[Federal Register Volume 61, Number 173 (Thursday, September 5, 1996)]
[Notices]
[Pages 46763-46776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22679]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-806]
Silicon Metal from Brazil; Final Results of Antidumping Duty
Administration Review
AGENCY: Import Administration, International Trade Administration
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review.
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SUMMARY: On March 20, 1995, the Department of Commerce published the
preliminary results of its administrative review of the antidumping
duty order on silicon metal from Brazil. The review period is July 1,
1992, through June 30, 1993. The review covers four manufacturers/
exporters. The review indicates the existence of margins for two firms.
We gave interested parties an opportunity to comment on the
preliminary results. Based on our analysis of the comments received, we
have changed our results from those presented in our preliminary
results as described below in the comments section of this notice.
EFFECTIVE DATE: September 5, 1996.
FOR FURTHER INFORMATION CONTACT:
Fred Baker or John Kugelman, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-5253.
SUPPLEMENTARY INFORMATION:
Background
On March 20, 1995, the Department of Commerce (the Department)
published in the Federal Register (60 FR 14731) the preliminary results
of its administrative review of the antidumping duty order on silicon
metal from Brazil (July 31, 1991, 56 FR 36135).
Applicable Statute and Regulations
The Department has now completed that administrative review in
accordance with section 751 of the Tariff Act of 1930, as amended (the
Tariff Act). Unless otherwise indicated, all citations to the statute
and the Department's regulations are in reference to the provisions as
they existed on December 31, 1994.
Scope of the Review
The merchandise covered by this 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 review is silicon metal from Brazil
containing between 89.00 and 96.00 percent silicon by weight but which
contains a higher aluminum content 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 2804.50 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. HTS item numbers are provided for convenience and
for U.S. Customs purposes. The written description remains dispositive
as to the scope of the product coverage.
The period of review (POR) is July 1, 1992, through June 30, 1993.
This review involves four manufacturers/exporters of Brazilian silicon
metal; Companhia Brasileira Carburetto de Calcio (CBCC), Companhia
Ferroligas Minas Gerais--Minasligas (Minasligas), Eletroila, S.A.
(currently known as Eletrosilex Belo Horizonte (Eletrosilex)), and Rima
Electrometalurgia S.A. (RIMA).
Compsumption Tax
In light of the Federal Circuit's decision in Federal Mogul v.
United States, CAFC No. 94-1097, the
[[Page 46764]]
Department has changed its treatment of home market consumption taxes.
Where merchandise exported to the United States is exempt from the
consumption tax, the Department will add to the U.S. price the absolute
amount of such taxes charged on the comparison sales in the home
market. This is the same methodology that the Department adopted
following the decision of the Federal Circuit in Zenith v. United
States, 988 F. 2d 1573, 1582 (1993), and which was suggested by the
court in footnote 4 of its decision. The Court of International Trade
(CIT) overturned this methodology in Federal Mogul v. United States 834
F. Supp. 1391 (1993), and the Department acquiesced in the CIT's
decision. The Department then followed the CIT's preferred methodology,
which was to calculate the tax to be added to U.S. price by multiplying
the adjusted U.S. price by the foreign market tax rate; the Department
made adjustments to his amount so that the tax adjustment would not
alter a ``zero'' per-tax dumping assessment.
The foreign exporters in the Federal Mogul case, however, appealed
that decision to the Federal Circuit, which reversed the CIT and held
that the statute did not preclude Commerce from using the ``Zenith
footnote 4'' methodology to calculate tax-neutral dumping assessments
(i.e., assessments that are unaffected by the existence amount of home
market consumption taxes). Moreover, the Federal Circuit recognized
that certain international agreements of the United States, in
particular the General Agreement on Tariffs and Trade (GATT) and the
Tokyo Round Antidumping Code, required the calculation of tax-neutral
dumping assessments. The Federal Circuit remanded the case to the CIT
with instructions to direct Commerce to determine which tax methodology
it will employ.
The Department has determined that the ``Zenith footnote 4''
methodology should be used. First, as the Department has explained in
numerous administrative determinations and court filings over the past
decade, and as the Federal Circuit has now recognized, Article VI of
the GATT and Article 2 of the Tokyo Round Antidumping Code required
that dumping assessments be tax- neutral. This requirement continues
under the new Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade. Second, the Uruguay Round Agreements
Act (URAA) explicitly amended the antidumping law to remove consumption
taxes from the home market price and to eliminate the addition of taxes
to U.S. price, so that no consumption tax is included in the price in
either market. The Statement of Administrative Action (p. 159)
explicitly states that this change was intended to result in tax
neutrality.
While the `'Zenith footnote 4'' methodology is slightly different
from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA
law required that the tax be added to United States price rather than
subtracted from home market price, it does result in tax-neutral duty
assessments. In sum, the Department has elected to treat consumption
taxes in a manner consistent with its longstanding policy of tax-
neutrality and with the GATT.
Analysis of Comments Received
We received case and rebuttal briefs from Minasligas, Eletrosilex,
and a group of five domestic producers of silicon metal (collectively,
the petitioners). Those five domestic producers are American Alloys,
Inc., Elken Metals, Co., Globe Metallurgical, Inc. SMI Group, and SKW
Metals,and Alloys, Inc. We also received written comments and written
rebuttal comments from CBCC and RIMA.
Comment 1: Petitioners argue that the Department erred by basing
the margin calculation for each of the four respondents on U.S. sales
of silicon metal that did not enter U.S. Customs territory during the
POR. Petitioners cite to section 751(a)(2) of the Tariff Act for
support that the statute requires that margins be based on entries.
Petitioners also cite to Torrington Co. v. United States, 818 F. Supp.
1563, 1573 (CIT 1993) (Torrington) to demonstrate that the Court of
International Trade (CIT) has held that the word ``entry'' as used in
the statute refers to the ``formal entry of merchandise into the U.S.
Customs territory.'' Furthermore, petitioners argue that the Department
itself has stated that the use of the term ``entry'' in the antidumping
law refers unambiguously to the release of merchandise into the customs
territory of the United States (See Antifriction Bearings (Other than
Tapered Roller Bearings) and Parts Thereof from the Federal Republic of
Germany; Final Results of Antidumping Duty Administrative Review, 56 FR
31692, 31704 (July 11, 1991) (AFBs from Germany)). Petitioners also
state that the Department's past practice has been to conduct reviews
of sales based on entries of subject merchandise and argue that any
unusual circumstances that may have prompted the Department to base
reviews on sales, rather than entries, in other case are not present
here. Finally, petitioners argue that basing reviews on entries rather
than sales is sound policy. By limiting reviews to entries, petitioners
argue, the Department precludes respondents from controlling the
outcome of administrative reviews. They Claim that basing the review on
entries prevents manipulation because the transactions subject to
review are determined by an objective administrative act performed by
the U.S. Customs Service.
CBCC and RIMA argue that the petitioners have confused the issue of
the liquidation of entries with the issue of the scope of inquiry in an
administrative review. They allege that, in effect, the petitioners
have argued that a company that does not have shipments that entered
the United States during the POR should not be reviewed. Such a policy,
CBCC and RIMA argue, would be contrary to the express language of the
statute and the regulations, and also a departure from the Department's
practice in the previous administrative review of this order.
Furthermore, they argue that the purpose of an administrative review
is, in part, to redetermine the deposit rate based on commercial
activities during the POR. Thus, it makes sense to base the review on
sales because the terms of sale are established by the exporter on the
date of sale, and not when the entry arrives in the United States.
Eletrosilex and Minasligas argue that the petitioners made the same
argument in the previous administrative review of this order, and the
Department rejected it in its final results of review. They argue that
in that review the Department cited its regulations for support that a
review covers either ``entries or sales of the merchandise during the
12 months immediately preceding the most recent anniversary month.''
Silicon Metal from Brazil; Final Results of Antidumping Duty
Administrative Review, 59 FR 42806, 42813 (DOC Position to Comment 25)
(August 19, 1994). They state that the Department also noted in that
review that it had based other administrative reviews on sales rather
than entries. Furthermore, they argue, the Department in its Advance
Notice of Proposed Rulemaking (56 FR 63696, 63697 (December 5, 1991))
(Advance Notice) stated that the statutory language in toto shows that
Congress did not intend to limit administrative reviews solely to
entries, and that to do so would hinder the achievement of statutory
goals governing review and assessments.
