16440 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

1Section A requested general information on each

company; and section C requested information on,

and a listing of, U.S. sales made during the period

of investigation (‘‘POI’’).

exist, that proceeding will be terminated

and all securities posted will be

refunded or cancelled. If, in either

proceeding, the ITC determines that

such injury does exist, the Department

will issue an antidumping duty order

for the appropriate proceeding directing

Customs officials to assess antidumping

duties on all imports of the subject

merchandise entered for consumption

on or after the effective date of the

suspension of liquidation.

These determinations are published

pursuant to section 735(d) of the Act

and 19 CFR 353.20(a)(4).

Dated: March 22, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–7776 Filed 3–29–95; 8:45 am]

BILLING CODE 3510–DS–P

(A–821–805, A–821–806)

Notice of Final Determinations of Sales

at Less Than Fair Value: Pure

Magnesium and Alloy Magnesium

From the Russian Federation

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 30, 1995.

FOR FURTHER INFORMATION CONTACT:

Ellen Grebasch, Dorothy Tomaszewski

or Erik Warga, Office of Antidumping

Investigations, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–3773, (202) 482–0631 or (202)

482–0922, respectively.

Final Determination

We determine that imports of pure

magnesium and alloy magnesium from

the Russian Federation are being, or are

likely to be, sold in the United States at

less than fair value (‘‘LTFV’’), as

provided in section 733 of the Tariff Act

of 1930, as amended (‘‘the Act’’). The

estimated margins are shown in the

‘‘Continuation of Suspension of

Liquidation’’ section of this notice.

Case History

Since the preliminary determination

on October 27, 1994 (59 FR 55420,

November 7, 1994), the following events

have occurred:

In December 1994, we issued sections

A and C of our antidumping

questionnaire 1 to respondent exporters

Amalgamet Canada, Greenwich Metals,

and Hochschild Partners. These

companies provided responses to these

questionnaires in December 1994 and

January 1995.

All participating respondents’ (in

each proceeding) supplemental

questionnaire responses were received

and verifications were conducted as

detailed in Appendix I.

On January 31, 1995, we amended our

preliminary determinations to correct

for certain ministerial errors (60 FR

7519, February 8, 1995).

Certain respondents (Amalgamet

Canada, AVISMA, SMW, Gerald Metals,

Greenwich Metals and Hochschild

Partners) and petitioners filed case

briefs. Rebuttal briefs were submitted by

petitioners and the following

respondents: Amalgamet Canada,

AVISMA, SMW, Razno, Interlink, &

AIOC, Gerald Metals, Greenwich Metals,

and Hochschild Partners. A public

hearing was held on February 28, 1995.

Scopes of Investigations

The scopes of these investigations

have been modified since the

preliminary determination in order to

clarify the distinctions between pure

magnesium and alloy magnesium. See

Comment 9 in the ‘‘Interested Party

Comments’’ section of this notice,

below.

A. Pure Magnesium

The product covered by this

investigation is pure primary

magnesium regardless of chemistry,

form or size, unless expressly excluded

from the scope of this investigation.

Primary magnesium is a metal or alloy

containing by weight primarily the

element magnesium and produced by

decomposing raw materials into

magnesium metal. Pure primary

magnesium is used primarily as a

chemical in the aluminum alloying,

desulfurization, and chemical reduction

industries. In addition, pure primary

magnesium is used as an input in

producing magnesium alloy.

Pure primary magnesium encompasses:

(1) products that contain at least 99.95%

primary magnesium, by weight (generally

referred to as ‘‘ultra-pure’’ magnesium);

(2) products containing less than 99.95%

but not less than 99.8% primary magnesium,

by weight (generally referred to as ‘‘pure’’

magnesium); and

(3) products (generally referred to as ‘‘offspecification pure’’ magnesium) that contain

50% or greater, but less than 99.8% primary

magnesium, by weight, and that do not

conform to ASTM specifications for alloy

magnesium.

‘‘Off-specification pure’’ magnesium

is pure primary magnesium containing

magnesium scrap, secondary

magnesium, oxidized magnesium or

impurities (whether or not intentionally

added) that cause the primary

magnesium content to fall below 99.8%

by weight. It generally does not contain,

individually or in combination, 1.5% or

more, by weight, of the following

alloying elements: aluminum,

manganese, zinc, silicon, thorium,

zirconium and rare earths.

Excluded from the scope of this

investigation are alloy primary

magnesium, primary magnesium

anodes, granular primary magnesium

(including turnings and powder), and

secondary magnesium.

Granular magnesium, turnings, and

powder are classifiable under

Harmonized Tariff Schedule of the

United States (HTSUS) subheading

8104.30.00. Magnesium granules and

turnings (also referred to as chips) are

produced by grinding and/or crushing

primary magnesium and thus have the

same chemistry as primary magnesium.

Although not susceptible to precise

measurement because of their irregular

shapes, turnings or chips are typically

produced in coarse shapes and have a

maximum length of less than 1 inch.

Although sometimes produced in larger

sizes, granules are more regularly

shaped than turnings or chips, and have

a typical size of 2mm in diameter or

smaller.

Powders are also produced from

grinding and/or crushing primary

magnesium and have the same

chemistry as primary magnesium, but

are even smaller than granules or

turnings. Powders are defined by the

Section Notes to Section XV, the section

of the HTSUS in which subheading

8104.30.00 appears, as products of

which 90 percent or more by weight

will pass through a sieve having a mesh

aperture of 1mm. (See HTSUS, Section

XV, Base Metals and Articles of Base

Metals, Note 6(b).) Accordingly, the

exclusion of magnesium turnings,

granules and powder from the scope

includes products having a maximum

physical dimension (i.e., length or

diameter) of 1 inch or less.

The products subject to this

investigation are classifiable under

subheadings 8104.11.00, 8104.19.00 and

8104.20.00 of the HTSUS. Although the

HTSUS subheadings are provided for

convenience and customs purposes, our

written description of the scope is

dispositive.

B. Alloy Magnesium

The product covered by this

investigation is alloy primary

magnesium regardless of chemistry,

form or size, unless expressly excluded
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16441

2Until just prior to our preliminary

determinations, the record showed that Bergmann

by itself was a mandatory respondent; this changed

(albeit temporarily given Amalgamet’s postpreliminary-determination revelation that it had

made U.S. sales) when Bergmann stated in an

October 1994 fax that earlier-disclosed sales of

subject merchandise, although to a U.S. company,

were sold ‘‘fob Rotterdam, Antwerp or Zeebrugge’’

without knowledge of destination on Bergmann’s

part.

3Final Determination of Sales at Less Than Fair

Value: Coumarin from the People’s Republic of

China (59 FR 66895, December 28, 1994).

from the scope of this investigation.

Primary magnesium is a metal or alloy

containing by weight primarily the

element magnesium and produced by

decomposing raw materials into

magnesium metal.

Alloy magnesium products are

produced by adding alloying elements

to pure magnesium in order to alter the

mechanical and physical properties of

the magnesium to make it suitable for

use as a structural material. Alloy

magnesium is used primarily for casting

or in wrought form. It is harder and

stronger than pure magnesium and may

possess a higher corrosion resistance.

This investigation covers alloy

primary magnesium which contains

50% or greater, but less than 99.8%,

primary magnesium, by weight, and one

or more of the following: Aluminum,

manganese, zinc, silicon, thorium,

zirconium and rare earths in amounts

which, individually or in combination,

constitute not less than 1.5% of the

material, by weight. Products that meet

the aforementioned description but do

not conform to ASTM specifications for

alloy magnesium are not included in the

scope of this investigation. In addition

to primary magnesium, alloy

magnesium may contain magnesium

scrap, secondary magnesium, or

oxidized magnesium in amounts less

than the primary magnesium itself.

Alloy primary magnesium is cast and

sold in various physical forms and sizes,

including ingots, slabs, rounds, billets

and other shapes.

Excluded from the scope of this

investigation are pure primary

magnesium, primary magnesium

anodes, granular primary magnesium

(including turnings and powder), and

secondary magnesium.

Granular magnesium, turnings, and

powder are classifiable under

Harmonized Tariff Schedule of the

United States (HTSUS) subheading

8104.30.00. Magnesium granules and

turnings (also referred to as chips) are

produced by grinding and/or crushing

primary magnesium and thus have the

same chemistry as primary magnesium.

Although not susceptible to precise

measurement because of their irregular

shapes, turnings or chips are typically

produced in coarse shapes and have

maximum length of less than 1 inch.

Although sometimes produced in larger

sizes, granules are more regularly

shaped than turnings or chips, and have

a typical size of 2mm in diameter or

smaller.

Powders are also produced from

grinding and/or crushing primary

magnesium and have the same

chemistry as primary magnesium, but

are even smaller than granules or

turnings. Powders are defined by the

Section Notes to Section XV, the section

of the HTSUS in which subheading

8104.30.00 appears, as products of

which 90 percent or more by weight

will pass through a sieve having a mesh

aperture of 1mm. (See HTSUS, Section

XV, Base Metals and Articles of Base

Metals, Note 6(b).) Accordingly, the

exclusion of magnesium turnings,

granules and powder from the scope

include products having a maximum

physical dimension (i.e., length or

diameter) of 1 inch or less.

The products subject to this

investigation are classifiable under

subheadings 8104.19.00 and 8104.20.00

of the HTSUS. Although the HTSUS

subheadings are provided for

convenience and customs purposes, our

written description of the scope is

dispositive.

Periods of Investigation

The POI in both proceedings is

October 1, 1993, through March 31,

1994.

Fair Value Comparisons

A. Participating Respondents

To determine whether sales of pure

magnesium to the United States by

AIOC, Gerald Metals, Greenwich Metals,

Hochschild Partners, HDM, Interlink,

MG Metals, and Razno, and sales to the

United States of alloy magnesium by

Amalgamet, Gerald Metals, and SMW,

were made at less than fair value, we

compared the United States price

(‘‘USP’’) to the foreign market value

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

States Price’’ and ‘‘Foreign Market

Value’’ sections of this notice.

Verification revealed that, for its POI

sales to U.S. companies, there were no

instances where Greenwich Metals’ role

in the sales process was that of being the

first company to sell Russia-produced

alloy magnesium to a U.S. customer.

That is, all subject merchandise

purchased by Greenwich was done so

on terms that made Greenwich the U.S.

customer of its supplier. Accordingly,

Greenwich will be subject to the

‘‘Russia-wide’’ deposit rate for alloy

magnesium.

Amalgamet Canada is closely related

to W&O Bergmann in that a large

percentage of each company’s shares are

owned by a common owner (Preussag).

Bergmann was sent an antidumping

questionnaire in August, but, despite its

close relationship to Amalgamet, never

apprised us of Amalgamet’s POI U.S.

sales of subject merchandise.2

The questionnaire sent to Bergmann

clearly instructed Bergmann to report

‘‘the names and addresses of all related

companies in all countries dealing’’

with the subject merchandise. Had

Bergmann properly participated in these

investigations, Amalgamet would have

been identified in a timely fashion, and

would have been instructed to respond

to the questionnaire. Amalgamet and

Bergmann should have known that

Amalgamet’s participation in these

proceedings was mandatory based on

Bergmann’s receipt of the questionnaire.

Accordingly, Amalgamet and Bergmann

will be assigned a deposit rate based on

the best information available (‘‘BIA’’)

based on their failure to participate

despite early notice of the

investigations.

B. All Other Companies

In both proceedings, there is nothing

on the record to indicate that any

exporters within Russia failed to report

U.S. sales of subject merchandise during

the POI. The only Russian exporter to

have sold either product to the United

States during the POI is SMW. Because

SMW’s calculated margin in both

proceedings is zero, we have based the

‘‘Russia-wide’’ deposit rate on a simple

average of the rates applicable to all

companies considered mandatory

respondents, excluding calculated rates

that are zero or de minimis. In these

proceedings, because all such

companies’ margins are based on BIA,

the ‘‘Russia-wide’’ rate is also based

entirely on BIA.

In determining what to use as BIA, the

Department follows a two-tiered

methodology, whereby the Department

normally assigns lower margins to

respondents that cooperated in an

investigation and margins based on

more adverse assumptions for those

respondents, like the non-participating

respondents in this investigation, which

did not cooperate in an investigation. As

outlined in Coumarin,3 where, as here,

a company refuses to provide the

information requested in the form

required, or otherwise significantly

impedes the Department’s investigation,

it is appropriate for the Department to

assign to that company the higher of (1)

the highest calculated rate of any

respondent in the investigation, (2) the
16442 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

highest margin alleged in the petition,

or (3) the margin from the preliminary

determination for that firm.

Accordingly, we have set the Russiawide deposit rate at 100.25 percent and

153.65 percent, ad valorem, in the pure

magnesium and alloy magnesium,

respectively. These margins represent

the highest margin in the petition, as

recalculated by the Department for

purposes of initiating this proceeding

and as further adjusted to account for

factors of production listed in the

petition that were not valued at the time

of initiation, but for which information

is on the record upon which to base a

surrogate value.

United States Price

As detailed below, we based USP on

purchase price, in accordance with

section 772(b) of the Act, when the

subject merchandise was sold directly

by the exporters to unrelated parties in

the United States prior to importation

into the United States and because

exporter’s sales price (‘‘ESP’’)

methodology was not indicated by other

circumstances.

We based USP on ESP, in accordance

with section 772(c) of the Act, when the

subject merchandise was sold to the first

unrelated purchaser after importation

into the United States.

Both purchase price and ESP were

based on packed prices to unrelated

purchasers in the United States,

according to the applicable delivery

terms, with appropriate price

adjustments. The following is a

summary of U.S. price calculations for

each exporter, with an asterisk (‘‘*’’)

designating price adjustments

applicable to some but not all sales (see

Final Calculation Memorandum, on file

in room B–099 of the Main Commerce

Department Building, for details of these

adjustments).

Exporter Terms of sale Price adjustments

Pure Magnesium

AIOC (PP, ESP) .................. CIF, FOB, Delivered ........... Foreign inland freight, storage charges, inspection charges*, sample costs

charges*, document charges*, other foreign inland freight, dunnage, ocean

freight, seaway tolls, U.S. duty, stevedoring, wharfage*, unloading charges*,

warehousing*, U.S. inland freight.

Interlink (PP) ....................... Delivered, In-Warehouse .... Foreign insurance, ocean freight, marine insurance, procedure fees, harbor maintenance fees, U.S. inland freight, U.S. inland insurance*, U.S. brokerage.

Gerald (PP) ......................... In-Warehouse, Delivered,

FOT Warehouse.

Foreign brokerage, foreign inland freight*, ocean freight, U.S. inland freight*, U.S.

brokerage, oxidation credits.*

Greenwich (PP, ESP) ......... Delivered, FOT, In-warehouse.Discounts*, foreign brokerage, ocean freight, marine insurance, U.S. duty, U.S. inland freight*, U.S. inland insurance, U.S. brokerage, third party payments.*

Hochschild (PP) .................. Delivered ............................. Foreign brokerage, ocean freight, marine insurance, U.S. duty*, U.S. inland freight*,

U.S. brokerage*, third party payments.*

HDM (ESP) ......................... Delivered ............................. Ocean freight, U.S. duty*, U.S. inland freight, U.S. brokerage*, repacking*, U.S.

containerization*, other containerization.

MG (PP, ESP) ..................... Delivered ............................. Foreign brokerage*, foreign inland freight, ocean freight, marine insurance, U.S.

duty, U.S. inland freight, U.S. inland insurance, U.S. brokerage, repacking.*

Razno (PP) .......................... CIF, FOB ............................ Foreign brokerage, foreign inland freight, oxidation credits.*

SMW (PP) ........................... FOB .................................... Foreign brokerage, foreign inland freight.

Alloy Magnesium

SMW (PP) ........................... FOB .................................... Foreign brokerage, foreign inland freight.

Gerald (PP) ......................... In-Warehouse, Delivered

FOT Warehouse.

Foreign brokerage*, foreign inland freight*, ocean freight, U.S. duty*, U.S. inland

freight, U.S. brokerage, third party payments.

From each exporter’s U.S. price, we

also deducted foreign inland freight

between the factory and the reported

intermediate destination (e.g.,

Rotterdam) as follows: For SMW and

Razno, we used reported distances and

transport modes to calculate an

appropriate surrogate factory-to-border

freight amount on the basis of surrogate

freight rates in Brazil; for all other

exporters, we deducted the per-ton

foreign inland freight amount reported

in the petition as best information

available because those exporters did

not in their questionnaire responses

information with respect to such

charges. We made no deduction from

USP to account for exporter-incurred

selling expenses, nor did we deduct

export taxes paid by Russian companies

to the Russian government because the

actual amounts paid are an internal

expense within an NME country. We

adjusted reported marine insurance and

ocean freight charges for Razno as

follows: a reported figure that was an

extended value (i.e., an amount

applicable to the entire transaction) was

adjusted to reflect a per-unit amount.

The following adjustments were made

to the reported U.S. sales of these

exporters pursuant to our findings at

verification (see Final Calculation

Memorandum, for details of these

adjustments):

AIOC (Pure Magnesium): AIOC’s final

U.S. sales listing was adjusted to

exclude certain sales that verification

revealed had been improperly included.

Based on verification findings, minor

corrections to reported figures for

inspection fees, sample costs, dunnage,

ocean freight, seaway tolls, U.S. duties,

unloading. Additionally, we deducted

an amount for marine insurance based

on verification.

Gerald Metals (Pure Magnesium and

Alloy Magnesium): Minor corrections to

reported figures for foreign brokerage,

foreign inland freight, ocean freight,

U.S. brokerage, third party payments,

and oxidation credits were made based

on verification findings.

Hochschild Partners (Pure

Magnesium): Hochschild’s final U.S.

sales listing was adjusted to exclude

certain sales that verification revealed

had been improperly included. An

additional unreported U.S. sale was

discovered at verification and included

in its final sales listing. For purposes of

calculating a unit margin for this sale,

we applied the highest reported charges

for ocean freight, foreign brokerage and

marine insurance, as well as the highest

reported U.S. movement charges

applicable to the delivery terms of this

sale. Minor adjustments to reported

figures for foreign brokerage, ocean

freight, and marine insurance were also

made based on verification findings.

Finally, third party payment figures

relating to certain sales were disclosed

at verification.
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16443

Hunter Douglas (Pure Magnesium):

Minor corrections to reported figures for

ocean freight, U.S. duty, U.S. brokerage,

and U.S. containerization charges were

made based on verification findings.

Interlink (Pure Magnesium):

Interlink’s final U.S. sales listing was

adjusted (a) to exclude certain sales that

had been improperly included and (b) to

include certain sales that had been

improperly excluded. Additionally,

minor corrections to reported figures for

ocean freight and U.S. brokerage were

made based on verification findings.

Razno Alloys (Pure Magnesium):

Razno’s final U.S. sales listing was

adjusted (a) to exclude certain sales that

had been improperly included and (b) to

include certain sales that verification

revealed had been improperly excluded.

Additionally, although we considered

Razno a Russian company for our

preliminary determination because its

sales office is in Moscow, we have

determined that Razno would more

properly be characterized as a Swiss

company. It is registered in Switzerland,

its accounts are kept in Switzerland,

and its ownership is majority nonRussian. Finally, minor corrections were

made to reported figures for foreign

brokerage based on verification.

Foreign Market Value

For sales of magnesium produced by

Avisma and SMW, we calculated FMV

based on factors of production cited in

the preliminary determination, making

adjustments based on verification

findings (see Final Calculation

Memorandum). To calculate FMV, the

verified factor amounts were multiplied

by the appropriate surrogate values for

the different inputs. We have used the

same surrogate values used in the

preliminary determination with the

exception of certain corrections made

based on verification or interested party

comments.

Based on verification, we adjusted

certain factors’ value to reflect the actual

purity used in the production of subject

merchandise.

We recalculated certain inland freight

distances between factory and input

supplier based on verified distances.

We calculated FMV based on factors

of production reported by the factories

which produced the subject

merchandise for the above-mentioned

exporters. The factors used to produce

pure and alloy magnesium include

materials, labor, and energy. To

calculate FMV, the reported quantities

were multiplied by the appropriate

surrogate values for the different inputs.

(For a complete analysis of surrogate

values, see our Final Calculation

Memorandum.) A factory overhead

figure was also included in the FMV

calculation based on a percentage of

materials, labor and energy. We also

granted certain by-product offsets

against the cost of manufacturing (i.e.,

the sum of materials, labor, energy and

factory overhead). We then added the

statutory minimum amounts for general

expenses and profit, the cost of

containers and coverings, and other

expenses incident to placing the

merchandise in condition packed and

ready for shipment to the United States.

We used the same methodology as in

the preliminary determination to value

factors of production, with the following

exceptions: (1) We used a publicly

available, published Brazilian rate for

unskilled labor; (2) we used a publicly

available, published Brazilian unit price

for natural gas; and (3) we applied a

publicly available, published Brazilian

industrial rate for electricity used by

electricity-intensive industries with

comparable levels of electricity

consumption and capacity as

magnesium producers.

A. Market Reforms in the Russian

Federation

In accordance with section 773(c) of

the Act, the Department normally uses

a factor valuation methodology to

calculate foreign market value when the

country involved is an NME country

and the Department determines that it

cannot determine foreign market value

based on the respondent’s prices or

costs. Alternatively, an NME-country

respondent may argue that marketdriven prices characterize its particular

industry and, therefore, despite NME

status, that foreign market value should

be calculated by using actual home

market prices or costs (a marketoriented industry or ‘‘MOI’’ claim).

In these investigations, the Russian

manufacturers, Avisma and SMW, claim

that economic conditions now prevalent

throughout Russia warrant revocation of

Russia’s NME-country status, effective

January 1, 1994. Alternatively, the two

companies claim MOI for the

magnesium industry in Russia.

Regarding the revocation of NME

status, the Department’s analysis centers

around a government’s role in economic

activity. See Final Determination of

Sales at Less Than Fair Value: Certain

Cut-to-Length Carbon Steel Plate from

Poland (58 FR 37205, July 9, 1993).

Consistent with the factors described in

section 771(18), the Department

considers the extent to which resources

are allocated by the market or

government, taking into account

government involvement in currency

and labor markets, pricing, and

production and investment decisions.

Where resources are not allocated by the

market, it would be difficult to conclude

that home market prices or costs should

be used to calculate fair value.

Evidence provided in these

proceedings indicates that Russia is in

the process of implementing extensive

reforms to achieve its goal of becoming

a market economy. The freeing of most

prices in December 1991 and the

privatization of most enterprises

formerly within the state-planning

system are important steps in moving

Russia towards a market economy.

We cannot conclude, however, based

on the information in this record that

Russia should be treated as a market

economy for purposes of the

antidumping duty law. The Russian

economy, having emerged from a

centrally-planned system, is in a state of

transition. Many of the state controls

have been abandoned, but that does not

mean that functioning markets have

replaced controls. Because the evidence

does not demonstrate that prices and

costs in Russia adequately reflect market

considerations, we cannot at this time

alter Russia’s designation as a

nonmarket economy.

Regarding the MOI claim, information

on the record suggests that the

government continues to be involved in

the Russian magnesium sector. For

example, the Russian Federal

Committee on Metallurgy, a successor to

the Ministry of Industry (Metallurgy

Department), indicated in an official

statement that it controls activity in the

magnesium industry in Russia, noting

particularly that it coordinates

production, exports, and prices. Also,

although the two producers under

investigation have been privatized, this

same statement indicates that the

Committee may be using the remaining

government interest in these companies

to carry out its intentions with respect

to pricing and production. For these

reasons, as stated in the preliminary

determination, we determine that the

prices or costs of producing magnesium

in Russia should not be used to

calculate fair value. No new information

has been presented since then to alter

this conclusion.

B. Separate Rates

In each of these proceedings, SMW

requested that the Department calculate

a dumping margin and assign a deposit

rate separate from other potential

Russian exporters. For our preliminary

determination, we decided that we did

not need to address the issue because (1)

SMW was the only Russian exporter of

alloy magnesium; and (2) we decided

that SMW’s pure magnesium exports

were too small to consider in margin
16444 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

4Although Avisma also made a separate rates

claim, it did not make any POI direct U.S. sales. It

is, for good reason, unprecedented for the

Department to entertain separate rates claims from

companies that have not made direct sales to the

United States: Analyzing and verifying separate

rates claims from such companies would be a great

burden, and government involvement in export

sales operations could be hard to fully evaluate

absent sales to the United States.

5Evidence supporting, though not requiring, a

finding of de jure absence of central control

includes: (1) An absence of restrictive stipulations

associated with an individual exporter’s business

and export licenses; (2) any legislative enactments

decentralizing control of companies; or (3) any

other formal measures by the government

decentralizing control of companies.

6The factors considered include: (1) whether the

export prices are set by or subject to the approval

of a governmental authority; (2) whether the

respondent has authority to negotiate and sign

contracts and other agreements; (3) whether the

respondent has autonomy from the government in

making decisions regarding the selection of

management; and (4) whether the respondent

retains the proceeds of its export sales and makes

independent decisions regarding disposition of

profits or financing of losses (see Silicon Carbide).

7Although an export license was required in

order to make export sales, and the nominal

purpose was to allow the licensing authority to

approve the export price, SMW characterized this

procedure as pro forma. Verification revealed no

indication that such control had ever been

exercised: export licenses that had been issued,

examined in the context of reviewing SMW’s sales,

appeared to reflect without exception prices

negotiated between SMW and its customers. The

price negotiation process did not appear to involve

any government authorities.

calculations. However, we have now

reconsidered our position that SMW’s

status as the only Russian company to

sell to the United States obviates the

need for a separate rates analysis when

a separate rates claim has been put

forward. SMW has claimed that

government ownership and control are

absent and, therefore, as a POI exporter,

it is entitled to consideration of its

claim. 4

Further, we no longer consider

SMW’s pure magnesium sales

insignificant because we have

determined, as discussed above, that

Razno Alloys, preliminarily found to be

a Russian company, is actually a Swiss

company. Razno’s redefined status as a

Swiss company renders SMW’s pure

magnesium exports significant in that

SMW was the only company in Russia

to have exported any pure magnesium

directly to the United States. Thus,

SMW is the only Russian company that

exported either pure or alloy

magnesium to the United States.

To establish whether a firm is

sufficiently independent to be entitled

to a separate rate, the Department

employs the criteria developed in the

Final Determination of Sales at Less

Than Fair Value: Sparklers from the

People’s Republic of China (56 FR

20588, May 6, 1991) (Sparklers) and

amplified in Silicon Carbide. Under this

analysis, the Department assigns a

separate rate only when an exporter can

demonstrate the absence of both de

jure 5 and de facto 6 governmental

control over export activities.

Ownership

SMW is a joint-stock company (‘‘JSC’’)

that was state-owned until 1992, when

a transition to private and employee

ownership was begun. At the end of the

POI, the Perm Regional Fund of State

Property (‘‘Perm Fund’’) owned 20

percent of SMW’s shares, with the rest

of shares owned by a workers

collective—51 percent—or private

companies (e.g., investment funds).

Verification supported SMW’s account

of its ownership status.

Control

Government control over SMW’s

export operations (both de jure and de

facto) is absent. Specifically:

The July 1, 1992, Decree of the

President of the Russian Federation:

Measures for the Organization and

Reconstruction of State Enterprises, and

the Transferring of State Enterprises into

Joint Stock Companies (‘‘Decree 721’’),

establishes that JSCs are ‘‘out of the

control of Ministries, State and Local

administrative organs and authorities.’’

The July 3, 1991, law, ‘‘On

Privatization of State-Owned and

Municipal Enterprises,’’ is divided into

three sections dealing with general

principles, procedures and means, and

concluding principles. It is also divided

into 31 articles. Significant articles

include:

Article 6, which establishes Russian

Federal Property Fund to act as temporary

‘‘possessor of RSFSR [Russian Federation]

deeds to enterprises’’ and to sell shares and

deeds to enterprises. Limits Fund’s voting

rights to a maximum of 20 percent of shares.

States that Fund may not ‘‘interfere in the

operations of enterprises except in cases

stipulated by enterprises’ founding

documents and the legislation of the RSFSR

* * *’’; and

Article 9, which forbids buying of

enterprises undergoing privatization by state

entities or certain state-held companies/

funds.

With respect to de facto aspects of

government control over export

activities, SMW sets its own prices 7 and

‘‘has free access to’’ the proceeds and

profits of its export sales, would finance

its own losses if they occurred, and

could purchase foreign currency with

rubles or otherwise dispose of assets

(but has never actually had done so).

Verification of sales transactions

revealed no evidence of government

involvement in the disposition of

SMW’s proceeds from export sales aside

from the already-reported requirement

that SMW convert half of foreign

exchange earnings to rubles.

As a shareholder, the Perm Fund was

able to appoint one of SMW’s 15 Board

members and votes in the appointment

of the general director. The other 14

Board members are employees. In fact,

minutes of SMW’s 1993 Board meeting,

examined at verification, did not appear

to indicate participation by a

representative associated with the Perm

Fund or with any other government

entity.

Although the Board of shareholders

did not appoint SMW’s general director,

it did, based on the minutes of its 1993

meeting, reaffirm the basic terms of

SMW’s contract with the general

director, who had been appointed before

SMW became a JSC. This reaffirmation

indicates that the Board controlled

decisions regarding the appointment of

management even though it did not

choose to make a management change

upon becoming a JSC.

In summary, the evidence favors a

finding that government control is

absent and, accordingly, we find that

SMW should be considered a separate

company for purposes of assigning a

deposit rate.

C. Surrogate Country Selection

We selected Brazil as the appropriate

surrogate country for the reasons set

forth in our preliminary determinations.

Since we find no compelling reason to

change this selection, we have

continued to base FMV on the values of

the appropriate factors of production as

valued in Brazil.

D. Factors of Production

For sales of magnesium produced by

Avisma and SMW, we calculated FMV

based on factors of production cited in

the preliminary determination, making

adjustments based on verification

findings (see Final Calculation

Memorandum). To calculate FMV, the

verified factor amounts were multiplied

by the appropriate surrogate values for

the different inputs. We have used the

same surrogate values used in the

preliminary determination with the

exception of certain corrections made

based on verification or interested party

comments.

Based on verification, we adjusted

certain factors’ value to reflect the actual

purity used in the production of subject

merchandise.

We have adjusted the surrogate inland

freight charge for transporting factor

inputs from supplier to factory to reflect

the surrogate value for the actual

quantity being transported. We
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16445

recalculated inland freight distances

between factory and input supplier

based on verified distances.

We calculated FMV based on factors

of production reported by the factories

which produced the subject

merchandise for the above-mentioned

exporters. The factors used to produce

pure and alloy magnesium include

materials, labor, and energy. To

calculate FMV, the reported quantities

were multiplied by the appropriate

surrogate values for the different inputs.

(For a complete analysis of surrogate

values, see our final calculation

memorandum.) We then added amounts

for general expenses and profit, the cost

of containers and coverings, and other

expenses incident to placing the

merchandise in condition packed and

ready for shipment to the United States.

We used the same methodology as in

the preliminary determination to value

the raw materials, except where

corrections were possible or necessary.

Verification

As provided in section 776(b) of the

Act, we verified the information

submitted by respondents for use in our

final determination. We used standard

verification procedures, including

examination of relevant accounting and

production records and original source

documents provided by respondents.

Critical Circumstances

In accordance with section 735(a)(3)

of the Act, we determine that critical

circumstances exist with respect to

imports of alloy magnesium from the

Russian Federation. No new information

has been placed on the record since our

preliminary determination. Therefore,

we continue to find that critical

circumstances exist with respect to all

imports of alloy magnesium except

those of Gerald Metals and SMW.

Interested Party Comments

Comment 1: Russian Manufacturers’

Knowledge of Destination

Petitioners contend that Avisma and

SMW should be assigned BIA margins

because they knew at the time of sale to

third-country resellers that the

merchandise was destined for the

United States. Petitioners note that the

producers completed GSP forms, sold to

customers that had U.S. addresses, and

were explicitly told by some customers

of merchandise’s destination. Because of

this knowledge on Avisma’s and SMW’s

part, petitioners argue, resellers

claiming to be the first to sell to a U.S.

customer in the sales process should be

assigned the ‘‘Russia-wide’’ rate.

Avisma and SMW argue that they did

not know at the time of sale that

merchandise was destined for the

United States. The companies assert that

the GSP forms were filled out by the

producers after the sales were made,

indicating that at the time of sale the

producers did not know the destination.

Avisma and SMW argue that the

customer’s address is irrelevant because

magnesium is a commodity product that

can be sold anywhere in the world.

Finally, the companies point out that

verification confirmed that there was no

indication that either Avisma or SMW

failed to report any U.S. sales.

DOC Position

We agree with Avisma and SMW.

Based on our examination of sales and

export documents at verification, we

found nothing to indicate any

unreported instances of merchandise

being sold with the knowledge at the

time of sale that the ultimate destination

was the United States. We verified that

simply because a purchaser’s address is

in the United States does not mean that

the merchandise is destined for the

United States. In fact, magnesium sold

to purchasers with U.S. addresses was

frequently shipped to non-U.S.

destinations. Although SMW did, as

some exporters stated, eventually learn

of some of its merchandise’s sale to U.S.

customers, this knowledge always came

after SMW had sold the merchandise.

Comment 2: Completeness and

Accuracy of Various Resellers’

Reporting of U.S. Sales

Petitioners contend that total or

partial BIA is warranted for AIOC,

Razno, Interlink, Hochschild and

Greenwich Metals because these

companies made various errors in

reporting U.S. sales that were not

revealed until just prior to, or during,

verification. Petitioners also advocate

total BIA for each exporter for which

any verification revealed that the

exporter failed to report sales of the

subject merchandise, as well as for all

companies that refused verification.

The companies argue that BIA is not

warranted because the errors made were

not serious and were corrected.

DOC Position

We agree with petitioners in part.

We determined that the errors cited

by petitioners for AIOC, Razno, and

Interlink were inadvertent and were, in

the end, verified. There is nothing to

indicate that the omission of these sales

would have had any impact on these

companies’ margins. Further, we are

satisfied that the record is now complete

and accurate as to these companies’ POI

sales of subject merchandise.

Accordingly, the reported information,

as corrected based on verification, is the

appropriate basis for our respective

LTFV determinations for AIOC, Razno,

and Interlink.

We disagree that BIA is warranted for

Hochschild’s failure to report a pre-POI

contract discovered at verification;

instead, we have included in

Hochschild’s sales listing information

gathered at verification regarding this

sale.

We agree with petitioners that

Hochschild and Greenwich Metals

incorrectly reported certain sales as U.S.

sales. Verification demonstrated that the

contracts setting terms of sale by these

companies’ suppliers included an

identification of the shipment

destination. This fact outweighs the

contention that the companies had the

option of transshipping the merchandise

to another country. Accordingly, we

determine that Greenwich did not make

any U.S. sales of alloy magnesium

during the POI and we have not

calculated a company-specific alloy

magnesium margin for Greenwich.

Instead, Greenwich will be subject to

the ‘‘Russia-wide’’ rate. We have also

eliminated these improperly included

sales from Hochschild’s sales listing and

have assigned the appropriate margin to

Hochschild’s European supplier.

Finally, with the exception of those

participating exporters that have

remedied reporting deficiencies, any

exporter that improperly did not report

POI sales is subject to suspension of

liquidation at the ‘‘Russia-wide’’ rate

(which is based entirely on BIA), as are

all companies that reported having

made no sales.

Comment 3: Scope

Petitioners contend that the

Department should clarify the scopes in

these proceedings. Petitioners argue that

‘‘off-specification’’ pure magnesium

(i.e., magnesium that is less than 99.8%

pure magnesium but that otherwise can

be and is considered pure magnesium

by consumers) should be considered

within the scope of the pure magnesium

proceeding instead of within the scope

of the alloy magnesium proceeding.

Petitioners propose revised scopes to

achieve this end.

Greenwich argues that the proposed

revised scopes are flawed because they

appear to include secondary magnesium

(i.e., magnesium that has been remelted

and recast) as subject merchandise.

DOC Position

We agree with petitioners some

magnesium, despite not meeting the

normal definition (based on magnesium

content) of pure magnesium,

nevertheless may be used in
16446 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

8Final Determination of Sales at Less Than Fair

Value: Coumarin from the People’s Republic of

China (59 FR 66895, December 28, 1994)

applications that normally require pure

magnesium. In fact, the records in the

concurrent antidumping investigations

of pure and alloy magnesium from the

People’s Republic of China show sales

of such magnesium were supplied to

fulfill orders for pure magnesium.

We therefore have revised the scopes

of these investigations to include this

off-specification pure magnesium

within the definition of pure

magnesium, described as any product

(1) that is 50 percent or more primary

magnesium, and (2) that does not meet

any ASTM definition of alloy

magnesium (based on specific

percentages of one or more alloying

agents).

We note that our consultations with

the Bureau of Mines established that the

industry standards for alloy magnesium

are ASTM standards. (See Final

Calculation Memorandum.)

Consequently, we have not adopted

petitioner’s proposed scope language

that would describe off-specification

pure magnesium as any product, inter

alia, that does not meet ASTM

standards or other industry standards.

Although ASTM standards define

pure magnesium as not less than 99.8

percent magnesium, metal with a

primary magnesium content below that

level should be captured in the scope of

the pure magnesium investigations if it

cannot legitimately be defined as a

specific ASTM alloy magnesium.

The fact that both scopes capture only

merchandise with primary magnesium

content of 50 percent or greater means

that merchandise composed of 50

percent or more secondary magnesium

would not fall within either scope.

Comment 4: Surrogate Value for

Electricity

Avisma and SMW contend that

published, public information indicates

that large industrial users of electricity

in Brazil receive a lower electricity rate

(compared to other types of users).

Respondents assert that information on

the record indicates that Avisma and

SMW are ‘‘large industrial users’’ of

electricity and, as such, would receive

a lower electricity rate if they bought

electricity in Brazil. Therefore,

respondents argue the appropriate value

for electricity is $0.0235/Kwh.

Petitioners contend that the

Department should continue to use the

$0.055/Kwh rate for electricity value

because the record does not show that

the rate advocated by Avisma and SMW

is the rate actually paid by the

magnesium industry in Brazil.

Petitioners charge that the record shows

that the Brazil ‘‘large industrial user’’

rates are (1) below cost because they are

subsidized, and (2) generally not

applicable because they are established

pursuant to individual negotiations.

Even if the Department were to accept

Brazil electricity rate schedules

submitted by Avisma and SMW,

petitioners contend, there would be no

way to determine which rate would be

appropriate for Avisma and SMW.

DOC Position

We agree with Avisma and SMW that

the Brazil ‘‘large industry user’’ rate is

the rate they would have received had

they been electricity consumers in

Brazil during the POI. For each

company, the record contains verified

figures on both POI magnesium

production and the number of kilowatt

hours needed to produce one metric ton.

Dividing the total number of kilowatt

hours used in POI magnesium

production by the number of hours in

the POI clearly shows that, at least

during the POI, the kilowatt capacity of

each user was significantly higher than

the minimum necessary to receive the

‘‘large industrial user’’ rate in effect in

Brazil during the POI. Although

subsidization would not necessarily

render a surrogate value inappropriate,

petitioners have not in this instance

presented evidence of subsidization

(providing only a vague reference to

possible subsidies in the Amazon

region).

Comment 5: By-Product Offset

Methodology

Petitioners contend that the

Department’s decision to permit an

offset to material surrogate values to

account for by-products of the

magnesium production process was

erroneous for the following reasons: (1)

The producers were unable to

demonstrate for the record that any

economic benefit accrued to the firm

and that the benefit was linked to the

production of the subject merchandise;

(2) the surrogate value used was

incorrect in that it did not correspond

to the actual purity level of the byproduct produced and was not

calculated net of transportation and

processing costs; and (3) any adjustment

determined to be appropriate should

have been made to the cost of

manufacture rather than cost of

materials so as not to understate factory

overhead, general expenses, and profit.

Avisma and SMW argue that there is

nothing on the record indicating that

they should not qualify for by-product

offsets. With respect to valuation, the

companies do not dispute that an

appropriate purity level adjustment

should be made, but contend that there

are no processing costs associated with

the by-products which are not captured

in costs associated with primary

product production. Finally, Avisma

and SMW argue that an adjustment to

cost of materials is the appropriate

adjustment because the Department is

using the factors-of-production

methodology to calculate FMV.

DOC Position

We agree with petitioners in part and

with Avisma and SMW in part. First,

because the by-products result from the

production process and are either used

by the magnesium producer or sold for

use by some other company in the NME

country, we agree with Avisma and

SMW that they are a factor whose value

must be taken into account in our

calculation of the fair value against

which to test U.S. prices. Second, we

have adjusted surrogate CIF import

value of the by-products to reflect

concentration differences. However, no

adjustment to value for transportation

costs is appropriate. For by-products, as

for material factors of production

consumed in the production process, we

consider the import values used to be

surrogates for ex-factory, freightexclusive prices from suppliers to

consumers. Third, we agree with

petitioners that the proper adjustment is

a reduction in the cost of manufacture.

This adjustment increases the surrogate

overhead amount commensurately with

the value of the by-product, thereby

eliminating the need for valuing any

additional processing-related elements.

Additionally, an adjustment to cost of

manufacture is consistent with

Department practice in other NME

investigations (see, e.g., Coumarin 8).

Comment 6: Surrogate Factory

Overhead

Petitioners contend that the

Department must account for costs

associated with the rebuilding of

electrolytic cells by adjusting upward

the surrogate overhead percentage used

in the preliminary determinations.

Petitioners suggest using their own

experience as to the cost of cell rebuilds

expressed as a percentage of the sum of

material, labor, and energy costs.

Petitioners also suggest that the

Department should, in calculating FMV,

use an overhead ratio that includes

energy in the numerator since verified

energy amounts for the producers

represent only energy directly related to

production.

Avisma, SMW, Interlink, Razno, and

AIOC argue that an adjustment to
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16447

9 Final Determination of Sales at Less Than Fair

Value: Sparklers from the People’s Republic of

China (56 FR 20588, May 6, 1991)

overhead based upon petitioners’ cell

rebuild experience would be

inconsistent with both the Act and

Department practice and is, therefore,

unwarranted. With respect to energy,

these respondents argue that (1)

inclusion in the denominator of the

overhead ratio should be limited to

indirect energy costs, and (2) only direct

energy should be included in the base

to which the overhead percentage is

applied in calculating surrogate

overhead.

DOC Position

We agree with respondents that the

adjustment proposed by petitioners is

not appropriate in this instance.

Although we may take into account

petitioners’ experience in extraordinary

circumstances, we generally do not

consider petitioners’ costs as an

appropriate benchmark by which to test

the accuracy of surrogate country

values. Further, the fact that one

element (i.e, cell rebuild) of factory

overhead has significant cost associated

with it does not invalidate the overhead

percentage used. Factory overhead is a

combination of elements, some of which

may be more or less expensive

depending on the product or even the

company. The Department has rejected

item-by-item evaluation of overhead

components in the past (see the final

determination of Tapered Roller

Bearings and Parts Thereof, Finished or

Unfinished, from the Socialist Republic

of Romania, (52 FR 17433, 17436, May

8, 1987)), and we see no reason to alter

this practice in this case.

Further, there is no contrary evidence

which indicates that the overhead

percentage used for the preliminary

determinations is an inappropriate

surrogate figure. In the absence of an

actual overhead for Brazil’s magnesium

industry, the Department will continue

to rely on the surrogate overhead

percentage used in the preliminary

determination.

Comment 7: Surrogate General

Expenses and Profit

Petitioners argue that the percentage

used to account for producers’ general

expenses in calculating FMV should be

changed from the statutory minimum to

26.92 percent, which is the ratio of

SG&A expenses to cost of goods sold

based on figures reported in the 1992

financial statement of an aluminum

manufacturer in Brazil. Petitioners also

argue that an additional amount should

be included in FMV calculations in

order to reflect general expenses

incurred and profit realized by each

reseller involved in the sales process.

Petitioners argue that, because the

responding resellers failed to provide

their selling expenses (despite a

Departmental request to do so in the

questionnaire), the Department should

add an amount based on financial

statements submitted by resellers.

With respect to surrogate SG&A for

manufacturers, Avisma, SMW, Interlink,

Razno and AIOC argue that the figures

put forward by petitioner are bogus

because they involve application to an

inflation-adjusted base of a percentage

that is based on figures that have not

been adjusted for inflation. These

respondents argue that their own

submitted surrogate information is

superior to petitioners’ information

because it is inflation-adjusted. With

respect to the question of whether to

include in FMV an amount for reseller

general expenses, the five

aforementioned respondents, along with

Greenwich, Hochschild, and Gerald

Metals, assert that petitioners have

provided no convincing rebuttal to the

Department’s recent rejection of such a

request in Coumarin.

DOC Response

With respect to the question of the

appropriate surrogate for manufacturer

general expenses, we agree with

Avisma, SMW, Interlink, Razno and

AIOC that use of inflation-adjusted

figures is the most appropriate basis for

calculating the SG&A ratio.

Accordingly, we have used either an

appropriate figure from the record or the

statutory minimum (10%), whichever is

greater.

We also agree with respondents that

addition to FMV of actual reseller

general expenses would be

inappropriate. Given that Russia is an

NME and the Russian magnesium

industry has not been found to be

market oriented, section 773(c) of the

Act requires that the Department

measure U.S prices against the factors of

production (materials, labor, energy,

and overhead) used in producing the

merchandise, valued in an appropriate

surrogate country, plus general

expenses, profit and containers. The

Act’s only specific guidance as to the

valuation of general expenses, profit and

containers is to establish minima for the

first two. Our regulations, meanwhile,

instruct us to ‘‘include in this

calculation of constructed value an

amount for general expenses and profit,

as required by section 773(e)(1)(B) of the

Act. (19 CFR 353.52(c)) The Department

has not interpreted the Act and the

regulations as requiring use of actual

expenses and profit for these FMV

components when FMV is based on

factors of production; the Department

has also explicitly rejected such

adjustments in prior NME proceedings

(see, e.g., Coumarin and Sparklers 9).

Moreover, to do so simply does not

make sense because it amounts to a

comparison of apples and oranges. In

NME proceedings, the FMV is normally

based completely on factors valued in a

surrogate country (without regard to, for

example, actual selling expenses) on the

premise that the actual experience

cannot be meaningfully considered.

Were the question simply one of

‘‘traditional’’ dumping by trading

companies, the market-economy priceto-price or price-to-CV methodology

would appropriately be employed;

actual selling expenses would have been

accounted for on both U.S. prices and

foreign market prices (or, if appropriate,

constructed value, in which case other

general expenses and profit would also

have been taken into account).

Accordingly, we have continued to

value general expenses and profit by

simply applying to the surrogate-based

cost of manufacture the greater of either

appropriate surrogate percentages or the

statutory minima.

Comment 8: Market Orientation (Russia

and Magnesium Industry)

Avisma and SMW contend that,

although they ‘‘do not expect the

magnesium investigation[s] to result in

the revocation of Russia’s NME status,’’

consideration of whether to revoke

Russia’s NME status should hinge upon

whether there are concrete indicators of

market-driven activity rather than on

the degree to which the market has

moved toward ‘‘an orderly Westernstyle brand of capitalism.’’ The

companies also state for the record that

they demonstrated that the Russian

magnesium industry is market oriented,

but opted not to pursue this tack

because they anticipated favorable

outcomes using factors of production

valued in a surrogate country.

Petitioners state that the records in

these investigations offer no basis for

determining that Russia is no longer an

NME for purposes of these

investigations, nor do the records

support a finding that the magnesium

industry is market oriented.

DOC Position

As discussed in the ‘‘Foreign Market

Value’’ section, above, we have

determined that it would be

inappropriate to alter Russia’s

designation as an NME, and that the

Russian magnesium sector is not a

market-oriented industry. Should these
16448 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

issues arise in future antidumping

proceedings involving merchandise

from the Russian Federation, the status

of market reforms and market

orientation of specific industries will be

carefully evaluated if raised by parties

in those proceedings.

Comment 9: Separate Rates

Petitioners argue that Avisma and

SMW are subject to de jure and de facto

government control and thus do not

warrant separate rates.

SMW and Avisma counter that they

are fully entitled to separate rates.

DOC Position

We agree with respondents in part. As

is detailed above, we find that SMW has

demonstrated the absence of de jure and

de facto government control and thus is

entitled to a separate rate in both

proceedings. However, because Avisma

did not make any POI U.S. sales of

subject merchandise in either

proceeding, it is not necessary to

address the question of whether Avisma

should be assigned a separate rate since

such an action would result in no

difference in the deposit rate that would

apply to any future direct U.S. sales by

Avisma.

Comment 10: Export Taxes

Petitioners argue that a tax imposed

by the Russian government on

magnesium exports must be accounted

for in making LTFV comparisons

because (1) section 772(d)(2)(B) requires

deduction from U.S. price of export

taxes, and (2) the tax imposition had the

effect of reducing net receipts to the

Russian producers selling their

magnesium.

DOC Position

We disagree, and have not accounted

for the export tax in our LTFV

calculations. With respect to the

reduction of net receipts to Russian

producers, the premise in determining

values in NME proceedings is that

pecuniary aspects of internal

transactions are considered meaningless

and thus ignored. The export tax paid to

an NME government is an intra-NME

transfer of funds between a Russian

producer and the Russian government.

As such, it is inappropriate to account

for such transfers in our LTFV analysis

just as it is NME prices and costs.

The Department has interpreted

section 772(e)(2), another paragraph

dealing with the general question of

reductions to U.S. price, as not requiring

the deduction of selling expenses from

ESP when FMV is based on factors of

production. The issue of the export tax

is analogous. Similarly, we interpret

772(d)(2)(B) as not requiring the

deduction of an intra-NME transfer of

funds, even if it is in the form of an

export tax. Finally, we note that, in

these proceedings, even if a reduction to

USP to account for the export tax had

been deemed appropriate, it would not

have resulted in positive margins for

any company receiving a calculated

rate.

Comment 11: Surrogate Country

Selection

Avisma and SMW contend that

Poland, not Brazil, is the more

appropriate surrogate country because

Poland is the market economy country

that most resembles the Russian

Federation in economic terms and

because Poland produces comparable

merchandise. The companies assert that,

in selecting a surrogate country,

economic similarity should outweigh

production of the investigated product.

Petitioners argue that Brazil is the

appropriate surrogate country citing,

among other factors weighing against

selection of Poland, the fact that Poland

produces an insignificant quantity of

aluminum and no magnesium.

DOC Response

We agree with petitioners. Selection

of a proper surrogate country must be

made on case-by-case basis, in

consideration of the Department’s

judgment of how to weigh facts on the

record within the parameters prescribed

by statute and regulations, as well as

case precedent. Based on our experience

in this case and previous proceedings

involving magnesium, we judged

electricity use to be a very important

factor and thus gave it great weight

under the rubric of product

comparability. Given the economic

comparability of Brazil to the Russian

Federation, and since Brazil is a

significant producer of electricityintensive products such as magnesium

and aluminum, we continue to find that

Brazil is the most appropriate surrogate

country in this case.

Comment 12: Quantity and Surrogate

Value of Natural Gas, Liquid Petroleum

Gas, and Heavy Oil

Petitioners contend that the

Department should correct for a

mathematical error made in converting

a surrogate value for natural gas from a

price per cubic meter to a price per

metric ton. Petitioners also suggest a

value of $290/MT to be the appropriate

surrogate value for liquid petroleum gas.

Petitioners claim that, for both Avisma

and SMW, reported usage of heavy oil

and natural gas appears to represent

theoretical amounts that do not account

for thermal losses (which petitioners

suggest should be at least 30 percent).

Avisma, SMW, AIOC, Interlink and

Razno argue that a value of $142.86/MT

is correct because of an error in the

source of petitioners’ figure.

DOC Position

We agree with Avisma et al. as to the

proper conversion of natural gas

quantities. We do not need to address

the question about the appropriate value

for LPG because we are basing the value

for this factor on natural gas. With

respect to actual use of heavy oil and

natural gas, we did not discover the

error claimed by petitioners at

verification and thus have not changed

the reported quantities.

Comment 13: Quantity and Surrogate

Value for Timber

Petitioners contend that the

Department, in calculating FMV, should

use the information on the record to

value the timber used by Avisma and

SMW and convert from cubic meters to

kilograms.

Avisma, SMW, AIOC, Interlink and

Razno advocate conversion of reported

figures to board feet rather than

kilograms, and use of the POI value of

lumber per board foot in the United

States.

DOC Position

We agree with petitioners and have

valued timber based on their suggested

methodology. With respect to the

contention of Avisma et al., use of U.S.

values for production factors is not

appropriate in NME proceedings,

particularly when surrogate-country

values are available.

Comment 14: Surrogate Values of

Carnallite Concentrate and Dehydrated

Carnallite

Petitioners argue that the price of

dolomite is not an appropriate surrogate

for carnallite concentrate and

dehydrated carnallite (which, unlike

dolomite, are processed materials).

Petitioners advocate increasing the

dolomite value used in the preliminary

determinations to account for

processing associated with the

manufacture from raw carnallite of

either concentrated carnallite or

dehydrated carnallite.

Avisma and SMW argue that the price

of dolomite is a reasonable surrogate for

the price of carnallite concentrate

because the two materials have similar

magnesium contents and the processing

necessary to transform raw carnallite

into carnallite concentrate is minimal.

The companies contend that the value

for calcinated dolomite is not a suitable
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16449

surrogate for carnallite concentrate

because the two materials have

completely different chemistries

(chiefly, the absence of magnesium

chloride in calcinated dolomite) and are

used in substantially different

magnesium production processes. The

two companies advocate calculation of

a value for dehydrated carnallite used

by SMW based on Avisma’s factors of

production for that commodity.

DOC Position

We agree with Avisma and SMW. We

used the price of dolomite in Brazil, as

provided in the petition, as the

surrogate for carnallite concentrate.

Dolomite, with a comparable

magnesium chloride content, is the most

appropriate substitute available in the

absence of an actual price in Brazil for

carnallite concentrate. We have also

calculated a value for dehydrated

carnallite based on Avisma’s factors of

production.

Comment 15: Quantity and Surrogate

Value of Labor

Petitioners advocate corrections to

reported labor figures based on

verification findings. Petitioners also

argue that the Department should use as

a surrogate 1993 wage rates in Brazil to

value unskilled labor.

DOC Position

We agree with petitioners and have

both corrected the reported labor figures

and adopted the alternative value for

unskilled labor.

Comment 16: Inflation Adjustments for

Brazil Values

Petitioners contend that 1992 Brazil

values used as surrogate values should

be adjusted for inflation.

Avisma, SMW, AIOC, Interlink and

Razno argue that no adjustment is

appropriate since dollar-denominated

prices of commodity chemicals cannot

be assumed to have risen between 1992

and the POI.

DOC Position

We disagree with petitioners. Since

we do not know the dates or exchange

rates used to convert these values into

dollars, an appropriate adjustment (if

any) for dollar inflation cannot be

determined. Further, the magnitude of

any adjustment would likely be small

since the data are nearly

contemporaneous with the POI.

Comment 17: Concentration/Purity

Levels of Material Inputs

Petitioners contend that appropriate

adjustments should be made for

differences in concentration or purity

between surrogate values on the one

hand and materials used in production

on the other hand. However, petitioners

also argue that the Department should

not assume that surrogate values

represent 100 percent concentration and

therefore should make no adjustment

where the concentration applicable to a

surrogate value cannot be determined.

DOC Position

Where we have been able to

determine the purity or concentration

applicable to a surrogate value, we have

adjusted for differences, if any, between

the surrogate and the actual material.

Otherwise, we have attempted no

adjustment for purity or concentration.

Continuation of Suspension of

Liquidation

In accordance with section

735(c)(4)(A) of the Act, we are directing

the Customs Service to continue to

suspend liquidation of all entries of

pure magnesium from the Russian

Federation that are entered, or

withdrawn from warehouse, for

consumption on or after November 7,

1994, which is the date of publication

of our notice of preliminary

determination in the Federal Register.

The following companies will be

excepted from these instructions

because their sales of pure magnesium

were found not to have been sold below

fair value: AIOC, Amalgamet, Gerald

Metals, Greenwich Metals, Hochschild

Partners, Hunter Douglas, Interlink, MG

Metals, Razno Alloys, or SMW. These

companies will be excluded from an

antidumping duty order should one be

issued.

We are also directing the Customs

Service to suspend liquidation of all

entries of alloy magnesium from the

Russian Federation entered, or

withdrawn from warehouse, for

consumption on or after August 9, 1994

(i.e., the date that is 90 days prior to the

date of publication of this notice in the

Federal Register). Gerald Metals and

SMW will be excepted from these

instructions because their sales of alloy

magnesium were found not to have been

sold below fair value. The Customs

Service shall, in each proceeding,

require a cash deposit or posting of a

bond equal to the estimated amount by

which the FMV exceeds the USP as

shown below. These suspension of

liquidation instructions will remain in

effect until further notice.

The weighted-average dumping

margins are as follows:

A. PURE MAGNESIUM

Exporter/manufacturer/producer

Weightedaverage

margin percentages

AIOC* ....................................................................................................................................................................................................... 0.00

AIOC/Other .............................................................................................................................................................................................. 100.25

Gerald Metals* ......................................................................................................................................................................................... 0.00

Gerald Metals/Other ................................................................................................................................................................................ 100.25

Greenwich Metals* ................................................................................................................................................................................... 0.00

Greenwich Metals/Other .......................................................................................................................................................................... 100.25

Hochschild Partners* ............................................................................................................................................................................... 0.00

Hochschild Partners/Other ....................................................................................................................................................................... 100.25

Hunter Douglas* ...................................................................................................................................................................................... 0.00

Hunter Douglas/Other .............................................................................................................................................................................. 100.25

Interlink* ................................................................................................................................................................................................... 0.00

Interlink/Other .......................................................................................................................................................................................... 100.25

MG Metals/Avisma ................................................................................................................................................................................... 0.00

MG Metals/SMW ...................................................................................................................................................................................... 0.00

MG Metals/Other ..................................................................................................................................................................................... 100.25

Razno Alloys/SMW .................................................................................................................................................................................. 0.00

Razno Alloys/Other .................................................................................................................................................................................. 100.25

SMW/SMW .............................................................................................................................................................................................. 0.00
16450 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

A. PURE MAGNESIUM—Continued

Exporter/manufacturer/producer

Weightedaverage

margin percentages

SMW/Other .............................................................................................................................................................................................. 100.25

Russia-wide ............................................................................................................................................................................................. 100.25

* This company has not disclosed for the public record the identity of its supplier or suppliers in Russia. Upon public disclosure of this information to the Department, we will notify the Customs Service that sales through certain supply channels have an LTFV margin of zero and thus an

exclusion from any order resulting from this investigation. Until and unless such disclosure is made, all entries will be subject to the ‘‘Russiawide’’ deposit rate.

B. ALLOY MAGNESIUM

Manufacturer/producer/exporter

Weighted

average

margin percentages

Critical

circumst.

Gerald Metals* ................................................................................................................................................................... 0.00 No.

Gerald Metals/Other .......................................................................................................................................................... 153.65 Yes.

SMW/SMW ........................................................................................................................................................................ 0.00 No.

SMW/Other ........................................................................................................................................................................ 153.65 Yes.

Russia-wide ....................................................................................................................................................................... 153.65 Yes.

* This company has not disclosed for the public record the identity of its supplier or suppliers in Russia. Upon public disclosure of this information to the Department, we will notify the Customs Service that sales through certain supply channels have an LTFV margin of zero and thus an

exclusion from any order resulting from this investigation. Until and unless such disclosure is made, all entries will be subject to the ‘‘Russiawide’’ deposit rate.

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determinations. As our final

determinations are affirmative, the ITC

will within 45 days determine whether

imports of either product are materially

injuring, or threaten material injury to,

the U.S. industry. In each proceeding, if

the ITC determines that material injury,

or threat of material injury does not

exist, that proceeding will be terminated

and all securities posted will be

refunded or cancelled. If, in either

proceeding, the ITC determines that

such injury does exist, the Department

will issue an antidumping duty order

for the appropriate proceeding directing

Customs officials to assess antidumping

duties on all imports of the subject

merchandise entered for consumption

on or after the effective date of the

suspension of liquidation.

These determinations are published

pursuant to section 735(d) of the Act

and 19 CFR 353.20(a)(4).

Susan G. Esserman,

Assistant Secretary for Import

Administration.

APPENDIX I

Company Rus. pure CASE rus.

alloy

Supp. QR filing dateVerif. start

date

Verif. end

date Location

Hunter Douglas ..................................... X ................... ...................... 12/8 12/8 Chicago.

MG Metals ............................................. X ................... ...................... 12/6 12/7 Chicago.

Gerald Metals ........................................ X X 11/1, 30 ....... 12/13 1/25 Lausanne and Stamford

CT.

Interlink .................................................. X ................... 11/8 ............. 12/15 1/10 Fribourg and NYC.

SMW ...................................................... X X ...................... 1/18 1/19 Solikamsk, Russia.

AVISMA ................................................. X ................... ...................... 1/16 1/17 Berezniki, Russia.

Razno .................................................... X ................... ...................... 1/23 1/24 Zurich.

Hochschild Partners .............................. X ................... ...................... 1/26 1/27 NYC.

Greenwich Metals ................................. X X ...................... 1/30 1/31 Greenwich, CT.

Amalgamet ............................................ X X 1/4 ............... 2/1 2/2 Toronto.

AIOC ...................................................... X ................... 11/21 ........... 12/15 2/9 NYC.

[FR Doc. 95–7777 Filed 3–29–95; 8:45 am]

BILLING CODE 3510–DS–P

U.S. DEPARTMENT OF COMMERCE

Minority Business Development

Agency

Native American Business

Development Center Applications:

Minnesota

AGENCY: Minority Business

Development Agency, Commerce.

ACTION: Cancellation.

SUMMARY: The Minority Business

Development Agency is cancelling the

announcement to solicit competitive

applications to organizations to operate

its Minnesota Native American Business

Development Center. The solicitation

was originally published in the Federal