[Federal Register Volume 62, Number 67 (Tuesday, April 8, 1997)]
[Notices]
[Pages 16763-16768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8956]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-351-820]


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

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

EFFECTIVE DATE: April 8, 1997.

FOR FURTHER INFORMATION CONTACT: Jennifer Katt or Sal Tauhidi, AD/CVD 
Enforcement Group II, Office Four, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-0498 or (202) 482-4851, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act) are references to the provisions effective 
January 1, 1995, the effective date of the amendments to the Act by the 
Uruguay Round Agreements Act (URAA).

Preliminary Results

    We preliminarily determine that sales of ferrosilicon from Brazil 
have been made below normal value (NV). If these preliminary results 
are adopted in our final results of administrative review, we will 
instruct U.S. Customs to assess antidumping duties on all appropriate 
entries.

Case History

    On March 4, 1996 (61 FR 8238), the Department of Commerce (the 
Department) published in the Federal Register a notice of ``Opportunity 
to Request an Administrative Review'' of the antidumping duty order on 
Ferrosilicon from Brazil covering the period March 1, 1995, through 
February 29, 1996. In accordance with 19 CFR 353.22(a)(2), in March 
1996, Companhia Brasileira Carbureto De Calcio (CBCC) and Companhia 
Ferroligas Minas Gerais (Minasligas) (collectively the respondents) 
requested that the Department conduct an administrative review of their 
shipments of ferrosilicon to the United States during this period. On 
April 25, 1996, the Department published a notice of initiation of 
administrative review (61 FR 18379). The Department is now conducting 
this administrative review in accordance with section 751 of the Act.
    On May 8, 1996, the Department issued an antidumping duty 
questionnaire to CBCC and Minasligas. This questionnaire instructed the 
respondents to respond to sections A (corporate structure, accounting 
practices, markets and merchandise), B (home market sales), C (United 
States sales) and D (cost of production/constructed value) of the 
questionnaire. CBCC and Minasligas submitted questionnaire responses in 
July 1996. The Department issued supplemental questionnaires to CBCC 
and Minasligas in September 1996, December 1996, and January 1997. 
Responses to the supplemental questionnaires were received in October 
1996, and January 1997.
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of a preliminary determination if it 
determines that it is not practicable to complete the review within the 
statutory time limit. On November 26, 1996, the Department extended the 
time limit for the preliminary results in this case. See Extension of 
Time Limits of Antidumping Duty Administrative Review, (61 FR 64322) 
(December 4, 1996).
    In accordance with section 782(i) of the Act, we verified the sales 
and cost questionnaire responses of CBCC and Minasligas during February 
1997. The results of these verifications are outlined in the public 
versions of the verification reports dated March 19, 1997, on file in 
room B-099 of the main Commerce building.

Scope of Review

    The merchandise subject to this review is ferrosilicon, a 
ferroalloy generally containing, by weight, not less than four percent 
iron, more than eight percent but not more than 96 percent silicon, not 
more than 10 percent chromium, not more than 30 percent manganese, not 
more than three percent phosphorous, less than 2.75 percent magnesium, 
and not more than 10 percent calcium or any other element. Ferrosilicon 
is a ferroalloy produced by combining silicon and iron through smelting 
in a submerged-arc furnace. Ferrosilicon is used primarily as an 
alloying agent in the production of steel and cast iron. It is also 
used in the steel industry as a deoxidizer and a reducing agent, and by 
cast iron producers as an inoculant.
    Ferrosilicon is differentiated by size and by grade. The sizes 
express the maximum and minimum dimensions of the lumps of ferrosilicon 
found in a given shipment. Ferrosilicon grades are defined by the 
percentages by weight of contained silicon and other minor elements. 
Ferrosilicon is most

[[Page 16764]]

commonly sold to the iron and steel industries in standard grades of 75 
percent and 50 percent ferrosilicon. Calcium silicon, ferrocalcium 
silicon, and magnesium ferrosilicon are specifically excluded from the 
scope of this review. Calcium silicon is an alloy containing, by 
weight, not more than five percent iron, 60 to 65 percent silicon, and 
28 to 32 percent calcium. Ferrocalcium silicon is a ferroalloy 
containing, by weight, not less than four percent iron, 60 to 65 
percent silicon, and more than 10 percent calcium. Magnesium 
ferrosilicon is a ferroalloy containing, by weight, not less than four 
percent iron, not more than 55 percent silicon, and not less than 2.75 
percent magnesium. Ferrosilicon is currently classifiable under the 
following subheadings of the Harmonized Tariff Schedule of the United 
States (HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000, 
7202.29.0010, and 7202.29.0050. Although the HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of this review is dispositive.
    Ferrosilicon in the form of slag is included within the scope of 
this order if it meets, in general, the chemical content definition 
stated above and is capable of being used as ferrosilicon. Parties that 
believe their importations of ferrosilicon slag do not meet these 
definitions should contact the Department and request a scope 
determination.

Period of Review

    The period of review (POR) is March 1, 1995, through February 29, 
1996.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by CBCC and Minasligas, covered by the description in 
the ``Scope of the Review'' section, above, and sold in the home market 
during the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product based on the following criteria: (1) The grade of ferrosilicon 
(i.e., standard, high purity and low aluminum); (2) the percentage 
range, by weight, of silicon content; and (3) the sieve size.
    Although we have used the sieve size category as a matching 
criterion in past reviews, we are reconsidering the matching criteria 
for CBCC and Minasligas in light of additional data on the record in 
this review. Although cost differences among sieve size categories do 
not exist, we considered whether the merchandise was a ``lump'' or a 
``fine'' in making our product comparisons because sales of 
ferrosilicon fines command significantly lower market prices than sales 
of ferrosilicon lumps. In addition, it appears that the two products 
have different end-uses. For purposes of these preliminary results, we 
considered ferrosilicon pieces with a minimum dimension equal to or 
greater than one millimeter to be lumps and ferrosilicon pieces with a 
maximum dimension less than one millimeter to be fines. We did not 
consider any difference in sieve size ranges within the lump or fine 
categories in determining the most appropriate product comparison 
because significant price differences within the lump or fine sieve 
size category did not exist. Interested parties are requested to 
comment on these matching criteria in the case briefs submitted in this 
review.
    For those sales where CBCC did not report the actual silicon weight 
content because the chemical analysis certification documentation had 
been destroyed, we assumed that the silicon content was 75 percent 
because it was confirmed at verification that this merchandise was 
marketed and sold to the U.S. customer as ``75 percent ferrosilicon.''
    CBCC and Minasligas reported only one cost of manufacturing (COM) 
for all three grades of ferrosilicon produced and sold during the POR. 
Both companies stated that in the normal course of business, their 
books and records do not capture any cost differences for producing 
different grades of ferrosilicon. However, at verification, Minasligas 
was able to identify some cost differences associated with the 
production of high purity and low aluminum ferrosilicon. Where 
Minasligas' U.S. sales of high purity or low aluminum ferrosilicon were 
matched to home market sales of standard grade ferrosilicon, we 
calculated a difference in merchandise (DIFMER) adjustment between the 
products as follows: (1) We isolated the additional material, labor and 
variable overhead costs used in the production of high purity and low 
aluminum ferrosilicon; (2) we removed these costs from the variable 
cost of manufacturing (VCOM) reported for standard grade ferrosilicon; 
and (3) we added these costs to the VCOM reported for high purity and 
low aluminum ferrosilicon. The DIFMER was then calculated, where 
appropriate, to be the difference in the variable cost of manufacturing 
between the product sold to the U.S. and the product sold in the home 
market. (For a further discussion of the calculation of the DIFMER, see 
the ``Concurrence Memorandum'' dated April 1, 1997, on file in room B-
099 of the main Commerce building.)

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the URAA, H.R. 
Doc. No. 316, 103d Cong., 2d Sess at 870. (1994) (SAA), at 829-831, to 
the extent practicable, the Department will calculate NV based on sales 
at the same level of trade as the U.S. sale. When the Department is 
unable to find sale(s) in the comparison market at the same level of 
trade as the U.S. sale, the Department may compare sales in the U.S. to 
foreign market sales at a different level of trade. See Final 
Determination of Sales at Less than Fair Value; Certain Pasta from 
Italy, 61 FR 30326 (June 14, 1996).
    In order to determine whether there is a difference in level of 
trade, the Department must find that two sales have been made at 
different stages of marketing, or the equivalent. Different stages of 
marketing necessarily involve differences in selling functions, but 
differences in selling functions (even substantial ones) are not alone 
sufficient to establish a difference in the level of trade. Similarly, 
seller and customer descriptions (such as ``distributor'' and 
``wholesaler'') are useful in identifying different levels of trade, 
but are insufficient to establish that there is a difference in the 
level of trade. See Porcelain-on-Steel Cookware from Mexico: 
Preliminary Results of Antidumping Duty Administrative Review (61 FR 
36551 (January 31, 1997)).
    In implementing these principles in this review, we examined 
information regarding the selling activities of the producers/exporters 
associated with each stage of marketing, or the equivalent. In 
reviewing the selling functions reported by the respondents, we 
considered all types of selling activities, both claimed and unclaimed, 
that had been performed. In analyzing whether separate LOTs existed, we 
found that no single selling activity was sufficient to warrant a 
separate LOT (see Notice of Proposed Rulemaking and Request for Public 
Comments, 61 FR 7307, 7348 (February 27, 1996)). Pursuant to section 
773(a)(7)(B)(i) of the Act and the SAA at 827, in identifying levels of 
trade for EP and home market sales, we considered the selling functions 
reflected in the starting price of these transactions before any 
adjustments.

[[Page 16765]]

    In addition, we examined any claimed LOTs reported by each 
respondent in response to our initial and supplemental questionnaires. 
When examining claimed LOTs, we analyzed the selling activities 
associated with the classes of customers and marketing stages the 
respondents reported. In applying this analysis, we expect that, if 
claimed LOTs are the same, the functions and activities of the seller 
should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar. The Department not only examines 
the types of selling activities, but weighs the overall function 
performed for each claimed level of trade.
    In accordance with section 773(a)(7)(A) of the Act, in comparing 
U.S. sales to NV sales, the Department will adjust the NV to account 
for any difference in level of trade if two conditions are met. First, 
the sales must in fact be made at different levels of trade, which can 
exist only if there are differences between the actual selling 
functions performed by the seller at the level of trade of the U.S. 
sale and the level of trade of the NV sale. Second, there must be a 
difference in price comparability, as evidenced by a pattern of 
consistent price differences between sales at the different levels of 
trade in the market in which NV is determined.
    Based on our analysis of the selling functions performed by each 
respondent, we found that a single level of trade exists in each 
market. We then compared selling functions in the U.S. market and in 
the home market and found them to be similar. We find, therefore, that 
sales in the home market and in the U.S. market are at the same level 
of trade.

Fair Value Comparisons

    To determine whether sales of ferrosilicon by CBCC and Minasligas 
to the United States were made at less than fair value, we compared the 
export price (EP) to the normal value (NV), as described in the 
``Export Price'' and ``Normal Value'' sections of this notice. In 
accordance with section 777A(d)(2) of the Act, we compared the EP of 
individual transactions to the weighted-average NV of contemporaneous 
sales of the foreign like product.

Export Price

    For CBCC and Minasligas, we calculated EP, in accordance with 
subsections 772 (a) and (c) of the Act because the subject merchandise 
was sold directly to the first unaffiliated purchaser in the United 
States prior to importation and constructed export price was not 
otherwise warranted based on the facts of record.
    For both respondents, we calculated EP based on packed prices to 
the first unaffiliated customers in the United States. In accordance 
with section 772(c)(2)(A) of the Act, we made deductions, where 
appropriate, for freight expenses between the plant and the port, 
foreign brokerage and handling, warehousing expenses, ocean freight, 
and marine insurance expenses.
    The questionnaire instructs respondents to report all costs, 
charges or expenses incurred in bringing the subject merchandise from 
the original place of shipment in the exporting country to the 
unaffiliated customer's place of delivery. At verification we 
discovered that Minasligas had not reported marine insurance expenses 
incurred on U.S. sales made on a CIFFO basis, and that CBCC had not 
reported the chemical analysis and weight inspection fees incurred on 
U.S. sales. Section 776(a)(2) of the Act provides that if an interested 
party withholds information that has been requested by the Department, 
fails to provide such information in a timely manner or in the form or 
manner requested, significantly impedes a determination under the 
antidumping statute, or provides information which cannot be verified, 
the Department shall use facts available in reaching the applicable 
determination. Because CBCC and Minasligas failed to provide the data 
requested by the Department regarding marine insurance expenses and 
chemical analysis and weight inspection fees prior to verification, the 
Department is compelled to use facts available with regard to these 
expenses.
    Section 776(b) of the Act provides that adverse inferences may be 
used if the party has failed to cooperate by not acting to the best of 
its ability to comply with requests for information. See also the 
Statement of Administrative Action (SAA) at 870. Because CBCC and 
Minasligas failed to report marine insurance expenses and chemical 
analysis and weight inspection fees, despite the Department's request 
for such data, and because the respondents provided no explanation for 
the lack of data, each company has failed, to date, to cooperate to the 
best of its ability with respect to these expenses. Thus, the 
Department has determined that, in selecting among the facts otherwise 
available to apply to these unreported U.S. expenses, an adverse 
inference is warranted. Consequently, as facts otherwise available, we 
have assigned the highest marine insurance expense incurred on a U.S. 
sale during the POR to all of Minasligas' U.S. sales made on a CIFFO 
basis and the highest chemical analysis and weight inspection fees 
incurred on a U.S. sale to all of CBCC's U.S. sales.
    We made additional company specific adjustments as follows:

Minasligas

    We calculated Minasligas' EP based on FOB Brazilian port and 
CIFFO prices. We added the amount of marine insurance revenue which 
was collected by Minasligas with regard to one U.S. sale during the 
POR. We disallowed Minasligas' claim for duty drawback for mineral 
coal because it was determined at verification that import duties on 
mineral coal were suspended upon importation. Therefore, Minasligas 
does not receive any duty drawback when ferrosilicon is exported. 
Finally, we corrected the reported date of sale for two transactions 
to reflect the actual date of sale confirmed at verification.

CBCC

    We calculated CBCC's EP based on FOB Brazilian port prices. We 
disallowed CBCC's claim for interest revenue as an offset to the 
reported credit expenses and instead used the actual bank charges 
incurred on each U.S. sale as the cost of extending credit to the 
U.S. customer. (For a further discussion of this issue, see the 
``Normal Value'' section of this notice, below.)

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared each respondent's volume of home market sales of foreign 
like product to the volume of U.S. sales of the subject merchandise in 
accordance with section 773(a)(1)(C) of the Act. Since the aggregate 
volume of home market sales of the foreign like product was greater 
than five percent of the aggregate volume of U.S. sales of the subject 
merchandise, and there was no evidence indicating that a particular 
market situation in the exporting country did not permit a proper 
comparison, we determined that the home market was viable for CBCC and 
Minasligas. Therefore, in accordance with section 773(a)(1)(B)(i) of 
the Act, we based NV on the prices at which the foreign like products 
were first sold for consumption in the exporting country. We calculated 
NV as noted in the ``Price to Price Comparisons'' and ``Price to 
Constructed Value'' sections of this notice, below.

Cost of Production Analysis

    Because we disregarded sales below the cost of production (COP) in 
the last completed segment of the proceeding for CBCC and Minasligas 
(i.e., the LTFV investigation) we had reasonable grounds to believe or 
suspect that sales

[[Page 16766]]

of the foreign product under consideration for the determination of NV 
in this review may have been made at prices below the COP, as provided 
by section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated COP investigations of sales by CBCC 
and Minasligas in the home market. (See the Memorandum to the File from 
Laurel LaCivita, dated May 3, 1996, on file in room B-099 of the main 
Commerce building.)
    Before making any fair value comparisons, we conducted the COP 
analysis described below for CBCC and Minasligas.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of each respondent's cost of materials and 
fabrication employed in producing the foreign like product, plus 
amounts for selling, general and administrative expenses (SG&A) and 
packing costs. We relied on the COP amounts reported by CBCC and 
Minasligas except in the following specific instances where the 
reported costs were determined to be improperly valued:

CBCC

    1. We reallocated the reported labor and overhead expenses for 
July, 1995, through February 1996, based on the actual production 
capacity.
    2. We recalculated the cost of charcoal for all charcoal 
consumed in the production process using the purchased unit cost 
obtained at verification.
    3. We recalculated the reported factory overhead for January 
1996, to include depreciation expenses on idle assets.

Minasligas

    1. We reallocated the reported variable overhead cost based on 
the actual production tonnage rather than the number of furnaces 
used.
    2. We recalculated the reported weighted-average cost used to 
average monthly COP costs to correct an error discovered at 
verification.
    3. We adjusted the reported G&A expense to deduct reforestation 
maintenance costs which had been reported twice in the COP/CV 
response.
    4. We disallowed Minasligas' claim for negative interest 
expenses and instead, set the interest expense equal to zero.
B. Test of Home Market Prices
    We compared the adjusted weighted-average COP for each respondent 
to home market sales of the foreign like product as required under 
section 773(b) of the Act, in order to determine whether these sales 
had been made at prices below the COP within an extended period of time 
in substantial quantities, and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time. On 
a product-specific basis, we compared the COP to the reported home 
market prices less any applicable movement charges, taxes, rebates, 
commissions and other direct and indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of a 
respondent's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product were at prices less than the COP, we disregarded the 
below-cost sales because such sales were found to be made within an 
extended period of time in ``substantial quantities'' in accordance 
with sections 773(b)(2) (B) and (C) of the Act, and based on 
comparisons of price to weighted-average COPs for the POR we determined 
that the below-cost sales of the product were at prices which would not 
permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act. Where all 
contemporaneous sales of a specific product were at prices below the 
COP, we calculated NV based on CV, in accordance with section 773(a)(4) 
of the Act.
    We found that, for certain ferrosilicon products, CBCC and 
Minasligas made home market sales at below COP prices within an 
extended period of time in substantial quantities. Further, we found 
that these sales prices did not permit for the recovery of costs within 
a reasonable period of time. We therefore excluded these sales from our 
analysis in accordance with section 773(b)(1) of the Act.
D. Calculation of CV
    For those ferrosilicon products for which we could not determine 
the NV based on home market sales either because (1) There were no 
contemporaneous sales of a comparable product or (2) all 
contemporaneous sales of the comparison product failed the COP test, we 
compared export prices to CV. In accordance with section 773(e)(1) of 
the Act, we calculated CV based on the sum of the COM of the product 
sold in the United States, plus amounts for home market selling, 
general and administrative expenses (SG&A), home market profit and U.S. 
packing costs. We calculated each respondent's CV based on the 
methodology described in the ``Calculation of COP'' section of this 
notice, above. In accordance with section 773(e)(2)(A), we used the 
actual amounts incurred and realized by CBCC and Minasligas in 
connection with the production and sale of the foreign like product, in 
the ordinary course of trade, for consumption in the foreign country to 
calculate home market SG&A and profit. In accordance with section 
773(e) of the Act, we added to CV the amount of ICMS/IPI taxes incurred 
on purchases of raw material inputs for CBCC. For Minasligas, we added 
to CV the greater of either (1) the actual home market IPI/ICMS taxes 
paid on raw material inputs or (2) the amount of ICMS tax collected by 
the Brazilian government on export sales. (See Final Results of 
Administrative Review: Silicon Metal from Brazil, 62 FR 1970 1976 
(January 14, 1997)).

Price to Price Comparisons

    Where there were contemporaneous sales of the comparison product 
that passed the COP test, we based NV on home market prices. For each 
of the respondents, we made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. (For a discussion of the calculation of 
the DIFMER, see the ``Product Comparisons'' section of this notice, 
above.) In addition, we deducted home market packing costs and added 
U.S. packing costs in accordance with sections 773(a)(6) (A) and (B) of 
the Act.
    CBCC and Minasligas reported negative U.S. credit expenses (i.e., 
credit revenue) based on their claims that unique financing 
arrangements for export sales, called advance exchange contracts 
(ACCs)), allowed the respondents to receive payment for their U.S. 
sales prior to the date of shipment. At verification we determined that 
ACCs work as follows. A producer goes to a Brazilian bank that it has a 
line of credit with, and applies for an ACC. At this time, the producer 
must specify the product to be exported. The name of the export 
country, customer and the value of particular sales may be specified, 
but these variables are not fixed. On the date the ACC is signed by the 
bank, the producer receives the value of the ACC in Brazilian Reais. At 
a later date, the producer must present documentation to the bank 
proving that the money obtained under the ACC was used to produce 
merchandise for exportation (e.g., the commercial invoice, bill of 
lading, etc.). After receiving the merchandise, the U.S. customer pays 
the bank directly. Once the bank has received payment, the Brazilian 
bank

[[Page 16767]]

charges the producer bank fees equal to the interest charged for the 
number of days the ACC was outstanding (i.e., the number of days 
between the date the producer received the money under the ACC and the 
date the U.S. customer paid the bank).
    We have disallowed CBCC's and Minasligas' claimed credit revenue/
negative U.S. credit expenses for purposes of the preliminary results 
because we do not consider the ACCs to be directly related to the U.S. 
sales made during the POR. Evidence on the record indicating that the 
ACC was not directly linked with the U.S. sales in question is as 
follows: (1) The export country, customer, and value of the sale were 
not fixed on the date the ACC was signed; (2) ACCs were obtained prior 
to the U.S. date of sale for all of CBCC's U.S. sales and certain sales 
made by Minasligas. Therefore, the ACC did not pertain to a particular 
U.S. sale but instead pertained to future unspecified shipments; (3) 
the amount borrowed under certain ACCs did not correspond exactly with 
the value of the U.S. sale which was later shipped; (4) in certain 
instances, more than one ACC was used to finance a single U.S. 
transaction; and (5) certain ACCs were used to finance more than one 
U.S. export. (For a further discussion of ACCs, see the ``Concurrence 
Memorandum'' dated April 1, 1997, on file in room B-099 of the main 
Commerce building.)
    In accordance with section 773(a)(6)(C) of the Act, the Department 
makes circumstance of sale (COS) adjustments to NV in order to account 
for the difference in credit terms between U.S. and home market sales. 
Because CBCC and Minasligas receive financing for their export sales 
prior to the date of shipment and the U.S. customer pays the Brazilian 
bank directly, the respondents do not forego payment from the U.S. 
customer but instead pay bank charges on U.S. sales. These bank charges 
represent the interest expense incurred between the date the respondent 
received an advance under an ACC and the date the U.S. customer paid 
the bank. For purposes of calculating U.S. credit expenses, we have 
used the actual bank charges incurred on each U.S. sale as the cost of 
extending credit to the customer. (See the CBCC and Minasligas 
``Verification Reports'' dated March 19, 1997, on file in room B-099 of 
the main Commerce building.)
    Pursuant to section 773(a)(6) of the Act, we made deductions, where 
appropriate, from the starting price for rebates, inland freight and 
IPI taxes. With respect to ICMS taxes for Minasligas, we deducted the 
difference between the ICMS tax incurred on the home market sale and 
the claimed ICMS tax on the U.S. sale. For CBCC, we deducted the 
reported ICMS tax. We made circumstance of sale adjustments to NV for 
direct expenses, where appropriate, in accordance with section 
773(a)(6)(C)(iii) of the Act. In doing so, we deducted home market 
credit expenses and, where appropriate, added U.S. credit expenses, 
U.S. chemical analysis and weight inspection fees, and U.S. port 
charges. Neither CBCC nor Minasligas had any short-term borrowings 
during the POR. Therefore, we calculated credit expenses for all home 
market sales using the average ``taxa referential'' rate offered on 
short-term transactions during the POR by the Central Bank of Brazil. 
In addition, for sales made on a consignment basis, we recalculated the 
credit period to include the number of days between the date the 
consignee was invoiced for the merchandise it consumed and the date the 
respondent received payment from the home market customer. In addition, 
we considered the date of sale for consignment sales to be the date 
that the respondent invoiced the customer for the merchandise the 
consignee notified the respondent it had consumed.
    We made company-specific-adjustments for price-to-price comparisons 
as follows:
CBCC
    We calculated NV based on packed, FOB plant and CIF prices to 
unaffiliated customers. We added the amount of interest revenue 
actually collected on home market sales in instances where the customer 
paid late. Section 773(a)(1)(B) of the Act directs that we calculate NV 
on the basis of the price at which the ``foreign like product is first 
sold.'' Foreign like product, in turn, is defined by section 771(16) of 
the Act as merchandise that is produced in the same country and by the 
same person as the merchandise which is the subject of the 
investigation. Therefore, because CBCC sold only self-produced 
merchandise to the United States, the statute prohibits using sales of 
merchandise produced by persons other than CBCC in the calculation of 
normal value. Accordingly, we excluded from the calculation of NV all 
re-sales of merchandise which was not produced by CBCC.
    In addition, we excluded all sales reported in the home market 
database which were determined to be either cancelled or reported twice 
in the sales listing. We did not deduct reported IPI taxes for four 
home market customers because it was determined at verification that 
the ferrosilicon these customers purchased was used to produce 
merchandise for exportation. Therefore, these customers were exempt 
from paying IPI taxes during the POR. Finally, we calculated a packing 
cost for one sale where no packing cost was reported because the sale 
was actually packed in bags.
    We adjusted for commissions as follows: Where commissions were paid 
on some, but not all, home market sales used to calculate NV, and no 
commissions were paid on a U.S. sale used to calculate export price, we 
deducted the home market commission from NV and added to NV the lesser 
of either (1) The indirect selling expenses incurred on the U.S. sale 
or (2) the weighted-average amount of the commissions paid on the home 
market sales. We recalculated U.S. inventory carrying costs as follows: 
(1) The credit period was recalculated using the number of days in 
inventory at the plant confirmed at verification; and (2) because CBCC 
had no short-term borrowings during the POR, we calculated U.S. 
inventory carrying costs using the average ``taxa referential'' rate 
offered on short-term transactions by the Central Bank of Brazil. (See 
the ``Concurrence Memorandum'' dated April 1, 1997, and the 
verification report dated March 19, 1997 on file in room B-099 of the 
main commerce building.)
Minasligas
    We calculated NV based on packed, FOB plant and CIF prices to 
unaffiliated customers. For those home market shipments which 
Minasligas claimed were made pursuant to long-term contracts, we based 
the date of sale on the invoice date because, based on information 
gathered at verification, we did not find the essential terms of sale 
(i.e., price and quantity) to be fixed on the date of contract. 
Specifically, we noted that the prices and quantities were frequently 
modified after the date of the contract, there were no penalties 
imposed by Minasligas in instances where the customer did not purchase 
the quantity specified in the contract, and the shipping schedules 
specified by the customer were frequently changed and/or not met. (For 
a further discussion of Minasligas' long-term contracts, see the 
``Concurrence Memorandum'' dated April 1, 1997, on file in room B-099 
of the main Commerce building.) We corrected the reported payment date 
for one transaction to reflect the actual payment date confirmed at 
verification.

Price to Constructed Value Comparisons

    Where we compared export prices to CV, we deducted from CV the 
weighted-average home market direct selling

[[Page 16768]]

expenses and added the product specific U.S. direct selling expenses in 
accordance with sections 773(a)(8) and 773(a)(6)(iii) of the Act.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank of New York. 
Section 773A(a) of the Act directs the Department to use a daily 
exchange rate in order to convert foreign currencies into U.S. dollars, 
unless the daily rate involves a ``fluctuation.'' In accordance with 
the Department's practice, we have determined that a fluctuation exists 
when the daily exchange rate differs from a benchmark by 2.25 percent. 
The benchmark is defined as the rolling average of rates for the past 
40 business days. When we determine that a fluctuation exists, we 
substitute the benchmark for the daily rate.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margins exist for the period March 
1, 1995 through February 29, 1996:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
CBCC.........................................................       2.27
Minasligas...................................................       7.98
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of the date of publication. Any 
hearing, if requested, will be held 44 days after the publication of 
this notice, or the first workday thereafter. Interested parties are 
invited to comment on the preliminary results. Parties who submit 
arguments in this proceeding are requested to submit with each 
argument: (1) A statement of the issue: and (2) a brief summary of the 
argument. All case briefs must be submitted within 30 days of the date 
of publication of this notice. Rebuttal briefs, which are limited to 
issues raised in the case briefs, may be filed not later than 37 days 
after the date of publication. The Department will publish a notice of 
the final results of this administrative review, which will include the 
results of its analysis of issues raised in any such written comments 
within 120 days from the publication of these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between EP and NV may vary from the percentages stated 
above. Upon completion of this review, the Department will issue 
appraisement instructions directly to the Customs Service. The final 
results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties. For duty 
assessment purposes, we calculated an importer-specific assessment rate 
by aggregating the dumping margins calculated for all U.S. sales to 
each importer and dividing this amount by the total quantity of subject 
merchandise sold to each of the respective importers. This specific 
rate calculated for each importer will be used for the assessment of 
antidumping duties on the relevant entries of subject merchandise 
during the POR.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of ferrosilicon from Brazil entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for CBCC and Minasligas 
will be the rates established in the final results of administrative 
review, except if the rate is less than 0.5 percent, ad valorem and, 
therefore, de minimis within the meaning of 19 CFR 353.6, the cash 
deposit rate will be zero; (2) for merchandise exported by 
manufacturers or exporters not covered in this review but covered in 
the original less than fair value (LTFV) investigation or a previous 
review, the cash deposit rate will continue to be the company-specific 
rate published in the most recent period; (3) if the exporter is not a 
firm covered in this review, a previous review, or the 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 reviews, the cash deposit 
rate will be 35.95 percent, the ``All Others'' rate made effective by 
the antidumping duty order (59 FR 11769, March 14, 1994). These 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a preliminary 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 administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: April 1, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-8956 Filed 4-7-97; 8:45 am]
BILLING CODE 3510-DS-P