Additionally, Minasligas argues that there are not compelling
policy reasons that would require the Department to base administrative
reviews solely on entries of subject merchandise because,
[[Page 46765]]
contrary to the petitioners' assertions, the respondent does not
control the outcome of an administrative review when the Department
bases its review on sales. First, the terms of the transaction
involving the subject merchandise will remain the same, whether the
Department bases the review on sales, shipments, or entries. Second,
the entry of the subject merchandise into the customs territory of the
United States is, in practical terms, of no importance to the
Department's comparison of United States price (USP) to FMV to
determine a dumping margin. Third, Minasligas argues that petitioners
have misconstrued Torrington. Torrington, Minasligas argues, deals with
the issue of whether entry of merchandise subject to an antidumping
duty order into a Free Trade Zone (FTZ) ``required that antidumping
duties be imposed on merchandise imported into a FTZ until such time as
the merchandise enters the Customs territory of the U.S.'' (Torrington,
818 F. Supp. at 1572, 1573 (emphasis added)). It did not, Minasligas
argues, deal with the question at issue here, and is therefore
irrelevant.
Department's Position
We agree with all parties in part, and disagree with all parties in
part.
We agree with petitioners that normally the Department reviews
sales where there are entries of subject merchandise during the POR. In
determining a respondent's antidumping duty margin, the Department
first determines whether the respondent had entries during the POR. In
reviews where the respondent had one or more entries during the POR,
the Department reviews the respondent's sales to determine the
antidumping duty margin and, in accordance with section 751 (a)(2),
uses this margin to assess on the entries during the POR. In reviews
where the respondent had no entries during the POR, the Department
normally conducts a no-shipment review (i.e., a review in which a
respondent's margin from the last review/investigation in which it had
entries is carried forward and applied in a period in which there were
no entries). This approach is in accordance with the explicit language
of the stastute which requires that we asses antidumping duties on
entries during the POR.
We do not agree with petitioners that section 751(a)(2) requires
that we review only sales that entered U.S. customs territory during
the POR. Section 751(a)(2) mandates that the dumping duties determined
be assessed on entries during the POR. It does not limit administrative
reviews to sales associated with entries during the POR. Furthermore,
to review only sales associated with entries during the POR would
require that we tie sales to entries. In many cases we are unable to do
this. Moreover, the methodology the Department should use to calculate
antidumping duty assessment rates is not explicitly addressed in the
statute, but rather has been left to the Department's expertise based
on the facts of each review. ``* * * the statute merely requires that
PUDD [i.e., potentially uncollected dumping duties] * * * serve as the
basis for both assessed duties and cash deposits of estimated duties.''
See The Torrington Company v. United States 44 F.3d 1572, 1578 (CAFC
1995).
The Department agrees with CBCC and RIMA that a company should not
be precluded from review simply because it has no entries during the
POR. However, the review we normally conduct under such circumstances
is a no-shipment review (described above), and not a review of sales
that may have occurred during the POR. No-shipment reviews ensure that
a respondent continues to be ``reviewed'' even in situations where it
had no entries during the POR.
We also agree with Eletrosilex and Minasligas that the Department's
regulations permit a review of either ``entries or sales.'' However,
this language pertains to the methodology to employ in conducting a
review, and does not address situations where a respondent had no
entries during a POR.
We also agree with Eletrosilex and Minasligas that the Department's
Advance Notice of Proposed Rulemaking states that the statutory
language in toto shows that Congress did not intend to limit
administrative reviews solely to entries. However, although we may base
a review on either sales or entries during the POR, we must rely on
entries to determine which type of review to conduct (i.e., a sales-
based review of a no-shipment review). Contrary to Minasligas' claims,
the entry of subject merchandise into the customs territory of the
United States is a necessary prerequisite for a sales-based review,
because if a respondent had no entries during a POR, we would be unable
to assess any antidumping duties determined to be due as a result of
our review.
We have determined, based on information received from the U.S.
Customs Service, that all respondents in this review had at least one
consumption entry into U.S. customs territory during the POR. However,
we have also determined that some respondents made sales to importers
who had not entries during the POR. In these final results of review,
we included all four respondents and adopted the following approach in
determining which sales to review:
1. Where 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.
2. Where a respondent sold subject merchandise to an importer who
had no entries during the POR, we did not review the sales of subject
merchandise to that importer in this administrative review. Instead, we
will review those sales in our administrative review of the next period
in which there is an entry by that importer.
After completion of this review, we will issue liquidation
instructions to Customs which will instruct Customs to assess dumping
duties against importer-specific entries during the period.
Comment 2: Petitioners argue that the Department erred in its
calculations for each of the four respondents by comparing the United
States price (USP) to the constructed value (CV) for the month of the
sale. They argue that in hyperinflationary economy cases it is the
Department's practice to compare the USP to the CV for the month of
shipment. In support of their contention, they cite Porcelain-On-Steel
Cooking Ware from Mexico; Final Results of Antidumping Duty
Administrative Review, 55 FR 21061, 21065 (May 22, 1990) (Porcelain-On-
Steel Cooking Ware), in which the Department stated:
where, as here, a country's economy experiences hyperinflation, we
use a company's replacement costs incurred during the month of
shipment, rather than its historical costs, to calculate CV and COP.
See Amended Final Determination of Sales at Less Than Fair Value and
Amended Antidumping Duty Order; Tubeless Steel Disc Wheels from
Brazil, 53 FR 34566 (1988); and Oil Country Tubular Goods from
Argentina, 50 FR 12595 (1985). This practice enables us to achieve a
fair comparison by examining contemporaneous costs and prices, and
thereby avoid distortions caused by hyperinflation. (emphasis
added.)
Accordingly, petitioners argue that in the final results of review the
Department should base its margin calculations for each of the four
respondents by comparing USP to the CV for the months of shipment.
Eletrosilex argues that the Department's regulations contemplate
that, in purchase price situations, the CV will be based on ``relevant
costs and
[[Page 46766]]
expenses at a time preceding the time the producer * * * sells the
merchandise for exportation to the United States.'' 19 CFR
Sec. 353.50(b)(1) (emphasis added). Furthermore, Eletrosilex argues
that the Department has long recognized that price and cost comparisons
are relevant only when made in a narrow and comparable time period, and
has in the past paid special attention in hyperinflationary economy
cases to avoid time frames that cause distortions that result from
hyperinflation. Moreover,the determination of what is the appropriate
time period is, Eletrosilex argues, a discretionary call that the
Department makes based on the facts of each case. According to
Eletrosilex, the Department's Antidumping Manual, Chapter 8, p. 61
(August 1991 ed.) states: ``The determination of proper comparison
periods is made on the basis of the facts in a particular
investigation.'' The facts of this situation, Eletrosilex argues,
warrant comparing the U.S. sale to the CV for the month of sale because
there was a six-month interval between the date of sale and the date of
shipment. On the date of sale (a time when prices were substantially
depressed) the price was fixed and did not subsequently change. Six
months later, when the merchandise was shipped, Brazil was facing
inflation in excess of 2000 percent annually. Therefore, Eletrosilex
claims that costs at that time had no relevance to costs or prices on
the date of sale six months earlier.
Minasligas argues that petitioners' argument is moot because the
department did not compare its USP to a CV; the Department compared USP
to a weighted-average home market sales price. However, if the
Department uses the CV of the month of shipment in the final results,
Minasligas argues that the Department should adjust the CV to account
for inflation between the date of sale and the date of shipment, as was
done in the investigation of this case. See Silicon Metal from Brazil;
Final Determination of Sales at Less Than Fair Value, 56 FR 26977,
26983 (June 12, 1991) (Silicon Metal Final Determination).
Department's Position: We agree with petitioners that, when using
CV in hyperinflationary economies, our normal practice is to compare
the U.S. price to the CV of the month of shipment. See Porcelain-On-
Steel Cooking Ware at 21065. Therefore, we have compared USP to CV of
the month of shipment in these final results of review, unlike in the
preliminary results of review. However, we also agree with Minasligas
that an adjustment should be made to CV to account for inflation
between the date of sale and the date of shipment. Therefore, in these
final results of review we have calculated a circumstance-of-sale
inflation adjustment as described in Tubeless Steel Disc Wheels from
Brazil; Amended Final Determination of Sales at Less than Fair Value
and Amended Antidumping Duty Order, 53 FR 34566 (September 7, 1988).
This was the same methodology followed in the original investigation of
this proceeding. See Silicon Metal Final Determination, at 26983.
Comment 3: Petitioners argue that the Department erred in using the
shipment date as the date of sale for Minasligas' sales made pursuant
to long-term contracts. They base this argument on Appendix 2-2 of the
Department's questionnaire which says that, for sales made pursuant to
a long-term contract, the date of sale is the date of the contract, and
that only if the terms of sale are subject to change, and do in fact
change up to, or even subsequent to, the date of shipment, may the date
of shipment be taken as the date of sale. Petitioners allege that there
is no evidence on the record to indicate that the essential terms of
sale changed, for the sales made pursuant to a long-term contract,
after the date of the contract. Therefore, petitioners argue the
Department should take the date of the contract as the date of sale for
each sale made pursuant to a long-term contract. Furthermore, as the
dates of the contracts are not on the record of this review,
petitioners argue that the Department should either require Minasligas
to report the date of the contracts, or else use the best information
available (BIA) in the final results of review.
