[Federal Register Volume 61, Number 144 (Thursday, July 25, 1996)]
[Notices]
[Pages 38711-38714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18937]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-357-804]


Notice of Preliminary Results of the 1992/93 Antidumping Duty 
Administrative Review: Silicon Metal From Argentina

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on silicon metal 
from Argentina in response to requests by the petitioners 1 and 
the respondents.2 This review covers shipments of this merchandise 
to the United States during the period September 1, 1992 through August 
31, 1993.
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    \1\ American Alloys Inc., American Silicon Technologies, ELKEM 
Metals Company, Globe Metallurgical Inc., and SKW Metals & Alloys 
Inc.
    \2\ Silarsa, S.A. and Electrometalurgica Andina.
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    We have preliminary determined that sales have been made below 
normal foreign market value (FMV). If these preliminary results are 
adopted in our final results, we will instruct U.S. Customs to assess 
antidumping duties equal to the differences between the United States 
price and FMV.
    Interested parties are invited to comment on the preliminary 
results. Parties who submit arguments are requested to submit with each 
argument: (1) A statement of the issue;

[[Page 38712]]

and (2) a brief summary of the argument.

EFFECTIVE DATE: July 25, 1996.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Howard Smith, Office of 
AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Ave., NW., Washington, DC 20230; telephone: (202) 482-4162 
or (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Background

    On September 26, 1991, the Department published in the Federal 
Register (56 FR 48779) the antidumping duty order on silicon metal from 
Argentina. On September 7, 1993, the Department published in the 
Federal Register (58 FR 47116) the notice of Opportunity to Request 
Administrative Review (AR) for the 1992/93 review period. On September 
17 and 29, 1993, respectively, Silarsa, S.A. (Silarsa), and 
Electrometalurgica Andina (Andina) requested an AR for the 1992/93 
review period. Petitioners requested an AR on September 30, 1993. On 
October 18, 1993, in accordance with 19 CFR 353.22 (c), we initiated an 
AR of this order on Andina and Silarsa for the period September 1, 1992 
through August 31, 1993 (58 FR 53710). The Department is now conducting 
this AR in accordance with section 751 of the Tariff Act of 1930, as 
amended (the Tariff Act).

Scope of Review

    The product covered by this review is silicon metal. During the 
less-than-fair-value (LTFV) investigation, the silicon metal was 
described as containing at least 96.00, but less than 99.99 percent of 
silicon by weight. In response to a request by petitioners for 
clarification of the scope of the antidumping duty order on silicon 
metal from the People's Republic of China (PRC), the Department 
determined that material with a higher aluminum content containing 
between 89 and 96 percent silicon by weight is the same class or kind 
of merchandise as silicon metal described in the LTFV investigation 
(see Final Scope Rulings--Antidumping Duty Orders on Silicon Metal From 
the People's Republic of China, Brazil, and Argentina (February 3, 
1993)). Therefore, such material is within the scope of the orders on 
silicon metal from the PRC, Brazil, and Argentina. Silicon metal is 
currently provided for under subheadings 2804.69.10 and 2804.69.50 of 
the Harmonized Tariff Schedule (HTS) and is commonly referred to as a 
metal. Semiconductor-grade silicon (silicon metal containing by weight 
not less than 99.99 percent of silicon and provided for in subheading 
2804.61.00 of the HTS) is not subject to this review. The HTS 
subheadings are provided for convince and U.S. Customs purposes only; 
our written description of the scope of the proceeding is dispositive.

Period of Review

    The period of review (POR) is September 1, 1992 through August 31, 
1993.

Best Information Available

    In accordance with section 776(c) of the Tariff Act, we have 
preliminarily determined that the use of best information available 
(BIA) is appropriate for Silarsa. In this review, Silarsa failed to 
respond to the Department's questionnaire. The Department's regulations 
provide that we take into account whether a party refuses to provide 
requested information (19 CFR 353.37(b)). In determining what to use as 
BIA, the Department follows a two-tiered methodology. The Department 
assigns lower margins to those respondents who cooperate in a review 
(tier two), and margins based on more adverse assumptions for those 
respondents who do not cooperate in the review, or who significantly 
impede the proceeding (tier one). See Antifriction Bearings (Other than 
Tapered Roller Bearings) and Parts thereof from France et al; final 
Results of Antidumping Duty Administrative Review, 57 FR 28360 (June 
24, 1992) (AFBs II); Allied Signal Aerospace Co. v. United States, 996 
F.2d 1185 (Fed.Cir., June 22, 1993), aff'd, 28 F.3d 1188, cert. denied, 
1995 U.S. Lexis 100 (1995) (Allied-Signal)).
    Given that Silarsa failed to respond to our questionnaire, we have 
assigned to it a margin based on first-tier BIA, which is the higher of 
(1) The highest of the rates found for any firm for the same class or 
kind of merchandise in the same country of origin in the LTFV 
investigation or a prior administrative review; or (2) the highest rate 
found in the present administrative review for any firm for the same 
class or kind of merchandise from the same country of origin. AFBs II, 
57 FR at 28379.
    In this review, we have assigned to Silarsa, as BIA, 24.62 percent, 
the rate assigned to Silarsa in the Amendment to Final Results of 
Antidumping Administrative Review (1991/92): Silicon Metal from 
Argentina (the first review) (59 FR 1617, April 6, 1994), which is the 
highest rate from any prior segment of the proceeding.

U.S. Price

    We based USP on PP in accordance with section 772(b) of the Tariff 
Act, because the subject merchandise was sold to unrelated purchasers 
in the United States prior to importation to the United States. We 
calculated PP based on packed f.o.b. and c&f prices to unrelated 
customers in the United States, and made deductions, where appropriate, 
for foreign inland freight, port authority fees, port handling fees, 
custom's fees, and ocean freight costs, in accordance with section 
772(d)(2) of the Act. In accordance with section 772(d)(1)(c) of the 
Act, we increased PP for uncollected duties by reason of exportation.
    Based on the CAFC opinion in American Alloys, Inc. v. United 
States, 30 F.3d 1469 (Fed. Cir. 1994) (American Alloys), the Department 
issued a questionnaire requesting that Andina demonstrate that the 
reembolso taxes for which it is requesting an upward adjustment to U.S. 
price were, in fact, imposed directly on the exported merchandise or 
components thereof. Andina, however, failed to respond to the 
Department's questionnaire. Therefore, absent sufficient information on 
the record regarding reembolso taxes, no upward adjustment was made. 
Moreover, as we determined in the first administrative review, we 
continued to treat turnover and lote hogar taxes as taxes on gross 
revenue, not taxes imposed directly upon the merchandise or components 
thereof. Therefore, we made no upward adjustment to the PP for turnover 
or lote hogar taxes. See Final Results of Antidumping Administrative 
Review (1991/92): Silicon Metal from Argentina (58 FR 238, December 14, 
1993) (Comment 16).
    We made adjustments to Andina's reported date of shipment and date 
of payment to reflect the date on which the merchandise left the 
factory and the date on which payment was made, respectively. Also, 
because Andina failed to provide sufficient information on its short-
term borrowings, we used, as best information available, the highest 
interest rate on the record for Andina's short-term loans denominated 
in U.S. dollars in calculating the imputed credit related to U.S. 
sales.

Foreign Market Value

    To calculate FMV, the Department used home market price or 
constructed

[[Page 38713]]

value (CV), as defined in section 773 of the Tariff Act, as 
appropriate.
    Petitioners alleged that Andina made home market sales during the 
POR at prices below its cost of production (COP). Based on petitioners' 
allegation, we concluded that we had reasonable grounds to believe or 
suspect that sales were made below the COP. Thus, in accordance with 
section 773(b), we initiated a cost investigation.
    In order to determine whether home market prices were below the COP 
within the meaning of section 773(b) of the Act, we performed a 
product-specific cost test in which we examined whether each product 
sold in the home market during the POI was priced below the COP. For 
each product, we compared the COP to the home market unit price.
    We calculated COP based on the sum of Andina's cost of materials, 
direct labor, variable and fixed factory overhead, selling, general and 
administrative expenses, and packing, in accordance with 19 CFR 
353.51(c). We revised Andina's COP calculations as follows:
    (1) Andina calculated incorrectly the unit selling expenses 
included in COP by dividing total selling expenses by the tons of 
subject merchandise produced. We recalculated the unit selling expenses 
by dividing total selling expenses by tons of subject merchandise sold.
    (2) Andina deducted incorrectly from the COP income earned from its 
subsidiary which is not directly related to production. We disallowed 
these deductions because it is our practice not to reduce the COP by 
income not directly related to production of the subject merchandise.
    (3) Andina calculated the plant general services (PGS) costs for 
each cost center by allocating (a) one portion of its total PGS costs 
to each cost center based on the tons of raw material and intermediate 
products going into each cost center, (b) another portion of its total 
PGS costs to its cost centers based on tons of intermediate and final 
products coming from each cost center, and (c) a third portion of its 
total PGS costs to its cost centers based on salaries incurred for each 
cost center. We rejected Andina's methodology because it determined 
arbitrarily the portions of PGS costs allocated using the bases noted 
above without demonstrating that these portions are the appropriate 
amounts.
    We determined that labor hours are a reasonable measure of the 
degree to which a cost center benefits from plant general services. 
Moreover, Andina indicated that it used labor hours to allocate plant 
general services in cost reports prepared in the normal course of 
business. Therefore, we reallocated plant general services to Andina's 
cost centers using labor hours as the allocation base.
    (4) Andina did not allocate depreciation related to a furnace, 
while it was idle during part of the POR, to the subject merchandise 
because non-subject merchandise was produced in that furnace after it 
had been reactivated. We recalculated depreciation related to that 
furnace to all of Andina's products including the subject merchandise 
because this furnace could have been used to produce any of Andina's 
products had it not been idle.
    (5) Andina failed to use the interest expenses reflected in its 
consolidated financial statement as a basis for calculating the 
interested expenses included in the COP. Furthermore, Andina deducted 
incorrectly from its interest expenses interest income from long-term 
investments. We recalculated the interest expenses using the interest 
expenses in Andina's consolidated financial statement. Furthermore, 
consistent with the Department's practice, we did not reduce interest 
expenses by income from long-term investments.
    (6) Andina classified incorrectly plant property taxes, plant 
insurance, and rejected VAT tax credits as general and administrative 
expenses. We reclassified these expenses as factory overhead.
    (7) Andina deducted from the COP indirect taxes rebated or duties 
refunded by reason of exportation. We disallowed those deductions, 
which are related to exported merchandise, because the COP is based on 
costs related to home market sales.
    If over 90 percent of Andina's sales of a given product were at 
prices above the COP, we did not disregard any below-cost sales because 
we determined that such sales were not made in substantial quantities. 
If between ten and 90 percent of Andina's sales of a given product were 
at prices below the COP, and such sales were over an extended period of 
time, we discarded only the below-cost sales. Where we found that more 
than 90 percent of Andina's sales were at prices below the COP, and 
such sales were over an extended period of time, we disregarded all 
sales for that product and calculated FMV based on CV.
    Section 773(b) of the Act requires us to examine whether below-cost 
sales were made in substantial quantities over an extended period of 
time, and whether such sales were made at prices that would permit 
recovery of all costs within a reasonable period of time in the normal 
course of trade. In order to establish that below cost sales were made 
over an extended period of time, we performed the following analysis on 
a product-specific basis: (1) if a respondent sold a product in only 
one month of the POR and there were sales in that month below the COP, 
or (2) if a respondent sold a product during two months or more of the 
POR and there were sales below the COP during two or more of those 
months, then below-cost sales were considered to have been made over an 
extended period of time. Andina provided no evidence to indicate that 
below COP prices would permit recovery of all costs within a reasonable 
period of time in the normal course of trade.
    Based on our analysis, we found that all of Andina's home market 
sales during the POR were below cost. Therefore, we disregarded all 
home market sales and based FMV on constructed value.
    In accordance with section 773(e), we calculated CV based on the 
sum of the cost of materials, fabrication, general expenses, U.S. 
packing costs and profit. The cost of materials included import duties 
paid on imported electrodes used to produce silicon metal. In 
accordance with section 773(e)(1)(B) (i) and (ii) of the Act we used: 
(1) Andina's reported general expenses because such expenses were 
greater than the statutory minimum of ten percent of the COM; and (2) 
the statutory minimum of eight percent of the sum of COM and general 
expenses for profit because actual profit was less than the statutory 
minimum. The adjustments noted above in our discussion of the COP were 
also applied to the CV calculation. Given the fact that Andina failed 
to provide information related to indirect taxes as described above, as 
BIA, we did not reduce CV by indirect taxes reimbursed upon 
exportation. We disallowed deductions from CV for duty drawback because 
we made an upward adjustment to the USP for such duties. Finally, in 
addition to the interest expense adjustments to the COP noted above, we 
adjusted the interest expense Andina included in CV because Andina 
improperly reduced the reported interest expense by interest expenses 
associated with inventories. Where applicable, we made adjustments for 
differences in credit expenses. Also, because Andina failed to provide 
sufficient information on the record with respect to its short-term 
borrowings, we used, as BIA, the only information available to us, 
which was the average bank lending rates applicable to short- and 
medium-term financing in Argentina for the POR,

[[Page 38714]]

published in the International Financial Statistics by the 
International Monetary Fund, in calculating home market credit.

Currency Conversion

    We made currency conversions based on the official monthly exchange 
rates in effect on the dates of the U.S. sales as published by the 
International Monetary Fund.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margin exists for the period September 1, 1992 through August 
31, 1993:

------------------------------------------------------------------------
                                                                 Margin 
     Manufacturer/exporter               Review period         (Percent)
------------------------------------------------------------------------
Andina.........................  9/01/92-8/31/93.............      8.52 
Silarsa........................  9/01/92-8/31/93.............     24.62 
------------------------------------------------------------------------

    Interested parties may request a disclosure within five days of 
publication of this notice and may request a hearing within 10 days of 
the date of publication. Any hearing, if requested, will be held 44 
days after the date of publication, or the first workday thereafter. 
Interested parties may submit case briefs within 30 days of the date of 
publication. Rebuttal briefs, limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish a notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any such case briefs.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and FMV may vary from the percentages stated 
above. The Department will issue appraisement instructions directly to 
the U.S. Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of silicon metal from Argentina entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this AR, as provided by section 751(a)(1) of the Act: 
(1) The cash deposit rates for Silarsa and Andina will be the rates 
established in the final results of this review, except if the rate is 
less than 0.5 percent and, therefore, de minimis within the meaning of 
19 CFR 353.6, the cash deposit 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) 
if neither the exporter nor the manufacturer is a firm covered in this 
or any previous conducted by the Department, the cash deposit rate will 
be the ``all others'' rate, as set forth below.
    On March 25, 1993, the U.S. Court of International Trade (CIT), in 
Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993), and 
Federal-Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993), 
decided that once an ``all others'' rate is established for a company, 
it can only be changed through an administrative review. The Department 
has determined that in order to implement this decision, it is 
appropriate to reinstate the original ``all others'' rate from the LTFV 
investigation (or that rate as amended for correction of clerical 
errors or as a result of litigation) in proceedings governed by 
antidumping duty orders. In proceedings governed by antidumping 
findings, unless we are able to ascertain the ``all others'' rate from 
the original investigation, the Department has determined that it is 
appropriate to adopt the ``new shipper'' rate established in the first 
final results of administrative review published by the Department (or 
that rate as amended for correction of clerical errors or as a result 
of litigation) as the ``all others'' rate for the purposes of 
establishing cash deposits in all current and future administrative 
reviews. Because this proceeding is governed by an antidumping duty 
order, the ``all others'' rate for the purposes of this review will be 
17.87 percent, the ``all others'' rate established in the LTFV 
investigation.
    These cash deposit 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 353.26 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 of 
double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: July 18, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-18937 Filed 7-24-96; 8:45 am]
BILLING CODE 3510-DP-P