[Federal Register Volume 63, Number 11 (Friday, January 16, 1998)]
[Notices]
[Pages 2661-2664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1157]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-351-820]


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

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to timely requests for administrative review, the 
Department of Commerce has conducted an administrative review of the 
antidumping duty order on ferrosilicon from Brazil. Because we 
determined that Companhia Brasileria Carbureto de Calcio had no 
shipment of the subject merchandise, we are terminating this review 
with regard to that firm. This notice of preliminary results covers one 
manufacturer/exporter, Companhia de Ferro Ligas da Bahia, for the 
period March 1, 1996, through February 28, 1997. The review indicates 
that there was no dumping margin during this period. If these 
preliminary results are adopted for purposes of the final results of 
our administrative review, we will instruct the Customs Service to 
assess antidumping duties of zero on entries during the period of 
review. Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the arguments (1) a statement of the issues, and (2) a 
brief summary of each argument.

EFFECTIVE DATE: January 16, 1998.

FOR FURTHER INFORMATION CONTACT: Wendy Frankel 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) 
482-5849 or (202) 482-4851, respectively.

SUPPLEMENTAL INFORMATION:

The Applicable Statute and Regulations

    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). In addition, unless otherwise 
indicated, all references to the Department of Commerce's (the 
Department's) regulations are to the regulations as codified at 19 CFR 
Part 353 (1997). Where appropriate, we have cited the Department's new 
regulations, codified at 19 CFR Part 351 (62 FR 27296, May 19, 1997). 
While not binding on this review, the new regulations serve as a 
restatement of the Department's policies.

Background

    On March 7, 1997 (62 FR 10521), 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, 1996, through February 28, 1997. In 
accordance with 19 CFR 353.22(a)(2), in March 1997, Companhia de Ferro 
Ligas da Bahia (Ferbasa), Companhia Brasileira Carbureto De Calcio 
(CBCC), and Companhia Ferroligas Minas Gerais (Minasligas) requested 
that the Department conduct an administrative review of their 
respective shipments of ferrosilicon to the United States during this 
period. On April 24, 1997, the Department published a notice of 
initiation of administrative review (62 FR 19988). The Department is 
now conducting this administrative review in accordance with section 
751 of the Act.
    On May 14, 1997, the Department issued an antidumping duty 
questionnaire to Ferbasa, CBCC, and Minasligas. On June 20, 1997, CBCC 
submitted a letter to the Department stating that it had no shipments 
or sales of the subject merchandise to the United States during the 
period of review (POR). On June 25, 1997, we requested the Customs 
Service (Customs) to confirm that CBCC had no shipments of the subject 
merchandise during the POR. On June 27, 1997, Customs did so. 
Therefore, because we determined that CBCC had no shipments of the 
subject merchandise during the POR, we are terminating this review with 
respect to CBCC. Further, on July 7, 1997, Minasligas requested that it 
be allowed to withdraw its request for review and that the review be 
terminated pursuant to 19 CFR 353.22(a)(5). On July 29, 1997, the 
Department published a partial termination notice of the administrative 
review on ferrosilicon from Brazil with respect to Minasligas. (See 
Ferrosilicon From Brazil: Partial Termination of Antidumping Duty 
Administrative Review (62 FR 40501) (July 29, 1997).)
    Ferbasa submitted its response to the questionnaire on July 11, 
1997. The Department issued supplemental questionnaires on August 13, 
1997, and October 14, 1997. We received Ferbasa's

[[Page 2662]]

responses to the supplemental questionnaires on September 2, 1997, and 
October 24, 1997, respectively. 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 September 15, 1997, the 
Department published an extension of the time limits for the 
preliminary results. (See Ferrosilicon from Brazil: Extension of Time 
Limits of Antidumping Duty Administrative Review, (62 FR 48218).)

Verification

    In accordance with section 782(i) of the Act, we verified the sales 
and cost questionnaire responses of Ferbasa from November 3, 1997 to 
November 11, 1997. We conducted verification of home market and U.S. 
sales information provided by Ferbasa using standard verification 
procedures, including on-site inspection of the company's sales and 
production facility, the examination of relevant sales and financial 
records, and original documentation containing relevant information.

Scope of Review

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

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Ferbasa, 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 the U.S. sale. During the month of 
the U.S. sale, Ferbasa had home market sales of identical merchandise; 
therefore, pursuant to section 771(16) of the Act we used those sales 
for comparison purposes and made no adjustments for differences in 
merchandise.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value (NV) based on sales in the 
comparison market at the same level of trade (LOT) as the export price 
(EP) or constructed export price (CEP) transaction. The NV LOT is that 
of the starting-price sales in the comparison market or, when NV is 
based on constructed value (CV), that of the sales from which we derive 
selling, general and administrative (SG&A) expenses and profit. For EP, 
the U.S. LOT is also the level of the starting-price sale, which is 
usually from exporter to importer. For CEP, it is the level of the 
constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information from Ferbasa regarding the marketing stages involved in the 
reported home market and U.S. sales, including a description of the 
selling activities performed by Ferbasa for each channel of 
distribution. Pursuant to section 773(a)(1)(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 prices 
before any adjustments. Ferbasa made only one U.S. sale during the 
period of review, which was to an unaffiliated reseller in the U.S. 
market. It made sales to unaffiliated resellers and to steel producers 
in the home market. The selling functions for the U.S. sale and for all 
home market sales are almost identical. The selling functions include 
invoicing, order acknowledgment, order processing, quality control, 
marketing, and price negotiation. With regard to the U.S. sale, Ferbasa 
also incurred freight expenses for movement of the subject merchandise 
from the factory to the port of embarkation. This does not represent a 
significant difference in selling functions. Thus, based on our 
analysis of the selling functions performed by Ferbasa, we conclude 
that a single level of trade exists in each market and that home market 
sales and the U.S. sale were all made at the same level of trade. 
Therefore, we have not made a level of trade adjustment because the 
price comparison is at the same level of trade and an adjustment 
pursuant to section

[[Page 2663]]

773(a)(7)(A) of the Act is not appropriate.

Export Price

    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. We calculated EP based on the packed FOB prices to Ferbasa's 
unaffiliated customer in the United States. In accordance with section 
772(c)(2)(A) of the Act, we made deductions, where appropriate, for 
foreign inland freight from the plant to the port and for brokerage and 
handling, because these expenses were incident to bringing the subject 
merchandise from the original place of shipment in the exporting 
country to the place of delivery. No other adjustments to EP were 
claimed or allowed.

Normal Value

Viability
    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 Ferbasa'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)(ii) 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, we determined that the home market was viable for 
Ferbasa. 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'' section of this notice, 
below.

Cost of Production (COP) Analysis

    Because we disregarded sales below the COP in the last completed 
segment of the proceeding for Ferbasa (i.e., Ferrosilicon from Brazil; 
Final Results of Administrative Review (61 FR 59407) (November 22, 
1996)), we had reasonable grounds to believe or suspect that sales 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 a COP investigation of sales by 
Ferbasa in the home market.

1. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of Ferbasa's cost of materials and fabrication 
employed in producing the foreign like product, plus amounts for 
general and administrative expenses (G&A). We adjusted Ferbasa's 
reported costs to calculate the cost of manufacturing for the months 
corresponding to the company's sales reporting period. We further 
adjusted Ferbasa's reported net interest expense calculations to 
account for certain items of income or expense that were improperly 
excluded or included in the company's calculation.

2. Net Home Market Prices for Comparison to COP

    We calculated net price by reducing the gross unit price by amounts 
for IPI and ICMS taxes, indirect selling expenses, home market packing 
expenses, direct selling expenses, and billing adjustments. We also 
made upward adjustments to the home market prices for interest revenue 
and packing revenue earned by Ferbasa. We adjusted Ferbasa's reported 
home market packing costs for errors found at verification.

3. Test of Home Market Prices

    We used Ferbasa's weighted-average COP, as adjusted (see above), 
for the period September 1996, through February 1997. We compared the 
weighted-average COP figure to the net home-market sales prices (see 
above) of the foreign like product as required under section 773(b) of 
the Act. In determining whether to disregard home market sales made at 
prices below the COP, we examined whether (1) within an extended period 
of time, such sales were made in substantial quantities, and (2) such 
sales were made at prices which permitted the recovery of all costs 
within a reasonable period of time. On a product-specific basis, we 
compared the COP to the home market prices (which did not include value 
added taxes) (VAT) less any applicable movement charges, discounts, and 
rebates. Since the COP did not contain VAT, for purposes of our sales-
below-cost analysis, we used home market prices which were exclusive of 
VAT.

4. Results of the COP Test

    In accordance with section 773(b)(2)(C), where less than 20 percent 
of Ferbasa's sales of ferrosilicon were at prices below 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 Ferbasa's sales during the 
POR were at prices less than the COP, we determined such sales to have 
been made in ``substantial quantities'' within an extended period of 
time in accordance with section 773(b)(2)(B) of the Act, and not at 
prices which would permit recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act. 
Therefore, we disregarded such below-cost sales of Ferbasa.

Fair Value Comparisons

    To determine whether sales of ferrosilicon by Ferbasa to the United 
States were made at less than fair value, we compared the EP to the 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 
calculated a monthly weighted-average price for NV and compared this to 
the U.S. transaction.

Price to Price Comparisons

    We based NV on the price at which the foreign like product was 
first sold for consumption in the exporting country, in the usual 
commercial quantities and in the ordinary course of trade, and at the 
same level of trade as the export price, as defined by section 
773(a)(1)(B)(i) of the Act. We increased NV by U.S. packing costs in 
accordance with section 773(a)(6)(A) and reduced it by home market 
packing costs and ICMS and IPI taxes in accordance with 773(a)(6)(B) 
(i) and (iii) of the Act. We adjusted Ferbasa's reported U.S. and home 
market packing costs to correct for errors found at verification. In 
addition, we increased NV for packing revenue and interest revenue 
earned by Ferbasa and decreased NV for billing adjustments reported by 
Ferbasa. We made a circumstance of sale adjustment for credit expenses 
under 773(a)(6)(C)(iii). Further, in accordance with 19 CFR 
353.56(a)(2), we made an offset to NV for U.S. commissions. No other 
adjustments to NV were claimed or allowed.

Currency Conversion

    We made currency conversions in accordance with section 773(A) of 
the Act. Currency conversions were made based on the rates certified by 
the Federal Reserve Bank. Section 773(A) directs the Department to use 
a daily exchange rate to convert foreign currencies into U.S. dollars 
unless the daily rate involves a ``fluctuation.'' It is our practice to 
find that a fluctuation exists when the daily exchange rate differs 
from a benchmark rate by 2.25 percent. See Preliminary Results of 
Antidumping Duty Administrative Review: Certain Welded Carbon Steel

[[Page 2664]]

Pipe and Tube from Turkey (61 FR 35188, 35192) (July 5, 1996). The 
benchmark rate is defined as the rolling average of the rates for the 
past 40 business days.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margin for Ferbasa is zero percent for the 
period March 1, 1996, through February 28, 1997.
    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 Customs shall assess, 
antidumping duties on all appropriate entries. Upon completion of this 
review, the Department will issue appraisement instructions directly to 
Customs. 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, because this review covers only one importer, we 
will divide the total dumping margin (calculated as the difference 
between NV and EP) by the total number of metric tons imported. We will 
direct Customs to assess the resulting per-metric ton dollar amount 
against each metric ton of subject merchandise entered by the importer 
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 Ferbasa 
will be the rate established in the final results of this 
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; (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) and; (5) 
consistent with our practice in previous reviews of this order, for 
those companies that did not have shipments of the subject merchandise 
during the POR but which had previously been reviewed or investigated, 
their cash deposit rate will continue to be the company-specific rate 
published for the most recently reviewed period. 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: January 12, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-1157 Filed 1-15-98; 8:45 am]
BILLIGN CODE 3510-DS-P