Minasligas argues that the Department acted properly and in full
accord with its own precedent in using the shipment date as the date of
sale. The Department has previously articulated, Minasligas argues,
that the date of sale is the date on which the essential terms of the
sale, specifically price and quantity, are finalized (See Department's
questionnaire, Appendix 2-2, and Final Determination of Sales at Less
Than Fair Value: Gray Portland Cement and Clinker from Japan (56 FR
12156, 12163, March 22, 1991 (Cement from Japan). Here, Minasligas
argues that, contrary to petitioners' assertions, evidence on the
record indicates that the price and quantity are not finalized until
the date of shipment.
Department's Position: We agree with Minasligas. In Cement from
Japan at 12163 we said:
It is the Department's practice to determine the date of sale as
that date on which the essential terms of the sale, specifically
price and quantity, are finalized to the extent that they are
outside the parties' control. See Titanium Sponge from Japan (54 FR
13403, 13404 (April 3, 1989)) (aff'd Toho Titanium Co. v. United
States, 743 F. Supp. 888 (CIT 1990)); Brass Sheet and Strip from
France, 52 FR 812, 814 (1987). The Department normally considers the
contract date as the date of sale because a written contract best
represents the date at which the terms of sale are formalized and
the parties are bound.
From our review of the price and quantity information on the record of
this review, we have determined that prices for sales made pursuant to
the same contract sometimes vary. Thus, we conclude that the parties
are not in fact bound by the contract, and that the terms of sale are
not finalized until the date of shipment. Hence, in these final results
of review, as in the preliminary results of review, we have used the
date of shipment as the date of sale.
Comment 4: Petitioners argue that the Department lacked the
information necessary to ``treat properly'' Minasligas' home market
sales of silicon metal to a particular Brazilian producer of silicon
metal. These sales were included in the margin calculation in the
preliminary results of review. Petitioners argue that the sales volumes
and prices to Minasligas' customer raise fundamental questions
regarding the relationship between Minasligas and the customer. Thus,
petitioners argue, the Department needs to know the ultimate
disposition of the silicon metal sold to the Brazilian producer and
whether Minasligas knew the ultimate disposition of the silicon metal
at the time of sale, (i.e., whether the silicon metal was subsequently
resold by the Brazilian producer to an American or third-country buyer)
in order to determine whether the sale should have been included in
Minasligas' home market sales listing and used in the margin
calculation. Petitioners argue that the Department should solicit this
information or else not use the sales in the calculation of the final
results of review.
Minasligas argues that the Department had all necessary information
to treat properly all of Minasligas' home market sales. It argues that
the petitioners have inaccurately cited Minasligas' sales volumes and
prices to this customer, and that there is nothing on the record to
suggest that the sales to the Brazilian producer were anything other
than arms-length transactions. It further argues that the petitioners'
claim that Minasligas may have known that the sales to the Brazilian
producer may have been resold and, therefore, should have
[[Page 46767]]
been treated differently than they were, is based on vague,
hypothetical conjecture, and is without any support in the record.
Department's Position: We agree with Minasligas. From our review of
the proprietary version of the record in this proceeding, we have
determined that there is an insufficient basis for concluding that the
sales to this particular home market customer were not arms-length
transactions. Where prices to this customer differ from prices to other
customers, the disparity can usually be explained as a function of
differing quantities. Furthermore the questionnaire to which Minasligas
responded in this review required that it report as U.S. sales, all
sales made to unrelated intermediaries outside the U.S. that it knew at
the time of sale were destined for delivery in the U.S. market. No
evidence exists on the record that Minasligas failed to comply with
this requirement. Hence, in these final results of review, as in the
preliminary results of review, we have included the sales to this
customer in the calculation of FMV.
Comment 5: Petitioners argue that the Department should reject
RIMA's cost of production (COP) response and base the margin for RIMA
on BIA. They base this argument on numerous alleged weaknesses they
find in the cost data that RIMA submitted. Among those alleged
weaknesses are the following:
(1) RIMA's financial accounting system did not record depreciation
and inventory in accordance with Brazilian Generally Accepted
Accounting Principles (GAAP), thus, petitioners argue, rendering the
reported cost from the audited financial statements completely
unreliable for antidumping purposes;
(2) RIMA's cost accounting system (which was used to value finished
inventory values) was not totally integrated into its financial
accounting system;
(3) RIMA's cost accounting system did not reconcile with supporting
documentation (e.g., payroll and purchase ledgers).
(4) the monthly adjustments RIMA used to reconcile the cost
accounting system to the financial account system fluctuated immensely.
Petitioners conclude from these points that the accounting systems
that generated the numbers to which the reported COP/CV data were
reconciled are completely unreliable, and that, therefore, the
Department should reject RIMA's submitted cost data and assign RIMA a
margin based on BIA.
RIMA argues that none of petitioners' criticisms of its cost
accounting system is pertinent. RIMA argues that it is permitted under
Brazilian tax and corporate laws to not report depreciation on its
financial statements. RIMA also claims that its failure to report
depreciation on its financial statements is not relevant to this case
because depreciation was calculated, verified, and taken into account
in the cost computations. Moreover, RIMA argues that because the
Department's methodology has departed entirely from the approach taken
in standard Brazilian accounting, the fact that RIMA's financial
statement may not comply with Brazilian GAAP should not be a basis for
using BIA. Furthermore, RIMA argues that the integration of the cost
accounting system with the financial accounting system has been
explained in responses and shown to verifiers, who found the
reconciliations acceptable.
Department's Position: For the final results, we accepted RIMA's
submitted costs as the basis for COP and CV calculations. The
Department recognizes that concerns exist about whether RIMA's
valuation and presentation of its production costs are in accordance
with Brazilian GAAP (see notes 3 & 4 of the independent auditor's
opinion on the financial statements, cost verification exhibit 4).
However, the Department also realizes that RIMA's auditors believed
that the cost reported in the financial statements could still be
relied upon and stated, ``[i]n our opinion, except for that contained
in paragraphs 3 and 4, the accounting reports * * * adequately
represent, in all relevant respects, the net worth and financial
position of RIMA * * *'' (see independent auditor's opinion on the
financial statement, note 5, cost verification exhibit 4, emphasis
added). For purposes of the Department's calculations, we note that
RIMA did calculate and submit depreciation based on internal schedules
maintained by the company. At verification, we reviewed these schedules
and traced selected information to both RIMA's audited balance sheet
and source documentation (see cost verification exibit 7). We noted no
discrepancies. Furthermore, because the Department required RIMA to use
monthly replacement costs, the petitioners' concern about RIMA's ending
inventory not being recorded in accordance with Brazilian GAAP is moot.
The Department has determined in previous cases that Brazilian GAPP
does not reasonably reflect the costs of producing silicon metal in
Brazil. (See Silicon Metal Final Determination at 26986.) Therefore, in
accordance with our replacement cost methodology, the Department valued
RIMA's actual monthly production using its respective current month's
cost and did not use RIMA's ending inventory in calculating RIMA's COP.
The Department also tested RIMA's cost and financial accounting
systems. The company's cost accounting system was used to prepare
managerial reports of product specific costs and the financial
accounting system was used to prepare the annual financial statement.
The two systems were linked (or integrated) through finished inventory
values. The costs reflected in the managerial reports were adjusted
monthly to conform with the accumulated production costs from the
financial accounting system. RIMA officials contended at verification
that their cost system produced questionable results and was not
reliable. Therefore, they based cost of production on data obtained
only from the financial accounting system. The Department found this
approach reasonable because the figures produced by the company's cost
accounting system were usually understated and required adjustment to
conform with the audited financial accounting system results (See cost
verification exhibit 9). Therefore, we were able to rely upon RIMA's
financial statements to verify its submitted costs.
Comment 6: Petitioners argue that the Department should increase
RIMA's direct material input quantities by the percentages recommended
by the Department's Office of Accounting (OA) in its preliminary
calculation adjustment memo dated December 22, 1994. By failing to
follow OA's recommendation that RIMA's direct material input quantities
be increased, petitioners argue that the Department used cost figures
and input quantities in its calculations that were unverifiable and
specifically rejected by the verifiers. They claim that this usage of
RIMA's data was a violation of section 776(b) of the Tariff Act which
requires that the Department rely on BIA for unverifiable information.
