Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce is conducting an administrative review of the antidumping duty order on silicomanganese from Brazil Start Printed Page 53629manufactured and exported by Rio Doce Manganês S.A. (RDM), Companhia Paulista de Ferro-Ligas (CPFL), and Urucum Mineração S.A. (Urucum) (collectively RDM/CPFL) in response to a request from Eramet Marietta Inc., a domestic manufacturer of silicomanganese. This review covers the period December 1, 2003, through November 30, 2004.
We have preliminarily determined that RDM/CPFL did not make sales of the subject merchandise to the United States at prices below normal value during the period of review. We invite interested parties to comment on these preliminary results.
September 9, 2005.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Yang Jin Chun at (202) 482-5760 or Richard Rimlinger at (202) 482-4477, AD/CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.End Further Info End Preamble Start Supplemental Information
On December 22, 1994, the Department of Commerce (the Department) published in the Federal Register the antidumping duty order on silicomanganese from Brazil. See Notice of Antidumping Duty Order: Silicomanganese from Brazil, 59 FR 66003 (December 22, 1994). On December 1, 2004, we published in the Federal Register a notice of opportunity to request an administrative review of this order covering the period December 1, 2003, through November 30, 2004. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 69 FR 69889 (December 1, 2004). On December 30, 2004, Eramet Marietta Inc. requested that the Department conduct an administrative review of RDM/CPFL's sales. On January 31, 2005, the Department published in the Federal Register a notice of initiation of this administrative review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 70 FR 4818 (January 31, 2005). The Department is conducting this review in accordance with section 751 of the Tariff Act of 1930, as amended (the Act).
Scope of Order
The merchandise covered by this order is silicomanganese. Silicomanganese, which is sometimes called ferrosilicon manganese, is a ferroalloy composed principally of manganese, silicon and iron, and normally contains much smaller proportions of minor elements, such as carbon, phosphorus, and sulfur. Silicomanganese generally contains by weight not less than 4 percent iron, more than 30 percent manganese, more than 8 percent silicon, and not more than 3 percent phosphorous. All compositions, forms, and sizes of silicomanganese are included within the scope of the order, including silicomanganese slag, fines, and briquettes. Silicomanganese is used primarily in steel production as a source of both silicon and manganese.
Silicomanganese is currently classifiable under subheading 7202.30.0000 of the Harmonized Tariff Schedule of the United States (HTSUS). Some silicomanganese may also currently be classifiable under HTSUS subheading 7202.99.5040. This order covers all silicomanganese, regardless of its tariff classification. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the order remains dispositive.
The Department's regulations outline the criteria for collapsing (i.e., treating as a single entity) affiliated producers for purposes of calculating a dumping margin. The regulations state that we will treat two or more affiliated producers as a single entity where those producers have production facilities for identical or similar products that would not require substantial retooling of either facility in order to restructure manufacturing priorities and we conclude that there is a significant potential for manipulation of price or production. In identifying a significant potential for the manipulation of price or production, the Department may consider the following factors: (i) the level of common ownership; (ii) the extent to which managerial employees or board members of one firm sit on the board of directors of an affiliated firm; and (iii) whether operations are intertwined, such as through the sharing of sales information, involvement in production and pricing decisions, the sharing of facilities or employees, or significant transactions between the affiliated producers. See 19 CFR 351.401(f).
Because RDM and Urucum are entities wholly owned by Companhia Vale de Rio Doce (CVRD) and CPFL is a subsidiary of RDM, CVRD is affiliated with RDM and Urucum, and RDM is affiliated with CPFL. Furthermore, based on CVRD's investment interest in both companies, we find that CVRD is in the position legally and/or operationally to exercise direction or restraint over RDM, CPFL, and Urucum and, thus, has direct or indirect control within the meaning of section 771(33)(F) of the Act. As such, we determine that RDM, CPFL, and Urucum are affiliated pursuant to section 771(33)(F) of the Act.
With respect to the first criterion of 19 CFR 351.401(f), the information currently on the record indicates that RDM, CPFL, and Urucum use similar production facilities, in terms of production capacities and type of machinery, and employ virtually identical production processes to produce identical or similar silicomanganese products. See RDM/CPFL's April 11, 2005, questionnaire response at pages D-3 through D-5. Based on this information, we find that the companies could shift the production requirements from one facility to the other without requiring substantial retooling in order to restructure manufacturing priorities.
We also find that a significant potential for manipulation of prices, production costs, and production priorities exists pursuant to 19 CFR 351.401(f)(2). Specifically, the information on the record indicates the following: CVRD has a direct involvement in RDM's, CPFL's, and Urucum's activities associated with the production and sales, as well as the transportation of raw materials; all three companies share the expertise of an executive officer; all three companies have heavily intertwined operations with respect to their purchases of manganese ore from each other's mines. Therefore, for the purposes of this administrative review, we find that RDM, CPFL, and Urucum are affiliated and have collapsed them into one entity pursuant to section 771(33) of the Act and 19 CFR 351.401(f). For a more complete discussion of this issue, see the September 2, 2005, Memorandum from Yang Jin Chun to Laurie Parkhill, “Administrative Review of the Antidumping Duty Order on Silicomanganese from Brazil: Collapsing of Affiliated Producers Rio Doce Manganês S.A., Companhia Paulista de Ferro-Ligas, and Urucum Mineraçã S.A. for Purposes of Calculating a Dumping Margin,” which is on file in the Central Records Unit (CRU) at the main Department building.
Affiliation of Parties
Pursuant to sections 771(33)(E) and (F) of the Act, the Department has preliminarily determined that certain customers to which RDM/CPFL sold silicomanganese during the period of Start Printed Page 53630review and whom RDM/CPFL identified as unaffiliated parties are, in fact, affiliated with RDM/CPFL. Specifically, the Department has determined that RDM/CPFL and some of its home-market customers are under the common control of CVRD, RDM/CPFL's parent company. According to section 771(33)(F) of the Act, two or more persons under common control with any other person shall be considered affiliated. Thus, we have preliminarily found these companies to be affiliated with RDM/CPFL. For a complete discussion of this issue, see the September 2, 2005, Memorandum to the File, “Analysis Memorandum for the Preliminary Results of the Administrative Review of the Antidumping Duty Order on Silicomanganese from Brazil: Rio Doce Manganês S.A. (RDM), Companhia Paulista de Ferro-Ligas (CPFL), and Urucum Mineraçã S.A. (Urucum) (collectively, RDM/CPFL),” which is on file in the CRU.
Comparisons to Normal Value
To determine whether sales of silicomanganese from Brazil were made in the United States at less than normal value, we compared the export price to the normal value. When making comparisons in accordance with section 771(16) of the Act, we considered all comparable products sold in the home market that were in the ordinary course of trade for purposes of determining appropriate product comparisons to U.S. sales.
For the price to the United States, we used export price, as defined in section 772(a) of the Act, because the subject merchandise was sold directly to the first unaffiliated purchaser in the United States prior to the date of importation. We based export price on the Free-on-Board price to the first unaffiliated purchaser in the United States. We made deductions, where appropriate, consistent with section 772(c)(2)(A) of the Act for movement expenses.
A. Home-Market Viability
Based on a comparison of the aggregate quantity of home-market and U.S. sales, we determined that the quantity of foreign like product sold by RDM/CPFL in the exporting country was sufficient to permit a proper comparison with the sales of the subject merchandise to the United States, pursuant to section 773(a) of the Act. RDM/CPFL's quantity of sales in its home market was greater than five percent of its sales to the U.S. market. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based normal value on the prices at which the foreign like product was first sold for consumption in the exporting country in the usual commercial quantities and in the ordinary course of trade.
B. Arm's-Length Sales
RDM/CPFL made sales in the home market to affiliated and unaffiliated customers. The Department may calculate normal value based on a sale to an affiliated party only if it is satisfied that the price to the affiliated party is comparable to the price at which sales are made to parties not affiliated with the exporter or producer, i.e., sales at arm's-length prices. See 19 CFR 351.403(c). We excluded sales to affiliated customers for consumption in the home market that we determined were not at arm's-length prices from our analysis. To test whether these sales were made at arm's-length prices, we compared the prices of sales of comparable merchandise to affiliated and unaffiliated customers, net of movement charges, direct selling expenses, and packing. Pursuant to 19 CFR 351.403(c) and in accordance with the Department's practice, when the prices charged to an affiliated party are, on average, between 98 and 102 percent of the prices charged to unaffiliated parties for merchandise comparable to that sold to the affiliated party, we determine that the sales to the affiliated party are at arm's-length prices and include these sales in our calculation of normal value. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 2002). In this review, however, we determined that no sales to affiliated parties were at arm's-length prices. As such, we did not include these sales in our calculation of normal value.
C. Cost-of-Production Analysis
Because the Department disregarded RDM/CPFL's home-market sales that it determined were sold at below-cost prices in the most recently completed administrative review, we had reasonable grounds to believe or suspect that sales of the foreign like product under consideration for the determination of normal value in this review may have been made at prices below the cost of production (COP) as provided by section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 773(b)(1) of the Act, we initiated a COP investigation of sales by RDM/CPFL in the home market.
Based on the respondent's request, we allowed the cost-reporting period to correspond with RDM/CPFL's 2004 fiscal year. Before making any price comparisons, we conducted the COP analysis. We calculated COP, in accordance with section 773(b)(3) of the Act, based on the sum of the costs of materials and fabrication employed in producing the foreign like product plus amounts for home-market selling, general, and administrative expenses, financial expenses, and packing expenses. For the preliminary results of review, we relied on the COP information submitted by RDM/CPFL in its questionnaire responses.
In accordance with section 773(b)(1) of the Act, we tested whether home-market sales of the foreign like product were made at prices below the COP within an extended period of time in substantial quantities and whether any such prices permitted the recovery of all costs within a reasonable period of time. We compared model-specific COPs to the reported home-market prices less any applicable movement charges.
Pursuant to section 773(b)(2)(C) of the Act, when less than 20 percent of the respondent's sales of the foreign like product were at prices less than the COP, we did not disregard any below-cost sales of that product because the below-cost sales were not made in substantial quantities within an extended period of time. When 20 percent or more of the respondent's sales of the foreign like product during the period of review were at prices less than the COP, we disregarded the below-cost sales because they were made in substantial quantities within an extended period of time in accordance with sections 773(b)(2)(B) and (C) of the Act and, based on comparisons of prices to weighted-average COPs for the period of review, we determined that these sales were at prices which would not permit recovery of all costs within a reasonable period of time in accordance with section 773(b)(2)(D) of the Act. Based on this test, we disregarded below-cost sales for RDM/CPFL.
D. Calculation of Normal Value
Because we were able to find contemporaneous home-market sales made in the ordinary course of trade for a comparison to all export-price sales, in accordance with section 773(a)(1)(B) of the Act we based normal value on the prices at which the foreign like product was sold for consumption in the home market. Home-market prices were based on ex-factory or delivered prices to unaffiliated purchasers. When applicable, we made adjustments for Start Printed Page 53631differences in packing and for movement expenses in accordance with sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for differences in circumstances of sale in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.401. Specifically, we made circumstance-of-sale adjustments by deducting home-market direct selling expenses from and adding U.S. direct selling expenses to normal value.
Preliminary Results of Review
As a result of our review, we preliminarily determine that a margin of 0.00 percent exists for RDM/CPFL for the period December 1, 2003, through November 30, 2004.
Pursuant to 19 CFR 351.224(b), the Department will disclose to parties calculations performed in connection with these preliminary results within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication of this notice. A hearing, if requested, will be held at the main Department building. We will notify parties of the exact date, time, and place for any such hearing.
Issues raised in hearings will be limited to those raised in the respective case and rebuttal briefs. Case briefs from interested parties may be filed no later than 30 days after publication of this notice. Rebuttal briefs, limited to the issues raised in case briefs, may be submitted no later than five days after the deadline for filing case briefs. Parties who submit case or rebuttal briefs in this proceeding are requested to submit with each argument a statement of the issue and a brief summary of the argument with an electronic version included.
The Department will publish a notice of final results of this administrative review, which will include the results of its analysis of issues raised in the case briefs, within 120 days from the date of publication of these preliminary results.
The Department shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. Upon completion of this review, the Department will issue appraisement instructions directly to the CBP.
Further, the following deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of silicomanganese entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) the cash-deposit rate for RDM/CPFL will be the rate established in the final results of review; (2) for previously reviewed or investigated companies not mentioned 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 less-than-fair-value (LTFV) investigation, but the manufacturer is, then the cash-deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) if neither the exporter nor the producer is a firm covered in this review, a prior review, or the LTFV investigation, the cash-deposit rate shall be 17.60 percent, the all-others rate established in the LTFV investigation. See Notice of Final Determination of Sales at Less Than Fair Value: Silicomanganese from Brazil, 59 FR 55432 (November 7, 1994). These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
This notice serves as a primary reminder to importers of their responsibility under 19 CFR 351.402(f) 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.
We are publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: September 2, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4939 Filed 9-8-05; 8:45 am]
BILLING CODE 3510-DS-S