct the

Customs Service to collect cash deposits

of 21.70 percent on all shipments of the

subject merchandise entered, or

withdrawn from warehouse, for

consumption on or after the publication

date of this amended final

determination.

This notice is published pursuant to

19 U.S.C. 1516a(g)(5)(B) (1996), section

735(d) of the Tariff Act of 1930, as

amended (19 U.S.C. 1673d(d) (1996)),

and 19 CFR 353.20(a)(4) (1996).

Dated: January 31, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–3006 Filed 2–5–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–357–804]

Notice of Final Results of the 1992/93

Antidumping Duty Administrative

Review: Silicon Metal From Argentina

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

SUMMARY: In response to timely requests

from the respondents,

Electrometalurgica Andina S.A.I.C.

(Andina) and Silarsa S.A. (Silarsa), and

the petitioners,1 the Department of

Commerce has conducted an

administrative review of the

antidumping duty order on silicon

metal from Argentina. The review

covers merchandise exported to the

United States by these two respondents

during the review period of September

1, 1992 through August 31, 1993.

EFFECTIVE DATE: February 6, 1997.

FOR FURTHER INFORMATION CONTACT:

Michelle Frederick, Magd Zalok, or

Howard Smith, Office of AD/CVD

Enforcement II, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Ave., NW.,

Washington, DC 20230; telephone: (202)

482–0186, (202) 482–4162, or (202) 482–

3530, respectively.

SUPPLEMENTARY INFORMATION:

Case History

On July 25, 1996, the Department of

Commerce (the Department) published

in the Federal Register the preliminary

results of this administrative review.

See Notice of Preliminary Results of the

1992/93 Antidumping Duty

Administrative Review: Silicon Metal

from Argentina, 61 FR 38711 (July 25,

1996) (Preliminary Results). On August

26, 1996, the Department received briefs

from Andina and the petitioners. On

September 3, 1996, the Department

received rebuttal briefs from Andina,

the petitioners, and Hunter Douglas, an

importer of the subject merchandise. On

September 10, 1996, the petitioners

withdrew their request for a hearing.

The Department held ex-parte meetings

with the petitioners’ counsel and

counsel for Hunter Douglas on

September 11 and 13, 1996, respectively

(see Ex-Parte Memoranda From the

Team to the File dated September 11

and 13, 1996). The Department has now

completed this administrative review in

accordance with section 751 of the

Tariff Act of 1930, as amended (the Act).

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute and to the

Department’s regulations are references

to the provisions as they existed on

December 31, 1994.

Scope of Review

The product covered by this review is

silicon metal. During the less-than-fairvalue (LTFV) investigation, silicon

metal was described as containing at

least 96.00 percent, but less than 99.99

percent, silicon by weight. In response

to a request by the petitioners for

clarification of the scope of the

antidumping duty order on silicon

metal from the People’s Republic of

China (PRC), the Department

determined that material with a higher

aluminum content containing between

89 and 96 percent silicon by weight is

the same class or kind of merchandise

as silicon metal described in the LTFV

investigation (see Final Scope Rulings—

Antidumping Duty Orders on Silicon

Metal From the People’s Republic of

China, Brazil, and Argentina (February

3, 1993)). Therefore, such material is

within the scope of the orders on silicon

metal from the PRC, Brazil, and

Argentina. Silicon metal is currently

provided for under subheadings

2804.69.10 and 2804.69.50 of the

Harmonized Tariff Schedule (HTS) and

is commonly referred to as a metal.

Semiconductor-grade silicon (silicon

metal containing by weight not less than

99.99 percent of silicon and provided

for in subheading 2804.61.00 of the

HTS) is not subject to this review. The

HTS subheadings are provided for

convenience and U.S. Customs purposes

only. Our written description of the

scope of the proceeding is dispositive.

Best Information Available

As explained in the preliminary

results, Silarsa failed to respond to the

Department’s questionnaire in this

review. Therefore, we have determined

that the use of best information

available (BIA) is appropriate for Silarsa

in accordance with section 776(c) of the

Act. For discussion of the Department’s

rationale for assigning a non-cooperative

respondent a dumping margin based on

BIA, see Preliminary Results. In this

review, we have assigned Silarsa, as

BIA, a margin of 24.62 percent, the rate

assigned to Silarsa in the Amendment to

Final Results of Antidumping

Administrative Review (1991/92):

Silicon Metal from Argentina, 59 FR

1617 (April 6, 1994), which is the

highest rate for any company from any

prior segment of the proceeding.
5614 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

Fair Value Comparisons

To determine whether Andina’s sales

of silicon metal from Argentina to the

United States were made at less than

fair value, we compared the United

States price (USP) to the foreign market

value (FMV), as specified in the ‘‘United

States Price’’ and ‘‘Foreign Market

Value’’ sections of this notice.

United States Price

We calculated the USP based on the

same methodology described in our

preliminary results.

Foreign Market Value

Except as noted below, the

methodology and calculations we used

to arrive at the FMV for the final results

are the same as those used in the

preliminary results of this review.

Because all home market sales were

made at prices below their cost of

production, we continued to use

Andina’s constructed value (CV) as the

basis for the FMV as defined in section

773(e) of the Act. For a discussion of the

Department’s sales below cost test, and

calculation of the cost of production

(COP) and CV, see Preliminary Results.

For purposes of the final results of

this review, we revised the COP and CV

calculated for Andina in the preliminary

results as follows:

1. For COP and CV, we included the

depreciation expense related to idle

furnaces. See Comment 1 in the

‘‘Interested Party Comments’’ section

below.

2. We used the cost incurred by

Andina’s subsidiary to produce

woodchips for purposes of COP. See

Comment 6 in the ‘‘Interested Party

Comments’’ section below.

3. For home market credit expense,

we used the highest short-term interest

rate for peso-denominated short-term

loans reported by Andina in its May 24,

1994 submission. See Comment 11 in

the ‘‘Interested Party Comments’’

section below.

Interested Party Comments

We gave interested parties an

opportunity to comment on the

preliminary results. We received

comments from the petitioners, Andina,

and Hunter Douglas.

Comment 1: Depreciation of Idle

Equipment

The petitioners argue that the

Department should reject Andina’s

reported depreciation expense for idle

furnace IV because the expense was

allocated over the wrong product base,

i.e., all products. Specifically, the

petitioners contend that the

depreciation expense for this furnace

should have been attributed in total to

silicon metal production because that is

how the expense was treated in the first

administrative review of this order.

They further contend that not only does

Andina’s normal accounting

methodology treat the depreciation

expense of the idle furnace as a cost of

producing silicon metal (and, therefore,

conclude it should be likewise for the

POR), but that the furnace has never

been used to produce any other product.

According to the petitioners, the

Department will not depart from a

respondent’s normal accounting

practice unless it is distortive. See, Final

Determination of Sales at Less Than

Fair Value: Canned Pineapple Fruit

From Thailand, 60 FR 29503, 29559

(June 5, 1995) (Pineapple from

Thailand) and Final Determination of

Sales At Less Than Fair Value: Certain

Iron Construction Castings From Brazil,

51 FR 9477, 9481 (March 19, 1994) (Iron

Castings from Brazil). To further

support their argument, the petitioners

point to ferroalloy industry directories

which identify Andina’s furnace IV as a

silicon metal furnace.

Alternatively, the petitioners assert

that, if the depreciation expense is not

allocated in total to silicon metal

production, then it should be allocated

only to silicon metal and ferrosilicon,

the two products capable of being

produced in furnace IV, as reported in

the Department’s verification report of

the first administrative review. Finally,

the petitioners argue that if the

Department does allocate this expense

to all products Andina is capable of

producing, then it should do so only for

the period of time when the furnace was

disassembled and incapable of

producing any product.

Andina disagrees with the petitioners

views, as does Hunter Douglas. Andina

argues that the furnace was

disassembled and had not yet been retooled to produce a particular product.

According to Andina, depreciation

expense incurred while the furnace was

disassembled should be allocated over

all products; it should be allocated to a

specific product only when the furnace

is reactivated, and producing a specific

product. It acknowledges that it had

previously allocated the full expense of

this furnace to silicon metal, but asserts

that was because the furnace was

producing silicon metal at that time.

Andina maintains that the Department

should not charge all of the depreciation

expense on idle furnace IV to the subject

merchandise because Andina was

uncertain as to how the furnace would

be used in the future.

Hunter Douglas further argues that the

petitioners have misapplied the facts of

Iron Castings from Brazil. First, it

contends that it is irrelevant how

depreciation expense was treated in the

first administrative review—the only

relevant issue is the status of the furnace

during this POR. Hunter Douglas asserts

that the depreciation expense for idle

furnace IV should be treated as a general

cost to Andina because, during the

period covered by this review, it was

disassembled and incapable of

producing any product. Hunter Douglas

cites to the Final Determination of Sales

at Less Than Fair Value: Shop Towels

from Bangladesh, 57 FR 3996, 3999

(February 3, 1992) (Shop Towels from

Bangladesh). Finally, it states that there

is nothing on the record to indicate that

Andina allocated depreciation of

furnace IV entirely to silicon metal

during the POR.

With respect to idle furnace III,

Andina argues that the Department

should not have allocated the

depreciation expense to all products,

but instead to calcium silicon, a product

furnace III was being modified to

produce.

DOC Position

For purposes of this final

determination, we have allocated the

depreciation expense for furnance IV to

the production of silicon metal.

Although Andina asserts that furnace IV

was disassembled and incapable of

producing any product during the entire

POR (August 1992–September 1993)

and, therefore, should be allocated

across all products, an on-site

verification conducted by the

Department in July 1993 found that

furnace IV was in fact being used to

produce silicon metal. (See, public File

Memorandum from Maureen

McPhillips, et al, August 3, 1993,

documenting the July 1993 verification

of the 1991–92 administrative review

period.) Accordingly, we have

determined that the depreciation related

to furnance IV should be allocated to the

production of silicon metal. The

comments raised by the petitioners,

with respect to Andina’s normal

accounting methodology for allocating

depreciation expenses related to furnace

IV, and Hunter Douglas, with respect to

the analogy of idle furnace allocation in

Shop Towels from Bangladesh with

Andina’s allocation methodology in this

review, are moot because of the

Department’s verification findings.

Finally, we agree with Andina

regarding furnace III. The record

indicates that furnace III was being

modified to produce calcium silicon

while it was idle during 1993 and it

began producing calcium silicon in June

1993. Thus, we have determined that
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5615

the depreciation expense for furnace III

should be charged to the production of

calcium silicon. We have amended our

calculations for the final results by not

attributing any portion of depreciation

expense associated with furnace III to

the cost of producing silicon metal.

Comment 2: Treatment of VAT on

Inputs for CV

The petitioners argue that VAT paid

on inputs used to produce silicon metal

should be included in CV in the

Department’s final results. The

petitioners assert that a home market tax

directly applicable to materials used in

the manufacture of merchandise

exported to the United States is a cost

of producing the exported merchandise

unless the tax is remitted or refunded

upon exportation. They contend that it

is incumbent upon Andina to provide

evidence that VAT paid on inputs used

in the production of silicon metal for

exportation was refunded, citing

Timken Co. v. United States, 673 F.

Supp. 495, 513 (CIT 1987). According to

the petitioners, although the record

shows Andina requested reimbursement

for VAT paid on inputs used to produce

exported silicon metal, a significant

amount of the reimbursement Andina

requested was not received.

Andina claims that it can receive

refunds for VAT paid on inputs in three

ways: (1) through an offset to the tax

generated on domestic sales; (2) through

a credit used to pay other taxes; or (3)

through a cash refund upon exportation

of the merchandise. Andina contends

that it did receive VAT refunds from the

Argentine Government on its exports as

seen by the decrease from 1992 to 1993

in the balance of the ‘‘government

receivables on exportations’’ account on

its balance sheet.

Hunter Douglas agrees with Andina

and claims that Andina’s method of

reporting VAT in its questionnaire

response is consistent with the way the

company records the tax in its audited

financial statements, (i.e.,VAT is

recorded as a receivable, not as an

expense). Hunter Douglas notes that in

the preliminary results the Department

confirmed Andina’s statements

regarding the Argentine VAT system

through independent third-party

sources.

DOC Position

We disagree with the petitioners that

VAT paid on inputs used to produce

silicon metal should be included in CV.

First, we corroborated Andina’s

statements regarding the operation of

the Argentine VAT system through an

independent source. Doing Business in

Argentina (Price Waterhouse, 1993 at

119–121). Exporters are entitled to a tax

credit for the full amount of VAT paid

on inputs, if the final product is

exported. The credit may either be offset

against other taxes (e.g., VAT on

domestic sales), transferred to third

parties, or reimbursed by the Direccion

General Impostiva (i.e., the Argentine

tax authority). Second, we confirmed

Andina’s statement that during the POR

it requested reimbursement of VAT paid

on inputs used to produce exported

merchandise by examining its audited

financial statements. Andina recorded

VAT payments on inputs for exported

merchandise as a receivable, not an

expense. Third, we noted the decrease

in Andina’s ‘‘government receivables on

exportations’’ account balance between

1992 and 1993 and agree that this

supports Andina’s claim that it receives

VAT refunds on exported merchandise.

Based on the foregoing, we have

concluded that Andina is receiving

credits for VAT associated with the

purchase of inputs used in the

production of the subject merchandise.

Consequently, we excluded VAT from

CV in the final results.

Comment 3: Import Duties on Electrodes

The petitioners claim that there is no

evidence to support Andina’s claim that

it included import duties on electrodes

in the reported COP and CV. Originally,

Andina had reported that the cost of

electrodes consumed in the production

of silicon metal by furnace V included

import duties. However, in its

supplemental response, Andina reduced

the cost of the electrodes by the amount

of the import duties and reported the

duties as an indirect material cost of

furnace V. The petitioners contend that

the indirect material cost for furnace V

reported in the supplemental response

is less than the indirect material cost for

furnace V reported in the original

Section D response. They argue that if

Andina had changed its reporting

methodology as stated in its narrative,

the indirect material costs should have

been greater in the supplemental

response, not less. Therefore, the

petitioners contend that Andina failed

to include duties on electrodes in the

indirect material cost of furnace V.

Additionally, the petitioners note that

if duties on electrodes were reported as

an indirect material cost, then duties on

electrodes consumed during 1993,

which were drawn from the 1993

beginning inventory, have not been

included in the reported costs. The

petitioners argue that the duties on

those electrodes would have been

reported as an indirect material cost in

1992, when the electrodes were

purchased. The petitioners argue that

the Department should either determine

whether Andina’s reported costs

include duties on imported electrodes

or include a proper amount for such

duties in Andina’s reported costs.

Andina argues that import duties on

electrodes are included as an indirect

material cost of furnace V. It states that

it had first included import duties on

electrodes used to manufacture silicon

metal in the cost of electrodes because

it had used this methodology in the

original investigation and the first

review. However, it reported import

duties on electrodes in indirect

materials costs of furnace V in its

supplemental responses so that the

reported cost could be reconciled with

its audited financial statements. Andina

contends that the Department should

not penalize it for changing its

accounting methodology when it

explained how it reported the duties on

electrodes.

Regarding the methodology it used to

account for import duties on electrodes

drawn from beginning inventory,

Andina agrees that it inadvertently

failed to report import duties on

electrodes drawn from beginning

inventory and requests the Department

to make the adjustment requested by the

petitioners.

DOC Position

We agree with Andina and the

petitioners that import duties on

electrodes in beginning inventory were

not included in the reported costs and

have corrected these final results for

that omission.

The petitioners’ conclusion that

import duties were not included in the

indirect material costs for furnace V is

wrong because they did not compare

correct costs and failed to include all

indirect material costs reported in

Andina’s supplemental response in

their comparison. Specifically, the

petitioners incorrectly compared the

operating supplies expense and other

costs for furnace V reported in Andina’s

Section D response to the indirect

materials expense for furnace V reported

in Andina’s supplemental response. In

addition, the indirect materials expense

from the supplemental should have

included an amount for the indirect

materials and other costs from other cost

centers which were allocated to furnace

V.

We found that the reported electrode

cost (exclusive of import duties) and the

indirect materials cost for furnace V

reconciled to Andina’s accounting

records as submitted. Thus, we have

accepted Andina’s statement that the

import duties on electrodes is included
5616 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

in indirect material costs for these final

results.

Comment 4: Allocation of Laboratory

Costs

The petitioners contend that the

Department should not accept the

methodology Andina used to allocate

laboratory costs because it is not based

on Andina’s normal accounting system.

They assert that Andina failed to show

that its reported methodology is more

reasonable than its normal

methodology. Therefore, they argue, the

Department should either require

Andina to report information that would

allow the Department to allocate

laboratory costs using Andina’s normal

accounting methodology, or allocate, as

best information available (BIA),

laboratory costs over the direct labor

hours of Andina’s cost centers.

Andina asserts that its reported

methodology is fair and logical. It

disagrees with the methodology

proposed by the petitioners, arguing that

using labor hours as an allocation basis

results in significant distortions.

Hunter Douglas also asserts that the

petitioners fail to acknowledge the

distortions created by using an

allocation methodology based on

Andina’s accounting system; it overallocates laboratory costs to

intermediate products used to produce

both subject and non-subject

merchandise. Instead, it contends,

Andina’s revised methodology more

reasonably reflects its actual costs. In

addition, Hunter Douglas asserts that

the petitioners offer no evidence that the

‘‘labor hours’’ methodology yields a

more reasonable allocation.

DOC Position

We agree with Andina and Hunter

Douglas. Andina appears to have

mischaracterized its normal allocation

of laboratory costs by stating that in its

accounting system it assigns laboratory

costs to the product that is being

analyzed. However, based on the

records submitted by Andina, we

concluded that its normal accounting

methodology is to allocate costs on the

basis of furnace capacity.

For purposes of this review, Andina

submitted an alternative allocation

methodology based on allocating

laboratory costs to its raw materials,

intermediate products, and final

products according to the volume of

materials and products entering and

leaving intermediate and final product

cost centers, i.e., an ‘‘input/output’’

basis.

Even though Andina’s response is

confusing regarding its normal

accounting methodology, we disagree

with the petitioners that Andina failed

to provide adequate information about

its normal accounting methodology. We

were able to conclude that Andina’s

normal methodology is based on furnace

capacity, (See Exhibit D–1 of March 15,

1996, supplemental response) and to

reconcile the inventory values in these

worksheets with Andina’s 1993 audited

financial statements, thus validating

Andina’s normal allocation basis.

However, we determined that this

allocation methodology does not

reasonably allocate laboratory costs

because furnace capacity is not the

determinant of the amount of testing

performed. Therefore, we have accepted

Andina’s alternative allocation

methodology because it is based on a

reasonable premise that the amount of

laboratory testing will vary directly with

the actual quantity of material

processed.

Comment 5: Deduction of Income From

Sales of Woodchips

The petitioners argue that the

Department should not reduce Andina’s

reported COP and CV by the income

from El Tambolar (a wholly-owned

subsidiary) because not all of El

Tambolar’s income was derived from

the sale of woodchips. They assert that

El Tambolar’s income includes an

extraordinary gain from the recovery of

a tax credit previously written-off and

rental income, both of which bear no

relation to the sale of woodchips or the

production of silicon metal.

Andina argues that this income

should be deducted from COP and CV

because it is directly related to the

production of silicon (i.e., it uses

woodchips to produce silicon metal).

DOC Position

We agree with the petitioners

regarding El Tambolar’s miscellaneous

income. It is the Department’s practice

to reduce production costs only by

revenue considered to be a recovery of

costs (e.g., revenue from sales of scrap)

rather than revenue generated from sales

in the normal course of business. (See

Final Determination of Sales at Less

Than Fair Value: Oil Country Tubular

Goods from Argentina, 60 FR 33539,

33550 (June 28, 1995) (OCTG from

Argentina).) The income El Tambolar

earned from its sales of woodchips is

revenue earned from sales in the normal

course of business.

In addition, we have not offset

production costs by El Tambolar’s

extraordinary gain or rental income

because this income is not related to

silicon metal production costs incurred

during the POR.

Comment 6: Use of Subsidiary’s Costs

for Woodchips

Andina argues that the cost of

woodchips included in COP for silicon

metal should be based on El Tambolar’s

actual costs to produce the woodchips,

rather than the price El Tambolar

charges Andina (i.e., the transfer price).

The petitioners agree with Andina

that El Tambolar’s actual cost should be

used to value the woodchips purchased

from the related party. However, the

petitioners urge the Department to base

the cost of woodchips on the costs

reported in El Tambolar’s fiscal 1993

(i.e., July 1, 1992–June 30, 1993)

financial statements rather than the

costs reported in El Tambolar’s 1993

calendar year financial statement which

was prepared for this review. The

petitioners contend that the cost of

woodchips reported in the calendar

1993 statement is inconsistent with

other cost information on the record,

namely the fiscal 1993 financial

statement. The petitioners argue that

Andina failed to reconcile the reported

woodchip production costs contained in

the calendar year 1993 financial

statement with El Tambolar’s fiscal 1993

financial statement. Moreover, the

petitioners claim that they were unable

to reconcile the costs figures reported in

each statement. Thus, because the

calendar year woodchip costs could not

be substantiated, the Department should

rely on the fiscal woodchip costs.

Additionally, the petitioners claim

that costs on the fiscal financial

statement should be increased to

include amortization of the eucalyptus

plantations from which wood is drawn

to produce woodchips because this

amortization appears to be missing from

that statement. (See Final Determination

of Sales at Less Than Fair Value;

Ferrosilicon from Brazil, 59 FR 732 737–

738 (January 6, 1994).)

DOC Position

We agree with both parties that, for

our COP analysis, the related party

purchases should be valued based on El

Tambolar’s actual cost of woodchips

rather than the transfer price. We based

the cost of woodchips on costs incurred

by El Tambolar in calendar year 1993.

(And, thus, no adjustment was

necessary for amortization of eucalyptus

plantations.)

With respect to petitioner’s argument

that Andina did not reconcile the

calendar year statement with the fiscal

year statement, we were able to

reconcile the reported woodchip costs

to El Tambolar’s portion of the

consolidated Andina income statement

for 1993. (See Calculation
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5617

Memorandum, January 10, 1997.)

Therefore, we believe the reported

woodchip costs reasonably reflect their

cost of production.

We note, however, that for CV we

have followed our normal practice and

used the transfer price which was

greater than cost. The Department

compared the transfer price to the prices

from third-party sources in Argentina

(submitted by the petitioners in their

sales below cost allegation). We found

the transfer prices to be consistent with

the petitioners’’ evidence of market

prices and concluded that the transfer

prices reflect arm’s length prices.

Therefore, we have used the higher

transfer price to value woodchips in our

calculation of CV.

Comment 7: Interest Expense

Andina argues that the Department

should not calculate interest expenses

based on the financial expense reported

in its consolidated financial statement.

Andina asserts that its auditors erred in

preparing its consolidated income

statement because they posted an

adjusting journal entry, eliminating

Andina’s share of El Tambolar’s net

income, to the ‘‘Financial Cost’’ account

instead of posting the entry to the

‘‘Other Income and Expenses’’ account.

According to Andina, it is clear that this

adjusting entry, which increased

Andina’s financial expenses, should

have been posted to the ‘‘Other Income

and Expenses’’ account. It argues that

information exists on the record

showing that this entry meant to

eliminate income recorded in the

‘‘Other Income and Expenses’’ account.

The petitioners contend that the

Department’s established practice is to

determine the interest expenses

included in COP and CV based on a

respondent’s audited consolidated

financial statements. (See, e.g., Final

Determination of Sales at Less Than

Fair Value: New Minivans from Japan,

50 FR 21065, 21069 (May 26, 1992), and

Final Determination of Sales at Less

Than Fair Value: Certain Carbon Steel

Butt-Weld Pipe Fittings from Thailand,

57 FR 21065, 21069 (May 18, 1992).)

According to the petitioners, Andina

failed to adequately support its claim

because the information on the record

that Andina cites to support its position

is unaudited and prepared solely for

this antidumping proceeding. Thus, the

petitioners argue that Andina failed to

demonstrate that the Department should

not rely on the financial expenses

reported on Andina’s audited

consolidated financial statement (see

Timken Co., 673 F. Supp. at 513).

DOC Position

We agree with the petitioners. Andina

has not provided sufficient evidence to

support its claim that its audited

consolidated 1993 financial statements

are inaccurate. It is the Department’s

longstanding practice to base interest

expense on the audited consolidated

financial statements. (See e.g., Notice of

Final Determination of Sales at LTFV:

Small Diameter Circular Seamless

Carbon and Alloy Steel, Standard, Line,

and Pressure Pipe from Italy, 60 FR

31981,31990 (June 19, 1995).) We have

used the financial expenses reported in

Andina’s audited, consolidated

financial statements for the final results.

Comment 8: Reducing COP and CV by

Reimbursed Taxes

Andina argues that the Department

should not include reembolso taxes

(taxes reimbursed under the reembolso

program) in CV when making

comparisons to USP for the final results

because reembolso taxes were rebated

upon exportation of the subject

merchandise. Andina argues that the

bills of lading for export sales prove

conclusively that tax rebates were

received on exports to the United States

and, thus, the Department must reduce

CV by the amount of these indirect taxes

proven to be rebated on U.S. exports.

Otherwise, claims Andina, the addition

of these taxes to CV creates an unfair

comparison because it compares a taxinclusive CV to a tax-exclusive USP.

(See OCTG from Argentina.)

The petitioners disagree with Andina.

They contend that indirect taxes must

be included in CV based on section

773(e)(1)(A) of the Act, which provides

that the constructed value of imported

merchandise shall ‘‘be the sum of * * *

the cost of materials (exclusive of any

internal tax applicable in the country of

exportation directly to such materials or

their disposition, but remitted or

refunded upon the exportation of the

article in the production of which such

materials are used) * * *.’’ The fact that

(a) indirect tax refunds under the

reembolso program are based on a

percentage of sales value and that

percentage is not directly related to the

indirect tax payments; (b) Andina paid

a series of indirect taxes that were not

directly related to materials; and (c)

Andina calculated the amount of the

requested percentage reduction to CV

based on the reported reembolso

amounts received on export sales of

silicon metal to all countries, contend

the petitioners, is further evidence that

Andina cannot establish a link.

The petitioners assert that Andina

failed to answer the Department’s

supplemental question requiring

Andina to demonstrate that reembolso

taxes were tied directly to the exported

merchandise. The petitioners cite

Timken Co. v. United States, 673 F.

Supp. 496, 513 (CIT 1987) arguing that

the burden of establishing the right for

an adjustment lies with Andina and

assert that Andina failed to sufficiently

support its claim.

Finally, the petitioners contend that

OCTG from Argentina does not support

Andina’s position because that case did

not address the proper treatment of

reembolso in the context of calculating

CV, but involved a circumstance-of-sale

adjustment to account for differences in

reembolso received on U.S. sales and

third-country sales used for FMV.

DOC Position

We agree with the petitioners that

Andina failed to substantiate its claimed

adjustment. Although we have in past

reviews granted this adjustment for

Andina, in accordance with OCTG from

Argentina, in this review we specifically

requested Andina to link the reembolso

tax to material inputs that are physically

incorporated into the subject

merchandise. See sections 773(e)(1)(A)

and 772(d)(1)(C) of the Act. Because

Andina failed to provide the

information specifically requested by

the Department with respect to this

issue, we disallowed the claimed tax

adjustments.

Comment 9: Short-term Interest Offset

From Interest Expense

Andina claims that it should be

allowed to reduce the interest expense

included in COP and CV by interest

income earned on certain bond

investments because they are short-term

investments. It supports this claim by

noting that the bond investments are

classified as current assets in the

company’s audited financial statement.

The petitioners disagree with Andina

arguing that it provided documentation

from the Argentine Central Bank

identifying the term of the bonds as four

years. The petitioners note that it is the

Department’s practice to reduce interest

expense by interest income earned on

investments with a maturity of one year

or less, citing the Final Determination of

Sales at Less Than Fair Value: Fresh Cut

Roses from Colombia, 60 FR 6980, 7011

(February 6, 1996). Therefore, the

petitioners contend, the interest income

from these bonds should not be used to

reduce interest expense because the

investments do not qualify as shortterm.
5618 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

DOC Position

We agree with the petitioners. It is the

Department’s practice to allow a

respondent to reduce its interest

expense by interest income earned from

short-term investments of working

capital. The Department generally

considers an investment with a maturity

of one year or less to be a short-term

investment. See e.g., Pasta from Italy, 61

FR 30326, 30359 (June 14, 1996).

Andina reported the term of the bonds

at issue as four years. Thus, because

these bonds are properly classified as

long-term investments, the interest

income earned from these bonds was

not used to offset interest expense for

the final results.

Comment 10: Allocation of Plant

General Services

Andina claims that allocating plant

general services (PGS) costs to cost

centers based on labor hours incurred in

each center is not a reasonable measure

of PGS provided to each cost center.

Instead, Andina contends, it would be

more appropriate to allocate these costs

on bases which are related to the costs

being allocated, such as (i) tonnage of

inputs; (ii) tonnage of outputs; and (iii)

salaries of each productive cost center.

The petitioners disagree with Andina

and state that the Department properly

rejected Andina’s allocation

methodology in the preliminary results

because Andina failed to use its normal

allocation methodology or demonstrate

that its normal methodology, based on

direct labor hours, is distortive (see e.g.,

Pineapple from Thailand). Furthermore,

the petitioners contend that Andina’s

proposed methodology allocates

relatively large amounts of PGS costs to

simple operations and smaller amounts

to more significant operations. The

petitioners argue that this result is

contrary to the Department’s practice to

allocate general facilities expenses and

other indirect costs according to the

level of activity within direct cost

centers. See Elemental Sulphur, p. 8245.

DOC Position

We disagree with Andina. We have

determined that Andina’s arbitrary

allocation of PGS costs into three

portions did not reasonably reflect the

cost of producing the merchandise

under investigation. Andina did not

demonstrate that the three different

allocation bases it used are each related

to a portion of total PGS costs.

Moreover, Andina’s normal allocation

methodology for PGS costs, which is

based on furnace capacity, is

unreasonable because the record does

not indicate that PGS costs are related

to furnace capacity. Therefore, as in the

preliminary results, we have allocated

PGS costs to Andina’s cost centers based

on direct labor hours worked in each

cost center because the nature of PGS

costs indicates that labor hours is a

reasonable measure of the degree to

which a cost center benefits from plant

general services.

Comment 11: BIA for Interest Rate

The petitioners argue that the

Department improperly used as BIA an

11.8 percent interest rate from the

International Monetary Fund, rather

than using the higher short-term, pesodenominated borrowing rate reported on

the bank statement submitted by Andina

in its questionnaire response. According

to the petitioners, the short-term rate

noted on Andina’s bank statement is the

only evidence on the record regarding

Andina’s short-term borrowing at a

peso-denominated rate.

Andina argues that using the highest

short-term interest rate reported for one

of its short-term loans is unjust since the

interest rate on that loan applies to an

overdraft accounting for a small portion

of its borrowings.

DOC Position

We agree with the petitioners that,

because Andina failed to provide a

complete list of its short-term

borrowings for the POR, we should use

BIA. Andina was given ample time and

opportunity to provide a complete

response to this request. However, it

chose to provide the Department with

information related to only a portion of

its short-term borrowings. As BIA, we

are using the higher (i.e., more adverse)

short-term, peso-denominated interest

rate on the record to calculate the home

market imputed credit expense for

purposes of calculating CV for the final

results.

Comment 12: Currency Conversion

The petitioners state that the

Department improperly multiplied the

peso-denominated CV and direct selling

expenses by the peso per U.S. dollar

exchange rates. The petitioner argues

that the Department should have

multiplied the peso-denominated

amounts by one divided by the

exchange rates used.

Andina argues that the Argentine

Convertibility Law (law 23928) makes

currency conversion irrelevant since it

is designed to equate the U.S. dollar

with the Argentine peso.

DOC Position

We agree with the petitioners that we

improperly converted CV and direct

selling expenses in the preliminary

results. The manner in which the FMV

was converted to U.S. dollars in the

preliminary results reflects a clerical

error in that the FMV (CV less direct

selling expenses) was multiplied

directly by the exchange rate rather than

the U.S. dollar amount based on the

exchange rate (i.e., US$1.00 divided by

the exchange rate). This clerical error

was corrected in the margin calculation

of these final results.

In addition, contrary to Andina’s

claim, currency conversion is relevant

to the Department’s antidumping duty

analysis. We have followed the currency

conversion requirements as set out in

the Department’s regulations for these

final results. See 19 CFR 353.60(a).

Currency Conversion

We made currency conversions for

expenses denominated in Argentine

pesos based on the official monthly

exchange rates in effect on the dates of

the U.S. sales as published by the

International Monetary Fund, in

accordance with 19 CFR 353.60(a),

because certified exchange rates for

Argentina were unavailable from the

Federal Reserve.

Final Results of Review

As a result of our review, we

determine that the following margin

exists for the period September 1, 1992

through August 31, 1993:

Manufacturer/exporter

Review

period

Margin

(percent)

Andina ..... 9/01/92–8/31/93 13.80

Silarsa ..... 9/01/92–8/31/93 24.62

The Department shall determine, and

the U.S. Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

USP and FMV may vary from the

percentages stated above. The

Department will issue appraisement

instructions directly to the U.S. Customs

Service.

Furthermore, the following deposit

requirements will be effective for all

shipments of silicon metal from

Argentina entered, or withdrawn from

warehouse, for consumption on or after

the publication date of the final results

of this administrative review, as

provided by section 751(a)(1) of the Act:

(1) the cash deposit rates for Silarsa and

Andina will be the rates indicated

above; (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
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5619

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) the cash

deposit rate for all other manufacturers

or exporters will be 17.87 percent, the

‘‘all other’’ rate established in the final

Results of Redetermination Pursuant to

Court Remand, American Alloys, Inc. v.

United States, Ct. No. 91–10–00782, p.

4 (April 7, 1995).

These cash deposit requirements,

when imposed, shall remain in effect

until publication of the final results of

the next administrative review.

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 of double

antidumping duties.

This notice also serves as the only

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 return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and terms of the 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. 1675(a)(1)) and 19

CFR 353.22.

Dated: January 30, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration

[FR Doc. 97–3005 Filed 2–5–97; 8:45 am]

BILLING CODE 3510–DS–P

University of Iowa Hospitals, et al.;

Notice of Decision on Applications for

Duty-free Entry of Scientific

Instruments

This is a decision pursuant to Section

6(c) of the Educational, Scientific, and

Cultural Materials Importation Act of

1966 (Pub. L. 89–651, 80 Stat. 897; 15

CFR part 301). Related records can be

viewed between 8:30 AM and 5:00 PM

in Room 4211, U.S. Department of

Commerce, 14th and Constitution

Avenue, NW., Washington, DC.

Decision: Denied. Applicants have

failed to establish that domestic

instruments of equivalent scientific

value to the foreign instruments for the

intended purposes are not available.

Reasons: Section 301.5(e)(4) of the

regulations requires the denial of

applications that have been denied

without prejudice to resubmission if

they are not resubmitted within the

specified time period. This is the case

for the following dockets.

Docket Number: 96–017. Applicant:

University of Iowa Hospitals and

Clinics, Iowa City, IA 52242.

Instrument: [18F] Synthesis Module.

Manufacturer: Nuclear Interface GmbH,

Germany. Date of Denial without

Prejudice to Resubmission: August 21,

1996.

Docket Number: 95–109. Applicant:

University of California, Berkeley,

Berkeley, CA 94722. Instrument: Energy

Dispersive Spectrometer. Manufacturer:

Oxford Instruments, United Kingdom.

Date of Denial without Prejudice to

Resubmission: April 2, 1996.

Frank W. Creel,

Director, Statutory Import Programs Staff.

[FR Doc. 97–2879 Filed 2–5–97; 8:45 am]

BILLING CODE 3510–DS–P

Applications for Duty-Free Entry of

Scientific Instruments

Pursuant to Section 6(c) of the

Educational, Scientific and Cultural

Materials Importation Act of 1966 (Pub.

L. 89–651; 80 Stat. 897; 15 CFR part

301), we invite comments on the

question of whether instruments of

equivalent scientific value, for the

purposes for which the instruments

shown below are intended to be used,

are being manufactured in the United

States.

Comments must comply with 15 CFR

301.5(a) (3) and (4) of the regulations

and be filed within 20 days with the

Statutory Import Programs Staff, U.S.

Department of Commerce, Washington,

D.C. 20230. Applications may be

examined between 8:30 A.M. and 5:00

P.M. in Room 4211, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C.

Docket Number: 96–136. Applicant:

Washington University, Department of

Earth and Planetary Sciences, Campus

Box 1169, One Brookings Drive, St.

Louis, MO 63130–4899. Instrument:

Mass Spectrometer, Model MAT 252.

Manufacturer: Finnigan MAT, Germany.

Intended Use: The instrument is

intended to be used for investigations

focusing on: (1) Understanding the

temporal variations in rivers and

springs, (2) the behavior of fossil

hydrothermal systems, (3) the origin of

granitic batholiths, evaporation

processes in lakes and other natural

water bodies, (4) isotopic tracing of

subsurface fluids, climatic change and

(5) isotopic variations in calcareous

organisms. In addition, the instrument

will be used for educational purposes in

earth and planetary science courses.

Application accepted by Commissioner

of Customs: December 11, 1996.

Docket Number: 96–139. Applicant:

U. S. Department of Agriculture,

Agricultural Research Service, U. S.

Water Conservation Laboratory, 4331 E.

Broadway Road, Phoenix, AZ 85040–

8832. Instrument: Mass Spectrometer,

Model Isochrom. Manufacturer:

Micromass, Inc., United Kingdom.

Intended Use: The instrument will be

used to analyze soil and plant materials

which contain stable isotopes of carbon

and nitrogen used as tracers to follow

biological processes. Application

accepted by Commissioner of Customs:

December 19, 1996.

Docket Number: 96–140. Applicant:

Associated Universities, Inc.,

Brookhaven National Laboratory,

Building 480, Upton, NY 11973.

Instrument: Electron Microscope with

Accessories, Model JEM–3000F.

Manufacturer: JEOL, Ltd., Japan.

Intended Use: The instrument will be

used to study high temperature

superconductors, high field permanent

magnets and interfaces between metals

and coatings. The preliminary research

plans include studies of: (a) Charge and

charge transfer, (b) microcomposition,

atomic structure and charge distribution

at grain boundaries and interfaces and

(c) local structural disorder by electron

diffuse scattering, imaging and

computer simulation. Application

accepted by Commissioner of Customs:

December 19, 1996.

Docket Number: 96–141. Applicant:

Oregon Graduate Institute of Science

and Technology, P.O. Box 91000,

Portland, OR 97291–1000. Instrument:

Stopped-Flow Spectrometer, Model

SX.18MV. Manufacturer: Applied

Photophysics, Ltd., United Kingdom.

Intended Use: The instrument will be

used to study the kinetic mechanism of

wild-type and mutant lignin-degrading

peroxidases and other redox enzymes

from wood-degrading fungi. Application

accepted by Commissioner of Customs:

December 19, 1996.

Docket Number: 96–142. Applicant:

The University of Tennessee, Knoxville,

Department of Physics and Astronomy,

401 Nielsen Physics Building,

Knoxville, TN 37996–1200. Instrument:

Energy Analyzer and Power Supply,

Model SES–200. Manufacturer: Scienta

Instrument AB, Sweden. Intended Use:

The instrument will be used to uncover

new physical and chemical phenomena