Petitioners also argue that relying on RIMA's reported cost information
is not adverse to RIMA and, therefore, allows the company to control
the outcome of the proceeding to its advantage.
RIMA argues that there is no justification for applying a BIA
figure to all of RIMA's direct material input quantities. RIMA believes
that the Department properly rejected OA's BIA recommendation for
direct materials. However, RIMA argues that the computer program used
to calculate the preliminary review results shows that the Department
increased costs. This
[[Page 46768]]
error, RIMA argues, should be corrected in the final results.
Department's Position: We accepted RIMA's submitted direct material
quantities as the basis for COP and CV calculations for the final
results. We disagree with the petitioners' contention that the
quantities were unverifiable and specifically rejected by the
verifiers. In fact, we were able to trace the submitted quantities to
RIMA's source documents in this review period. In the verification
report, we stated that we traced the direct materials quantities from
RIMA's characteristic numbers report, which is used as a basis for
reporting its quantity of inputs, to RIMA's daily production records,
which are maintained in the furnace control room. (See cost
verification report, page 8, October 31, 1994). However, due to a
discrepancy between the information provided at the first and second
review verifications concerning the availability of furnace reports
through November 1993, OA contemplated an adjustment to increase RIMA's
submitted direct material quantities. Upon reflection, however, we
decided to accept RIMA's submitted information for this review because
each review is conducted independently of other reviews and should not,
on such matters, be influenced by other reviews. See Fresh Cut Flowers
from Mexico; Final Results of Antidumping Duty Administrative Review,
60 FR 49569, 49570 (September 26, 1995).
Furthermore, we have determined that, contrary to RIMA's assertion,
the computer program used to calculate the preliminary results of
review does not contain an increase to direct material input
quantities. Therefore, for purposes of these final results of review,
we have not adjusted the quantity of direct material inputs in the
computer program.
Comment 7: Petitioners argue that the Department made two mistakes
with regard to RIMA's overhead costs. They allege that the first
mistake was the Department's calculation of overhead by averaging
ratios for direct labor, electricity, and direct materials calculated
by comparing the usage for each item for silicon metal production to
the usage for overall production. Petitioners argue that this use of a
simple average does not accurately reflect the relationship of material
costs, direct labor, and electricity costs to the sum of RIMA's cost of
materials, direct labor, and utility costs. Petitioners claim that the
Department needs to add an additional step to its calculations that
weight-averages the adjustment ratios (based on the relationship of
each cost item to the sum of the direct materials, electricity, and
direct labor) to account accurately for the amount of overhead
attributable to the production of silicon metal. Petitioners' second
argument is that the Department erred in using the overhead costs for
the month of sale rather than the month of shipment.
RIMA argues that it allocated its direct labor, direct materials,
and electricity costs to most accurately reflect its true cost of
production. RIMA argues that it is inappropriate for the Department to
decide whether a company's approach is the ``best allocation.'' It
states that unless there is something seriously wrong with the overall
cost accounting system of a company, the Department must use the
figures developed by the company in its ordinary course of business.
RIMA also argues that OA was incorrect to characterize the direct labor
hours as ``estimates.'' It states that the direct labor hours are
programmed hours, developed over time and based on actual production
performance. Finally, RIMA argues that there is no evidence on the
record that a more complex allocation program would be better. In fact,
RIMA argues that electricity consumption, which the Department used in
its revised allocation methodology, is a poor method of allocating
indirect costs because the amount of electricity consumed varies
greatly with the product being made and the quality of raw materials.
Department's Position: We believe the allocation of overhead costs
used in the preliminary results of review is appropriate, and applied
the same methodology in these final results of review. We reviewed
RIMA's submitted allocation method and found that it understates the
cost of the subject merchandise. RIMA used estimated direct labor hours
to allocate overhead costs. This method is not used in RIMA's normal
course of business. Furthermore, the Department does not believe that
direct labor hours alone are an adequate basis for cost allocations in
this case because RIMA derived the hours from its cost accounting
system which, as discussed in comment 5, does not produce accurate
results. We believe that, based upon the specific facts of this case,
an average of ratios based on direct labor hours, electricity usage,
and direct material usage provides a broad and stable base for
allocation purposes. Furthermore, this combination corresponds very
closely to RIMA's production furnaces' machinery, and labor
requirements. For example, silicon metal production consumes a larger
quantity of electricity than non-subject merchandise. Therefore, a
larger portion of the cost of maintaining the power lines and
transformers should be allocated to the product. Finally, we note that
RIMA's normal allocation method was examined at verification, and
produced appropriately the same results as the method used in these
final results (see cost verification exhibit 7).
We also reviewed the petitioners' criticism of our calculation, and
disagree with their suggested additional step to weight the three
ratios based on April 1993 values. Because Brazil's economy was
hyperinflationary during the POR, we believe that the use of a specific
month's values in the calculation could create inappropriate results
when applied to the remaining months of the POR. Therefore, in these
final results of review, we have used the same computation of RIMA's
overhead costs as we did in the preliminary results of review. However,
we agree with petitioner that overhead costs, like the other elements
of CV, should be based on the CV of the month of shipment. In these
final results of review, we have based CV on the month of shipment. See
Department's Position to comment 2.
Comment 8: Petitioners argue that the Department erred by deducting
RIMA's home market packing expenses from RIMA's CV before adding U.S.
packing expenses to RIMA's CV. They argue that RIMA's CV did not
include home market packing expenses and, therefore, these expenses did
not need to be deducted before adding U.S. packing expenses.
Department's Position: We agree, and have corrected this error in
these final results of review.
Comment 9: Petitioners cite to page two of the Department's March
14, 1995, preliminary results analysis memorandum to argue that the
Department erred by excluding a line item called ``HM Taxes'' from
Eletrosilex's CV. The line item in question, petitioners believe,
represents Eletrosilex's Program of Social Integration (PIS), Social
Investment Fund (FINSOCIAL), and Industrialized Products (IPI), taxes.
Petitioners argue that these taxes must be included in CV since they
are not remitted or refunded upon exportation of the merchandise. The
statutory authority they cite to support their argument is section
773(e)(1)(A) of the Tariff Act, which provides that:
the constructed value of imported merchandise shall be the sum of *
* * the cost of material (exclusive of any internal tax applicable
in the country of exportation directly to such materials of their
disposition, but remitted or refunded upon the exportation of the
article in the production of which such materials are used * * *
(emphasis added)
[[Page 46769]]
Eletrosilix argues that petitioners' argument is flawed because
page two of the preliminary results analysis memo to which petitioners
cite refers not to CV, but to the calculation of Net Home Market Price.
Department's Position: Eletrosilix is correct that page two of the
preliminary results analysis memorandum concerns Net Home Market Price,
and not CV. However, we believe petitioners intended to reference page
five of the analysis memorandum, where we stated that in our
computation of CV, we subtracted from COM the field ``HM taxes.''
Petitioners are correct that, in accordance with section
773(e)(1)(A) of the Tariff Act, internal taxes should be included in CV
if they are not remitted or refunded upon exportation of the
merchandise. After publishing the preliminary results of review, we
solicited information from all respondents in this review regarding
their tax payments. Eletrosilex stated that its PIS and FINSOCIAL
(currently known as COFINS) taxes are already included in its reported
direct materials costs (See Eletrosilex's September 6, 1995,
submission, p. 4) Furthermore, in these final results of review, unlike
the preliminary results of review, we have included the IPI tax (and
also the tax on Circulation of Merchandise (ICMS)) in the calculation
of CV for all respondents because these taxes are not remitted or
refunded upon export of silicon metal. Because section 773(e)(1)(A) of
the Tariff Act does not account for offsets of taxes paid due to home
market sales, we did not account for the reimbursement to the
respondents of ICMS and IPI taxes due to home market sales of silicon
metal. The experience with regard to home market sales is irrelevant to
the tax burden borne by the silicon metal exported to the U.S.
Therefore, in these final results of review, all of the taxes
Eletrosilex paid on its purchases of inputs for the production of
silicon metal are included in CV.
In adopting this methodology, we are using the methodology applied
in the less-than-fair-value (LTFV) investigation of this case (See
Silicon Metal Final Determination at 26984). We believe this
methodology more strictly accords with the language of section
773(e)(1)(A) of the Tariff Act than does the methodology used in the
preliminary results of this review.
Comment 10: Petitioners argue that the Department erred by
calculating Eletrosilex's net financial expenses from information
contained in Eletrosilex's financial statements. Petitioners argue that
the financial statements are unreliable for calculating Eletrosilex's
net financial expenses for antidumping purposes because they include
both long and short-term interest income, whereas the Department's
practice is to offset interest expenses by only short-term interest
income. Furthermore, petitioners note that in response to further
questioning by the Department, Eletrosilex reported monthly total
interest income rather than only short-term interest income.
