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Notice

Silicon Metal From Brazil: Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent Not To Revoke Order in Part

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of antidumping duty administrative review and notice of intent not to revoke order in part.

SUMMARY:

In response to requests by American Silicon Technologies, Elkem Metals Company, and Globe Metallurgical, Inc. (collectively “petitioners”), and by Companhia Brasileira Carbureto De Calcio (“CBCC”), Ligas de Aluminio S.A. (“LIASA”), Eletrosilex S.A. (“Eletrosilex”), RIMA Industrial S.A. (“RIMA”) and Companhia Ferroligas Minas Gerais—Minasligas (“Minasligas”), the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on silicon metal from Brazil. The period of review (“POR”) is July 1, 1998 through June 30, 1999.

We preliminarily determine that two respondents sold subject merchandise at less than normal value (“NV”) during the POR. If these preliminary results are adopted in the final results of this administrative review, we will instruct Customs to assess antidumping duties on all appropriate entries. We invite interested parties to comment on the preliminary results. Parties who submit comments in this proceeding should also submit with the argument: (1) A statement of the issue(s), and (2) a brief summary of the argument (not to exceed five pages). Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette.

EFFECTIVE DATE:

August 4, 2000.

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FOR FURTHER INFORMATION CONTACT:

Maisha Cryor (RIMA), telephone: (202) 482-5831; Nova Daly (Eletrosilex), 482-0989; Mark Manning (LIASA), 482-3936, Zev Primor (CBCC), 482-4114; Alexander Amdur ( Minasligas), 482-5346, AD/CVD Enforcement, Office IV, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations at 19 CFR part 351 (1999).

Background

On July 31, 1991, the Department published in the Federal Register the antidumping duty order on silicon metal from Brazil (56 FR 36135). On July 15, 1999, the Department published in the Federal Register a notice of opportunity to request an administrative review of the antidumping duty order on silicon metal from Brazil for the period July 1, 1998, through June 30, 1999 (64 FR 38181). On July 27, 1999, in accordance with 19 CFR 351.213(b)(1), LIASA requested that the Department conduct an administrative review of its sales and revoke the order with respect to LIASA pursuant to 19 CFR 351.222(e). Also on July 27, 1999, RIMA and Minasligas requested that the Department conduct an administrative review of their respective sales. On July 28, 1999, Eletrosilex requested that the Department conduct an administrative review of its sales. Also on July 28, 1999, CBCC requested that the Department conduct an administrative review of its sales and revoke the order with respect to CBCC pursuant to 19 CFR 351.222(e).

On July 30, 1999, petitioners requested that the Department conduct an administrative review of sales made by CBCC, Eletrosilex, LIASA, Minasligas, and RIMA. On August 30, 1999, in accordance with 19 CFR 351.221(b)(1), the Department published in the Federal Register a notice of initiation of this antidumping duty administrative review (64 FR 47167).

The Department issued questionnaires on October 19, 1999, to CBCC, Eletrosilex, LIASA, Minasligas, and RIMA, and received responses to Section A on December 2, 1999, from all respondents. The Department received responses to sections B, C, and D of the questionnaire from Eletrosilex on December 17, 1999, and from CBCC, LIASA, Minasligas, and RIMA on December 27, 2000. The Department issued supplemental questionnaires to LIASA on February 25, 2000, March 23, 2000, and June 6, 2000, and received responses on March 27, 2000, April 18, 2000, and June 12, 2000. The Department issued supplemental questionnaires to Minasligas on February 25, 2000, May 11, 2000, and June 2, 2000, and received responses on March 27, 2000, May 26, 2000, and June 7, 2000. The Department issued supplemental questionnaires to CBCC and Rima on February 25, 2000, and received responses on March 27, 2000. The Department issued a supplemental questionnaire to Eletrosilex on March 2, 2000, and did not receive a response.

On March 2, 2000, in accordance with section 751(a)(3)(A) of the Act, the Department published in the Federal Register its notice extending the deadline for the preliminary results until July 30, 2000 (65 FR 11285). The Department is conducting this review in accordance with section 751 of the Act.

Scope of Review

The merchandise covered by this administrative review is silicon metal from Brazil containing at least 96.00 percent but less than 99.99 percent silicon by weight. Also covered by this administrative review is silicon metal from Brazil containing between 89.00 and 96.00 percent silicon by weight but which contains more aluminum than the silicon metal containing at least 96.00 percent but less than 99.99 percent silicon by weight. Silicon metal is currently provided for under subheadings 2804.69.10 and 2804.69.50 of the Harmonized Tariff Schedule (HTS) as a chemical product, but is commonly referred to as a metal. Semiconductor grade silicon (silicon metal containing by weight not less than 99.99 percent silicon and provided for in subheading 2804.61.00 of the HTS) is not subject to the order. Although the HTS item numbers are provided for convenience and for U.S. Customs purposes, the written description remains dispositive. Start Printed Page 47961

Verification

As provided in section 782(i) of the Act, we conducted verifications of the information provided by CBCC, LIASA, Minasligas, and RIMA. RIMA was verified from April 25, 2000, through May 4, 2000, CBCC was verified from May 8, 2000, through May 12, 2000, Minasligas was verified from June 13, 2000, through June 21, 2000 and LIASA was verified from June 19, 2000, through June 23, 2000. We used standard verification procedures including; on-site inspection of the manufacturers' facilities, examination of relevant sales and financial records, and selection of relevant source documentation as exhibits. Our verification findings are detailed and on file in the Central Records Unit, Room B099 of the Main Commerce building (CRU—Public File).

Facts Available (“FA”)

Eletrosilex

In accordance with section 776 of the Act, we have determined that the use of adverse FA is warranted for Eletrosilex.

1. Application of FA

Section 776(a) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides information which cannot be verified, the Department shall use, subject to sections 782(d) and (e), facts otherwise available in reaching the applicable determination. In this review, as described in detail below, Eletrosilex failed to provide the necessary information in the form and manner requested. Thus, pursuant to section 776(a) of the Act, the Department is applying, subject to section 782(d), facts otherwise available.

Section 782(d) of the Act provides that, if the Department determines that a response to a request for information does not comply with the request, the Department will inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person the opportunity to remedy or explain the deficiency. If that person submits further information that continues to be unsatisfactory, or this information is not submitted within the applicable time limits, the Department may, subject to section 782(e), disregard all or part of the original and subsequent responses, as appropriate.

Pursuant to section 782(e) of the Act, not withstanding the Department's determination that the submitted information is “deficient” under section 782(d) of the Act, the Department shall not decline to consider such information if all of the following requirements are satisfied: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

After careful analysis, we have determined that the use of FA with respect to Eletrosilex is appropriate. Eletrosilex failed to respond to the Department's request for additional information in its supplemental questionnaire dated March 2, 2000. Thus, Eletrosilex did not submit requested information by the established deadline. Furthermore, the information on the record is so incomplete that it cannot serve as a reliable basis for reaching the applicable determination or an appropriately calculated margin for Eletrosilex. See Memorandum Regarding the Application of Adverse Facts Available to Eletrosilex, dated July 27, 2000 (“Eletrosilex FA Memo”). For these reasons, the Department has determined that the use of FA is warranted.

2. Selection of FA

In selecting from among the facts otherwise available, section 776(b) of the Act authorizes the Department to use an adverse inference if the Department finds that an interested party failed to cooperate by not acting to the best of its ability to comply with the request for information. See e.g., Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997).

Eletrosilex completely failed to respond to the Department's supplemental requests for information, which prevented the Department from making critical decisions involving the calculation of Eletrosilex's dumping margin. In addition, as required by section 782(d), Eletrosilex was put on notice, via Department extension letters and other correspondence, that failure to respond to the Department's supplemental request for information constituted a deficiency which could result in the use of FA. See Extension Letter from U.S. Department of Commerce to Eletrosilex, dated March 17, 2000; Letter from U.S. Department of Commerce to Eletrosilex, dated April 12, 2000. Moreover, section 782(e) is not applicable as the information Eletrosilex submitted is so incomplete that it cannot serve as a reliable basis for making a preliminary determination. Specifically, because of Eletrosilex's failure to provide: audited financial statements, explanations of affiliation issues, product specifications (regarding silicon content), values for billing adjustments, values for inland freight, reconciliation of direct and indirect selling expenses, reconciliation of packing expenses, reconciliation of U.S. imputed credit expenses, detail regarding the costs associated with furnace shut downs, reconciliation of ICMS and IPI taxes, and a reconciliation of total cost of manufacturing (“TOTCOM”) figures, the Department has determined that the information on the record is insufficient for purposes of calculating a dumping margin. See Eletrosilex FA Memo. Accordingly, Eletrosilex did not act to the best of its ability to comply with the request for information and thus, under section 776(b) of the Act, an adverse inference is warranted. For further discussion of the Department's selection of FA, see Eletrosilex FA Memo.

Pursuant to section 776(b) of the Act, we are basing Eletrosilex's margin on adverse FA for purposes of these preliminary results. As adverse FA for Eletrosilex, we have used the highest rate determined for Eletrosilex in any segment of this proceeding. This rate is 93.20 percent. See Silicon Metal From Brazil; Notice of Final Results of Antidumping Duty Administrative Review, 64 FR 6305 (February 9, 1999) (“1996-1997 Silicon Metal”).

3. Corroboration of Information Used as FA

Section 776(b) of the Act authorizes the Department to use as adverse FA information derived from the petition, the final determination from the less than fair value (“LTFV”) investigation, a previous administrative review, or any other information placed on the record.

Section 776(c) of the Act requires the Department to corroborate, to the extent practicable, secondary information used as FA. Secondary information is defined as “[i]nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See Statement of Administrative Action (“SAA”) Start Printed Page 47962accompanying the URAA, H.R. Doc. No. 316, 103d Cong., 2d Sess. 870 (1994).

The SAA further provides that the term “corroborate” means simply that the Department will satisfy itself that the secondary information to be used has probative value (see SAA at 870). Thus, to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. The rate selected is a calculated rate from a prior segment of this proceeding. Thus, it is not necessary to question the reliability of the rate. See e.g., Extruded Rubber Thread from Malaysia; Final Results of Antidumping Duty Administrative Review, 65 FR 6140 (February 8, 2000) and 1996-1997 Silicon Metal.

As to the relevance of the margin used for adverse FA, the courts have stated that “by requiring corroboration of adverse inference rates, Congress clearly intended that such rates should be reasonable and have some basis in reality.” See F.Lli De Cecco Di Filippo Fara S. Martino S.p.A., v. U.S., ____ CAFC __, Slip Op. 99-1318 (June 16, 2000).

In determining a relevant and reasonable adverse FA rate for Eletrosilex, the Department notes that margins for Eletrosilex have historically fluctuated between the present rate of 18.87 percent and the 93.20 percent rate, determined for the1996-1997 POR. See Final Results of Antidumping Duty Administrative Review: Silicon Metal From Brazil, 65 FR 7497 (February 15, 2000) (“1997-1998 Silicon Metal”), and the 1996-1997 Silicon Metal. Eletrosilex received a calculated rate of 18.87 percent for the 1997-1998 POR, an FA rate of 93.20 in the 1996-1997 POR, a calculated rate of 39.00 percent for the 1995-1996 POR, a calculated rate of 6.33 percent for the 1994-1995 POR, a calculated rate of 38.39 percent for the 1993-1994 POR, and a calculated rate of 51.84 percent for the 1992-1993 POR. See: 1997-1998 Silicon Metal, 1996-1997 Silicon Metal, Final Results of Antidumping Duty Administrative Review: Silicon Metal From Brazil, 63 FR 6899 (February 11, 1998) (“1995-1996 Silicon Metal”), Silicon Metal From Brazil; Amended Final Results of Antidumping Duty Administrative Review, 62 FR 54087 (October 17, 1997), Silicon Metal From Brazil; Amended Final Results of Antidumping Duty Administrative Review, 62 FR 54094 (October 17, 1997) and Silicon Metal From Brazil; Amended Final Results of Antidumping Duty Administrative Review in Accordance With Court Decision, 65 FR 33297 (May 23, 2000), respectively. Furthermore, during the last three administrative reviews, whereas Eletrosilex has received margins of 18.87 percent, 93.20 percent, and 39.00 percent, other parties in this proceeding have had calculated rates below 10 percent. See 1997-1998 Silicon Metal, 1996-1997 Silicon Metal, and 1995-1996 Silicon Metal, respectively.

Noting that Eletrosilex's rates have moved up and down from one period of review to the next, and given Eletrosilex's failure to cooperate to the best of its ability in this review, we have no reason to believe that Eletrosilex's dumping margin would be any less than the highest rate at which we have previously found Eletrosilex to have dumped or that other available rates would ensure that Eletrosilex does not benefit by failing to cooperate fully. Thus, we used the highest rate determined for Eletrosilex of 93.20 percent.

Partial FA

Minasligas

The Department has determined, in accordance with section 776 of the Act, that the application of partial FA is warranted for Minasligas.

In the course of verification, the Department discovered a U.S. sale, made by Minasligas within the current POR, which Minasligas had not reported. Minasligas officials explained that the failure to report this sale was inadvertent. For further information regarding the discovery of this unreported sale, see Sales Verification Report for Minasligas, dated July 31, 2000.

For purposes of these preliminary results, the Department has concluded that because Minasligas failed to report this sale, an adverse FA is warranted for the sale. Consequently, as partial adverse FA we have preliminarily calculated a margin for that transaction using the actual price, which is on the record in verification documents, and the highest U.S. selling expenses from Minasligas' reported transactions.

Intent Not To Revoke

The Department “may revoke, in whole or in part” an antidumping duty order upon completion of a review under section 751 of the Act. While Congress has not specified the procedures that the Department must follow in revoking an order, the Department has developed a procedure for revocation that is described in 19 CFR 351.222. This regulation requires, inter alia, that a company requesting revocation must submit the following: (1) A certification that the company has sold the subject merchandise at not less than NV in the current review period and that the company will not sell at less than NV in the future; and (2) a certification that the company sold the subject merchandise in commercial quantities in each of the three years forming the basis of the revocation request. See 19 CFR 351.222(e)(1). Upon receipt of such a request, the Department may revoke an order, in part, if it concludes, inter alia, that the exporter and producer covered at the time of revocation: (1) sold subject merchandise at not less than NV for a period of at least three consecutive years; and (2) is not likely in the future to sell the subject merchandise at less than NV. See 19 CFR 351.222(b)(2) (1999); Final Results of Antidumping Duty Administrative Review and Determination Not To Revoke Order In Part: Pure Magnesium from Canada, 64 FR 12977, 12982 (March 16, 1999) (“Pure Magnesium from Canada”).

I. CBCC

On July 28, 1999, CBCC submitted a request, in accordance with 19 CFR 351.222(e), that the Department revoke the order covering silicon metal from Brazil with respect to its sales of subject merchandise. In accordance with 19 CFR 351.222(e)(1), the request was accompanied by certifications from CBCC that for a consecutive three-year period, including this review period, it sold the subject merchandise in commercial quantities at not less than NV, and would continue to do so in the future. CBCC also agreed to its immediate reinstatement in the relevant antidumping order, as long as any firm is subject to the order, if the Department concludes under 19 CFR 351.216 that, subsequent to revocation, it sold the subject merchandise at less than NV.

On March 23, 2000, the Department requested additional information from CBCC and interested parties regarding CBCC's revocation request. We received comments from CBCC and from petitioners in April and May of 2000.

After review of the record, the Department preliminarily determines that although CBCC has had zero or de minimis dumping margins for the previous two review periods, during the current review CBCC's weight-averaged dumping margin is preliminarily determined to be 0.63 percent, an above de minimis rate. A rate must be below 0.50 percent to be de minimis. See 19 CFR 351.106(c). Consequently, CBCC failed to achieve sales of subject merchandise “at not less than NV for a period of at least three consecutive years” as required by the Department's regulations. Because one of the Start Printed Page 47963requirements to qualify for revocation has not been met, the Department has not addressed the issues of commercial quantities and whether the continued application of the antidumping duty order is necessary to offset dumping with regard to CBCC. However, should this rate be revised to below 0.50 percent for the final results of review, it will be necessary to address these factors at that time. Interested parties are invited to comment on these factors in their case briefs.

As a result of our analysis of factual information submitted to us during the course of this review, we preliminarily intend not to revoke this order with respect to CBCC.

II. LIASA

On July 27, 1999, LIASA submitted a request, in accordance with 19 CFR 351.222(e), that the Department revoke the order covering silicon metal from Brazil with respect to its sales of this merchandise. In accordance with 19 CFR 351.222(e)(1), the request was accompanied by certifications from LIASA that for a consecutive three-year period, including this review period, it had sold the subject merchandise in commercial quantities at not less than NV, and would continue do so in the future. LIASA also agreed to its immediate reinstatement in the relevant antidumping order, as long as any firm is subject to the order, if the Department concludes under, 19 CFR 351.216, that subsequent to revocation, it sold the subject merchandise at less than NV.

On March 23, 2000, the Department requested additional information from LIASA and interested parties regarding LIASA's revocation request. We received comments from LIASA and from petitioners in April and May of 2000.

For these preliminary results, the Department has relied upon LIASA's sales activity during the 1996-1997, 1997-1998, and 1998-1999 review periods in making its decision regarding LIASA's revocation request. LIASA argues that, as part of its normal business operations, it sells “small” quantities of silicon metal to all, i.e., foreign and domestic, customers. Accordingly, LIASA claims, the quantities of the subject merchandise sold to the United States are not small but rather “commercially representative” of LIASA's activity in all markets. See LIASA's Revocation Comments, dated April 18, 2000, at 4 (“LIASA's Comments”). Petitioners argue that LIASA's small individual sales are not relevant because the Department evaluates commercial quantities based on aggregate volumes of such sales during each of the consecutive PORs rather than the volumes of individual sales. See “Petitioners Rebuttal Comments,” dated May 2, 2000, at 4.

In accordance with the regulations described above, we must determine whether the company requesting revocation sold the subject merchandise in commercial quantities in each of the three years forming the basis of the revocation request. See 19 CFR 351.222(d)(1). In other words, the Department must determine whether the quantities sold during these time periods are reflective of the company's normal commercial activity. See Final Results of Antidumping Duty Administrative Reviews and Determination To Revoke in Part Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Canada, 64 FR 2175 (January 13, 1999) (“Certain Corrosion-Resistant Carbon Steel Flat Products from Canada”). Sales during a POR which, in the aggregate, are of an abnormally small quantity, either in absolute terms or in comparison to an appropriate benchmark period, do not generally provide a reasonable basis for determining that the discipline of the order is no longer necessary to offset dumping. Id.; see also, Pure Magnesium From Canada. However, the determination as to whether or not sales volumes are made in commercial quantities is made on a case-by-case basis, based on the unique facts on the record of each proceeding. See section 751(d) of the Act; 19 CFR 351.222; see also Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke the Antidumping Duty Order: Brass Sheet and Strip from the Netherlands 65 FR 750, (January 6, 2000) (“Brass from Netherlands”).

In the present case, we compared LIASA's aggregate U.S. sales during each of the PORs to the six-month period of investigation (“POI”). The POI was used as an appropriate benchmark because it reflects sales activity without the discipline of an antidumping order in place. The comparison indicates that LIASA's sales to the U.S. market during the three above-mentioned PORs represent 0.69 percent, 12.77 percent, and 1.6 percent, of the U.S. sales during the POI, respectively. When the POI sales are annualized, the sales for each of the three consecutive PORs decline even further to approximately 0.35 percent, 6.38 percent, and 0.8 percent, respectively, when compared to the POI sales volume. In Brass from Netherlands, the Department denied revocation by stating that the volume of merchandise sold to the United States was approximately two percent of the volume of merchandise sold in the benchmark investigative period. Id. at 752. Similarly, in the most recently completed segment of the proceeding, the Department denied revocation for CBCC because it failed to meet the commercial quantities threshold. In that particular administrative review, the Department determined that CBCC's aggregate sales during one of the three-consecutive years forming the basis for revocation, represented approximately 2 percent of the sales volume sold during the POI. Based on that finding, inter alia, the Department denied CBCC's revocation request. See 1997-1998 Silicon Metal. In the instant review, we find that in 1996-1997 and 1998-1999 PORs, LIASA's sales to the United States were significantly lower, as a percentage of its POI sales, than in cases mentioned above.

After review of the criteria outlined at sections 351.222(b) and 351.222(d) of the Department's regulations, the Department's practice, the comments of the parties, and the evidence on the record, we have preliminarily determined that the requirements for revocation have not been met. Based on the preliminary results of this review and the final results of the two preceding reviews, LIASA has not demonstrated three consecutive years of sales in commercial quantities. Therefore, because LIASA has not sold subject merchandise in commercial quantities during each of the three consecutive PORs, we do not intend to revoke the antidumping duty order as to LIASA. See Memorandum Regarding “Eighth Administrative Review: Commercial Quantities,” dated July 30, 2000.

Additionally, because one of the requirements to qualify for revocation has not been met, the Department has not addressed the issue of whether the continued application of the antidumping duty order is necessary to offset dumping with regard to LIASA. However, should this decision be revised for the final results of review, it will be necessary to address this factor at that time. Interested parties are invited to comment on this factor in their case briefs.

NV Comparisons

During the POR, all U.S. sales by Brazilian respondents were export price (“EP”), none were constructed export price (“CEP”) sales. To determine whether sales of silicon metal by the Brazilian respondents to the United States were made at less than normal value, we compared EP to the NV, as Start Printed Page 47964described in the “EP” and “NV” sections of this notice, below. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual EP transactions.

Sales Reviewed

We have continued to employ the approach, adopted in the final results of the second review of this order, covering the 1992-1993 POR, in determining which U.S. sales to review for all companies. If a respondent sold subject merchandise, and the importer of that merchandise had at least one entry during the POR, we reviewed all sales to that importer during the POR. See Silicon Metal from Brazil, Final Results of Antidumping Duty Administrative Review, 61 FR 46763 (September 5, 1996).

Product Comparisons

In accordance with section 771(16) of the Act, we considered all products produced by the respondents, covered by the description in the “Scope of Review” section, above, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. Further, as in the preceding segment of this proceeding, we have continued to treat all silicon metal meeting the description of the merchandise under the “Scope of Review” section, above (with the exception of slag and contaminated products) as identical products for purposes of model-matching. See Silicon Metal From Brazil: Preliminary Results, Intent To Revoke in Part, Partial Rescission of Antidumping Duty Administrative Review, and Extension of Time Limits, 64 FR 43161 (August 9, 1999).

Level of Trade (“LOT”)

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same LOT as the EP transaction. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive selling, general and administrative (“SG&A”) expenses and profit. For EP sales, the U.S. LOT is also the level of the starting-price sale, which is usually from the exporter to the importer.

To determine whether NV sales are at a different LOT than EP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different LOT, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and the export transaction, we make a LOT adjustment under section 773(a)(7)(A) of the Act.

In determining whether separate LOTs actually existed in the home and U.S. markets for each respondent, we examined whether the respondent's sales involved different marketing stages (or their equivalent) based on the channel of distribution, customer categories, and selling functions (or services offered) to each customer or customer category, in both markets.

CBCC reported sales through one LOT, consisting of three customer categories (i.e., original equipment manufacturers, distributors and silicon metal producers) which also represent three channels of distribution for its home market sales. CBCC reported only EP sales in the U.S. market. For EP sales, CBCC reported one customer category and one channel of distribution (i.e., direct sales to an unaffiliated trading company, for sale to the U.S. market). CBCC claimed in its response that EP sales were made at the same LOT as home market sales to unaffiliated customers. For this reason, CBCC has not asked for a LOT adjustment to NV for comparison to its EP sales.

In analyzing CBCC's selling activities for the home and U.S. markets, we determined that essentially the same selling functions were provided for both markets. These selling functions in both markets were minimal in nature and usually limited to arranging for freight, if requested by the customer. No other selling functions or services were rendered for either home market (regardless of customer category) or EP sales. Therefore, based upon this information, we have preliminarily determined for CBCC that the LOT for all EP sales is the same as that in the home market. Accordingly, because we find the U.S. sales and home market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) of the Act is warranted for CBCC.

RIMA reported sales through one channel of distribution to one customer category (i.e., end users) for home market sales. In the U.S. market, RIMA reported EP sales through one channel of distribution to one customer category (i.e., end users). In its response, RIMA stated that it performs the same type of services for home market customers as it does for its foreign market customers. For this reason, RIMA has not requested a LOT adjustment.

In analyzing RIMA's services for the home and U.S. market, we determined that essentially the same services were provided for both markets. These services in both markets were minimal in nature and limited to arranging for freight and delivery. Therefore, based upon this information, we have preliminarily determined for RIMA that the LOT for all EP sales is the same as that in the home market. Accordingly, because we find the U.S. sales and home market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) of the Act is warranted for RIMA.

LIASA reported one customer category (i.e., “end-user”) and one channel of distribution for its home market sales. LIASA reported only EP sales in the U.S. market. For EP sales, LIASA reported one customer category and one channel of distribution (i.e., direct sales to unaffiliated “end-users” in the U.S. market). LIASA claimed in its response that EP sales were made at the same LOT as home market sales to unaffiliated customers. For this reason, LIASA has not asked for a LOT adjustment to NV for comparison to its EP sales.

In analyzing LIASA's selling activities for its EP sales, we noted that the sales involved basically the same selling activities associated with the home market LOT described above. These selling activities in both markets were minimal in nature and usually limited to arranging for freight, if requested by the customer. No other services were rendered for either home market or EP sales. Therefore, based upon this information, we have preliminarily determined for LIASA that the LOT for all EP sales is the same as that in the home market. Accordingly, because we find the U.S. sales and home market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) of the Act is warranted for LIASA.

Minasligas reported sales through one LOT consisting of one customer category (i.e., original equipment manufacturers) which represents one channel of distribution for its home market sales. Minasligas reported only EP sales in the U.S. market. For EP sales, Minasligas reported one customer category and one channel of distribution (i.e., direct sales to trading companies). Minasligas claimed in its response that its U.S. and home market sales were made at the same LOT. For this reason, Minasligas has not asked for a LOT adjustment to NV for comparison to its EP sales.

In analyzing Minasligas' selling activities for the home and U.S. market, we determined that essentially the same Start Printed Page 47965services were provided for both markets. These selling activities in both markets were minimal in nature and limited to arranging for freight and delivery. No other services were rendered for either home market or EP sales. Therefore, based upon this information, we have preliminarily determined for Minasligas that the LOT for all EP sales is the same as that in the home market. Accordingly, because we find the U.S. sales and home market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) of the Act is warranted for Minasligas.

EP

For CBCC, LIASA, RIMA, and Minasligas, we used the Department's EP methodology, in accordance with section 772(a) of the Act, because the subject merchandise was sold by each producer outside the United States directly to the first unaffiliated purchaser in the United States prior to importation (or to unaffiliated trading companies for export to the United States) and CEP methodology was not otherwise warranted. We made deductions from the starting price for movement expenses in accordance with section 772(c) of the Act. Movement expenses included, where appropriate, foreign inland freight, brokerage and handling, and international freight. Where foreign inland freight was reported inclusive of the value-added tax (“VAT”), we deducted the VAT from the gross freight cost. For Minasligas, we added duty drawback to the starting price. We made company-specific adjustments to EP as follows:

I. RIMA

We recalculated RIMA's inventory carrying costs and indirect selling expenses pursuant to corrections presented at verification. For further discussion of these changes, see Calculation Memorandum for RIMA dated July 30, 2000, and Report on the Verification of the Sales and Cost Responses for Rima, dated July 24, 2000, for further information regarding sales and cost verification.

II. Minasligas

We recalculated Minasligas' U.S. credit expense using corrected payment dates and interest rates. First, we used the date of payment by the U.S. customer to Minasligas for each sale rather than the date of payment by the bank to Minasligas. Second, for the interest rate, Minasligas reported a rate based on the Brazilian dollar Taxa Referencial (“TR”) rate, the published Government of Brazil prime lending rate, while we calculated a U.S. dollar rate based on the Advance Exchange Contract (“ACC”) information presented in Minasligas” March 27, 2000 and May 27, 2000 submissions. Further, we recalculated Minasligas' reported duty drawback adjustment by allocating all import duties, forgiven by the Brazilian government through duty drawback during the POR, over all of Minasligas' export sales of silicon metal during the POR. We also made adjustments for unreported bank charges that we found at verification. For further discussion, see Calculation Memorandum for Minasligas, dated July 31, 2000.

III. LIASA

Although LIASA stated in the narrative section of its questionnaire response that it reported U.S. credit expenses, it did not include this expense in its U.S. market database. We calculated LIASA's U.S. credit expense using its reported date of sale and date of payment. Since LIASA stated that it did not have any short-term borrowing in U.S. dollars, we calculated this expense using an interest rate obtained from the Federal Reserve's data for short-term commercial and industrial loans. For further discussion, see Calculation Memorandum for LIASA dated July 31, 2000.

NV

1. Viability

In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product is greater than five percent of the aggregate volume of U.S. sales), we compared each respondent's volume of home market sales of the foreign like product to the volume of its U.S. sales of subject merchandise, in accordance with section 773(a)(1) of the Act. Since each respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market provides a viable basis for calculating NV for each respondent. Therefore, pursuant to section 773(a)(1)(B) of the Act, we based NV on home market sales.

2. Cost of Production (“COP”) Analysis

In the review segment of this proceeding most recently completed prior to initiating this review, we disregarded home market sales found to be below the cost of production for LIASA. See 1996-1997 Silicon Metal. Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, the Department has reasonable grounds to believe or suspect that sales of the foreign like product under consideration for the determination of NV in this review may have been made by LIASA at prices below the COP as provided by section 773(b)(2)(A)(ii) of the Act.

On April 3, 2000, the petitioners in this proceeding filed a timely sales-below-cost allegation with regard to CBCC, RIMA, and Minasligas. In the cases of CBCC and Minasligas, the petitioners' allegation was based on the respondents' antidumping duty questionnaire responses. Upon review of the allegations, we found that petitioners' methodology provided the Department with a reasonable basis to believe or suspect that sales in the home market had been made at prices below the COP by both CBCC and Minasligas. Accordingly, pursuant to section 773(b)(1) of the Act, we have initiated an investigation to determine whether CBCC and Minasligas' sales of silicon metal were made at prices below COP during the POR. See Analysis of Petitioners' Allegation of Sales Below the COP for CBCC, dated May 23, 2000; Analysis of Petitioners' Allegation of Sales Below the COP for Minasligas, dated May 23, 2000.

With regard to petitioners' allegation against RIMA, petitioners' did not base their sales-below cost analysis of RIMA on company-specific data submitted in RIMA's supplemental questionnaire response submitted on March 27, 2000. When company-specific information has been placed on the record, any subsequent sales-below-cost allegation must take into account such information. See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27336 (May 19, 1997). Therefore, because the petitioners did not take into account RIMA's most current reported sales and cost data, we find that the petitioners did not provide the Department with a reasonable basis to believe or suspect that sales in the home market have been made at prices below the COP. Accordingly, pursuant to section 773(b)(1) of the Act, we have not initiated an investigation to determine whether RIMA's sales of silicon metal were made at prices below COP during the POR. For further discussion of this decision, see Memoranda from Maisha Cryor to Thomas F. Futtner, dated July 24, 2000.

A. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated a product-specific COP based on the sum of each respondent's cost of materials and fabrication for the foreign like product, plus amounts for home market selling, Start Printed Page 47966general and administrative expenses (“SG&A”) expenses, including interest expenses and packing costs.

We relied on the home market sales and COP information submitted by each respondent in its questionnaire responses, except for the following company-specific adjustments described below.

Minasligas

1. In its response, Minasligas allocated its reported costs for silicon metal over different grades of silicon metal, while in its own books and records, it only records one cost for all grades of silicon metal (see e.g., page D-14 of Minasligas' December 27, 1999 response). We calculated one cost for all grades of silicon metal, as Minasligas itself records in its books and records as verified by the Department. See Report on the Verification of Cost Information for Minasligas, dated July 31, 2000.

2. We recalculated variable overhead by: (1) reallocating certain variable overhead expenses by production quantities, as is the Department's practice (see Notice of Preliminary Results of Antidumping Duty Administrative Review: Ferrosilicon From Brazil, 62 FR 16763, 16766 (April 8, 1997)); (2) correcting the errors that we found at verification in other indirect costs; and (3) subtracting packaging costs, which were incorrectly double-reported as part of variable overhead and in the sales response.

3. We recalculated fixed overhead by using the corrected amount of depreciation expense that we found at verification.

4. We did not offset Minasligas' gross charcoal cost by the reported offset for charcoal fines sales because we found at verification that the reported gross charcoal cost already includes an offset for charcoal fines sales.

5. Since we compared both COP and home market prices on an ICMS tax-exclusive basis, we based the electricity cost on the reported gross electricity cost, and not on the reported cost net of the electricity cost paid with ICMS credits. See 1997-1998 Silicon Metal, at 7497, 7507.

Due to the proprietary nature of these issues, for further discussion, see Calculation Memorandum for Minasligas and Minasligas: Report on the Verification of Cost Information Submitted in the Administrative Review Covering July 1, 1998 through June 30, 1999, both dated July 31, 2000.

B. Test of Home Market Sales Prices for CBCC, Minasligas and LIASA

For CBCC, Minasligas and LIASA, we compared the per-unit COP figures for the POR to home market sale prices of the foreign like product, as required under section 773(b) of the Act, in order to determine whether these sales were made at prices below the COP. In determining whether to disregard home market sales made at prices below the COP, we examined whether: (1) within an extended period of time, such sales were made in substantial quantities; and (2) such sales were made at prices which permitted the recovery of all costs within a reasonable period of time. On a product-specific basis, we compared the COP to the home market prices, less any applicable movement charges, rebates, and discounts.

C. Results of COP Test for CBCC, Minasligas and LIASA

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's sales of a given product are at prices below the COP, we do not disregard any below-cost sales of that product because the below-cost sales are not made in “substantial quantities.” Where (1) 20 percent or more of the respondent's sales of a given product during the POR are made at prices below the COP and thus such sales were made within an extended period of time in substantial quantities in accordance with sections 773(b)(2)(B) and (C) of the Act, and (2) based on comparisons of price to per-unit COPs for the POR, we determined that the below-cost sales of the product were at prices which would not permit recovery of all costs within a reasonable time period, in accordance with 773(b)(2)(D) of the Act, we disregarded the below-cost sales.

We found that only CBCC and LIASA made comparison-market sales at prices below the COP within an extended period of time in substantial quantities. Further, we found that these sales prices did not permit the recovery of costs within a reasonable period of time. We therefore excluded these sales from our analysis in accordance with section 773(b)(1) of the Act.

Price-to-Price Comparisons

For those comparison products for which there were sales at prices above the COP (i.e., sales by CBCC, LIASA, RIMA, and Minasligas), we based the respondents' NV on the prices at which the foreign like product was first sold to unaffiliated parties for consumption in Brazil, in the usual commercial quantities, in the ordinary course of trade in accordance with section 773(a)(1)(B)(i) of the Act. We based NV on sales at the same level of trade as the EP sales. For level of trade, please see the “Level of Trade” section above. In accordance with section 773(a)(6) of the Act, we made adjustments to home market price, where appropriate for inland freight, brokerage and handling charges, and rebates. Where inland freight was reported inclusive of value-added taxes VAT, we deducted the VAT from the gross freight cost. To account for differences in circumstances of sale between the home market and the United States, where appropriate, we adjusted home market prices by deducting home market direct selling expenses (including credit) and commissions and adding an amount for late payment fees earned on home market sales, and by adding U.S. direct selling expenses (including U.S. credit expenses) and, where appropriate, deducting an amount for late payment fees earned on U.S. sales. For Minasligas, we recalculated home marking credit by using as an interest rate the simple average of monthly TR rates, as is the Department's practice (see Silicon Metal From Brazil; Preliminary Results of Antidumping Duty Administrative Review, 62 FR 42759, 42761 (August 8, 1997)). Where commissions were paid on home market sales and no commissions were paid on U.S. sales, we increased NV by the lesser of either: (1) The amount of commission paid on the home market sales or (2) the indirect selling expenses incurred on U.S. sales. See 19 CFR 351.410(e). In order to adjust for differences in packing between the two markets, we deducted HM packing costs and added U.S. packing costs, where appropriate, in accordance with sections 773(a)(6)(A) and (B) of the Act. Where home market prices were reported exclusive of VAT we made no adjustment. However, where home market prices were reported inclusive of VAT, we deducted the VAT from the gross home market price.

Currency Conversion

We made currency conversions in accordance with section 773A of the Act. Section 773A(a) of the Act directs the Department to use a daily exchange rate to convert foreign currencies into U.S. dollars unless the daily rate involves a fluctuation. The Department considers a “fluctuation” to exist when the daily exchange rate differs from the benchmark rate by 2.25 percent or more. The benchmark is defined as the moving average of rates for the past 40 business days. When we determine a fluctuation to have existed, we generally substitute the benchmark rate for the daily rate, in accordance with established practice. (For an explanation of this method, see Policy Bulletin 96-1: Currency Conversions, 61 FR 9434 (Mar. 8, 1996).) Our preliminary analysis of dollar-real Start Printed Page 47967exchange rates shows that the real declined rapidly in early 1999, losing over 40 percent of its value in January 1999, when the Brazilian government ended its exchange rate restrictions. The decline was, in both speed and magnitude, many times more severe than any change in the dollar-real exchange rate during recent years, and it did not rebound significantly in a short time. As such, we preliminarily determine that the decline in the real during January 1999 was of such magnitude that the dollar-real exchange rate cannot reasonably be viewed as having simply fluctuated at that time, i.e., as having experienced only a momentary drop in value relative to the normal benchmark. We preliminarily find that there was a large, precipitous drop in the value of the real in relation to the U.S. dollar in January 1999. We recognize that, following a large and precipitous decline in the value of a currency, a period may exist wherein it is unclear whether further declines are a continuation of the large and precipitous decline or merely fluctuations. Under the circumstances of this case, such uncertainty may have existed following the large, precipitous drop in January 1999. Thus, we used a methodology for identifying the point following a precipitous drop at which it is reasonable to presume that rates were merely fluctuating. Beginning on January 13, 1999, we used only daily rates until the daily rates were not more than 2.25 percent below the average of the 20 previous daily rates for five consecutive days. At that point, we determined that the pattern of daily rates no longer reasonably precluded the possibility that they were merely “fluctuating.” (Using a 20-day average for this purpose provides a reasonable indication that it is no longer necessary to refrain from using the normal methodology, while avoiding the use of daily rates exclusively for an excessive period of time.) Accordingly, from the first of these five days, we resumed classifying daily rates as “fluctuating” or “normal” in accordance with our standard practice, except that we began with a 20-day benchmark and on each succeeding day added a daily rate to the average until the normal 40-day average was restored as the benchmark. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, 65 FR 5554, 5563-64 (Feb. 4, 2000); and Notice of Final Results of Antidumping Duty Administrative Review: Certain Welded Carbon Steel Pipes and Tubes from Thailand, 64 FR 56759, 56763 (Oct. 21, 1999). Applying this methodology in the instant case, we used daily rates from January 13, 1999, through March 4, 1999. We then resumed the use of a benchmark, starting with a benchmark based on the average of the 20 reported daily rates on March 5, 1999. We resumed the use of the normal 40-day benchmark starting on April 3, 1999, through the close of the review period.

Preliminary Results of Review

As a result of our review, we preliminarily determine that the following weighted-average dumping margins exist for the period July 1, 1998, through June 30, 1999, and we preliminarily determine not to revoke the order covering silicon metal from Brazil with respect to CBCC's and LIASA's sales of this merchandise.

Manufacturer/exporterWeighted-average margin percentage
CBCC0.63
Eletrosilex93.20
LIASA0.00
RIMA0.00
Minasligas0.00

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within 5 days of the date of publication of this notice. Any interested party may request a hearing within 30 days of the date of publication of this notice. Parties who submit arguments in this proceeding are requested to submit with each argument: (1) A statement of the issue and (2) a brief summary of the argument. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette. All case briefs must be submitted within 30 days of the date of publication of this notice. Rebuttal briefs, which are limited to issues raised in the case briefs, may be filed not later than seven days after the case briefs are filed. A hearing, if requested, will be held two days after the date the rebuttal briefs are filed or the first business day thereafter.

The Department will publish a notice of the final results of this administrative review, which will include the results of its analysis of the issues raised in any written comments or at the hearing, within 120 days from the publication of these preliminary results.

The Department shall determine, and Customs shall assess, antidumping duties on all appropriate entries. Upon completion of this review, the Department will issue appraisement instructions directly to Customs. The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the determination and for future deposits of estimated duties. For duty assessment purposes, we calculated a per-unit customer or importer-specific assessment rate by aggregating the dumping margins calculated for all U.S. sales to each customer/importer and dividing this amount by the total quantity of those sales.

Furthermore, the following deposit requirements will be effective for all shipments of silicon metal from Brazil entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act: (1) The cash deposit rates for the reviewed companies will be those established in the final results of this review except if the rate is less than 0.5 percent, and therefore, de minimis, the cash deposit rate will be zero; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) for all other manufacturers and/or exporters of this merchandise, the cash deposit rate will continue to be 91.06 percent, the “all others” rate established in the LTFV investigation. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) of the Department's regulations to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

Start Signature
Start Printed Page 47968

Dated: July 31, 2000.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

End Signature End Supplemental Information

[FR Doc. 00-19822 Filed 8-3-00; 8:45 am]

BILLING CODE 3510-DS-P