Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices 21325

1The meaning of this term is the same as that

used by the American Society for Testing and

Materials in its Annual Book of ASTM Standards:

Volume 01.02 Aluminum and Magnesium Alloys.

Dated: April 23, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import

Administration.

[FR Doc. 01–10685 Filed 4–27–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–508–809]

Notice of Preliminary Determination of

Sales at Less Than Fair Value: Pure

Magnesium from Israel

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 30, 2001.

FOR FURTHER INFORMATION CONTACT:

Craig Matney or Andrew Covington,

Office 1, AD/CVD Enforcement, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW., Washington, DC 20230;

telephone: (202) 482–1778, or (202)

482–3534, respectively.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department of Commerce’s (the

Department’s) regulations refer to the

regulations codified at 19 CFR Part 351

(April 2000).

Preliminary Determination

We preliminarily determine that pure

magnesium from Israel is being sold, or

is likely to be sold, in the United States

at less than fair value (LTFV), as

provided in section 733 of the Act. The

estimated margins are shown in the

Suspension of Liquidation section of

this notice.

Case History

Since the publication of the notice of

initiation of this investigation in the

Federal Register (see Initiation of

Antidumping Duty Investigations: Pure

Magnesium from Israel, the Russian

Federation, and the People’s Republic of

China, 65 FR 68121 (November 14,

2000) (Initiation Notice)), the following

events have occurred:

On December 1, 2000, the United

States International Trade Commission

(ITC) preliminarily determined that

there is a reasonable indication that

imports of pure magnesium from Israel

are materially injuring the United States

industry. See 65 FR 77910 (December

13, 2000). On December 4, 2000, the

Department requested comments from

interested parties regarding the criteria

to be used for model matching purposes.

The parties submitted comments on our

proposed model matching criteria on

December 8, 2000. On December 12,

2000, the Department issued an

antidumping questionnaire to Dead Sea

Magnesium (DSM).

DSM submitted its initial responses to

the questionnaire on January 25 and

February 1, 2001. The petitioners in this

case (i.e., the Magnesium Corporation of

America (Magcorp) and the United Steel

Workers of America, Locals 482 and

8319) filed comments on the

questionnaire responses on February 12,

2001. After analyzing the initial

responses and the petitioners’

comments, we issued a supplemental

questionnaire to DSM on February 22,

2001. We received DSM’s response to

this supplemental questionnaire on

March 15, 2001.

On February 8, 2001, the petitioners

requested that the Department initiate

an investigation of sales below the cost

of production (COP) for DSM. On

February 20, 2001, based on our review

of the petitioners’ below cost allegation,

we initiated a cost investigation for

DSM and requested that DSM respond

to Section D of the antidumping

questionnaire concerning COP and

constructed value (CV) (see

Memorandum dated February 20, 2001,

to Senior Office Director Susan

Kuhbach, which is on file in Import

Administration’s Central Records Unit

(Cost Initiation Memo)). DSM filed its

Section D response on March 21, 2001.

On April 2, 2001, we issued a Section

D supplemental questionnaire to DSM.

DSM submitted supplemental section D

information on April 10 and 16, 2001.

On March 1, 2001, the petitioners

made a timely request for a

postponement of the preliminary

determination pursuant to section

733(c)(1)(A) of the Act. On March 6,

2001, the Department postponed the

preliminary determination until no later

than April 23, 2001 (see Notice of

Postponement of Preliminary

Determinations of Sales at Less Than

Fair Value: Pure Magnesium From

Israel, the Russian Federation, and the

People’s Republic of China and

Alignment of Final Countervailing Duty

Determination With Final Antidumping

Duty Determinations: Pure Magnesium

From Israel, 66 FR 14546 (March 13,

2001) (Postponement Notice)).

Scope of the Investigation

The scope of this investigation

includes imports of pure magnesium

products, regardless of chemistry, form,

or size, including, without limitation,

ingots, raspings, granules, turnings,

chips, powder, and briquettes.

Pure magnesium includes: (1)

Products that contain at least 99.95

percent primary magnesium, by weight

(generally referred to as ‘‘ultra-pure’’

magnesium); (2) products that contain

less than 99.95 percent but not less than

99.8 percent pure magnesium, by weight

(generally referred to as ‘‘pure’’

magnesium); and (3) chemical

combinations of pure magnesium and

other material(s) in which the pure

magnesium content is 50 percent or

greater, but less than 99.8 percent, by

weight, that do not conform to an

‘‘ASTM Specification for Magnesium

Alloy’’ 1 (generally referred to as ‘‘offspecification pure’’ magnesium); and (4)

physical mixtures of pure magnesium

and other material(s) in which the pure

magnesium content is 50 percent or

greater, but less than 99.8 percent, by

weight, except that mixtures containing

90 percent or less pure magnesium, by

weight, when mixed with lime, calcium

metal, calcium silicon, calcium carbide,

calcium carbonate, carbon slag

coagulants, and/or fluorspar, are

excluded.

The merchandise subject to this

investigation is classifiable under

8104.11.00, 8104.19.00, and 8104.30.00

of the Harmonized Tariff Schedule of

the United States (HTSUS). Although

the HTSUS subheading is provided for

convenience and customs purposes, the

written description of the merchandise

under investigation is dispositive.

Comments on Scope

In accordance with our regulations,

we set aside a period of time for parties

to raise issues regarding product

coverage and encouraged all parties to

submit such comments within 20

calendar days of publication of the

Initiation Notice (see 65 FR at 68123).

On December 1, 2000, the petitioners

requested that the Department clarify

that the scope of this investigation

excludes finished mixtures containing

pure magnesium and/or offspecification pure magnesium prepared

solely for use as a desulfurizer in steelmaking, unless such mixtures contain

only minimal amounts of nonmagnesium materials in order to

circumvent an antidumping order. On

21326 Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices

December 4, 2000, an interested party in

this investigation, ESM, submitted a

letter supporting the petitioners’

position that magnesium-based reagents

should not be included in the scope of

the Department’s investigation. On

January 30, 2001, the petitioners

submitted proposed language to further

clarify their intent with respect to the

scope of this investigation. Based on

this submission, we have revised the

scope to exclude reagent magnesium.

In its December 4, 2000, submission,

ESM also argued that pure magnesium

ingot and granular magnesium

constitute separate classes or kinds of

merchandise and that the Department

should exclude granular magnesium

from the scope of the investigation.

While ESM claimed that magnesium

ingot and granular magnesium

constitute separate classes or kinds of

merchandise, it did not address the

criteria for determining separate classes

or kinds as set forth in 19 CFR

351.225(k) (i.e., the physical

characteristics of the products, the

expectations of the ultimate purchasers,

the ultimate use of the product, the

channels of trade in which the product

is sold, and the manner in which the

product is advertised or displayed).

Instead, ESM addressed the criteria

relating to designation of like products.

The Department determined prior to

initiating this investigation that ingot

and granular magnesium are a single

like product (see Initiation Notice 65 FR

at 68122 and Memorandum from the

team to Richard W. Moreland, Deputy

Assistant Secretary, Office of AD/CVD

Enforcement, Group I entitled ‘‘Like

Product and Industry Support

Determinations in the Antidumping

Duty Investigations of Pure Magnesium

from Israel, the People’s Republic of

China, and the Russian Federation and

the Countervailing Duty Investigation of

Pure Magnesium from Israel,’’ dated

November 6, 2000 (Like Product/

Industry Support Memo).

On April 10, 2001, Rossborough

Manufacturing Co., L.P., requested that

the Department amend the scope of this

investigation to exclude certain

additional reagent mixtures and imports

of granular magnesium used for making

reagent mixtures. Rossborough’s

submission was filed too late to be given

proper consideration for purposes of the

preliminary determination, but we will

consider these issues for the final

determination.

Period of Investigation

The period of investigation (POI) is

October 1, 1999, through September 30,

2000. This period corresponds to the

respondent’s four most recently

completed fiscal quarters prior to the

filing of the petition (see 19 CFR

351.204(b)).

Normal Value

A. Selection of Comparison Market

Pursuant to section 771(16) of the Act,

all products produced and sold by the

respondents in the comparison market

that fit the definition contained in the

Scope of the Investigation section of this

notice and were sold during the POI

comprise the foreign like product. In

accordance with section 773(a)(1)(C)(ii)

of the Act, in order to determine

whether there was a sufficient volume

of sales in the home market to serve as

a viable basis for calculating normal

value (NV), we compared the

respondent’s volume of home market

sales of the foreign like product to the

volume of its U.S. sales of the subject

merchandise.

DSM reported that its home market

sales of pure magnesium during the POI

were less than 5 percent of its sales of

pure magnesium in the United States.

Therefore, DSM did not have a viable

home market for purposes of calculating

normal value. However, DSM reported

that Germany was its largest viable third

country market and, therefore, DSM

reported its sales to Germany for

purposes of calculating normal value.

Because all of DSM’s German sales

failed the cost test, we have disregarded

all comparison market sales (see the

Results of the COP Test section below).

Accordingly, we compared the

merchandise sold in the United States to

CV, in accordance with section 773(a)(4)

of the Act.

B. Cost of Production Analysis

Based on a timely cost allegation, and

in accordance with section

773(b)(2)(A)(i) of the Act, we found

reasonable grounds to believe or suspect

that DSM’s pure magnesium sales made

in Germany were made at prices below

COP (see Cost Initiation Memo). As a

result, the Department has conducted an

investigation to determine whether the

respondent made sales in its

comparison market at prices below the

COP during the POI within the meaning

of section 773(b) of the Act. We

conducted the COP analysis described

below.

1. Calculation of COP

In accordance with section 773(b)(3)

of the Act, we calculated a weightedaverage COP for pure magnesium, based

on the sum of the cost of materials and

fabrication (COM) for the foreign like

product, plus amounts for interest

expenses, general and administrative

expenses (G&A) and packing costs. We

adjusted DSM’s reported COM data by

treating certain joint products as byproducts rather than as co-products.

This required the reallocation of

manufacturing costs. We also

recalculated DSM’s reported interest

and G&A expenses based on this revised

COM. See April 23, 2001 memorandum

to Neal Halper regarding adjustments to

the COP and CV.

2. Test of Comparison Market Sales

Prices

We compared the adjusted, weightedaverage, COP for DSM to its prices for

German market sales of the foreign like

product. The prices were exclusive of

billing adjustments, movement

expenses, commissions, and other direct

and indirect selling expenses. This is in

accordance with 773(b) of the Act, and

was done to determine whether these

sales had been made at prices below the

COP within an extended period of time

(i.e., a period of one year) in substantial

quantities and whether such prices were

sufficient to permit the recovery of all

costs within a reasonable period of time.

3. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the

Act, where less than 20 percent of a

respondent’s sales of a given product

were at prices less than the COP, we do

not disregard any below-cost sales of

that product because we determine 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 during the POI were

at prices less than the COP, we

determine such sales to have been made

in substantial quantities within an

extended period of time. See also

section 773(b)(2)(B) of the Act. The

Department next compares prices from

the comparison market to the POI

average COP in order to determine

whether such sales were made at prices

which would permit recovery of all

costs within a reasonable period of time.

See section 773(b)(2)(D) of the Act.

We found that all of DSM’s

comparison market sales were made

within an extended period of time at

prices less than the COP. In addition,

the prices did not provide for the

recovery of costs within a reasonable

period of time. Therefore, because there

were no comparable comparison market

sales in the ordinary course of trade, we

compared EP/CEP to CV in accordance

with section 773(a)(4) of the Act. See the

section on Calculation of Normal Value

Based on Constructed Value below.

Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices 21327

C. Calculation of Normal Value Based

on Comparison Market Prices

Because all of DSM’s sales of

comparable merchandise in the

comparison market failed the cost test,

we did not calculate NV based on

comparison market prices.

D. Calculation of Normal Value Based

on Constructed Value

Section 773(a)(4) of the Act provides

that where normal value cannot be

based on comparison market sales,

normal value may be based on the

constructed value. Accordingly, because

all sales of comparison products failed

the COP test, we based NV on CV.

Sections 773(e)(1) and (e)(2)(A) of the

Act provide that the CV shall be based

on the sum of the cost of materials and

fabrication for the foreign like product,

plus amounts for selling expenses, G&A,

profit, and U.S. packing costs. We

calculated the cost of materials and

fabrication based on the methodology

described in the Calculation of COP

section, above.

Because DSM does not have any

above cost comparison market sales of

subject merchandise, the Department

has not determined selling expenses,

G&A expenses, and profit under section

773(e)(2)(A) of the Act, which requires

sales by the respondent in question in

the ordinary course of trade in a

comparison market. In situations where

we cannot calculate selling expenses,

G&A expenses, and profit under section

773(e)(2)(A), section 773(e)(2)(B) of the

Act sets forth three alternatives. The

Statement of Administrative Action at

840 (H.R. Doc. 103–316 (1994)) states

that ‘‘section 773(e)(2)(B) does not

establish a hierarchy or preference

among these alternative methods.’’

Section 773(e)(2)(B)(i) specifies that

selling expenses, G&A expenses, and

profit may be calculated based on

‘‘actual amounts incurred by the

specific exporter or producer * * * on

merchandise in the same general

category’’ as subject merchandise. DSM

also produces alloy magnesium, which

could be considered as the same general

category of merchandise as pure

magnesium. However, there is

insufficient information on the record

for us to determine the selling and G&A

expenses or the profit rate for DSM’s

sales of alloy magnesium.