Petitioners argue that the Department should, therefore, make no offset
to Eletrosilex's short-term interest expense.
Eletrosilex argues that it had no long-term interest income during
the POR, and that all of its interest income was from short-term
investments. Therefore, Eletrosilex argues, the Department properly
subtracted all of its reported interest income from interest expenses
in determining its net interest expenses.
Department's Position: We agree with the respondent. During
verification, we traced financial receipts to source documentation to
confirm that Eletrosilex's audited interest income figure was derived
from only short-term investments (cost verification exhibit 12). We
noted no discrepancies. Therefore, in these final results of review, as
in the preliminary results of review, we allowed Eletrosilex to offset
financing costs by the reported interest income.
Comment 11: Petitioners argue that the Department incorrectly
calculated Eletrosilex's cost of overhauling one of its furnaces.
Petitioners argue that the Department's calculation, which allocated
costs equally to all months of the POR and applied each month's
inflation rate to those costs, fails to account for the compounding
effect of inflation. However, petitioners claim that the Department
properly rejected Eletrosilex's September 1992 projected costs.
Petitioners argue that using projected figures would violate the
Department's practice of calculating replacement costs based on actual
figures.
Eletrosilex argues that the use of compounded inflation rates by
the Department is discretionary. Furthermore, it argues that the merits
of using compounded inflation rates should be weighed against
Eletrosilex's argument that the maintenance costs should be allocated
over a longer period of time, not less than three years, because the
furnace breakdown was a highly aberrational event. Eletrosilex also
contends that the Department erred in using the actual production
volume in the COP/CV calculations for the month of September 1992, and
argues that the Department should instead use Eletrosilex's projected
output.
Department's Position: We agree with petitioners. First, the
petitioners are correct in arguing that COP/CV data should be based
upon actual results and not projections. See Final Determination of
Sales at less Than Fair Value: Oil Country Tubular Goods from Austria,
60 FR 33551, 33557 (June 28, 1995). Therefore, in these final results
of review, as in the preliminary results of review, the Department used
actual production tons and not projected results to obtain
Eletrosilex's actual per-ton costs for September 1992. Second, we
amortized Eletrosilex's shut down costs over the POR since the repairs
benefited production during this period. We are rejecting Eletrosilex's
three year amortization period because the longer time period is
unsupported by facts on the record. Additionally, we discussed the POR
amortization period with company officials at verification. At that
time, company officials agreed with the suggested period and did not
offer any alternate amortization periods (see October 5, 1994, cost
verification report, p. 5). Third, we have adjusted our calculation to
account for the compounding effects of inflation.
Comment 12: Petitioners argue that the Department double-counted
Eletrosilex's claimed duty drawback for ICMS and IPI taxes paid on
imported electrodes by adding the duty drawback adjustment to USP, but
also excluding ICMS and IPI taxes from CV. They argue that the
Department's practice has been to perform its calculation in such a way
that double-counting does not occur. In support of their view,
petitioners cite Final Determination of Sales at Less Than Fair Value:
Mechanical Transfer Presses from Japan, 55 FR 335, 343 (January 4,
1990), in which the Department said that if duty drawback is ``not
included in the materials costs in the calculation of COM (cost of
manufacture), the Department [adds] these uncollected duties to the
CV.''
Eletrosilex argues that it does not include ICMS and IPI taxes in
its COM because they are not costs to Eletrosilex. Rather, because they
are value-added taxes, their cost is passed along to the next user.
Therefore, Eletrosilex argues, the Department should not consider these
taxes in its calculation of CV. Furthermore, Eletrosilex argues, it is
the Department's practice, in accordance with section 773(e)(1)(a) of
the Tariff Act, not to include in CV any internal tax which is remitted
or refunded upon exportation of the product in which the material is
used. Eletrosilex states that because more than 87 percent of their
product is exported, nearly all of the tax
[[Page 46770]]
would be excluded from the CV calculation under any circumstances.
Department's Position: We agree with petitioners. Eletrosilex's
argument with respect to section 773(e)(1)(a) of the Tariff Act is not
valid because the duty drawback law applicable to Eletrosilex suspends
the payment of ICMS and IPI taxes that would ordinarily be due upon
importation of electrodes. Therefore, because the ICMS and IPI taxes
are suspended, we cannot conclude that they are already included in the
COM or the tax payments that Eletrosilex has reported. Thus, in order
to make an ``apples-to-apples'' comparison between USP And CV, we need
to add to CV the full amount of the duty drawback that we added to USP
in accordance with section 772(d)(1)(B) of the Tariff Act. We have done
so in these final results of review.
Comment 13: Petitioners argue that the Department used an incorrect
exchange rate in converting five of Eletrosilex's U.S. selling and
movement charges from cruzeiros to U.S. dollars. They argue that the
Department should use a devalued exchange rate because Eletrosilex
reported its charges in devalued cruzeiros.
Eletrosilex argues that the petitioners's argument is confused
because the Department used the exchange rate which petitioners, in
their case brief, argued should be used, i.e., the exchange rate of the
month of shipment.
Department's Position: We agree with Eletrosilex. Our standard
methodology in reviews involving hyperinflationary economies is to
convert U.S. movement expenses using the exchange rate in effect on the
date the costs were incurred. We employ this methodology to avoid
creating dumping margins that result only from the rapid depreciation
of a local currency during the interval between the month of sale and
the month of shipment. See Steel Wheels from Brazil, Final
Determination of Sales at Less than Fair Value, 54 FR 21456, 21459 (May
18, 1989) (Steel Wheels). Thus, in these final results of review, as in
the preliminary results of review, we have converted Eletrosilex's U.S.
export costs into U.S. dollars using the monthly exchange rate in
effect during the month of shipment.
Comment 14: Petitioners argue that the Department erred by
comparing Eletrosilex's U.S. prices inclusive of ICMS tax to a CV
exclusive of ICMS tax. By doing so, the Department failed to make an
``applies-to-apples'' comparison. Moreover, they argue that section
772(d)(2) of the Tariff Act states that the USP shall be reduced by
``any additional costs and charges * * * incident to bringing the
merchandise * * * the United States'' and by ``any export tax * * * or
other charge imposed by the country of exportation on the exportation
of the merchandise to the United States * * *'' if included in the
price of the merchandise. Therefore, petitioners argue that the
Department should subtract from Eletrosilex's USP the ICMS taxes that
were included in the reported gross prices.
Eletrosilex argues that the ICMS tax is applied to the sale of
semi-industrialized products, such as silicon metal, and the law
specifically excludes any waiver of the tax upon exportation.
Therefore, Eletrosilex argues, the ICMS tax is not an export tax and
is, therefore, properly included in the calculation of USP.
Department's Position: We disagree with petitioners that the ICMS
tax is an export tax or other charge imposed on the exportation of the
merchandise to the United States as defined in section 772(d)(2) of the
Act. The ICMS tax is imposed upon all sales of this product, regardless
of the market to which it is destined. Since the tax is not levied
solely upon exported merchandise, it does not constitute an export tax
and cannot be subtracted from the USP of the merchandise under section
772(d)(2). However, the Department has concluded that the ICMS tax must
be added to the constructed value (CV) of the product. Section
773(e)(1)(A) of the Act requires the deduction from CV of any internal
tax applicable directly to material inputs or their disposition which
has been rebated or not collected upon exportation. For Eletrosilex,
this tax was collected upon exportation, but not rebated. Thus, the tax
must be added to the CV to properly reflect the true costs and expenses
borne by the product.
Comment 15: Petitioners argue that the Department used an incorrect
exchange rate in converting three of CBCC's U.S. movement charges from
cruzeiros to U.S. dollars. They argue that the Department should use a
devalued exchange rate because CBCC reported its charges in devalued
cruzeiros.
CBCC argues that the petitioners' only argument for using an
artificially-determined rate rather than the true and real rate in
effect on the date the expense was incurred is that it results in a
very small increase in the expense in dollars. The Department was
correct, CBCC argues, to seek a calculation of values based on the
prevailing and correct economic indices in effect at the time of the
transaction.
Department's Position: Our standard methodology in reviews
involving hyperinflationary economies is to convert U.S. movement
expenses using the exchange rate in effect on the date the costs were
incurred. We employ this methodology to avoid creating dumping margins
that result only from the rapid depreciation of a local currency during
the interval between the month of sale and the month of shipment. (See
Department's Position to comment 13.) Thus, in these final results of
review we have converted CBCC's U.S. export costs into U.S. dollars
using the monthly exchange rate in effect during the month of shipment.
We intended to employ this methodology for all U.S. movement expenses
in the preliminary results. However, in our review of the computer
programs used for the preliminary results, we determined that for
warehousing we used the exchange rate during the month of sale. We have
corrected this error in these final results of review.
Comment 16: Petitioners argue that the Department erred by
deducting CBCC's home market packing expenses from CBCC's CV before
adding U.S. packing expenses to CBCC's CV. They argue that CBCC's CV
did not include home market packing expenses and, therefore, they did
not need to be deducted before adding U.S. packing expenses.
Department's Position: We agree, and have corrected this error in
these final results of review.
Comment 17: Petitioners argue that the Department erred by using
the incorrect indirect selling expenses in its calculation of CBCC's
CV. The Department's preliminary results analysis memorandum for CBCC
states that the Department used the indirect selling expenses CBCC
submitted in its March 22, 1994, submission. Petitioners allege that,
in reality, the Department used the indirect selling expenses submitted
by CBCC in its March 17, 1994, submission.
Department's Position: We disagree. Upon review of the computer
program used to calculate the preliminary results of review, we have
determined that we used the indirect selling expenses that CBCC
reported in exhibit 9 of its March 22, 1994, submission.
Comment 18: Minasligas argues that the Department erred in its
method of calculating an ICMS tax rate to be applied to its USP.
According to Minasligas, the Department's method was to calculate an
average rate based on home market sales prices for the entire POR, and
to then deduct from that rate the ICMS tax payable on exports.
Minasligas contends that this method is flawed in two ways. First, it
is distortive in a hyperinflationary
[[Page 46771]]
economy such as Brazil's because it biases the result in favor of sales
that occur later in the POR. A more accurate method, Minasligas argues,
is to perform the calculation on a monthly basis. Second, Minasligas
argues that the method is flawed because Minasligas is exempt from
paying ICMS tax on its exports which is evident in the information on
the record of this review. Thus, the Department should not have made a
deduction from the calculated ICMS tax rate for any ICMS tax allegedly
due on exports.
Petitioners comment that the Department used the wrong set of home
market sales in calculating Minasligas' FMV (see comments 3 and 4
above). Thus, any recalculation of the ICMS tax rate that the
Department performs should be based on the correct set of sales.
Department's Position: In these final results of review, we have
not calculated a tax rate to be applied to USP. Rather, as discussed
under the ``Consumption Tax'' section of this notice, where we have
made price-to-price comparisons, we have added to U.S. price the
absolute amount of tax charged in the home market. Moreover, because
Brazil had a hyperinflationary economy during the period of review, we
have calculated the absolute amount of tax on a monthly basis, rather
than an annual basis, in order to avoid distortion resulting from
hyperinflation. Finally, we agree with Minasligas that evidence on the
record indicates that Minasligas' export customers were not charged
ICMS tax. In the preliminary results we made a deduction from the home
market tax rate that we applied to the U.S. price because we mistakenly
believed that Minasligas paid ICMS tax on its exports. In these final
results of review, we have added to Minasligas's U.S. selling price the
absolute amount of tax without making any deductions.
We disagree with petitioners' argument that we based FMV on the
wrong set of sales. See the Department's Position to comments 3 and 4.
Comment 19: Minasligas argues that the Department erred in
including inventory carrying costs in its computation of CV. It argues
that it is the Department's longstanding practice to exclude inventory
carrying costs from the computation of CV when all of the U.S. sales
were purchase price transactions, as is the case here. (See Notice of
Amended Final Determination of Sales at Less Than Fair Value:
Ferrosilicon from Brazil; 59 FR 8598, 8599 (February 23, 1994).) Thus,
Minasligas argues that if the Department resorts to CV in the final
results of review, inventory carrying costs should be removed from the
computation of CV.
Department's Position: This issue is moot with respect to
Minasligas because we did not use CV as the basis of FMV for Minasligas
in these final results.
Comment 20: Minasligas argues that the Department erred in its
computation of CV by not removing its inland freight costs from the
direct selling expenses before calculating profit. The effect of this
error, Minasligas argues, is to increase profit by 8 percent of the
amount of inland freight.
Department's Position: This issue is moot with respect to
Minasligas because we did not use CV as the basis of FMV for Minasligas
in these final results.
Comment 21: RIMA argues that the Department erred in calculating an
arm's-length price for the cost of RIMA's self-produced charcoal by
using the April 1993 cost as the basis for calculating a write-up for
the entire POR. It argues that there is no reasons to take an
arbitrarily chosen month and apply it across a year's worth of data
where, as here, data exist for each month of the POR, and the
calculation is relatively simple.
Petitioners argue that RIMA is incorrect in stating that sufficient
information is on the record to enable the Department to calculate an
adjusted charcoal cost for each month of the POR. Specifically, RIMA
did not submit information on the quantity of charcoal purchased each
month from related and unrelated suppliers. Therefore, petitioners
argue that in the final results of review the Department should base
its adjustment for charcoal cost on the information submitted by RIMA
for April 1993, as it did in the preliminary results of review. The
petitioners also contend that the Department should increase the cost
of quartz to account for wastage.
Department's Position: We agree with petitioners that our charcoal
adjustment used in the preliminary results of review is appropriate.
RIMA obtained charcoal from unrelated suppliers, related suppliers, and
company-owned plantations. At verification, RIMA did not provide
information to support its claim for costs incurred for self-produced
charcoal and for costs incurred for charcoal acquired from related
suppliers. Instead, RIMA suggested that the Department value all
charcoal consumed during the POR using the replacement cost of monthly
purchases from related suppliers. Therefore, as representational
figures in this case, we used the relative quantity and value of
charcoal purchased from related and unrelated suppliers during the
month of April 1993 as BIA to increase charcoal costs (see cost
verification exhibit 15). Furthermore, we reviewed the information on
the record and not that RIMA reported monthly per-unit prices of
charcoal in its submitted inventory holding gain and loss calculation,
but did not submit information on the quantity of charcoal purchased
from related and unrelated suppliers (see most verification exhibit
13). Therefore, contrary to RIMA's statement, the Department could not
calculate monthly charcoal adjustments for any month other than April
1993.
As for the petitioners' concern about waste, in these final results
of review we have increased RIMA's quartz quantity based on the waste
factor provided by RIMA officials at verification. (See cost
verification report, p. 3.)
Comment 22: RIMA states that there is a discrepancy between the
cost spreadsheet from the preliminary results analysis memorandum and
the computer printout that calculated the margins. It claims that the
COM in the computer printout is approximately ten percent higher than
the spreadsheet. RIMA argues that this error should be corrected in the
final results.
Department's Position: In its case brief, RIMA cited to no specific
numbers in the computer program that vary from the COP spreadsheet.
Nevertheless, we have extensively reviewed the computer program used to
calculate the margins for the preliminary results for any possible
errors with regard to COM, and we have found none. We believe that
RIMA's confusion may be due to the fact that the variable COM on the
computer output pages labeled ``Constructed Value Profit'' of the
margin calculation program is the COM of the month of payment, rather
than the COM of the month of sale.
Comment 23: RIMA argues that the Department erred by not making an
adjustment for inventory holding gains and losses. It states that this
adjustment is necessary in order to account for short-term inventory
gains that accrue when using a replacement cost accounting system, as
was done in this administrative review. Furthermore, RIMA argues that
it is not clear from the decision memorandum what the perceived defect
is in the inventory holding figures that RIMA reported. RIMA speculates
that the apparent problem is that the Department has changed
methodologies between the original investigation and this review. RIMA
claims that the Department cannot ask for data, verify the data, and
then use a methodology that does not use the data.
Petitioners argue that the Department correctly rejected RIMA's
inventory
[[Page 46772]]
holding gain and loss calculation because RIMA had failed to follow the
Department's methodology for calculating inventory holding gains and
losses in a hyperinflationary economy. Petitioners cite the
Department's preliminary results analysis memorandum (p. 7) to document
that the Department determined that RIMA had failed to properly layer
the inventory and to value it at the production cost for each month.
Thus, petitioners argue, the Department's basis for rejecting RIMA's
calculation was not because the Department had changed methodologies.
Petitioners further argue that because RIMA submitted inaccurate
information, the Department is required not only to reject RIMA's
inventory carrying gains/losses calculation, but to resort to BIA for
RIMA's inventory holding gains and losses.
Department's Position: We reviewed RIMA's inventory gains and
losses calculation and found certain inconsistencies which render that
calculation unacceptable. In its calculation, RIMA failed to follow our
instructions to layer inventory by month, and identify when the
finished goods and direct materials were produced or purchased (See
question C.5 of the questionnaire and cost verification exhibit 13).
RIMA cannot shift the burden of correcting the calculation to the
Department when, as here, doing so would require substantial inventory
identification and the performance of numerous recalculation. (See,
e.g., Chinsung Indus, Co., Ltd. v. United States, 705 F. Supp. 598
(February 7, 1989.) Thus, we have denied RIMA an adjustment for
inventory carrying gains/losses. Furthermore, we do not agree with
petitioners that we must use BIA. There is no legal or policy precedent
which requires the Department to resort to BIA when we deny an
adjustment that a respondent failed to accurately and adequately
substantiate.
Comment 24: RIMA argues that the Department double-counted its
credit expenses in the cost test by imputing them to COP and also
deducting credit from the home market price compared to COP.
Petitoners argue that, contrary to RIMA's assertion, the Department
did not reduce home market price by a credit adjustment prior to
performing the cost test. The analysis memorandum and the computer
program used to calculate the preliminary results of review both
indicate, petitioners' argue, that the only adjustment the Department
made to the home market price before comparing the price to the COP of
the month of payment is that for the ICMS tax.
Department's Position: We agree with petitioners. In the
preliminary results of review we made no deduction of credit from the
home market selling price before comparing the price to COP. Thus, we
did not double-count RIMA's credit expenses.
Comment 25: CBCC argues that the Department erred in performing the
cost test when it applied a deflator to CBCC's home market selling
prices before comparing them to the COP. It argues that because nothing
on the record defines the deflator or explains its use, it should be
removed from the computer program because its use was not in accordance
with law.
Department's Position: We agree in part. In the preliminary results
of review we compared CBCC's home market selling prices, net of
adjustments, to the COP for the month of payment. This information was
contained on page 4 of the preliminary results analysis memorandum for
CBCC. Inadvertently omitted from the analysis memorandum (but included
in the analysis memoranda for other respondents in this review) was the
explanation that for sales with payment dates after the POR, we
performed the cost test by comparing the COP of the last month of the
review period to a deflated sales price. We have followed this
methodology in these final results of review as we did in the
preliminary results of review. The specifics of how we calculated the
deflator are contained in the final results analysis memorandum for
CBCC. However, in the computer program used to calculate the
preliminary results of review, we mistakenly applied the deflator to
all home market sales, and not just those with payment dates after the
POR. We have corrected this error in these final results of review.
Comment 26: CBCC argues that the Department erred in calculating
the direct selling expenses used in computing its COP/CV. These selling
expenses consist of three elements: shipping, warehousing, and
commission. CBCC states that the Department's computation of shipping
expenses incorrectly included shipping expenses for all products that
CBCC produces, and not just silicon metal. CBCC argues that in the
final results, the Department should allocate shipping expenses to
silicon metal based on the volume of silicon metal shipped as a
percentage of shipments of all products. With respect to warehousing,
CBCC argues that it incurs no warehousing expenses on its domestic
sales; therefore, warehousing should not be considered a home market
direct selling expense. Furthermore, in the computation of CV,
warehousing expenses (which are all incurred on exports) are already
included in the computation of the foreign unit price in dollars. Thus,
by also including them in the calculation of CV, warehousing expenses
are double-counted. With respect to commissions, CBCC argues that it
incurs no commission in the home market on sales of silicon metal, and
that, therefore, commissions also should not be included as direct
selling expenses.
Petitioners argue that the Department should not consider the
arguments CBCC has set forth in support of its position because they
are untimely and unsupported. The antidumping questionnaire to which
CBCC responded, petitioners state, requests CBCC to report selling
expenses ``associated with the same general class or kind of
merchandise sold in the home market/third country.'' The arguments in
CBCC's case brief, which CBCC failed to supply in its questionnaire
response are, according to petitioners, based on untimely information
which the Department is obliged under its regulations not to consider.
Moreover, petitioners argue that CBCC's proposed methodology for
reducing shipping costs is flawed because it is based on quantities
produced, and not on quantities sold.
Department's Position: We have reviewed the record of this
proceeding and determined that the information CBCC submitted in its
case brief is not new information. Contrary to petitioners' assertions,
CBCC did provide this information in its November 1, 1993,
questionnaire response (pp. 8, 9, 23, and exhibit 11). We agree with
CBCC that because it incurs no warehousing expenses on sales of silicon
metal in the home market and pays no commissions in the home market,
these expenses should not be included in its COP/CV for silicon metal.
Because we have removed warehousing expenses from COP/CV, they are not
double-counted in these final results of review. Furthermore, the
Department does not treat shipping expenses as direct selling expenses.
See Color Televisions Receivers from the Republic of Korea; Final
Results of Antidumping Duty Administrative Review, 55 FR 26225, 26230
(June 27, 1990), where we stated that inland freight was a movement
expense, and not part of selling, general, and administrative expense.
Therefore, because CBCC incurred no direct selling expenses on its home
market sales of silicon metal, we have removed the
[[Page 46773]]
selling expense category from the calculation of COP/CV.
Comment 27: CBCC argues that the Department incorrectly calculated
CBCC's general and administrative (G&A) expenses. It states that, in
the preliminary results, the Department divided the financial statement
G&A by the financial statement cost of goods sold (both of which were
calculated on a historical cost basis), and multiplied the resulting
percentage by the replacement cost COM for each month. CBCC states that
this methodology was explicitly found deficient by the CIT on an appeal
of the initial investigation in this case. There, CBCC states, the CIT
remanded the case to the Department and directed it to use a consistent
criterion. As a result, the percentage or ratio of G&A expenses to
historical cost in the financial statement had to be applied to the
historical cost of silicon metal in each respective month of the POR.
CBCC argues that the Department should do the same in this review.
Petitioners argue that the CIT decision relied upon by CBCC has
been vacated by the U.S. Court of Appeals for the Federal Circuit
(CAFC). (See Camargo Correa Metais, S.A. v. United States, 52 F.3d 1040
(Fed. Cir. April 17, 1995).) As a result, petitioners argue, CBCC's
argument should be rejected, and the Department should calculate
monthly G&A and financial expenses for all respondents based on
replacement COM in accordance with its long-established practice prior
to the CIT decision relied upon by CBCC.
Department's Position: We agree, in part, with both the respondent
and the petitioners. First, the petitioner is current that the CIT
decision has been vacated by the CAFC. Therefore, we could calculate
monthly C&A and financial expenses for all respondents based on
replacement COM in accordance with our establishment practice prior to
the CIT decision. However, CBCC correctly points out that this
methodology does not use a consistent criterion. Therefore, we
recalculated CBCC's G&A factor on a replacement cost basis. We
readjusted CBCC's G&A factor on a company-wide annual basis by indexing
CBCC's submitted monthly nominal G&A and cost of sales figures. The
purpose of indexing the respondent's monthly figures is to obtain
values at a uniform price level because the simple addition of monthly
nominal values during a period of high inflation would yield a
meaningless result. We then divided the indexed G&A figure by the
indexed cost of sales figure to derive the company's annual G&A factor
on a replacement cost basis. We then multiplied this factor by the
monthly replacement COM. For these final results, the Department used
this method to calculate G&A factors for all respondents except
Eletrosilex because it submitted a constant purchasing power, audited
financial statement.
Comment 28: CBCC argues that the Department double-counted its
credit expenses by imputing them to COP and also deducting credit from
the home market price compared to COP.
Petitioners argue that, contrary to CBCC's assertion, the
Department did not reduce home market price by a credit adjustment
prior to performing the cost test. The analysis memorandum and the
computer program used to calculate the preliminary results of review
both indicate, petitioners argue, that the only adjustment the
Department made to the home market price before comparing the price to
the COP for the month of payment is that for the ICMS tax.
Department's Position: We agree with petitioners. In the
preliminary results of review we made no deduction of credit from the
home market selling price before comparing the price to COP. Thus, we
did not double-count CBCC's credit expenses.
Comment 29: CBCC argues that the Department incorrectly calculated
CBCC's financial expenses by using an interest factor based on
historical cost multiplied by the monthly replacement COM. CBCC
contends that this method is contrary to the CIT decision in the
initial investigation of this case. CBCC also argues that the
Department should not consolidate CBCC's financial expenses with those
of its parent company, Solvay do Brasil (Slovay), because CBCC incurred
no financial expense during 1992 and 1993. Furthermore, CBCC states
that Slovay's financial expenses do not relate to the production of
silicon metal.
The petitioners contend that the Department's interest calculation
is permissible since the CIT ruling was subsequently vacated by the
CAFC. Furthermore, the petitioners argue that the Department correctly
consolidated the financial expense. To support its argument the
petitioners cite the Final Determination of Sales at Less Than Fair
Value: New Minivans from Japan, 57 FR 21937, 21946 (May 26, 1992), in
which the Department said its practice ``is based on the fact that the
group's parent, primary operating company, or other controlling entity,
because of its influential ownership interest, has the power to
determine the capital structure of each member within the group.'' The
petitioners also cite Final Determination of Sales at Less Than Fair
Value: Certain Carbon Steel Butt-Weld Pipe Fittings from Thailand, 57
FR 21065, 21069 (May 18, 1992), in which the Department said that it
``is the Department's policy to combine the financing activities of a
parent or subsidiary when the parent exercises control over the
subsidiary (i.e., meets the requirements for consolidation).''
Therefore, the petitioners argue that consolidating the financial
statements of CBCC and Solvay is justified because Solvay has a
controlling interest in CBCC, and thus has the power to decide the
composition of CBCC's capital structure. Finally, the petitioners
believe that the Department's interest calculation incorrectly
subtracted CBCC's total financial revenue from its total financial
expenses. The petitioners argue that the correct method is to subtract
only the short-term interest income from CBCC's financing costs.
Department's Position: We disagree with CBCC's claim that its
interest factor should be based on only historical figures. The
Department's preferred methodology is to calculate CBCC's interest
factor on a replacement cost basis (see Department's Position to
comment 27 for details on this methodology). However, in this case we
do not have the necessary information on the record to index monthly
interest costs. Therefore, we calculated financial expenses based on
our established practice prior to the CIT decision because it is still
a viable method (see comment 27 for details). See Silicon Metal from
Brazil; Final Results of Antidumping Duty Administrative Review, 59 FR
42806 (August 19, 1994).
Regarding CBCC's argument that we should not have consolidated the
interest expenses of CBCC with Solvay, we agree with the petitioners
that CBCC should report interest expenses on a consolidated basis
regardless of what they produce. We maintain that the cost of capital
is fungible, and we allocate a proportional share of interest expenses
to all goods produced by a respondent during the POR. The Department
considers financing expenses to be costs incurred for the general
operations of the corporation. We recognize the fungible nature of a
corporation's invested capital resources, including debt and equity,
and we do not allocate corporate financing expenses to individual
divisions of a corporation on the basis of sales per division. Instead,
we allocate the interest expense related to the debt portion of the
capitalization of the corporation, as we appropriate, to the total
operations of the consolidated corporation. This consolidation
methodology is consistent with our longstanding practice for computing
[[Page 46774]]
interest expense in cases involving parent-subsidiary corporate
relationships. See, e.g., Final Determination of Sales at Less Than
Fair Value, Small Business Telephones from Korea, 54 FR 53141, 53149
(December 27, 1989). Therefore, for these final results we calculated
net financing costs on a consolidated basis.
Regarding CBCC's claim that it is inappropriate to use consolidated
interest figures because CBCC has no debt, we note that this argument
fails to take into consideration any borrowing costs associated with
Solvay's initial and subsequent capital investment in the company. CBCC
maintains that all interest expenses incurred by Solvay pertain solely
to the parent's operations. Under this principle, CBCC would have us
accept that its parent funds its own operations from borrowing while,
at the same time, funding its investment in CBCC solely through equity
capital. Such a principle ignores the fact that Solvay's capital
structure is comprised of both debt and equity. Therefore, it is
neither possible, nor appropriate, in our analysis to allow the company
to pick and chose which portions of its parent's operation should incur
the additional interest costs associated with borrowed funds.
Regarding petitioners' claim that financing costs should not be
reduced by interest income, we note that during verification we
confirmed that Solvay's audited interest income figure was derived from
only short-term investments. (See cost verification exhibit 19.) We
noted no discrepancies. Therefore, we allowed Solvay to offset
financing costs by the reported interest income.
Comment 30: CBCC alleges that the Department applied an incorrect
criterion for profit in the CV calculation. It states that, although it
is impossible to determine from the disclosure documents the source of
the profit calculations, the profit margins indicated in the output of
the computer program suggest that there was a programming error.
Department's Position: The profit calculation was skewed in the
preliminary results of review because we calculated a profit ratio
using cost and revenue data computed over the entire POR. Because
Brazil was a hyperinflationary economy during the POR, we have, in
these final results of review, calculated a profit ratio for each month
of the review period using cost and revenue data calculated on a
monthly basis. We then weight-averaged these profit ratios to calculate
an annual profit ratio. For any respondent whose profit ratio was
greater than eight percent, we used the actual profit ratio in the
computation of profit for CV. For any respondent whose profit ratio was
less than eight percent, we used the statutory minimum of eight
percent.
Comment 31: CBCC argues that the Department incorrectly calculated
the FMV for March 1993. It states that the CV for March 1993, according
to the expanded sales listing of the program output, is one figure,
whereas the FMV used in the margin calculation for the same month is a
different figure. CBCC argues that the disclosure documents do not
explain the reason for the differences in the two figures, and
therefore, CBCC concludes that there was an error either in the program
or in the criteria employed.
Department's Position: We have reviewed extensively the computer
program and output, including the expanded sales listing for March
1993, and have been unable to determined why CBCC believes the CV for
March 1993 is the figure that it cites in its case brief. This figure
appears nowhere in the output. Therefore, we found no error in the
computer program based on this comment from CBCC.
Comment 32: Eletrosilex argues that the Department erred in
calculating its imputed credit expense by using the short-term interest
rates charged by the state bank of Minas Gerais. It states that it
reported its own actual short-term borrowing rates, and that these
rates should have been used in the imputed credit calculation. Use of
the exogenous rates, Eletrosilex argues, inflated the determination of
CV and distorted the CV in a manner prejudicial to Eletrosilex.
Petitioners argue that it is the Department's policy to calculate
home market imputed credit expenses based on an interest rate tied to
the currency in which the home market sales were made. (See Final
Determination of Sales at Less Than Fair Value: Circular Welded Non-
Alloy Steel Pipe from Mexico, 57 FR 42953, 42956 (September 17, 1992)
and Final Determination of Sales at Less Than Fair Value: Certain Hot-
Rolled Carbon Steel Flat Products, Certain Cold-Rolle Carbon Steel Flat
Products and Certain Cut-to-Length Carbon Steel Plate from Belgium, 58
FR 37083, 37089 (July 9, 1993).) Because Eletrosilex's home market
prices were invoiced in Brazilian currency and the interest rates that
Eletrosilex reported were for loans denominated in U.S. dollars,
petitioners argue that the Department was correct in not using
Eletrosilex's reported rates for home market imputed credit. For the
final results, petitioners claim that the Department should continue to
use a home market interest rate denominated in Brazilian currency to
calculate home market credit expenses. Moreover, petitioners argue that
in the preliminary results the Department erroneously divided a monthly
interest rate by 365 instead of 30 days, and that this error should be
corrected in the final results.
Department's Position: We agree with petitioners that because the
loans Eletrosilex reported were loans denominated in U.S. dollars, we
cannot use the interest rates on those loans for calculations involving
Brazilian currency. See Notice of Final Determination of Sales at less
Than Fair Value and Negative Critical Circumstances Determination:
Disposable Pocket Lighters from Thailand, 60 FR 14263, 14269 (March 16,
1995); Final Determination of Sales at Less Than Fair Value; Fresh Cut
Roses from Colombia, 60 FR 6980, 6998 (February 6, 1995). Therefore,
for the computation of home market credit, we have used the short-term
interest rates charged by the state bank of Minas Gerais, as we did for
the preliminary results. In these final results of review, we have,
however, applied Eletrosilex's U.S. dollar-denominated interest rates
to its calculation of U.S. imputed credit. We also agree with the
petitioners that because the interest rates used in the calculation are
monthly rates, the denominator should be 30, rather than 365. We have
corrected this error in these final results of review.
Comment 33: Eletrosilex argues that the Department erred in not
granting an inventory carrying cost offset to its CV financing costs.
Eletrosilex argues that in making a CV calculation the Department uses
annualized calculations for G&A and interest expense. Therefore, there
is no sound reason for the Department to ignore an accurate calculation
designed to make the CV calculation conform as closely as possible to
reality.
Department's Position: We disagree with Eletrosilex. For the final
results, we disallowed Eletrosilex's submitted CV inventory carrying
cost offset because the company's POR sales were purchase price
transactions, and not exporter's sales price transactions (see
Eletrosilex's November 1, 1993, submission, p. 17). Thus, the inventory
carrying cost offset is not a factor.
Comment 34: Petitioners argue that because Eletrosilex failed to
properly layer its inventory, the Department was correct in rejecting
Eletrosilex's reported inventory holding gains/losses calculation.
Petitioners argue that in its calculation, Eletrosilex also failed to
report beginning inventory for one of the months for charcoal, wood,
quartz,
[[Page 46775]]
and electrodes. Furthermore, according to petitioners, Eletrosilex also
calculated inventory holding gains/losses for only direct materials,
and not for secondary materials or for finished goods. