[Federal Register Volume 59, Number 214 (Monday, November 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27546]


[[Page Unknown]]

[Federal Register: November 7, 1994]


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DEPARTMENT OF COMMERCE
[A-351-824]

 

Notice of Final Determination of Sales at Less Than Fair Value: 
Silicomanganese From Brazil

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

EFFECTIVE DATE: November 7, 1994.

FOR FURTHER INFORMATION CONTACT:
Paul Kullman or John Brinkmann, Office of Antidumping Investigations, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW.; 
Washington, DC 20230; telephone: (202) 482-1279 or (202) 482-5288, 
respectively.

FINAL DETERMINATION: We determine that imports of silicomanganese from 
Brazil are being, or are likely to be, sold in the United States at 
less than fair value, as provided in section 735 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 and postponement of the final 
determination of this investigation on June 10, 1994, (59 FR 14852, 
June 17, 1994), the following events have occurred:
    On June 16, 1994, the U.S. Department of Commerce (the Department) 
received the response of Companhia Paulista de Ferro-Ligas and Sibra 
Eletro-Siderurgica Brasileira S/A (collectively ``Paulista'') to the 
Department's cost of production (COP) and constructed value (CV) 
questionnaire. The Department sent a COP/CV deficiency questionnaire to 
Paulista on July 8, 1994, which the company answered on July 29, 1994. 
On August 3, 1994, the Department sent a letter requesting additional 
clarification, which the company responded to on August 23, 1994.
    The Department conducted verification in Brazil of Paulista's COP/
CV response in August 1994.
    On September 2, 1994, Paulista informed the Department that it 
would no longer be participating in the investigation. Paulista cited a 
lack of personnel and the fact that the company was operating under the 
Brazilian equivalent of U.S. Chapter 11 bankruptcy protection as 
reasons why it was withdrawing from the investigation. Paulista 
requested that all of its proprietary information be removed from the 
record.
    The petitioners (Elkem Metals Company and the Oil, Chemical & 
Atomic Workers, Local 3-639) submitted a case brief on September 23, 
1994. Paulista submitted a rebuttal brief on September 28, 1994. At 
petitioners' request, a public hearing was held on September 30, 1994.

Scope of the Investigation

    The merchandise covered by this investigation is silicomanganese. 
Silicomanganese, which is sometimes called ferrosilicon manganese, is a 
ferroalloy composed principally of manganese, silicon, and iron, and 
normally containing much smaller proportions of minor elements, such as 
carbon, phosphorous and sulfur. Silicomanganese generally contains by 
weight not less than four percent iron, more than 30 percent manganese, 
more than eight percent silicon and not more than three percent 
phosphorous. All compositions, forms and sizes of silicomanganese are 
included within the scope of this investigation, including 
silicomanganese slag, fines and briquettes. Silicomanganese is used 
primarily in steel production as a source of both silicon and 
manganese. This investigation covers all silicomanganese, regardless of 
its tariff classification. Most 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. Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope is dispositive.

Period of Investigation

    The period of investigation is June 1, 1993, through November 30, 
1993.

Such or Similar Comparisons

    We have determined that the merchandise subject to this 
investigation constitutes two such or similar categories, lumps and 
fines.

Best Information Available (BIA)

    As noted in the ``Case History'' section of this notice, Paulista 
withdrew from the investigation after completion of the COP/CV 
verification and requested that all of its proprietary data be removed 
from the record. Section 776(c) of the Act provides that whenever a 
party refuses or is unable to produce information requested in a timely 
manner and in the form required, or otherwise significantly impedes an 
investigation, the Department shall use BIA as a basis for its 
determination. Consequently, we have based this determination on BIA.
    In determining what rate to use as BIA, the Department follows a 
two-tiered methodology, whereby the Department normally assigns lower 
margins to those respondents who cooperated in an investigation and 
margins based on more adverse assumptions to those respondents found to 
be uncooperative in an investigation. The Department's two-tiered 
methodology for assigning BIA has been upheld by the U.S. Court of 
Appeals for the Federal Circuit. (See Allied Signal v. United States, 
996 F.2d 1185 (Fed. Cir. 1993) (June 22, 1993)).
    When a company refuses to cooperate or otherwise significantly 
impedes an investigation, the Department normally uses as BIA the 
highest of: (1) the highest margin in the petition; (2) the highest 
margin calculated for any other respondent within the same country for 
the same class or kind of merchandise; or (3) the estimated margin 
found for the affected firm in the preliminary determination. (See 
Final Determination of Sales at Less Than Fair Value: Antifriction 
Bearings (other than Tapered Roller Bearings) and Parts Thereof from 
the Federal Republic of Germany, 54 FR 18992, 19033 (1989)).
    As detailed in the DOC position in Comment 1 below, we consider 
Paulista to have been uncooperative. Under our standard practice, we 
would have selected as the most adverse BIA for this investigation the 
estimated margin found for Paulista in the preliminary determination. 
However, because Paulista withdrew all of its proprietary data from the 
record, we cannot rely on the preliminary determination. Smith Corona 
Corp. v. United States, 796 F.Supp. 1532 (CIT 1992) (Smith Corona). It 
would be inappropriate to allow Paulista to thwart proper 
administration of the law and reward its uncooperative behavior by 
selecting as BIA the highest rate in the amended petition, which is 
less adverse than the preliminary rate. Therefore, we assigned to 
Paulista a BIA margin by comparing United States price (USP) to CV, 
based on information in the record. (For a discussion of this BIA 
calculation see the ``Fair Value Comparisons'' section of this notice 
and Comment 2 below).
    In calculating the ``All Others'' rate, the Department normally 
weight averages all positive margins found in the investigation, 
including BIA rates. As discussed above, as an uncooperative 
respondent, Paulista will receive an adverse BIA margin. Because 
Paulista's margin is the only margin found in the investigation, under 
our normal practice, its margin would become the ``All Others'' rate. 
The Department notes, however, that in Smith Corona, the Court of 
International Trade (CIT) held that the Department may assign a rate 
lower than the highest available rate to nonparticipants in an 
investigation, when those parties (1) had no control over the sole 
respondent's withdrawal of documentation, (2) had no reason to believe 
that an adverse rate would be selected for the respondent as a result 
of the withdrawal of information, and (3) had no opportunity to offer 
their own data.
    In the present case, as in Smith Corona, producers/exporters who 
were not respondents had no control over Paulista's withdrawal of its 
information, had no reason to believe that Paulista would receive an 
adverse rate as a result of withdrawing information, and by virtue of 
the point at which Paulista withdrew its information from the record, 
had no opportunity to submit their own data for analysis and 
verification. We have concluded that, under these circumstances, 
assigning an adverse BIA rate to all other producers/exporters would be 
inappropriately punitive. Therefore, the Department has based the ``All 
Others'' rate in this investigation on the dumping margin which formed 
the basis for the initiation of this investigation.

Fair Value Comparisons

    As BIA, we have calculated a margin for Paulista based on a 
comparison of USP and foreign market value (FMV). USP was based on 
information contained in the petition, as fully described in the notice 
of initiation of this investigation (58 FR 64553, December 8, 1993). 
FMV was based on CV, using data submitted by petitioners and relied 
upon by the Department in its initiation of the COP investigation (See, 
Memorandum from Richard W. Moreland to Barbara R. Stafford, May 13, 
1994, on file in Room B-099 of the Main Commerce Building), adjusted 
for interest expense and profit. In accordance with section 
773(e)(1)(B)(ii), we added the statutory minimum of eight percent for 
profit and recalculated interest expense based on the consolidated 
results of the operations of Paulista for the year ending December 31, 
1993, as reflected in its public financial statements. Since FMV is 
based on a CV, which is exclusive of any value added taxes (VAT), we 
have adjusted USP to exclude the VAT adjustment that was made for 
purposes of this initiation.

Interested Party Comments

    Comment 1: Petitioners argue that the Department should find 
Paulista uncooperative because it withdrew its participation from the 
investigation and removed all of its proprietary information from the 
record.
    Paulista states that the company devoted significant time and 
resources to provide the information requested by the Department during 
the course of the investigation, allowed verification of its cost 
response and provided additional information to the Department after 
the cost verification.
    DOC Position: We agree with petitioners. By withdrawing from the 
investigation, Paulista significantly impeded the completion of the 
Department's investigation. Moreover, in light of Paulista's removal of 
all of its proprietary information from the record, the Department has 
no choice but to treat Paulista as an uncooperative respondent. This 
action has the consequence of expunging from the administrative record 
the basis for showing, either now or on appeal, that Paulista had been 
cooperative during this investigation. (See, e.g., Final Determination 
of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat 
Products and Certain Cut-to-Length Carbon Steel Plate from Italy, 58 FR 
37153 (July 9, 1993); Final Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from 
France, 58 FR 6205 (January 27, 1993)).
    Comment 2: Petitioners argue that Paulista withdrew from the 
investigation only after recognizing that the results of the 
investigation would be more favorable if based on the petition or 
initiation rate. Consequently, petitioners argue that the Department 
must look beyond the pool of rates identified in its two-tier BIA 
policy, since none of those rates was sufficiently adverse to compel 
Paulista's cooperation. Petitioners contend that, as BIA, the 
Department should use data in petitioners' COP allegation and 
Paulista's financial statements to calculate FMV, and data provided in 
Paulista's own ranged public submissions of its questionnaire response 
to calculate USP. In addition, the petitioners contend that because 
Paulista was uncooperative, the Department should ``de-range'' USP 
information provided in the public version of Paulista's response by 
reducing gross prices by 10 percent and increasing the foreign movement 
charges and U.S. selling expenses by 10 percent.
    Paulista agrees that BIA is warranted in this investigation. 
However, Paulista contends that the company's ranged public data should 
not be used to calculate USP. Paulista argues that the use of its 
ranged public data as BIA would be unprecedented and contrary to the 
intent of the Department's public summary requirements, which is to 
provide meaningful summaries of data for the public. Additionally, 
Paulista asserts that there is sufficient information on the record in 
this investigation to establish a BIA dumping rate without resorting to 
the use of ranged data.
    DOC Position: We agree with the petitioners that Paulista should 
not be rewarded for withdrawing from the investigation. In order to 
assign Paulista an adverse BIA rate, the Department cannot rely on the 
margin calculated in the preliminary determination because the use of 
such a rate would not comport with the CIT's decision in Smith Corona. 
While the Department might otherwise rely on the amended petition for 
purposes of BIA, given the circumstances of this case and the intent of 
the statute, we do not find that the rates contained in that petition 
provide an adequate basis for BIA. Section 776(c) of the Act provides 
for the use of BIA to compel participation. Further, a more adverse BIA 
is required where a respondent fails to cooperate or significantly 
impedes the investigation, as in this case. The preliminary margin was 
substantially higher than the rate found in the amended petition for 
purposes of initiation. To use the petition rate would, in effect, 
reward the respondent for refusing to cooperate. Moreover, a precedent 
could be set which would encourage a respondent to withdraw from a 
proceeding and remove its proprietary information from the record 
whenever the margin found in the preliminary determination exceeded 
that which formed the basis of the initiation (e.g., Krupp Stahl A.G. 
v. United States, Slip Op. 93-84, May 26, 1993).
    We disagree, however, with petitioners' proposed selection of BIA. 
Although the Department has used such ranged data as a basis for BIA in 
the past, the use of such information is a last resort. In this 
instance, we are not compelled to use the ranged data in order to 
calculate an adverse final determination rate. There is sufficient data 
available in petitioners' COP allegation and Paulista's public 
financial statement to calculate a FMV based on CV. This methodology is 
consistent with both past practice (see, e.g., Final Determinations of 
Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat 
Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain 
Cut-to-Length Carbon Steel Plate From Belgium, 58 FR 37083 (July 9, 
1993), and with the CIT's holding that respondents should not realize a 
benefit from noncooperation.

Continuation of Suspension of Liquidation

    In accordance with Section 735(c)(4) of the Act, we are directing 
the Customs Service to continue to suspend liquidation of all entries 
of silicomanganese from Brazil that are entered, or withdrawn from 
warehouse, for consumption on or after June 17, 1994, the date of 
publication in the Federal Register of our preliminary determination. 
The Customs Service shall require a cash deposit or posting of a bond 
equal to the estimated amount by which the FMV of the merchandise 
subject to this investigation exceeds the U.S. price, as shown below. 
This suspension of liquidation will remain in effect until further 
notice. The dumping margins are as follows:

------------------------------------------------------------------------
                                                           Antidumping  
            Producer/manufacturer exporter                   margin     
------------------------------------------------------------------------
Paulista..............................................             64.93
All Others............................................             17.60
------------------------------------------------------------------------

International Trade Commission (ITC) Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. The ITC will now determine whether these 
imports are materially injuring, or threaten material injury to, the 
U.S. industry within 45 days. If the ITC determines that material 
injury, or threat of material injury, does not exist with respect to 
the subject merchandise, the proceeding will be terminated and all 
securities posted will be refunded or canceled. If the ITC determines 
that such injury does exist, the Department will issue an antidumping 
duty order directing Customs officials to assess antidumping duties on 
all imports of the subject merchandise from Brazil entered, or 
withdrawn from warehouse, for consumption on or after the effective 
date of the suspension of liquidation.

Notification to Interested Parties

    This notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility, pursuant 
to 19 CFR 353.34(d), concerning the return or destruction of 
proprietary information disclosed under APO. Failure to comply is a 
violation of the APO.
    This determination is published pursuant to section 735(d) of the 
Act and 19 CFR 353.20(a)(4).

    Dated: October 31, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27546 Filed 11-4-94; 8:45 am]
BILLING CODE 3510-DS-M