1954 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

DEPARTMENT OF COMMERCE

International Trade Administration

[A–351–806]

Silicon Metal From Brazil; Final

Results of Antidumping Duty

Administrative Review and

Determination Not to Revoke in Part

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative review

and determination not to revoke in part.

SUMMARY: On September 5, 1996, the

Department of Commerce (the

Department) published the preliminary

results of its administrative review of

the antidumping duty order on silicon

metal from Brazil. This review covers

the period July 1, 1993, through June 30,

1994, and five manufacturers/exporters

of the subject merchandise to the United

States. The review indicates the

existence of margins for four firms.

We gave interested parties an

opportunity to comment on the

preliminary results. Based on our

analysis of the comments received and

new information submitted at the

Department’s request, we have changed

our results from those presented in our

preliminary results, as described below

in the comments section of this notice.

EFFECTIVE DATE: January 14, 1997.

FOR FURTHER INFORMATION CONTACT: Fred

Baker, Alain Letort, or John Kugelman,

AD/CVD Enforcement Group III, Office

8, Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–2924, –4243, or –0649,

respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 5, 1996, the

Department of Commerce published in

the Federal Register (61 FR 46776) the

preliminary results of its administrative

review of the antidumping duty order

on silicon metal from Brazil (July 31,

1991, 56 FR 36135). On September 27,

October 2, and November 13, 1996 the

Department requested additional

information from Minasligas,

Eletrosilex, and CCM, respectively. We

received responses from these firms on

October 15, October 16, and November

20, 1996, respectively. The Department

has now completed that administrative

review in accordance with section 751

of the Tariff Act of 1930, as amended

(the Tariff Act).

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute and the

Department’s regulations are in

reference to the provisions as they

existed on December 31, 1994.

Scope of the Review

The merchandise covered by this

review is silicon metal from Brazil

containing at least 96.00 percent but less

than 99.99 percent silicon by weight.

Also covered by this review is silicon

metal from Brazil containing between

89.00 and 96.00 percent silicon by

weight but which contains a higher

aluminum content than the silicon

metal containing at least 96.00 percent

but less than 99.99 percent silicon by

weight. Silicon metal is currently

provided for under subheadings

2804.69.10 and 2804.69.50 of the

Harmonized Tariff Schedule (HTS) as a

chemical product, but is commonly

referred to as a metal. Semiconductor

grade silicon (silicon metal containing

by weight not less than 99.99 percent

silicon and provided for in subheading

2804.61.00 of the HTS) is not subject to

the order. HTS item numbers are

provided for convenience and for U.S.

Customs purposes. The written

description remains dispositive as to the

scope of the product coverage.

The period of review (POR) is July 1,

1993, through June 30, 1994. This

review involves five manufacturers/

exporters of Brazilian silicon metal:

Companhia Brasileira Carbureto de

Ca ́lcio (CBCC), Companhia Ferroligas

Minas Gerais—Minasligas (Minasligas),

Eletrosilex Belo Horizonte (Eletrosilex),

Rima Eletrometalurgia S.A. (RIMA), and

Camargo Correˆa Metais (CCM).

Consumption Tax

In light of the Federal Circuit’s

decision in Federal Mogul v. United

States, CAFC No. 94–1097, the

Department has changed its treatment of

home market consumption taxes. Where

merchandise exported to the United

States is exempt from the consumption

tax, the Department will add to the U.S.

price the absolute amount of such taxes

charged on the comparison sales in the

home market. This is the same

methodology that the Department

adopted following the decision of the

Federal Circuit in Zenith v. United

States, 988 F.2d 1573, 1582 (1993), and

which was suggested by the court in

footnote 4 of its decision. The Court of

International Trade (CIT) overturned

this methodology in Federal Mogul v.

United States, 834 F.Supp. 1391 (1993),

and the Department acquiesced in the

CIT’s decision. The Department then

followed the CIT’s preferred

methodology, which was to calculate

the tax to be added to U.S. price by

multiplying the adjusted U.S. price by

the foreign market tax rate; the

Department made adjustments to this

amount so that the tax adjustment

would not alter a ‘‘zero’’ pre-tax

dumping assessment.

The foreign exporters in the Federal

Mogul case, however, appealed that

decision to the Federal Circuit, which

reversed the CIT and held that the

statute did not preclude Commerce from

using the ‘‘Zenith footnote 4’’

methodology to calculate tax-neutral

dumping assessments (i.e., assessments

that are unaffected by the existence or

amount of home market consumption

taxes). Moreover, the Federal Circuit

recognized that certain international

agreements of the United States, in

particular the General Agreement on

Tariffs and Trade (GATT) and the Tokyo

Round Antidumping Code, required the

calculation of tax-neutral dumping

assessments. The Federal Circuit

remanded the case to the CIT with

instructions to direct Commerce to

determine which tax methodology it

will employ.

The Department has determined that

the ‘‘Zenith footnote 4’’ methodology

should be used. First, as the Department

has explained in numerous

administrative determinations and court

filings over the past decade, and as the

Federal Circuit has now recognized,

Article VI of the GATT and Article 2 of

the Tokyo Round Antidumping Code

required that dumping assessments be

tax-neutral. This requirement continues

under the new Agreement on

Implementation of Article VI of the

General Agreement on Tariffs and

Trade. Second, the Uruguay Round

Agreements Act (URAA) explicitly

amended the antidumping law to

remove consumption taxes from the

home market price and to eliminate the

addition of taxes to U.S. price, so that

no consumption tax is included in the

price in either market. The Statement of

Administrative Action (p. 157)

explicitly states that this change was

intended to result in tax neutrality.

While the ‘‘Zenith footnote 4’’

methodology is slightly different from

the URAA methodology, in that section

772(d)(1)(C) of the pre-URAA law

required that the tax be added to United

States price rather than subtracted from

home market price, it does result in taxneutral duty assessments. In sum, the

Department has elected to treat

consumption taxes in a manner

consistent with its longstanding policy

of tax-neutrality and with the GATT.
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1955

Verification

As provided in section 776(b) of the

Tariff Act, we verified information

provided by Minasligas, CBCC, RIMA,

and CCM by using standard verification

procedures, including onsite inspection

of the manufacturers’ facilities, the

examination of relevant sales and

financial records, and selection of

original documentation containing

relevant information. Our verification

results are outlined in the public

versions of the verification reports.

Use of Best Information Available (BIA)

In our preliminary results of this

administrative review, we determined

that RIMA was a non-shipper. See

Silicon Metal from Brazil; Preliminary

Results of Antidumping Duty

Administrative Review, Intent to Revoke

in Part, and Intent Not to Revoke in

Part, 61 FR 46776 (September 5, 1996)

(preliminary results). Since publication

of the preliminary results, we have

determined that RIMA did have

shipments during the POR. See the

Department’s response to comment 2

below. Therefore, we have included in

these final results of review all of

RIMA’s sales during the POR made to an

importer who had at least one

importation during the POR. See the

Department’s response to comment 1

below.

Because RIMA failed to produce

information requested at verification to

substantiate significant portions of its

response, in accordance with section

776(c) of the Act, we have determined

that the use of BIA is appropriate. For

these final results we applied the

following two-tier BIA analysis in

choosing what to use as BIA:

1. When a company refuses to cooperate

with the Department or otherwise

significantly impedes these proceedings, it

assigns that company first-tier BIA, which is

the higher of:

(a) The highest of the rates found for any

firm for the same class or kind of

merchandise in the same country of origin in

the less-than-fair-value investigation (LTFV)

or prior administrative review; or

(b) The highest rate found in the present

administrative review for any firm for the

same class or kind of merchandise from the

same country of origin.

2. When a company substantially

cooperates with our requests for information

including, in some cases, verification, but

fails to provide the information requested in

a timely manner or in the form required, it

assigns to that company second-tier BIA,

which is the higher of:

(a) The firm’s highest rate (including the

‘‘all others’’ rate) of the same class or kind

of merchandise from a prior administrative

review or, if the firm has never before been

investigated or reviewed, the all others rate

from the LTFV investigation; or

(b) The highest calculated rate in this

review for the class or kind of merchandise

for any firm from the same country of origin.

See Allied-Signal Aerospace Co. v.

United States, 28 F.3d 1188, 1189, 1190

n.2 (CAFC 1994).

RIMA cooperated by responding to

the Department’s questionnaires.

However, we determined at verification

that this company could not

substantiate significant portions of its

responses. Therefore, we have

determined to apply second-tier BIA to

RIMA’s third-review sales. (See Use of

BIA memorandum to Joseph Spetrini,

Deputy Assistant Secretary,

Enforcement Group Three.) The secondtier BIA rate we have assigned to RIMA

is 91.06 percent. This rate represents the

highest rate ever applicable to RIMA for

the subject merchandise.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results. We received case

and rebuttal briefs from Minasligas,

Eletrosilex, CCM, CBCC, and a group of

five domestic producers of silicon metal

(collectively, the petitioners). Those five

domestic producers are American

Alloys, Inc., Elkem Metals Co., Globe

Metallurgical, Inc., SMI Group, and

SKW Metals and Alloys, Inc. We

received a request for a hearing from

CBCC, Minasligas, Eletrosilex, CCM,

and the petitioners. We held a public

hearing on November 25, 1996.

Comment 1

Petitioners argue that the Department

erred in determining which U.S. sales to

review by using the methodology

employed in the final results of the

second administrative review of this

order. In the second review final results,

we explained our methodology as

follows:

1. Where a respondent sold merchandise,

and the importer of that merchandise had at

least one entry during the POR, we reviewed

all sales to that importer during the POR.

2. Where a respondent sold subject

merchandise to an importer who had no

entries during the POR, we did not review

the sales of subject merchandise to that

importer in this administrative review.

Instead, we will review those sales in our

administrative review of the next period in

which there is an entry by that importer.

We also said in the notice that after

completion of the review, we would

instruct Customs to assess dumping

duties against importer-specific entries

during the period. See Silicon Metal

from Brazil, Final Results of

Antidumping Duty Administrative

Review, 61 FR 46763, 46765 (September

5, 1996) (Silicon Metal from Brazil;

Second Review Final Results).

Petitioners argue that the

methodology described above and used

in the preliminary results of this review

is inconsistent with the Tariff Act,

because section 751(a)(2) of the Tariff

Act requires that margins be based on

sales associated with entries during the

POR. Petitioners also cite to Torrington

Co. v. United States, 818 F. Supp. 1563,

1573 (CIT 1993) (Torrington) to

demonstrate that the Court of

International Trade (CIT) has held that

the word ‘‘entry’’ as used in the statute

refers to the ‘‘formal entry of

merchandise into the U.S. Customs

territory.’’ They argue that this date of

formal entry is the date on which the

entry summary is filed in proper form.

Furthermore, petitioners argue that the

Department itself has stated that the use

of the term ‘‘entry’’ in the antidumping

law refers unambiguously to the release

of merchandise into the customs

territory of the United States. See

Antifriction Bearings (Other than

Tapered Roller Bearings) and Parts

Thereof from the Federal Republic of

Germany; Final Results of Antidumping

Duty Administrative Review, 56 FR

31692, 31704 (July 11, 1991). Petitioners

also argue that the legislative history of

section 751 demonstrates that margin

calculations in administrative reviews

are to be based on sales of merchandise

that entered during the POR.

In addition to the above arguments

based on their interpretation of the

statute and case law, petitioners argue

that the questionnaire issued by the

Department to the respondents in this

review shows that, prior to the 1992–93

administrative review of this order, the

Department’s established practice was

to base reviews on sales of merchandise

that entered U.S. Customs territory

during the POR, and that it was the

Department’s expressed intention to

conduct this review in the same way.

Furthermore, petitioners argue that the

failure to calculate dumping margins

based on sales associated with entries

during the POR would result in

improper assessment of duties, because

the duties assessed on entries during the

POR would have no relation to the

margin of dumping on those sales. Thus,

by assessing duties on entries at rates

unrelated to the margin of dumping on

the associated sales, petitioners argue,

the Department would violate 19 U.S.C.

1673(2)(B), which requires that ‘‘there

shall be imposed upon such

merchandise an antidumping duty

* * * in an amount equal to the amount

by which the foreign market value

exceeds the United States price for the

merchandise.’’
1956 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

Eletrosilex argues that section 751 of

the Tariff Act does not provide the

specificity that petitioners assert, and

must be read in light of the other

provisions of the statute. In a rulemaking proceeding several years ago,

Eletrosilex alleges that the Department

did just that. There the Department said:

Notwithstanding the reference to review

and assessment of ‘‘entries’’ pursuant to

section 751, Congress also provided that the

Department should analyze ‘‘sales’’

transactions pursuant to sections 772 and 773

of the statute in the course of conducting its

administrative review. The statute provides

for the review of both ‘‘entries’’ and ‘‘sales’’

without recognizing that the two terms are

not synonymous or providing a mechanism

for linking them.