Alternative (ii) of this section

provides that selling expenses, G&A

expenses, and profit may be calculated

based on ‘‘the weighted average of the

actual amounts incurred and realized by

{other} exporters or producers that are

subject to the investigation.’’ However,

because there are no other respondents

in this case, the Department cannot

calculate selling expenses, G&A

expenses, and profit based on

alternative (ii) of this section.

Therefore, the only statutory option

available to the Department to calculate

the CV selling expenses, G&A expenses,

and profit for DSM is under section

773(e)(2)(B)(iii). Alternative (iii) of this

section allows the Department to use

‘‘any other reasonable method’’ to

calculate the CV selling expenses, G&A

expenses, and profit, provided that the

amount for profit does not ‘‘exceed the

amount normally realized by exporters

or producers * * * in connection with

the sale, for consumption in the foreign

country, of merchandise that is in the

same general category of products as the

subject merchandise.’’

With respect to selling expenses,

lacking more suitable information, we

calculated CV selling expenses based on

DSM’s reported comparison market

sales. We calculated G&A based on

DSM’s reported information as applied

to a revised COM (see the Calculation of

COP section, above), as we have no

reason to believe DSM’s reported G&A

expenses are unreliable as a result of all

of its comparison market sales being

made at prices below the cost of

production.

We calculated amounts for the CV

profit based on the profit earned by

Dead Sea Periclase (DSP). DSP produces

periclase (i.e., magnesium oxide) and

other magnesium-based compounds.

These magnesium-based products, like

subject merchandise, are manufactured

from the Dead Sea brine. Periclase is

primarily used to manufacture

refractories and other flame retardant

materials. The other magnesium-based

compounds are used in

pharmaceuticals, food mineral

supplements, rubbers, plastics, and to

produce specialty steel for transformers.

Because we do not have any further

information regarding profit on the same

general category of merchandise, we

have not been able to quantify the

‘‘profit cap’’ described in section

773(e)(2)(B)(iii) of the Act. The SAA, at

841, anticipates such situations and

directs that where the Department

cannot calculate a profit cap, the

Department may apply 773(e)(2)(B)(iii)

of the Act on the basis of the facts

available. Therefore, we have not

calculated a ‘‘profit cap’’ for the instant

determination. As facts available, we

have used DSP’s profit rate of 3.12

percent in calculating CV as a

reasonable surrogate for DSM’s home

market profit.

In addition, we added U.S. packing

costs. Lastly, we made adjustments to

CV for differences in circumstances of

sale (COS) (i.e., imputed credit) in

accordance with section 773(a)(6)(C)(iii)

of the Act and 19 CFR 351.410. We

made COS adjustments for both EP and

CEP sales.

Fair Value Comparisons

To determine whether sales of pure

magnesium from Israel to the United

States were made at less than fair value,

we compared the export price (EP) or

constructed export price (CEP) to NV, as

described in the Export Price and

Normal Value sections, below. In

accordance with section

777A(d)(1)(A)(i) of the Act, we

compared POI-wide weighted-average

EPs and CEPs to the NVs.

Date of Sale

DSM reported that it made a number

of its sales based on term contracts in

which the terms of sale (e.g., price,

quantity, delivery schedule) purportedly

were set at the time the contract was

signed. In an April 19, 2001

supplemental questionnaire, the

Department requested that DSM provide

further information on these sales and

report the contract date and other

necessary information for all term

contract sales negotiated during the POI.

The current due date for this

questionnaire response is May 2, 2001.

For purposes of this preliminary

determination, the Department has used

the reported invoice date as the date of

sale. However, we intend to examine

DSM’s response to our outstanding

supplemental questionnaire and

consider this issue further for the final

determination.

Export Price

In accordance with section 772 of the

Act, we based U.S. price on EP for

certain sales. Section 772(a) of the Act

defines EP as the price at which the

subject merchandise is first sold before

the date of importation by the exporter

or producer outside the United States to

an unaffiliated purchaser in the United

States, or to an unaffiliated purchaser

for exportation to the United States.

Consistent with this definition, we

found that some of the respondent’s

sales during the POI were EP sales. For

these sales, we calculated EP based on

prices charged to the first unaffiliated

customer in the United States.

As the starting U.S. price, we relied

on the reported gross unit price. These

prices were delivered and FOB prices to

unaffiliated customers in the United

States. In accordance with section

772(c)(2) of the Act, we reduced the EP,

where appropriate, by billing

adjustments and movement expenses,

including foreign inland freight, foreign

21328 Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices

1The Coalition for Fair Lumber Imports Executive

Committee is comprised of Hood Industries,

International Paper Company, Moose River Lumber

Company, New South Incorporated, Plum Creek

Timber Company, Polatch Corporation, Seneca

Sawmill Company, Shearer Lumber Products,

brokerage charges, insurance,

international freight and U.S. inland

freight.

Constructed Export Price

For certain sales, we used CEP

methodology in accordance with

sections 772(b), (c) and (d) of the Act,

because sales to the first unaffiliated

purchaser in the United States took

place after importation. Consistent with

these definitions, we found that some of

the respondent’s sales during the POI

were CEP sales. For these sales, we

calculated CEP based on prices charged

to the first unaffiliated customer in the

United States.

As the starting U.S. price, we relied

on the reported gross unit price. These

prices were delivered and FOB prices to

unaffiliated customers in the United

States. In accordance with section

772(c)(2) of the Act, we reduced the

CEP, where appropriate, by billing

adjustments and movement expenses,

including foreign inland freight, foreign

brokerage charges, insurance,

international freight and U.S. inland

freight. Also, where appropriate, we

deducted direct and indirect selling

expenses related to commercial activity

in the United States. Pursuant to section

772(d)(3) of the Act, where applicable,

we made an adjustment for CEP profit.

Currency Conversions

We made currency conversions in

accordance with section 773A(a) of the

Act.

Verification

In accordance with section 782(i) of

the Act, we intend to verify information

to be used in making our final

determination.

Suspension of Liquidation

In accordance with section 733(d)(2)

of the Act, we are directing the Customs

Service to suspend liquidation of all

imports of subject merchandise from

Israel entered, or withdrawn from

warehouse, for consumption on or after

the date of publication of this notice in

the Federal Register. We will instruct

the Customs Service to require a cash

deposit or the posting of a bond equal

to the weighted-average amount by

which the NV exceeds the EP or CEP, as

indicated in the chart below. These

suspension of liquidation instructions

will remain in effect until further notice.

The weighted-average dumping

margins are as follows:

Exporter/producer

Weighted-average margin

(in percent)

Dead Sea Magnesium .................. 12.68

All-others ....................................... 12.68

ITC Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

determination. If our final

determination is affirmative, the ITC

will determine before the later of 120

days after the date of this preliminary

determination or 45 days after our final

determination whether these imports

are materially injuring, or threaten

material injury to, the U.S. industry.

Disclosure

We will disclose the calculations used

in our analysis to parties in this

proceeding within five days of the

publication of this notice. See 19 CFR

351.224(b).

Public Comment

Case briefs for this investigation must

be submitted no later than one week

after the issuance of the verification

reports. Rebuttal briefs must be filed

within five days after the deadline for

submission of case briefs. A list of

authorities used, a table of contents, and

an executive summary of issues should

accompany any briefs submitted to the

Department. Executive summaries

should be limited to five pages total,

including footnotes.

Section 774 of the Act provides that

the Department will hold a hearing to

afford interested parties an opportunity

to comment on arguments raised in case

or rebuttal briefs, provided that such a

hearing is requested by an interested

party. If a request for a hearing is made

in an investigation, the hearing will

tentatively be held two days after the

deadline for submission of the rebuttal

briefs at the U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW, Washington, DC 20230.

Parties should confirm by telephone the

time, date, and place of the hearing 48

hours before the scheduled time.

Interested parties who wish to request

a hearing, or to participate if one is

requested, must submit a written

request to the Assistant Secretary for

Import Administration, U.S. Department

of Commerce, Room 1870, within 30

days of the publication of this notice.

Requests should contain: (1) The party’s

name, address, and telephone number;

(2) the number of participants; and (3)

a list of the issues to be discussed. Oral

presentations will be limited to issues

raised in the briefs.

If this investigation proceeds

normally, we will make our final

determination within 75 days of this

preliminary determination.

This determination is issued and

published in accordance with sections

733(f) and 777(i)(1) of the Act. Effective

January 20, 2001, Bernard T. Carreau is

fulfilling the duties of the Assistant

Secretary for Import Administration.

Dated: April 23, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import

Administration.

[FR Doc. 01–10686 Filed 4–27–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–122–838]

Notice of Initiation of Antidumping

Duty Investigation: Certain Softwood

Lumber Products From Canada

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 30, 2001.

FOR FURTHER INFORMATION CONTACT:

Valerie Ellis or Charles Riggle at (202)

482–2336 and (202) 482–0650,

respectively; Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW,

Washington, DC 20230.

Initiation of Investigation

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department of Commerce (the

Department) regulations are references

to the provisions codified at 19 CFR part

351 (2001).

The Petition

On April 2, 2001, the Department

received a petition filed in proper form

by the Coalition for Fair Lumber Imports

Executive Committee,1 the United