See Advance Notice of Proposed

Rulemaking, 56 FR 63696 (December 5,

1991). Eletrosilex argues that in that

proceeding the Department concluded

that Congress could not have intended

that it base all reviews on entries of

merchandise rather than sales, and that

such a conclusion ‘‘would hinder the

achievement of other statutory goals

governing review and assessments.’’ Id.,

at 63697.

Furthermore, Eletrosilex argues that,

contrary to the petitioners’ statements,

the Department has consistently

adhered to this policy. Petitioners’

citations in support of their argument,

Eletrosilex argues, are dicta, and have

no controlling precedent. More

importantly, Eletrosilex argues, the

Department has recently repudiated

exactly the same argument made by the

very same petitioners. As support for

this statement, Eletrosilex cites the final

results of the first and second

administrative reviews of this

proceeding. See Silicon Metal from

Brazil; Final Results of Antidumping

Duty Administrative Review, 59 FR

42806, 42813 (August 19, 1994) (Silicon

Metal From Brazil; First Review Final

Results) and Silicon Metal from Brazil;

Second Review Final Results.

Department’s Position

We disagree with petitioners. We

most recently addressed this issue in the

final results of the second review of this

order. There we stated:

We do not agree with petitioners that

section 751(a)(2) requires that we review only

sales that entered U.S. customs territory

during the POR. Section 751(a)(2) mandates

that the dumping duties determined be

assessed on entries during the POR. It does

not limit administrative reviews to sales

associated with entries during the POR.

Furthermore, to review only sales associated

with entries during the POR would require

that we tie sales to entries. In many cases we

are unable to do this. Moreover, the

methodology the Department should use to

calculate antidumping duty assessment rates

is not explicitly addressed in the statute, but

rather has been left to the Department’s

expertise based on the facts of each review.

‘‘* * * the statute merely requires that PUDD

(i.e., potentially uncollected dumping duties)

* * * serve as the basis for both assessed

duties and cash deposits of estimated

duties.’’ See The Torrington Company v.

United States, 44 F.3d 1572, 1578 (CAFC

1995).

See Silicon Metal from Brazil; Second

Review Final Results at 46765. Our

analysis of this issue and interpretation

of the statute remain unchanged from

those announced in the final results of

the second review. Furthermore, by

applying a consistent methodology in

each segment of the proceeding we

ensure that we review all sales made

during the entire proceeding. Changing

the methodology could result in our

failure to review some sales. Hence, in

these final results of review we have

employed the methodology we

announced in the final results of the

second review, and which petitioners

cite above.

Comment 2

Petitioners argue that the Department

should assign a margin to RIMA based

on BIA. In the preliminary results of

review the Department determined that

RIMA had no shipments during the

POR, and therefore assigned RIMA its

calculated rate from the final results of

the previous review. Petitioners argue

that the Department was in error in its

determination that RIMA had no

shipments during the POR, and that

because at verification RIMA was

unable to substantiate significant

portions of its response, the Department

should assign RIMA a margin based on

BIA.

Department’s Position

On October 21, 1996 the importer of

the merchandise in question submitted

information regarding its imports. We

have carefully reviewed the importer’s

Customs documentation, and have

determined that the Department was in

error in its preliminary determination

that the sales did not involve an entry

during the third administrative review

period. Furthermore, RIMA was unable

at verification to substantiate significant

portions of its response in regard to this

entry (see the preliminary review results

for the fourth review (Preliminary

Results of Antidumping Administrative

Review; Intent Not to Revoke in Part, 61

FR 46779, September 5, 1996), the

October 25, 1995 verification report, and

the September 13, 1996 ‘‘Use of Facts

Available’’ memorandum from Fred

Baker to Richard Weible). Therefore, we

have determined to use BIA for these

sales. We have assigned to this sale, as

BIA, 91.06 percent (see Use of Best

Information Available (BIA) above).

This rate represents the highest rate ever

applicable to RIMA for the subject

merchandise.

Comment 3

Petitioners argue that the Department

erred in its preliminary results of review

by announcing an intent to revoke the

order with respect to Minasligas. They

argue that Minasligas does not qualify

for revocation for two reasons. First,

Minasligas has sold at less than fair

value (LTFV) in this and every prior

segment of this proceeding, and

therefore has not met the regulatory

requirement of having not sold at less

than fair value for at least three years.

See 19 CFR §353.25(a)(2)(i). The three

years in question are the first (91–92),

second (92–93), and third (93–94)

reviews. For the first and second

reviews, the Department calculated a

margin of zero percent in its final results

of review. For the third review the

Department calculated a margin of zero

percent for its preliminary results.

Petitioners argue, with respect to the

first review (which is in litigation before

the CIT), that after the Department

corrects the errors for which it has

already conceded error, Minasligas will

have a margin. They argue, with respect

to the second review, that after the

Department corrects the ministerial

errors they allege it made in its final

results, Minasligas will again have a

margin. They argue, with respect to the

third review, that after the Department

corrects the calculation and

methodological errors which they allege

it made, Minasligas will again have a

margin.

Second, petitioners argue that the

Department cannot correctly determine

that Minasligas is not likely to resume

selling at less than fair value in the

future, and without this determination

the Department cannot revoke the order.

(See 19 CFR 353.25(a)(2)(ii).) Petitioners

base this argument on the following

factors:

(1) Minasligas had a margin greater

than de minimis in the preliminary

results of the fourth administrative

review of this order. See Silicon Metal

from Brazil, Preliminary Results of

Review and Intent Not to Revoke in Part,

61 FR 46779, 46781 (September 5,

1996).

(2) Minasligas has submitted no

evidence that it is unlikely to sell at less

than fair value in the future.

(3) The Department has not verified

any information that Minasligas is

unlikely to dump in the future. Citing

19 U.S.C. §1677e(b)(2)(B) and 19 CFR
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1957

353.25(c)(2)(ii), petitioners argue that

the statute and regulations require that

the basis for the ‘‘likelihood’’

determination be verified, and that

because the Department did not verify

any such basis, Minasligas does not

qualify for revocation.

Furthermore, petitioners argue that

analysis based on the criteria used by

the Department in its review of the

antidumping duty order on brass sheet

and strip from Germany show that

Minasligas is likely to resume dumping.

(See Brass Sheet and Strip from

Germany, Final Results of

Administrative Review, 61 FR 49727,

49730 (September 23, 1996) (German

Brass).) These criteria include a

dramatic decline in shipments after

publication of the antidumping duty

order and the low level of shipments by

the respondent. Both of these factors,

petitioners allege, are present here with

respect to Minasligas.

Minasligas argues, first, that in two

consecutive administrative reviews

prior to the issuance of the preliminary

results of the third review, the

Department found Minasligas not to

have sold at less than fair value, and

that, therefore, if, in the final results of

this review the Department finds no

sales at less than fair value, it will have

met the requirement of 19 CFR

353.25(a)(2)(i). Secondly, Minasligas

argues that 19 CFR 353.25(a)(2)(ii)

requires a finding that dumping is not

likely to occur in the future, but,

contrary to petitioner’s suggestion, does

not require Minasligas to provide, or the

record to contain, evidence that

Minasligas is unlikely to resume

dumping in the future. Furthermore,

Minasligas argues that there is evidence

on the record that Minasligas will not

dump in the future. That evidence

consists of Minasligas’ written

agreement to reinstatement of the

antidumping duty order if it is found to

be selling at less than fair value in the

future.

Department’s Position

To qualify for revocation in part

under 19 CFR 353.25(a)(2)(i), a

respondent must have sold the subject

merchandise at not less than foreign

market value for at least three

consecutive years. Our analysis in these

final results of review indicates that

Minasligas had no margin for this

period. Therefore, because Minasligas

has met the requirement under

353.25(a)(2)(i), we determine that

Minasligas has met the regulatory

requirement of having sold the subject

merchandise at not less than foreign

market value for at least three

consecutive years.

However, in order to revoke an order

in part the Department must also be

satisfied that the firm is not likely to

resume dumping in the future. The

Department has determined that

Minasligas has a dumping margin of

greater than de minimis in the fourth

administrative review (being issued

concurrently). Accordingly, the issue of

likelihood of dumping in the future is

moot because Minasligas has in fact

resumed dumping. Therefore, we are

not revoking the order in part for

Minasligas.

Comment 4

Petitioners argue that the Department

erred in its calculation of the COP/CV

for Minasligas, Eletrosilex, and CCM by

using the monthly amounts of

depreciation that they reported.

Petitioners argue with respect to

Minasligas and Eletrosilex that their

calculation of depreciation does not

reflect the useful life of the assets, but

rather reflects an accelerated life.

Petitioners argue that the Department’s

practice is to reject accelerated

depreciation of assets where such

accelerated depreciation fails to allocate

the cost of the asset on a consistent basis

over the life of the asset, which,

petitioners allege, is the case here.

Furthermore, with respect to Eletrosilex,

petitioners argue that evidence on the

record indicates that Eletrosilex did not

report depreciation in accordance with

Brazilian GAAP. With respect to

Minasligas and CCM, petitioners argue

that their depreciation calculation does

not restate the value of the assets to

account for hyperinflation. Petitioners

argue that when an economy is

hyperinflationary, basing depreciation

on historical asset values results in

severe understatement of actual costs;

for this reason the Department’s practice

is to use depreciation that is based on

revalued assets in hyperinflationary

economy cases. Finally, petitioners

argue that CCM’s submitted calculation

is inadequate because it does not

include depreciation of idle equipment.

It is the Department’s practice,

petitioners argue, to include

depreciation for idle equipment when

calculating COP and CV. Moreover,

petitioners allege that there is

contradictory information on the record

as to whether CCM had expenses for

idle equipment. Petitioners argue that

because CCM failed to provide the

information that would allow the

Department to calculate monthly

depreciation based on revalued assets

and to include depreciation for idle

assets, and because CCM misled the

Department about whether it had

depreciated its idle equipment, the

Department should determine

depreciation for CCM based on BIA. In

the alternative, the Department should

obtain from CCM the information

necessary to determine monthly

depreciation in accordance with

Department practice.

Minasligas argues that petitioners’

argument is fallacious. Minasligas

points to documentation it submitted on

October 15, 1996, showing that (1)

Minasligas did not depreciate its assets

over the shortened period that

petitioners suggest; (2) the depreciation

reported in its COP/CV tables for

purposes of this proceeding is fully

supported by Minasligas’ accounting

records; (3) the value of the assets

subject to depreciation is restated in

current currency to account for

hyperinflation through the use of

special indices known as the BTN/UFIR

indices. Furthermore, Minasligas argues

that the Department fully verified this

information. Moreover, Minasligas

argues that the petitioner’s argument is

based on a misunderstanding of some of

the columns in the verification exhibit

upon which they base their argument.

Finally, Minasligas argues that to

recalculate depreciation, using the

longer useful lives of Minasligas’ assets

that petitioners suggest, would be unfair

because the Department has already

completed two administrative reviews

in which it calculated Minasligas’

depreciation using the shorter useful

lives that are the basis for the

depreciation calculation that Minasligas

records in its books and reported to the

Department. Therefore, Minasligas

argues that, if the Department does

decide to recalculate its depreciation

using longer useful lives for the firm’s

assets, it should adopt a methodology

that takes into account the depreciation

expenses that Minasligas reported in the

previous administrative reviews.

Eletrosilex argues that the petitioners

have presented no basis for rejecting

Eletrosilex’s longstanding use of

aggressive accelerated depreciation. It

argues that after having taken

depreciation of 10 percent per year

through 1991 on its furnaces, as

permitted under Brazilian generally

accepted accounting principles (GAAP),

Eletrosilex necessarily had to interrupt

depreciation on an item that had a 20-

year useful life. It states it resumed a 5

percent depreciation on its furnaces in

January 1995. Furthermore, it argues

that it has provided the Department

with a clear statement of its

depreciation schedule and its

application to all depreciable assets.

Thus, Eletrosilex concludes that it has

demonstrated to the Department a

sound and legitimate basis for the
1958 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

depreciation schedules used in the POR,

and the Department should use those

schedules again in the final results of

this review.

CCM argues that petitioners’ argument

with respect to restatement of asset

values is invalid because CCM does not

base its depreciation on historical costs.

CCM’s financial statement, CCM argues,

makes clear that the value of CCM’s

property, plant, and equipment is

recorded at the cost of acquisition plus

monetary adjustment. CCM states that

this is a common accounting

mechanism used by Brazilian

companies to restate the historical costs

of their assets at their current cost

during hyperinflation. With regard to its

statement (cited by petitioners) that

CCM did not revalue its assets, CCM

argues that the statement meant only

that there was no special asset revaluation during the POR; CCM did

follow the accepted accounting practice

of restating the historical cost through

the application of monetary correction.

Thus, CCM argues, there is no basis for

petitioners’ statements that CCM’s

reported depreciation is grossly

understated because it is based on

historical costs.

With respect to petitioners’ argument

that CCM did not report depreciation of

idle equipment, CCM admits that it did

not include idle equipment in its

submitted costs, but argues that doing

otherwise would have distorted the

Department’s hyperinflationary cost

calculations. The fundamental premise

of the Department’s replacement cost

methodology, CCM argues, is that costs

actually incurred by the respondent in

the production of subject merchandise

must be restated on a replacement basis

in order to eliminate the distortive

effects of hyperinflation on costs

incurred at various times in the POR. In

order to calculate an accurate monthly

replacement cost, CCM argues, the

Department must apply this approach

only to the value of inputs actually

consumed in the production process.

Because of this, it would be incorrect to

include the replacement cost of an idled

asset, because by definition the asset

was not used or consumed in the

specific month. Thus, CCM argues that

the Department’s replacement cost rules

work only if applied to those costs

actually (and not hypothetically)

incurred in production, as petitioners

advocate. Therefore, CCM argues, the

Department should not include

depreciation on idled equipment in

CCM’s COP/CV.

Department’s Position

We agree with petitioners in part.

With respect to Minasligas, we disagree

with petitioners’ argument that

Minasligas’ depreciation calculation is

unacceptable because it is based on

accelerated depreciation. The CIT has

upheld the Department’s calculation of

depreciation based on a respondent’s

financial records where their financial

records are consistent with foreign

GAAP principles and where those

records do not distort actual costs. See

Laclede Steel Co. v. United States, 18

CIT 965, 975 (1994). Here, Minasligas

has historically used accelerated

depreciation, and these methods are

consistent with Brazilian GAAP.

Moreover, we note that we have in the

past used accelerated depreciation

where the respondent has historically

used it in its financial statements. See

Foam Extruded PVC and Polystyrene

Framing Stock from the United

Kingdom; Final Determination of Sales

at Less Than Fair Value; 61 51411,

51418 (October 2, 1996). Furthermore,

we agree with Minasligas that to

recalculate depreciation using a longer

useful life for Minasligas’ assets after

having used a shorter life in two prior

reviews would allocate costs to this

review that have already been

accounted for in prior reviews, and

would therefore be inequitable. Finally,

we agree with Minasligas that its use of

the BTN/UFIR indices accurately

restates the value of its assets.

Therefore, in these final results of

review, as in the preliminary results of

review, we have used Minasligas’

reported depreciation in calculating

COP.

With respect to Eletrosilex, we agree

with petitioners that evidence on the

record indicates that Eletrosilex did not

report depreciation in accordance with

Brazilian GAAP. See note 5(b)(iv) of

Eletrosilex’s 1994 financial statement in

Eletrosilex’s February 26, 1996

submission. Therefore, for these final

results of review, we have used the

auditor’s estimate of Eletrosilex’s

depreciation for the COP calculation

because it is the most accurate reflection

of Eletrosilex’s depreciation that is on

the record and because it is in

accordance with Brazilian GAAP.

With respect to CCM, we agree with

CCM that evidence on the record

indicates that it makes a monetary

adjustment in recording the value of its

property, plant, and equipment.

Therefore, no additional restatement is

necessary.

Concerning idle assets, we agree with

the petitioners that the Department

includes in fully absorbed factory

overhead the depreciation of equipment

not in use or temporarily idle,

notwithstanding home market

accounting standards which may allow

companies to refrain from doing so. See,

for example:Silicon Metal From

Argentina (58 FR 65336, 65338,

December 14, 1993); Antifriction

Bearings (Other than Tapered Roller

Bearings) and Parts Thereof From

France, Germany, Italy, Japan,

Romania, Singapore, Sweden, Thailand,

and the United Kingdom (58 FR 39729,

39756, July 26, 1993); Tapered Roller

Bearings and Parts Thereof, Finished

and Unfinished, From Japan and

Tapered Roller Bearings, Four Inches or

Less in Outside Diameter, and

Components Thereof, From Japan (58

FR 64720, 64727–28, July 26, 1993);

Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From

Japan and Tapered Roller Bearings,

Four Inches or Less in Outside

Diameter, and Components Thereof,

From Japan (57 FR 4960, 4973, February

11, 1992); Shop Towels from

Bangladesh (57 FR 3996, 3999, February

3, 1992); Mechanical Transfer Presses

from Japan (55 FR 335, January 4, 1990);

Titanium Sponge from Japan (49 FR

38687, 38689, October 1, 1984). See also

NTN Bearing Corp. of America, et al.,

plaintiffs, v. United States, Slip Op. 93–

129 (August 4, 1993) (upholding the

Department’s inclusion of depreciation

expenses for idle equipment).

We disagree with CCM’s argument

that a hyperinflationary environment

necessitates disregarding the

Department’s long-standing policy.

Depreciation is a cost that is incurred

without regard to whether the assets

being depreciated are used in

production during a particular period.

Thus, depreciation of idle assets must

be included in COP in order for COP to

reflect the full costs incurred during the

POR regardless of whether an economy

experienced hyperinflation during the

POR.

Similarly, we disagree with CCM’s

related argument that depreciation

expense for idled assets involves only

hypothetical expenses; depreciation

expenses reflect not only wear and tear

from usage but also aging and

obsolescence, which affect idle assets as

much as, and sometimes more than,

active assets.

Therefore, in these final results of

review we have added the depreciation

for idle assets to CCM’s reported

depreciation.

Comment 5

Petitioners argue that the Department

should disregard Minasligas’ inventory

holding gain/loss calculation because

Minasligas failed to ‘‘layer’’ or value its

inventory properly. They argue the

Department should require Minasligas

to provide the information necessary to
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1959

perform a proper inventory holding

gain/loss calculation in accordance with

Department practice.

Minasligas argues that the petitioner’s

point is moot because the Department

used Minasligas’ home market selling

prices for foreign market value (FMV),

not CV. It also argues that the

Department verified the accuracy of

Minasligas’ calculations, and found no

discrepancies.

Department’s Position

While we verified that the amounts

Minasligas used in its calculation were

derived from accounting records,

Minasligas did not substantiate its

method of layering its inventory. As

petitioners note in their brief,

Minasligas’ calculations show only one

layer of prior inventory for inputs and

finished product even though inventory

stemmed from more than one previous

month. By failing to include in its

calculations the goods placed in

inventory during prior months,

Minasligas failed to value the inventory

properly based on the inflation-adjusted

costs in the prior months. See

Minasligas’ March 17, 1995 submission,

exhibit 11. Thus, consistent with our

practice when a respondent fails to

report inventory properly, we have

denied Minasligas an adjustment for

inventory holding gains/losses in these

final results of review.

Comment 6

Petitioners argue that the Department

erred by not including Minasligas’ and

Eletrosilex’s claimed duty drawback in

CV. This drawback consists of taxes and

import duties that the government of

Brazil suspended on Minasligas’ and

Eletrosilex’s purchases of imported

electrodes used in the production of

silicon metal destined for export.

Petitioners argue that because the

Department added the duty drawback to

U.S. price, and because the taxes

represented by the drawback were not

elsewhere represented in CV, the

Department should add the drawback to

CV in order to make an ‘‘apples-toapples’’ comparison of U.S. price to CV.

In addition, they argue, with respect to

Eletrosilex, that the Department must

include the duty paid on purchases of

electrodes in COP for purposes of the

sales-below-cost analysis.

Minasligas argues that in the

preliminary results of review the

Department correctly added duty

drawback to U.S. price for comparison

with a sales-based FMV. However, if the

Department uses CV in the final results,

and includes indirect taxes in CV, it

must still add duty drawback to U.S.

price to make an ‘‘apples-to-apples’’

comparison.

Eletrosilex argues that the

methodology the Department

announced in its second review final

results with respect to taxes does not

achieve the stated aim of tax neutrality.

Therefore, it urges the Department to

adopt the approach mandated by the

Uruguay Round Agreements Act, and

eliminate consumption taxes from all

calculations. It states that this is the

only way truly to achieve tax neutrality.

Furthermore, it argues that this

approach has the additional virtue of

simplifying these proceedings.

Department’s Position

We agree with petitioners. The

Brazilian duty drawback law applicable

to Minasligas and Eletrosilex suspends

the payment of ICMS and IPI taxes and

import duties that would ordinarily be

due upon importation of electrodes if

they are consumed in producing silicon

metal for export. Therefore, because the

ICMS and IPI taxes and import duties

are suspended, we cannot conclude that

they are already included in the COM or

reported tax payments that Minasligas

and Eletrosilex have reported. Thus, in

order to make a valid comparison

between USP and CV, we need to add

to CV the full amount of the claimed

duty drawback that we added to USP in

accordance with section 772(d)(1)(B) of

the Tariff Act. We have done so in these

final results of review. This

methodology is identical with the

methodology announced in the final

results of the prior review of this case.

See Silicon Metal from Brazil; Second

Review Final Results, at 46770.

Because the import duties are not

suspended for electrodes consumed in

the home market, we agree with

petitioners that Eletrosilex’s import

duties on carbon electrodes should be

added to COP for purposes of the cost

test. In these final results of review we

have calculated the import duties by

multiplying the cost of carbon

electrodes that we allocated to the

domestic market by the import duty rate

of ten percent.

Comment 7

Petitioners argue that the Department

erred in its computation of Minasligas’

monthly COP by not including the cost

of tubes and rods that Minasligas

consumed during each month. The

Department included these costs only in

the months in which Minasligas made

purchases of tubes and rods, and not in

the months in which Minasligas

consumed them. Petitioners argue that

in the final results the Department

should determine the proper costs for

tubes and rods based on the number of

units of each input used in the

production of silicon metal in each

month and the monthly replacement

cost for each input.

Minasligas states that it reported its

costs for tubes and rods in the month of

purchase because this is how they are

reported in Minasligas’ accounting

records. It also states that if the

Department wishes to recalculate these

costs for each month of consumption, it

is willing to cooperate fully with the

Department in providing all necessary

information.

Department’s Position

Because Brazil’s economy was

hyperinflationary during the POR, in

these final results of review, we have

calculated each respondent’s COM

using an ‘‘annual average’’

methodology. See the Final Results

Analysis Memorandum. In this

methodology we first calculated an

annual weighted-average COM indexed

to end-of-year values, and then restated

the annual average COM to compute a

monthly COM. We used the wholesale

price index to restate the annual COM

to the specific month of production.

Thus, because we calculated monthly

costs based on annualized figures,

petitioners’ point regarding Minasligas’

tubes and rods is moot.

Comment 8

Petitioners argue that the Department

made numerous errors with respect to

Brazilian taxes in performing the cost

test. With respect to Minasligas,

petitioners allege that the Department

erred by comparing COP to home

market prices that included a

disproportionately high amount of ICMS

tax. By so doing, petitioners allege, the

Department failed to follow its practice

of either including the same absolute

amount of value-added taxes (VAT) in

both home market price and COP, or of

excluding VAT from both COP and

home market price. Thus, petitioners

argue, the Department did not make a

fair and equal comparison in the

preliminary results of review. They

argue that in the final results of review

the Department should exclude ICMS

taxes from both the home market prices

and the COPs used in the sales-belowcost analysis.

With respect to Eletrosilex, petitioners

argue that the Department erred by

failing to deduct the ICMS, PIS, and

COFINS taxes from Eletrosilex’s home

market prices before performing the cost

test. Petitioners argue that the failure to

deduct the ICMS tax was in error

because information on the record

shows that Eletrosilex’s reported cost of
1960 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

manufacture (COM) did not include the

ICMS tax. With respect to PIS and

COFINS taxes, petitioners argue that the

Department correctly included in COP

the PIS and COFINS taxes that

Eletrosilex paid on its purchases of

inputs (and which Eletrosilex included

in its reported price of materials), but

erred in how it treated the PIS and

COFINS taxes Eletrosilex collected on

sales of silicon metal. In the preliminary

results, the Department, petitioners

allege, added to COP a variable

Eletrosilex reported that represents its

home market direct selling expenses,

consisting of inland freight and PIS and

COFINS taxes collect on sales.

Petitioners argue that rather than adding

this selling expense variable to COP to

account for collections of PIS and

COFINS taxes on home market sales, the

Department should instead subtract

from the net home market prices the

sales-specific amount of PIS and

COFINS taxes in its computation of

NPRICOP (the price which we compare

to COP in the cost test).

With respect to CCM, petitioners

argue that the Department erred in the

cost test by comparing home market

prices that included ICMS taxes with

COPs that included a disproportionately

larger amount of ICMS taxes. They argue

that it is established Department

practice when performing the cost test

to either include the same absolute

amount of VAT in both home market

price and COP or to exclude VAT from

both.

Minasligas argues that the Department

should not include the same amount of

VAT in the sales price and COP because

different amounts of taxes were

collected and paid on the sales price

and production costs, respectively.

Eletrosilex argues that the Department

should eliminate consumption taxes

from all calculations. This approach, it

argues, is the only way to achieve true

tax neutrality.

CCM argues that the Department

correctly accounted for its VAT in the

preliminary results of review. In support

of its argument, it cites Silicomanganese

from Venezuela, 57 FR 55436

(November 7, 1994) (Silicomanganese

from Venezuela), in which the

Department agreed with a respondent’s

argument that ‘‘if the Department

includes the value-added taxes paid on

inputs in the cost of production, it must

also include the VAT received from its

customers in the price for purposes of

the sales below cost test.’’

Department’s Position

We agree with petitioners that in

performing the cost test our policy is to

either include the same absolute amount

of VAT in both home market price and

COP, or to exclude VAT from both COP

and home market price. In

Silicomanganese from Venezuela,

though we agreed with the statement

that CCM cites, we also said, ‘‘The

amount of VAT included in the home

market COP should be the same as the

amount that is included in the home

market sales prices.’’ See

Silicomanganese from Venezuela at

55441. In performing the cost test for

these final results of review, we have

calculated both COP and the price we

compare to COP exclusive of the ICMS

tax. This is the methodology recently

used in Ferrosilicon from Brazil; Final

Results of Antidumping Duty

Administrative Review, 61 FR 59407,

59410 (November 22, 1996)

(Ferrosilicon from Brazil; First Review

Final Results). However, unlike

Ferrosilicon from Brazil; First Review

Final Results, we have not deducted IPI

tax from COP because IPI tax is not

assessed on sales of silicon metal as it

is for ferrosilicon.

With respect to PIS and COFINS, we

have not deducted these taxes from the

home market price to which we

compare COP because they are gross

revenue taxes, and not taxes imposed

directly on the merchandise or

components thereof on a transaction-bytransaction basis. See the Department’s

Position in response to comment 28

(below). For Eletrosilex we have

eliminated the addition to COP of the

selling expense variable it reported in

its COP response, and have instead

added to COP the sales-specific amount

of direct selling expenses, which does

not include PIS and COFINS taxes. We

have also calculated COP for all

respondents so that it represents the full

purchase price of all inputs, and is not

exclusive of a hypothetical amount of

PIS and COFINS taxes.

Comment 9

Petitioners argue that the Department

erred in its treatment of inland freight

in the COP test for CCM, Minasligas,

and Eletrosilex. With respect to CCM,

petitioners argue that the Department

erred by comparing COPs that did not

include freight costs to home market

selling prices that did include freight

costs. They argue that to make a fair

comparison in the final results the

Department should exclude freight

expenses from the home market prices

used in the sales-below-cost analysis.

CCM states that it included freight

costs in the direct selling expense field

of its COP/CV database. Therefore, CCM

argues, the COPs that the Department

used in the cost test did in fact include

freight costs.

With respect to Minasligas,

petitioners argue that the Department

erred by comparing COPs inclusive of

freight charges to home market prices

inclusive of disproportionately high

freight charges. This difference in

freight occurred, petitioners argue,

because Minasligas calculated the perunit freight cost for home market sales

by dividing the freight charges incurred

on each home market sale by the

quantity of each sale, while it calculated

the per-unit freight included in COP by

dividing the monthly sum of those same

freight charges by the monthly volume

of its silicon metal production. This

methodology, petitioners allege,

resulted in Minasligas including a lower

per-unit amount of freight in COP than

in the home market prices. By using this

methodology, petitioners argue, the

Department failed to compare home

market prices to COP on an ‘‘apples-toapples’’ basis. Petitioners also allege this

methodology violates Import

Administration Policy Bulletin No. 94.6,

which states that the Department

determines both COP and the home

market prices on an ex-factory basis

(i.e., net of movement charges, which,

by definition, include freight expenses).

They argue, therefore, that in the final

results of review the Department should

exclude freight expenses from both the

COP and the home market prices.

Minasligas argues that the petitioners’

proposed method is distortive, and in

fact is contrary to Import

Administration Policy Bulletin 94.6.

According to this bulletin, Minasligas

argues, COP is calculated net of selling

expenses. Because its reported selling

expenses included inland freight,

Minasligas argues that if the Department

removes freight from home market

price, it should also remove selling

expenses from COP.

With respect to Eletrosilex, petitioners

argue that the Department erred by not

deducting inland freight from

Eletrosilex’s home market prices before

performing the cost test. In the

preliminary results, rather than

subtracting inland freight from

Eletrosilex’s home market prices before

performing the cost test, the Department

added to the cost build-up a variable

that Eletrosilex reported that included

inland freight (as well as PIS and

COFINS taxes). Petitioners argue that

this approach was an error because not

all of Eletrosilex’s home market sales

included freight expenses. Thus,

petitioners argue, the Department

improperly compared the home market

sales prices that include freight to a COP

that includes an amount of freight that

is artificially lowered by Eletrosilex’s

improper division of the total freight
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1961

incurred on a portion of home market

sales by the volume of all home market

sales. At the same time, petitioners

argue, the Department improperly

compared a COP that includes freight to

home market sales prices for which

Eletrosilex reported no freight.

Department Position

Petitioners and Minasligas are correct

that Import Administration Policy

Bulletin 94.6 states that the cost test will

be performed on an ex-factory basis, and

thus net of freight expenses. Therefore,

in these final results of review we have

deducted inland freight from the price

which we compare to COP in the cost

test. In order to ensure we make a

proper comparison for those

respondents (i.e., Minasligas and CCM)

who included freight in their reported

direct selling expenses for COP, we have

not used the direct selling expenses the

respondents reported in their cost

questionnaire response. Instead, in these

final results of review, we have added

to COP the sales-specific direct selling

expenses included in each home market

sales price.

Comment 10

Petitioners argue that the Department

erred by calculating Minasligas’, CCM’s,

and CBCC’s home market imputed

credit expenses based on prices that

include VAT. The Department’s

established practice, petitioners argue,

is to exclude VAT collected on home

market sales from the prices used in

calculating imputed credit expenses.

Thus, petitioners argue, in the final

results of review the Department should

exclude ICMS taxes from the prices

used to calculate home market imputed

credit.

Minasligas argues, based on the tax

policies of the government of Brazil,

that ICMS taxes should be included in

the imputed credit calculation. It argues

that imputed credit expenses represent

the opportunity cost of financing

accounts receivable, and that this

opportunity cost does not apply solely

to a portion of the sale, but to the entire

revenue that is generated by the sale.

During the period that payment from the

customers is outstanding, not only must

Minasligas finance its production

operations, it must also pay any ICMS

amounts it owes to the Brazilian

government. To the extent that it pays

such taxes before it receives them from

its customers, they become part of the

cost of financing receivables. Therefore,

Minasligas argues, ICMS taxes should be

included in the imputed credit

calculation.

CCM argues that petitioners are

incorrect in saying that it is the

Department’s policy not to include

ICMS tax in the computation of imputed

credit. It argues that the Department has

previously calculated CCM’s home

market imputed credit expenses based

on ICMS tax-inclusive home market

prices. In support of this statement, it

cites the final determination of the

LTFV investigation of this case, in

which the Department said:

The ICMS incident to a home market sale

is outstanding until that time that the

customer pays for its merchandise. Until the

customer pays, CCM cannot use the ICMS

collected on that sale to offset ICMS it has

paid on purchases of materials used in the

production of the subject merchandise.

Accordingly, there is an inherent cost in

maintaining an outstanding amount of ICMS

due to CCM’s receivables. Therefore, we have

included the ICMS in the home market price

when calculating imputed credit expenses.

See Silicon Metal from Brazil; Final

Determination of Sales at Less Than

Fair Value, 56 FR 26977, 26982 (June

12, 1991). Furthermore, CCM points out

that no party appealed this issue to the

CIT, reflecting all parties’ agreement

concerning the legitimacy of this

approach.

Department’s Position

We agree with petitioners. While CCM

is correct that we have calculated

imputed credit inclusive of ICMS tax in

earlier segments of this proceeding, our

more recent practice is to calculate

imputed credit exclusive of ICMS tax.

We addressed this issue in

Silicomanganese from Venezuela. There

we said:

The Department’s practice is to calculate

credit expenses exclusive of VAT. (See the

discussion of our VAT methodology in the

preliminary determination (59 FR 31204,

31205, June 17, 1994.) Theoretically, there is

an opportunity cost associated with any postservice payment. Accordingly, to calculate

the VAT adjustment argued by Hevensa

would require the Department to calculate

the opportunity costs involved with freight

charges, rebates, and selling expenses for

each reported sale. It would be an impossible

task for the Department to attempt to

determine the opportunity cost of every such

charge and expense.

See Silicomanganese from Venezuela,

59 FR 55436, 55438 (November 7, 1994).

Similarly, in this case to calculate the

ICMS adjustment argued by CCM would

require the Department to calculate the

opportunity costs involved with freight

charges, selling expenses, and packing

for each reported sale. It would be an

impossible task for the Department to

determine the opportunity cost of every

such charge and expense. In these final

results of review we have followed our

more recent practice. See also

Ferrosilicon from Brazil; First Review

Final Results at 59410.

Comment 11

Petitioners argue that the Department

made two currency conversion errors in

its margin calculation for CBCC and

Minasligas. With respect to CBCC,

petitioners argue that the Department

used the wrong exchange rate for

converting CBCC’s brokerage,

warehousing, and foreign inland freight

from Brazilian currency into U.S.

dollars. This error occurred, petitioners

allege, because the Department

incorrectly believed that these expenses

were denominated in cruzeiros, rather

than in cruzeiros reais.

CBCC argues that there is no evidence

on the record that any of the charges it

reported are in a currency other than

cruzeiros.

With respect to Minasligas,

petitioners argue that the Department

erred by converting the cruzeiro value of

Minasligas’ U.S. sales into dollars,

rather than using the actual value of the

U.S. sales in the currency in which they

were originally denominated. They

argue that the needless recalculation of

U.S. price had the effect of increasing

the U.S. price.

Minasligas argues that it reported its

U.S. sales in cruzeiros (as recorded in its

books), and that the Department

correctly converted it into dollars using

the average exchange rate of the month

of shipment. This methodology,

Minasligas argues, is in accordance with

the Department’s practice of comparing

the U.S. price to the CV or FMV in the

month of shipment.

Department’s Position

We agree with petitioners. With

respect to CBCC, we note that in exhibit

6 of CBCC’s March 17, 1994

supplemental questionnaire response

(SQR) CBCC demonstrated the currency

conversion. That demonstration

indicates that the expenses were in fact

denominated in cruzeiros reais, and not

cruzeiros. We have corrected this error

in these final results of review. With

respect to Minasligas, our practice is to

use the actual U.S. price in the currency

in which it was originally denominated.

We also seek to avoid any unnecessary

currency conversions. Therefore, in

these final results of review we have

used the actual sales prices in the

currency in which they were originally

denominated.

Comment 12

Petitioners argue the Department

erred in the margin calculation for

Minasligas and CCM by using the wrong

shipment date. With respect to
1962 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

Minasligas this alleged error occurred

where the Department performed the

currency conversion for the movement

expenses on U.S. sales by using the

exchange rate on the date of shipment

from the port in Brazil, rather than the

exchange rate on the date of shipment

from Minasligas’ plant. Doing so,

petitioners allege, was a violation of the

Department’s practice in which the date

of shipment is the date the merchandise

was shipped from the producer’s

factory. Therefore, petitioners argue, the

Department should use the exchange

rate of the date of sale in converting U.S.

movement expenses, just as it used the

date of sale (rather than the reported

date of shipment) in the calculation of

imputed credit.

Minasligas argues that because the

record does not contain the date on

which Minasligas paid the movement

expenses, the Department was correct in

using the exchange rate of the date of

shipment from the port because it was

the closest date on record to the date in

which the expenses were actually

incurred.

With respect to CCM, petitioners

argue that the Department used the

wrong shipment date in its calculation

of U.S. imputed credit. The shipment

date that CCM reported and that the

Department used in its computation,

petitioners allege, was the shipment

date from the port in Brazil, rather than

the shipment date from CCM’s plant.

Petitioners argue that the Department

should use the date of sale as the date

of shipment as it did in calculating

Minasligas’ imputed credit.

Furthermore, petitioners argue that for

the same reason the Department should

base CV on the month of the U.S. sale,

rather than on CCM’s reported month of

shipment.

With respect to petitioners’ argument

that the Department should have

calculated imputed credit using the date

of the U.S. sale, CCM argues, first, that

the Department should use the credit

calculation it submitted in its

questionnaire response as the actual

credit expense. This calculation, CCM

states, reflects the actual interest

charged on the export credit line

obtained for that shipment, and

therefore is the most accurate,

transaction-specific measure of CCM’s

interest expense in connection with its

U.S. sale. Second, CCM argues that if

the Department decides to use an

imputed figure, it need not resort to the

date of sale as the date of shipment

because the date of shipment from

CCM’s factory is on the record as

verification exhibit 11.

With regard to petitioners’ argument

that the Department should use the CV

in the month of sale to establish fair

value, CCM argues that it is the

Department’s practice in

hyperinflationary economy cases to use

the bill-of-lading date as the shipment

date, and thus the date upon which CV

should be based. In support of this

assertion it cites Tubeless Steel Disc

Wheels from Brazil; Amended Final

Determination of Sales at Less than Fair

Value and Amended Antidumping Duty

Order, 53 FR 34566 (September 7, 1988)

(Tubeless Steel Disc Wheels from

Brazil). There the Department stated

that it corrected a clerical error whereby

‘‘invoice dates were used rather than

bill-of-lading dates to represent the date

of shipment for the calculation of

antidumping duty margins.’’ CCM also

argues that if the Department decides to

use the invoice date, rather than the billof-lading date, as the date of shipment,

it need not resort to using the date of

sale (as petitioners urge) because, as

previously mentioned, the invoice date

is on the record in verification exhibit

11.

Department’s Position

With respect to the petitioners’

argument regarding Minasligas, we

agree with Minasligas. Where the record

does not contain the actual dates of

payment for its export sale movement

expenses and where the Department did

not specifically solicit this information,

it is reasonable to use the date of

shipment from the port in the imputed

credit calculation because it is the

closest date on record to the date on

which the expenses were actually

incurred. With respect to the

petitioners’ argument regarding CCM,

we agree with CCM that when using CV

in hyperinflationary economy cases it is

the Department’s practice to perform the

margin calculation using the CV of the

month of shipment from the port, rather

than (as petitioners argue) the CV of the

month of shipment from the plant. See

Tubeless Steel Disc Wheels from Brazil

at 34567.

We disagree with CCM that we should

use its reported ‘‘actual expense’’ for

U.S. credit. The Department requires

that the credit expenses reflect the

opportunity cost of the entire period

between shipment from the plant and

payment by the customer. That is not

the case for CCM’s reported ‘‘actual

expense.’’ The actual expense covers

only a portion of the imputed credit

expense period. Therefore, in these final

results of review we have calculated

imputed credit using the shipment date

from CCM’s plant, as given in

verification exhibit 11.

Comment 13

Petitioners argue that the Department

erred in its computation of Minasligas’

COP/CV by using the 1993 G&A

expenses that Minasligas reported. They

argue that Minasligas’ 1993 audited

financial statements show that

Minasligas’ G&A expenses are greater

than what it reported to the Department.

Therefore, petitioners argue, the

Department should require Minasligas

to report monthly G&A expenses for

1993 whose sum reconciles to the total

1993 G&A expenses shown on its

financial statement.

Minasligas argues that petitioners’

argument fails to consider that

Minasligas deducted from its G&A some

expenses associated with forest

maintenance, depletion, and exhaustion

that it included in its cost of charcoal as

part of direct material expenses. To have

not made this deduction, Minasligas

argues, would have resulted in these

costs being double-counted.

Department’s Position

We agree with petitioners that the

G&A figures Minasligas reported in its

October 15, 1996 submission do not

reconcile to its 1993 financial statement.

Though Minasligas claims that the

difference is due to its exclusion from

G&A of some costs that had been

included in its cost of charcoal as part

of direct material costs, we note that

neither Minasligas’ G&A chart of

accounts nor its cost of charcoal list

includes the categories of forest

maintenance, depletion, or exhaustion.

See verification exhibits 23 and 33.

Thus, since there is no evidence on the

record to substantiate Minasligas’

explanation or the G&A figures in its

October 15, 1996 submission, for these

final results of review we have relied

upon the G&A expenses reported in

Minasligas’ 1993 financial statement.

Furthermore, in these final results of

review, unlike the preliminary results of

review, we have calculated Minasligas’

G&A by multiplying a ratio (consisting

of indexed monthly historical G&A

divided by indexed monthly historical

cost of goods sold) by monthly

replacement cost COM. As explained

below in response to comment 22, this

is our current method of calculating

G&A in a hyperinflationary economy.

To perform this calculation, we

increased the reported G&A costs for

each month in 1993 by the percentage

difference between the reported annual

G&A costs and the financial statement

G&A costs.

Comment 14

Petitioners argue that the Department

erred in its calculation of interest
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1963

expense for Eletrosilex, CCM, and CBCC

by offsetting interest expenses with

interest income. Petitioners argue with

respect to all three of these respondents

that the interest income for which the

Department allowed an offset is not

interest income derived from short-term

investments of working capital (i.e.,

from business operations). Petitioners

argue that allowing an offset for this

income was a violation of the

Department’s requirements for granting

an interest income offset. Those

requirements are, petitioners state, that

the respondent demonstrate (1) that the

interest income stemmed from shortterm investments and (2) that short-term

interest income was derived from

business operations. Petitioners argue

with respect to CBCC that some of the

interest income for which the

Department allowed an offset does not

meet these two criteria. Therefore,

petitioners argue, in the final results the

Department should allow an offset only

for those interest income items which

CBCC has demonstrated to be from

short-term investments.

With respect to Eletrosilex, petitioners

focus on one transaction recorded on

Eletrosilex’s 1994 financial statement

for which, they allege, there is no

evidence that it was revenue from a

short-term investment. They also allege

it does not consist of interest income

from investments, and therefore does

not qualify to be an offset to

Eletrosilex’s financial expenses.

Furthermore, petitioners argue,

Eletrosilex did not even make a claim

for an offset to its financial expenses,

and for this reason alone the

Department should not have made one.

With respect to CCM, petitioners also

argue that CCM did not submit the

financial statement of its direct parent,

or a consolidated financial statement for

the CCM group of related companies. By

not submitting such statements,

petitioners argue, CCM thwarted

application of the Department’s

established practice of determining

interest expenses on a consolidated

basis. Furthermore, petitioners argue

that because CCM did not cooperate

with the Department by answering the

Department’s questions regarding its

interest income, the Department should

base interest expense for CCM on BIA,

or, in the alternative, it should obtain

the information necessary to calculate

interest expenses for CCM properly in

accordance with Department practice.

CBCC argues that the Department

verified the financial income and

expenses of CBCC and its parents

Solvay do Brasil and Solvay & Cie at

verification, and the Department’s

report did not indicate that the financial

gains were not derived from short-term

investments, nor that they were not

related to the companies’ business

operations. Furthermore, because the

Department verified CBCC’s financial

gains, CBCC argues that it is no longer

CBCC’s burden to prove that the

financial gains are short-term or related

to its business operations; it is, rather,

the petitioners’ burden to prove that the

Department’s methodology was

incorrect. Because petitioners are unable

to do this, CBCC argues, the Department

should reject their argument.

Eletrosilex argues, with regard to

petitioners’ second argument, that its

submitted financial statement (at page

79) shows that the entire transaction

occurred between July 28, 1994 and

December 27, 1994, and therefore

qualifies as short-term under any

analysis. Eletrosilex also argues that the

financial statement shows that the

transaction was a credit cession

operation made with several financial

institutions. A credit cession operation,

Eletrosilex argues, is by its nature a

transaction that provides interest

income on the investment.

CCM argues, with regard to

petitioners’ first argument, that in a

February 21, 1995, submission (in

which it submitted its balance sheet) it

demonstrated that all of its interest

income was derived from short-term

investments. With regard to petitioners’

second argument, CCM argues that in

the same February 21, 1995, submission,

it submitted financial statements for

each of CCM’s corporate layers. It argues

that these financial statements

demonstrate that each of its corporate

layers had a net interest expense of zero,

and that for each corporate layer the

interest expenses were offset by interest

revenue from short-term investments.

As for the company that petitioners call

CCM’s ‘‘direct parent,’’ CCM states that

this company is a related entity which

does not have audited financial

statements, and therefore CCM did not

submit one. CCM also says that this

entity’s net income was captured in the

financial statement of another related

entity, and that CCM submitted this

financial statement.

Department’s Position

We agree with petitioners in part.

With respect to CBCC, we agree with

petitioners that CBCC’s reported interest

income includes two line items which

do not constitute interest income. We

are unable to identify these line items in

this notice because CBCC has requested

that the identity of these line items be

treated as business proprietary

information subject to release only

under administrative protective order

(APO). The fact that the verification

report does not discuss these items does

not imply the Department’s agreement

with CBCC’s characterization of these

two line items as interest income. CBCC

unduly attempts to shift the burden of

proof to the petitioners, disregarding the

fact that it is up to a respondent to

substantiate and document any

adjustment or claim to the Department.

As the Department stated in Gray

Portland Cement and Clinker from

Japan; Final Results of Antidumping

Duty Administrative Review (60 FR

43761, 43767, August 23, 1995),

‘‘[w]hen a respondent makes a claim for

an adjustment, it is the respondent’s

responsibility to provide a detailed

explanation of the adjustment as well as

supporting documentation.’’ Therefore,

because CBCC did not substantiate

through an explanation or supporting

documentation that the claimed offsets

were from short-term investments, we

have reduced CBCC’s interest income by

the total amount of those two line items.

See Final Results Analysis

Memorandum for our calculations.

With respect to Eletrosilex, we agree

with petitioners that Eletrosilex is not

entitled to an adjustment. The

transaction in question consisted of an

investment in Brazilian bonds

denominated in reais and financed by

borrowing on dollar-denominated

export notes. Eletrosilex later sold the

real-denominated bonds after they had

accrued pro rata interest for Eletrosilex.

Such a transaction would result in

interest income and capital gains; only

the former would qualify as an offset to

interest expenses. However, we have no

information on the record to enable us

to break out the interest income from

the capital gains. Furthermore, we are

unable to evaluate any of Eletrosilex’s

other claimed short-term interest

income because, in response to a request

that it itemize its offsets, Eletrosilex

stated that it is not claiming any offsets.

See Eletrosilex’s March 17, 1995, SQR,

at 32. Therefore, in these final results of

review, we have denied Eletrosilex an

offset to its interest expenses.

We agree with CCM that the evidence

on the record supports its contentions

that (1) all of CCM’s interest income was

derived from short-term investments

(see CCM’s audited balance sheet); (2)

CCM’s interest income outweighed

interest expenses (see CCM’s audited

profit/loss statement); and (3) each of

CCM’s parent companies also

experienced short-term interest income

in excess of short-term interest expenses

(see the financial statements for each

corporate layer of the group of which

CCM is a member). The fact that CCM

did not submit consolidated financial
1964 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

statements—which do not exist—cannot

be held against CCM since the

individual company statements

demonstrate that short-term income

exceeded short-term interest. For all of

these reasons, we have continued to

exclude interest expenses from CCM’s

COP.

Comment 15

Petitioners argue that the Department

erred in its computation of Eletrosilex’s

COP by allocating Eletrosilex’s

production costs equally between

silicon metal and products which

petitioners allege are by-products of

silicon metal production. They argue

that in the final results of review the

Department, as it did in the preliminary

results of the fourth administrative

review of this order, should allocate

silicon metal production costs only to

commercial-grade silicon metal, and

should offset COM with estimated

revenue from by-product sales.

Eletrosilex argues that if the

Department allocates all production

costs only to commercial-grade silicon

metal, then it should make an offset to

the COP for the revenue generated from

the sale of by-products, and should

apply the offset to the volume of byproducts produced, rather than the

volume of by-products sold.

Furthermore, Eletrosilex argues that the

Department should consider as byproducts only ladle sculls, off-grades,

and fines, but not slag or silicon metal

of ingot bottom. Eletrosilex states that it

does not consider slag or silicon metal

of ingot bottom production items, and

does not include them in its production

volume records.

Department’s Position

We agree with petitioners that

Eletrosilex’s production costs should be

allocated to only commercial-grade

silicon metal, and that an offset should

be made to Eletrosilex’s costs for the

revenue it collects from its sale of byproducts. By using this approach we

succeed in calculating the actual costs

of the merchandise subject to review,

without distorting that calculation by

allocating some costs to merchandise

not subject to review. We have done so

in these final results of review.

We do not agree with Eletrosilex that

the by-product offset should be

calculated based on the volume of byproducts produced. Our policy is to

allow an offset only for actual revenue.

To offset costs with revenue not earned

would result in an inaccurate

calculation of actual costs, and thus an

inaccurate calculation of COP/CV. In

these final results of review we have

offset production costs with all revenue

that Eletrosilex reported from its sale of

by-products. Based on Eletrosilex’s

statement that it does not record slag or

silicon metal of ingot bottom as

production items in its books, in these

final results of review we have counted

as by-products only ladle sculls, offgrades, and fines.

Comment 16

Petitioners argue that the Department

erred in its calculation of the indirect

selling expenses used in Eletrosilex’s

COP. For the preliminary results of

review, the Department divided

Eletrosilex’s indirect selling expenses by

its volume of production. This

methodology was incorrect, petitioners

argue, for two reasons. First, the selling

expense total used in the calculation

does not include the selling expenses of

Eletrosilex’s related affiliates. Second, it

is not the Department’s practice,

petitioners state, to calculate selling

expenses based on production volume.

Therefore, petitioners argue, in the final

results the Department should calculate

per-unit indirect selling expenses for

COP and CV by dividing Eletrosilex’s

reported indirect selling expenses by its

reported volume of home market and

U.S. sales.

Eletrosilex argues that it makes no

sense to calculate per-unit indirect

selling expenses solely on U.S. and

home market sales quantities. It argues

that its indirect selling expenses

(consisting primarily of salaries and

related employee costs) apply to all

facets of Eletrosilex’s sales functions

without regard to the particular market.

Citing statements in its questionnaire

response, Eletrosilex argues that sales in

both the United States and in Brazil are

made solely by Eletrosilex personnel,

with no assistance from affiliated

companies. The Eletrosilex employees

involved in all aspects of these sales,

Eletrosilex argues, have functions that

are relevant to all sales in all markets,

and the fact that some affiliated

companies may assist in some way with

respect to some of the sales in the much

larger markets of Europe, Asia, and the

Middle East is not relevant to the

determination of per-unit indirect

selling expenses in the U.S. and home

markets.

Department’s Position

We agree with petitioners that

indirect selling expenses should be

calculated based on sales volumes, and

not production volumes because, by

their nature, indirect selling expenses

are attributable to sales, not production,

of merchandise. We do not agree with

petitioners that the computation needs

to include the indirect selling expenses

of all of Eletrosilex’s affiliates because

COP includes only the indirect selling

expenses included in each home market

sale. Because the related affiliates did

not contribute toward Eletrosilex’s

home market sales, there is no reason to

include their indirect selling expenses

in COP. In these final results of review,

we have calculated Eletrosilex’s

monthly indirect selling expenses by

dividing its monthly indirect selling

expenses allocated to the home market

by its monthly home market sales

volumes.

Comment 17

Petitioners argue that the Department

erred in its computation of Eletrosilex’s

COP by using the fixed factory overhead

costs that Eletrosilex reported on its

tape file. Petitioners argue that doing so

was improper because evidence on the

record suggests that the fixed overhead

costs in Eletrosilex’s tape file were not

replacement cost figures. Specifically,

petitioners point out that the fixed

factory overhead costs on Eletrosilex’s

tape file are inconsistent with the

replacement cost fixed overhead costs in

exhibit 14 of Eletrosilex’s March 22,

1995 SQR and with the historical cost

fixed overhead costs in exhibit 23 of

Eletrosilex’s March 22, 1995 SQR.

Furthermore, they argue that a

worksheet that Eletrosilex submitted

(exhibit 17 of its March 22, 1995 SQR)

in response to the Department’s request

does not reconcile to either exhibit 14

or 23 of the SQR, though it does

reconcile to the figures on its tape file.

Petitioners argue that though exhibit 17

does reconcile to the tape file, it is not

truly responsive to the Department’s

question because the Department had

asked Eletrosilex to support the fixed

factory overhead costs in its worksheet.

In light of these discrepancies, and in

the absence of any explanation from

Eletrosilex for them, petitioners argue

that the Department should use

Eletrosilex’s reported ‘‘historical’’ fixed

factory overhead cost figures as

Eletrosilex reported them in exhibit 23

of its SQR. These figures are the most

disadvantageous to Eletrosilex.

Eletrosilex argues that the figures

reported in exhibit 23 of its SQR, which

petitioners cite as evidence that the

numbers in the tape file are not

replacement cost figures, were only

preliminary figures on a table which

was inadvertently submitted with the

SQR. Therefore, they are not the correct

historical fixed factory overhead figures.

It further argues that data contained in

exhibit 17 of its SQR provide the correct

historical cost figures for fixed

overhead, and that these numbers are

identical to those in the tape file.
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1965

Department’s Position

In its rebuttal brief Eletrosilex

explained the discrepancy regarding its

reported historical costs, and has

indicated that the fixed factory overhead

figures it reported on its tape file were

historical cost figures. However, in

hyperinflationary economies the

Department uses replacement cost

figures, and not historical cost figures.

Therefore we agree with petitioners that

the Department should not have used

the figures on Eletrosilex’s tape file. For

this same reason we cannot use the

figures Eletrosilex reported in exhibits

17 or 23 of its SQR. In these final results

of review we have used the figures that

Eletrosilex reported in exhibit 14 of its

SQR because these are replacement cost

figures.

Comment 18

Petitioners argue that the Department

must include in CV all of the taxes that

Eletrosilex and CBCC paid on purchases

of inputs. They base this argument on

the fact that the statute requires that CV

include taxes paid on inputs unless the

taxes are ‘‘remitted or refunded upon

the exportation of the article in the

production of which such materials are

used.’’ See 19 U.S.C. §1677b(e)(1)(A).

Petitioners argue, with respect to

Eletrosilex, that because Eletrosilex did

not even claim that home market taxes

paid on material inputs were remitted or

refunded upon exportation of the

merchandise, all of Eletrosilex’s taxes

must be included in CV.

Eletrosilex argues that the Department

should eliminate consumption taxes

from all calculations. This approach, it

argues, is the only way to achieve true

tax neutrality.

CBCC argues the Department erred in

its calculation of CV (for those sales for

which it used CV, as opposed to BIA, in

the preliminary results) by including

VAT in the cost build-up. CBCC argues,

first, that including VAT in CV violates

the tax-neutrality principle that the

Department regularly applies in the

calculation of margins. If the

Department seeks to apply the taxneutrality policy in its calculation of CV

that it applies in its calculation of

margins, CBCC argues, VAT should not

be included in CV because it has the

effect of creating dumping even where

none exists. Secondly, CBCC argues that

evidence on the record demonstrates

that CBCC was able to offset its VAT

liability with taxes collected on

domestic sales. Thus, CBCC argues, with

respect to CBCC in this review, the

ICMS tax does not remain a cost of the

material input, and should not be

included in CV.

Petitioners argue that Eletrosilex’s and

CBCC’s arguments ignore the fact that

the statute applicable to this review (19

U.S.C. §1677b(e)(1)(A)(1994)) and the

statute as amended by the URAA (19

U.S.C. §1677b(e)(1)) require that CV

includes taxes on purchases of inputs

unless those taxes are remitted or

refunded upon exportation. Section

773(e)(1)(A) of the Tariff Act states 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) * * *

Furthermore, petitioners argue that

CBCC’s claim that it was able to offset

its VAT liability with taxes collected on

domestic sales is contradicted by other

information on the record. Moreover,

petitioners point out that the

Department directly addressed this

issue in the final results of the second

administrative review of this order, and

agreed that section 773(e)(1)(A) of the

Tariff Act required that VAT be

included in CV. Silicon Metal from

Brazil; Second Review Final Results, at

46769. The Department took this same

position, petitioners state, in

Ferrosilicon from Brazil, Final

Redetermination of Remand at 9–10,

AIMCOR v. United States, Ct. No. 94–

03–00182 (January 16, 1996). Therefore,

petitioners conclude, CBCC’s claim that

ICMS and IPI taxes paid on inputs used

to produce exported silicon metal are

not a ‘‘cost of materials’’ has no basis

and has already been rejected by the

Department.

Department’s Position

We agree with petitioners. In the final

results of the second review of this

order, the Department stated:

because section 773(e)(1)(A) of the Tariff Act

does not account for offsets of taxes paid due

to home market sales, we did not account for

the reimbursement to the respondents of

ICMS and IPI taxes due to home market sales

of silicon metal. The experience with regard

to home market sales is irrelevant to the tax

burden borne by the silicon metal exported

to the U.S.

See Silicon Metal from Brazil; Second

Review Final Results, at 46769. Our

interpretation of the statute and our

analysis of the issue have not changed

since publication of the second review

final results. Thus, in keeping with our

prior determination on this issue, we

have included in CV all taxes paid on

purchases of material inputs except

where an ICMS tax was assessed on the

respondent’s U.S. sales. For our

treatment of the ICMS tax in such a

situation, see comment 19 below.

Comment 19

Petitioners argue that the Department

must add to Eletrosilex’s CV the ICMS

tax that Eletrosilex collects from its

exports of silicon metal, and that is

included in the reported U.S. selling

price. They argue that to do otherwise

would result in a dumping margin

distorted by the use of an artificially

high selling price as the basis for U.S.

price (USP). Petitioners argue that, in

the alternative, the Department should

reduce USP by the amount of the ICMS

taxes included in the reported USP.

This approach, they argue, is pursuant

to section 772(d)(2)(A) of the Tariff Act,

which requires that USP be reduced by

‘‘any additional costs, charges, and

expenses, and United States import

duties, incident to bringing the

merchandise from the place of shipment

in the country of exportation to the

place of delivery in the United States.’’

Eletrosilex argues that the Department

should eliminate consumption taxes

from all calculations. This approach, it

argues, is the only way to achieve true

tax neutrality. Furthermore, Eletrosilex

argues that the Department erred in

subtracting the ICMS tax from USP. It

argues that this subtraction was a

violation of a policy the Department

stated in the final results of the second

administrative review of this order.

There the Department stated:

We disagree with petitioners that the ICMS

tax is an export tax or other charge imposed

on the exportation of the merchandise to the

United States as defined in section 772(d)(2)

of the Act. The ICMS tax is imposed upon

all sales of this product, regardless of the

market to which it is destined. Since the tax

is not levied solely upon exported

merchandise, it does not constitute an export

tax and cannot be subtracted from the USP

of the merchandise under section 772(d)(2).

Petitioners argue that Eletrosilex is in

error in stating that the Department

subtracted the ICMS tax from USP. It

states that while the Department said in

its analysis memorandum that it made

such a subtraction, in fact it did not do

so in its margin calculations. Moreover,

petitioners state, the argument

Eletrosilex has advanced is irrelevant

because it applies only to margin

calculations based on price-to-price

comparisons. After the Department

makes the necessary corrections in its

calculations for Eletrosilex that the

petitioners have identified, Eletrosilex,

petitioners allege, will have its margin

calculated on the basis of CV.

CCM argues that the Department erred

by leaving imbedded in the USP the

ICMS tax that its U.S. customers pay,
1966 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

and comparing that USP to a home

market price that includes the ICMS tax

that its home market customers pay.

This was an error, CCM argues, because

the ICMS tax rates in the U.S. and home

markets are significantly different. Thus,

CCM argues, in its methodology the

Department did not achieve tax

neutrality.

Department’s Position

We agree with Eletrosilex that because

the ICMS tax assessed on its U.S. sale

is not an export tax, it should not be

deducted from the U.S. prices. See

Silicon Metal from Brazil; Second

Review Final Results at 46770. However,

where the ICMS tax is included in the

U.S. price, a proper comparison requires

that CV not include both the ICMS tax

paid on the purchases of material inputs

and the ICMS tax assessed on the U.S.

sale. Thus, for the calculation of CV in

this situation, we ensured that the

amount of the ICMS tax included in CV

was the higher of either the ICMS tax on

purchases of material inputs or the

ICMS tax included in the U.S. price.

We agree with CCM that in the

preliminary results of review our

methodology failed to achieve tax

neutrality. In these final results of

review, where we based the margin

calculation on a price-to-price

comparison (as opposed to a price-to-CV

comparison) we have added to the U.S.

price the difference between the ICMS

tax assessed on the U.S. sale and the

ICMS tax assessed on FMV.

Comment 20

Petitioners argue that the Department

erred in the calculation of Eletrosilex’s

U.S. selling prices by calculating the

unit prices on the net weight of

contained silicon, rather than the gross

weight of the silicon metal. They argue

that in a CV-based margin calculation

the Department should use the gross

weight of the silicon metal to calculate

the per-unit USP because CV is reported

on a gross-weight basis.

Department’s Position

We disagree with petitioners. We find

no evidence on the record to support

petitioners’ contention that the weights

Eletrosilex reported for its U.S. sales

reflect only the weight of the silicon,

rather than the weight of the silicon

metal. Furthermore, there is no record

evidence to support petitioners’

assertion that CV was calculated on a

gross-weight basis. Therefore, there is

no basis to change the per-unit

calculations from those in the

preliminary results of review.

Comment 21

Petitioners argue that the Department

erred in its treatment of packing costs in

the cost test for Eletrosilex and CCM.

They argue, with respect to Eletrosilex,

that the Department erred by including

in the calculation of Eletrosilex’s COP

the packing expense amounts as

Eletrosilex reported them on its COP

computer file. Petitioners argue that

Eletrosilex’s computation of packing on

its computer file is not appropriate for

the cost test because not all of

Eletrosilex’s home market sales incurred

packing costs. They argue that the

Department should compare net home

market sales prices to a COP that

includes the reported amount of packing

for each sale.

With respect to CCM, petitioners

argue that the Department erred in its

cost test by comparing monthly COPs

that include per-unit packing costs to

home market prices that include much

larger per-unit packing costs. They

argue that by so doing the Department

failed to make an ‘‘apples-to-apples’’

comparison. For the final results, they

argue, the Department should include

the same absolute per-unit packing costs

in the home market prices and COPs

used in the sales-below-cost analysis.

CCM argues that the Department

correctly calculated packing costs for

the COP analysis. It argues that

differences in per-unit packing costs are

to be expected because in

hyperinflationary economy cases the

Department compares home market

prices to costs incurred during the

month of payment of the comparison

home market sale. Furthermore, it cites

Import Administration Policy Bulletin

94.6 (at 1) which states that in the salesbelow-cost test, the Department uses

‘‘COM, actual interest cost, and home

market packing * * * based on

information in the section D COP/CV

questionnaire response.’’ Thus, CCM

concludes, the Department’s policy in a

COP analysis is to use the packing costs

from the cost section of the

questionnaire response.

Department’s Position

We agree with petitioners in part. We

agree that where home market sales

were sold in bulk (i.e., not packed), COP

should not include packing because

Import Administration Policy Bulletin

94.6 states (at 1), ‘‘Both the net COP and

the net home-market prices should be

on the same basis, e.g., packed, exfactory, net of selling expenses;

otherwise, the comparison would be

distorted.’’ We have done this for

Eletrosilex and all other respondents in

this review.

We disagree with CCM that we should

use the packing costs reported in the

section D response. Our present policy

is to use the packing costs identified on

the home market sales tape, which are

transaction-specific. Since the section D

packing computation is based on

monthly averages, using it would reflect

less accurate costs than using

transaction-specific packing costs.

Finally, we disagree with petitioners

that CCM reported much higher packing

costs on its home market sales listing

than it reported on its COP worksheet.

Comparison of exhibits A (home market

sales listing) and B (COP worksheet) of

CCM’s March 17, 1995 submission

reveals that the packing costs are

identical.

Comment 22

Petitioners argue the Department

erred by using CCM’s reported general

and administrative (G&A) expenses in

its calculation of CCM’s COP, because

CCM calculated an annual G&A ratio

that it applied to its monthly historical

COM. Petitioners allege that this

methodology is not the Department’s

practice in hyperinflationary economy

cases. They argue that the Department

should determine monthly G&A

expenses for CCM by multiplying the

reported ratio by the monthly

replacement COM which CCM reported.

CCM argues the methodology that

CCM submitted and that the Department

used in the preliminary results is the

one that the Department used for CCM

in response to the CIT’s remand

instruction to the Department in the

LTFV investigation to ensure that ‘‘its

allocation of GS&A expenses does not

lead to a systematic overstatement of

those expenses due to the restatement of

monthly costs as replacement costs.’’

See Camargo Correˆa Metais, S.A. v.

United States, Ct. No. 91–09–00641,

Slip Op. 93–163 (August 12, 1993) at 15.

As a result of these instructions, CCM

states, the Department developed and

used this method in the preliminary

remand results and final remand results

which are now awaiting the CIT’s

approval. See Preliminary Results on

Remand at 4–5 (Nov. 17, 1993) and

Final Results of Redetermination

Pursuant to Court Remand at 6–7 (Dec.

13, 1993). CCM argues the Department

is under obligation to comply with the

CIT’s remand order until and if it is

determined by the Federal Circuit in the

LTFV appeal that the CIT’s remand

instructions, and the Department’s

resulting methodology for calculating

CCM’S G&A, were incorrect.

Furthermore, CCM argues that the

methodology the petitioners say we

should use is one that was developed
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1967

for other respondents, and not the one

the Department developed for CCM.

Department’s Position

We agree with petitioners. Contrary to

CCM’s argument, the Department is not

obligated to employ the calculation

methodology it used in its remand

determination in the LTFV

investigation. Since issuing the remand

determination the Department has

refined its methodology, and now

employs a formula in which it

multiplies a ratio (consisting of indexed

monthly historical G&A divided by

indexed monthly historical cost of

goods sold) by monthly replacement

cost COM. As explained in the final

results of the second administrative

review of this order, the purpose of

indexing is to obtain values at a uniform

price level because the simple addition

of monthly nominal values during a

period of high inflation would yield a

meaningless result. See Silicon Metal

from Brazil; Second Review Final

Results at 46773. This is the formula we

used in these final results of review.

Comment 23

Petitioners argue that the Department

should include in CV the ICMS tax that

CCM paid on its purchases of electricity.

They allege that CCM did not report this

tax in the electricity costs or ICMS tax

it previously reported.

CCM argues that it already reported

the ICMS tax it paid on electricity, and

that these amounts are included in its

computer database under the field for

taxes.

Department’s Position

We agree with CCM. Evidence on the

record indicates that CCM did report the

ICMS tax it pays on electricity. See July

3, 1996 submission by CCM, p. 8. We

have included this tax in CV.

Comment 24

Petitioners argue that the Department

should not include in CV the amounts

that CCM reported on its CV worksheet

under the name ‘‘inventory holding.’’

They argue that if these amounts are

inventory carrying costs, then they

should be excluded from CV because it

is the Department’s established practice

to exclude inventory carrying costs from

CV when the margin calculations are

based on purchase price (PP) sales.

Furthermore, they argue that if the

amounts that CCM reported in its CV

worksheet under the name ‘‘inventory

holding’’ are actually inventory holding

gains/losses (i.e., the difference between

replacement costs and the inflationadjusted cost of inventory), they should

be excluded from the calculation

because CCM did not calculate them

correctly. They base this argument on

the fact that CCM’s calculation allegedly

includes only gains or losses on finished

product inventory (and not inventoried

inputs) and were calculated without

proper layering of the inventory.

CCM argues that it reported inventory

carrying costs as requested by the

Department in its questionnaire, and

that petitioners’ argument is irrelevant

because in the preliminary results of

review the Department based the margin

calculation on a price-to-price

comparison, and not CV. It also notes

that it is appropriate to include

inventory carrying costs in the salesbelow-cost test where such costs are

compared to the home market sales

which were made out of inventory. CCM

also argues (presumably with respect to

inventory holding gains and losses), that

it followed the inventory layering

method that the Department used in the

LTFV investigation and noted in the

questionnaire, and that these costs

should be included in the monthly COM

for CV purposes, should the Department

rely on CV for FMV in the final results

of review.

Department’s Position

Consistent with our practice we did

not include inventory carrying costs in

our calculation of CV. Also consistent

with Department practice, for purposes

of the cost test we did not adjust prices

for inventory carrying costs because we

do not include any imputed costs in the

calculation of COP. See Silicon Metal

from Brazil; Second Review Final

Results, at 46775.

Concerning the adjustment CCM

reported on its CV worksheet under the

name ‘‘inventory holding,’’ we have not

made this adjustment because CCM

failed to substantiate its entitlement to

this adjustment. The record of this

review contains no narrative description

of or request for the adjustment, nor any

worksheet demonstrating its

calculations. In light of these

deficiencies we have denied this

adjustment.

Comment 25

Petitioners argue that the Department

erred in its calculation of CBCC’s

interest expense ratio for 1992 by

treating as interest income a value that

was actually interest expense.

CBCC argues that petitioners’ point is

moot because the Department did not

use the 1992 ratio in the margin

calculation.

Department’s Position

We agree with CBCC that this point is

moot because we did not use the 1992

ratio in the margin calculation.

Comment 26

Petitioners argue that the Department

used an incorrect methodology in

calculating profit for CBCC. The

Department calculated profit by

subtracting a COP that includes interest

expenses (which by definition include

the cost of financing receivables) from

home market prices from which the

Department subtracted home market

imputed credit expenses. By comparing

a COP that includes the cost of

financing receivables to home market

prices from which the (imputed) cost of

financing receivables had been

subtracted, the Department, petitioners

allege, made an improper comparison.

Thus they argue that the Department

should remove the subtraction of home

market imputed credit from the

calculation of the price to which the

Department compares COP in the cost

test.

Department’s Position

We agree with petitioners. For

purposes of calculating profit, we have

continued to include interest expenses

in the calculation of COP, but did not

deduct imputed credit expenses from

home market prices.

Comment 27

Petitioners argue that the Department

erred in its margin calculation for CBCC

by failing to deduct from U.S. price an

unspecified charge that CBCC reported

as ‘‘other expenses.’’ Petitioners argue

that these ‘‘other expenses’’ should be

deducted from U.S. price in accordance

with section 772(d)(2)(A) of the Tariff

Act.

CBCC argues that if the Department

decides to deduct the ‘‘other expenses’’

(which, it states, are movement

expenses) from U.S. price, it should

note that CBCC mislabeled the currency

as U.S. dollars. In fact, CBCC states, it

reported them in cruzeiros, and they

must be converted into U.S. dollars for

the margin calculation.

Department’s Position

We agree that we failed to deduct

‘‘other expenses’’ in the calculation of

U.S. price used in the preliminary

results. We have converted them into

dollars because the amount of these

expenses relative to other reported

expenses indicates that they were

incurred in cruzeiros. See CBCC’s

March 17, 1994 submission, exhibit 3.
1968 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

Comment 28

Minasligas comments that the

Department correctly applied its taxneutral policy in the preliminary results

of this review. Minasligas summarizes

that application as follows:

(1) Home market prices included PIS

and COFINS taxes;

(2) In calculating U.S. price, the

Department subtracted the ICMS tax

that Minasligas’ customers pay on their

purchases of silicon metal;

(3) The Department then added to the

U.S. price the equivalent amount of

ICMS, IPI, PIS, and COFINS taxes due

on Minasligas’ home market sales.

This methodology, Minasligas states,

is consistent with the Department’s

guiding principle of tax neutrality, and

should be affirmed in the final results of

this review.

Eletrosilex argues that the Department

erred in failing to add to USP the PIS,

COFINS, and consumption taxes

charged on its home market comparison

sales. It argues, with respect to the PIS

and COFINS taxes, that this failure was

a violation of the Department’s policy of

calculating tax-neutral dumping

assessments. It argues, with respect to

the consumption taxes, that this failure

was a violation of the change in the

treatment of consumption taxes that the

Department announced in the final

results of the second review of this case.

There the Department stated:

Where merchandise exported to the United

States is exempt from the consumption tax,

the Department will add to the U.S. price the

absolute amount of such taxes charged on the

comparison sales in the home market.

Eletrosilex argues that the Department’s

failure to add to USP the absolute

amount of consumption taxes charged

on its home market sales was a violation

of the Department’s announced policy

because there is evidence on the record

that the relevant consumption tax, the

ICMS tax, is exempt from payment upon

exportation.

CCM also argues that the Department

erred by not adding to USP the PIS and

COFINS taxes that its home market

customers pay on their purchases of

silicon metal. It argues that these taxes

are imposed only on home market sales,

and not on export sales. Thus, by failing

to add them to USP, CCM argues, the

Department failed to achieve tax

neutrality. Moreover, CCM argues, in

numerous antidumping investigations

and reviews involving imports from

Brazil, the Department has made an

adjustment to USP for the PIS and

COFINS taxes.

Petitioners argue that the Department

was correct in not adding the equivalent

amount of PIS and COFINS taxes to

USP. They base this argument on

772(d)(1)(C) of the Tariff Act which

states that USP may be adjusted only for

taxes imposed directly upon the

‘‘merchandise or components thereof.’’

They argue that the Department has

concluded that taxes on gross revenue

exclusive of export revenue were not

taxes imposed directly upon the

merchandise or components thereof,

and thus did not qualify for an

adjustment to USP. See Silicon Metal

from Argentina, 56 FR 37891, 37893

(August 9, 1991) (Silicon Metal from

Argentina). Petitioners argue that

Brazil’s PIS and COFINS taxes are taxes

on gross revenue exclusive of export

revenue, and that therefore the

Department should not add them to

USP.

Department’s Position

We disagree with Eletrosilex that

there is evidence on the record that the

ICMS tax is not assessed upon

exportation. In fact, there is evidence to

the contrary. See Eletrosilex’s March 22,

1995, submission, pp. 21–22. To achieve

tax neutrality in these final results of

review, where we calculated the margin

on U.S. and Brazilian price-to-price

comparisons, we added to Eletrosilex’s

USP the difference between the absolute

amounts of ICMS tax assessed on its

U.S. sales and its FMV. See comment 19

(above).

We agree with petitioners that

information on the record demonstrates

that the PIS and COFINS taxes are taxes

on gross revenue exclusive of export

revenue. Thus, in accordance with our

determination in Silicon Metal from

Argentina, we determine that these

taxes are not imposed ‘‘directly upon

the merchandise or components

thereof.’’ Therefore, in these final results

of review we have not added PIS and

COFINS taxes to USP.

Comment 29

Eletrosilex argues that the Department

erred in its calculation of home market

imputed credit by dividing an allegedly

annual interest rate by 30, rather than by

365.

Petitioners argue that the interest rate

the Department used in its calculation

was a monthly rate, and that the

Department was therefore correct in

using 30 in the denominator.

Department’s Position

We agree with petitioners that the rate

is a monthly rate. This rate is the

average of the monthly rates that appear

in Exhibit VI–3 of Minasligas’ November

10, 1994, submission. Those rates are

the monthly rates of the state bank of

Minas Gerais.

Comment 30

CCM argues that in order for its cash

deposit rate for future entries to reflect

the appropriate dumping margin, the

Department should issue the third

review final results prior to, or

concurrently with, issuance of the

fourth review final results. If the

Department issues the fourth review

final results prior to the third review

final results, CCM argues, CCM will

continue to face the 93.2 percent cash

deposit rate established in the LTFV

investigation. In the alternative, if the

Department does issue the third review

final results after the fourth review,

CCM argues that the Department should

make clear in its cash deposit

instructions that CCM’s third review

cash deposit rate should apply to all

future entries because CCM was a nonshipper in the fourth review.

Department’s Position

CCM’s point is moot because the

Department is issuing the results of both

reviews concurrently.

Comment 31

CBCC argues that the Department

erred in using total BIA for its U.S. sales

verified at the third review verification.

(The Department assigned a margin to

these sales based on total BIA after it

determined that CBCC was unable to

substantiate significant portions of its

response with respect to these sales.)

CBCC argues that the Department was

not justified in using BIA for these sales

because:

1. Throughout the proceeding CBCC

cooperated fully with the Department;

2. At the verification the verifiers

collected the information needed to

correct the mistakes uncovered at the

verification;

3. Even if the Department did not

have the resources to recalculate CBCC’s

data, the Department could have

requested CBCC to perform the

recalculations.

CBCC also notes that there was ample

time to perform any necessary

recalculations during the 14 months

between the verification and issuance of

the Department’s BIA memorandum.

Furthermore, CBCC argues that, if the

Department believes it does not have all

necessary information totally to correct

the mistakes found at verification, it

should calculate CBCC’s dumping

margin using partial BIA for those

discrete areas where it does not have the

necessary information. CBCC argues that

this use of partial BIA would be

warranted in this case because there

were no mistakes uncovered at

verification regarding U.S. sales; most of
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1969

the mistakes, CBCC argues, were

connected with home market sales.

CBCC argues that as an alternative, the

Department should base FMV on CV, for

which, CBCC alleges, the Department

has all necessary information.

Petitioners argue the Department

properly determined the margin for the

sales at issue based on total BIA. They

argue that the number and magnitude of

the deficiencies in CBCC’s reported

data, the law, and the Department’s

practice require the Department to

assign a margin to the sales at issue

based on total BIA. With respect to

CBCC’s argument that it could have

rectified the problems found at the

verification if the Department had

requested that it do so, petitioners argue

that this suggestion ignores the

responsibility of respondents to provide

accurate and complete information in

antidumping proceedings prior to

verification. Moreover, petitioners

argue, this suggestion is tantamount to

asking the Department to condone the

submission of false and incomplete

information in response to the

Department’s questionnaire until, at

verification, the Department positively

determines the submitted information to

be false. Doing so would allow

respondents to abuse and manipulate

the administrative review process.

With regard to CBCC’s argument that

the Department use partial BIA,

petitioners argue that the deficiencies

the Department found at verification are

so fundamental and numerous that they

require the use of total BIA. Moreover,

with regard to CBCC’s argument that the

Department should use CV as the FMV,

petitioners argue that using CV would

be contrary to the purpose of using BIA.

The purpose of using BIA is to induce

the respondent to provide accurate and

complete information. To achieve this

purpose, petitioners argue, a margin

based on BIA must be adverse, i.e., it

must be higher than the margin that

would have been calculated had the

respondent provided accurate and

complete information. Here, because of

the deficiencies in the submitted

information, the Department cannot

even begin to determine whether a

price-based margin calculation would

result in a higher margin than the CVbased margin calculation that CBCC

suggests.

Department’s Position

We agree with the petitioners. As we

stated in our September 13, 1996

memorandum on this subject:

It is the obligation of the respondents to

provide an accurate and complete response

prior to verification so that the Department

may have opportunity to analyze fully the

information and other parties are able to

review and comment on it. Verification is

intended to establish the accuracy and

completeness of a response rather than to

supplement and reconstruct the information

to fit the requirements of the Department.

Nor is it the Department’s practice or

policy to reconstruct a response with

the large number of errors which we

found in CBCC’s response. See Final

Determination of Sales at Less Than

Fair Value: Certain Granite Products

from Italy (53 FR 27187, 27190, July 19,

1988). See also Final Determination of

Sales at Less Than Fair Value:

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From the Federal Republic of

Germany (54 FR 18992, 19037, May 3,

1989). Among the problems we

encountered were:

• CBCC underreported all per-unit

COP and CV values by using unrefined

weights, rather than refined weights;

• CBCC underreported its direct

materials costs by failing to report late

fees it had to pay;

• CBCC was unable to substantiate

some of its parent company’s interest

rates;

• CBCC’s method of calculating

depreciation understated depreciation

for all months;

• CBCC could not substantiate its

reported home market sales value;

• CBCC’s reported consignment sales

listing reported adjustments to sales

prices, rather than actual sale prices;

• CBCC underreported ICMS taxes for

all its consignment sales.

Because of these and other problems

more fully discussed in the September

13, 1996 memorandum, we deem

CBCC’s submissions to be unusable.

Accordingly, in these final results of

review we have applied total BIA to

CBCC’s third review sales.

Comment 32

CBCC argues that the Department

erred in its application of its two-tier

BIA methodology. This methodology,

CBCC argues, states explicitly that the

Department has discretion to use two

alternative types of BIA when a

respondent is deemed to be cooperative.

The Department can (1) use the firm’s

highest rate from a prior administrative

review or, if the firm has never been

investigated or reviewed, the all others

rate from the LTFV investigation; or (2)

the highest calculated rate in this

review.

CBCC argues that in this case the

Department erred because it used

CBCC’s rate from the LTFV

investigation. Under the two-tier BIA

methodology, the Department should

have used CBCC’s rate from a prior

review because CBCC has been included

in two completed reviews since the

LTFV investigation.

Petitioners argue that CBCC’s

erroneous argument is based on the

Department’s inadvertent misstatement

of its second-tier BIA policy in the

preliminary results of this review. It

argues that the Department has

expressed its two-tier BIA methodology

on many occasions, and on one of those

recent occasions it expressed it as

follows:

When a company substantially cooperates

with our request for information, but fails to

provide all the information requested in a

timely manner or in the form requested, we

use as BIA the higher of (1) the highest rate

(including the ‘‘all others’’ rate) ever

applicable to the firm for the same class or

kind of merchandise from the same country

from the LTFV investigation or a prior

administrative review; or (2) the highest

calculated rate in the review of any firm for

the same class or kind of merchandise from

the same country.

See Silicon Metal from Argentina; Final

Results of Antidumping Duty

Administrative Review and Termination

In Part, 60 FR 64416, 64417 (December

15, 1995) (Silicon Metal from Argentina

II). Petitioners argue that the

Department properly applied this

methodology when as BIA it assigned to

CBCC its rate from the LTFV

investigation.

Department’s Position

We agree with the petitioners. As

cooperative BIA, we use the higher of

either (1) the highest rate ever

applicable to the firm in the

investigation or in any previous review,

or (2) the highest calculated margin for

any respondent in the same review. See

Silicon Metal from Argentina II and

Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From

the People’s Republic of China; Final

Results of Antidumping Duty

Administrative Reviews (61 FR 65527,

December 13, 1996). Accordingly, for

these final results, where necessary, we

have applied to CBCC 87.79 percent,

which is the highest rate ever applicable

to CBCC. This use of BIA applies to only

those sales where we determined that

the use of BIA is appropriate. See

September 10, 1996 preliminary results

analysis memorandum from Fred Baker

to the file and September 13, 1996 ‘‘Use

of Best Information Available’’

memorandum from Fred Baker to

Richard Weible.

Comment 33

Parties allege the following clerical

errors:

• Petitioners argue that the

Department erred by failing to make a
1970 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

circumstance-of-sale adjustment to

Minasligas’ FMV for bank charges

related to loans taken out to finance its

U.S. sales.

• Petitioners argue that the

Department erred by using an incorrect

amount of foreign inland insurance on

CCM’s U.S. sale.

• CCM argues that the Department

erred by failing to deduct post-sale

inland freight expenses from its home

market price.

Department’s Position

We agree, and have corrected these

errors in these final results of review.

We have also corrected one additional

error we noted in our review of the

preliminary results. There, for U.S.

sales, we used Minasligas’ dates of sale

as the date of shipment from its plant

because we believed the dates of

shipment not to be on the record.

However, we have determined that the

invoice dates are on the record in

verification exhibit 12. Therefore, in

these final results of review we have

used the invoice dates as the dates of

shipment.

Final Results of Review

As a result of our analysis of the

comments received, we determine that

the following margins exist for the

period July 1, 1993, through June 30,

1994:

Producer/manufacturer/exporter

Weightedaverage

margin

(percent)

CBCC .......................................... 64.39

CCM ............................................ 5.97

Eletrosilex ................................... 39.72

Minasligas ................................... 0

RIMA ........................................... 91.06

The Department shall determine, and

the 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 Customs

Service.

Furthermore, the following deposit

requirements will be effective upon

publication of these final results of

review for all shipments of silicon metal

from Brazil entered, or withdrawn from

warehouse, for consumption on or after

the publication date, as provided by

section 751(a)(1) of the Tariff 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; (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 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 Tariff Act (19 U.S.C. §1675(a)(1))

and 19 CFR §353.22.

Dated: January 3, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–816 Filed 1–13–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–351–806]

Silicon Metal From Brazil; Final

Results of Antidumping Duty

Administrative Review and

Determination Not To Revoke in Part

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative review

and determination not to revoke in part.

SUMMARY: On September 5, 1996, the

Department of Commerce (the

Department) published the preliminary

results of its administrative review of

the antidumping duty order on silicon

metal from Brazil. This review covers

the period July 1, 1994, through June 30,

1995, and five manufacturers/exporters

of the subject merchandise to the United

States. The review indicates the

existence of margins for four firms.

We gave interested parties an

opportunity to comment on the

preliminary results. Based on our

analysis of the comments received and

new information submitted at the

Department’s request, we have changed

our results from those presented in our

preliminary results as described below

in the comments section of this notice.

EFFECTIVE DATE: January 14, 1997.

FOR FURTHER INFORMATION CONTACT: Fred

Baker, Alain Letort, or John Kugelman,

AD/CVD Enforcement Group III, Office

8, Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–2924, –4243, or –0649,

respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 5, 1996, the

Department of Commerce (the

Department) published in the Federal

Register (61 FR 46779) the preliminary

results of its administrative review of

the antidumping duty order on silicon

metal from Brazil (July 31, 1991, 56 FR

36135). We solicited additional

information from Minasligas on October

1, 1996, from Eletrosilex on October 2,

1996, from CBCC on October 10, 1996,

and from RIMA on November 14, 1996.

We received responses on October 15,

October 16, October 24, and November

20, 1996, respectively. The Department

has now completed that 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 Act are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (URAA).

Scope of the Review

The merchandise covered by this

review is silicon metal from Brazil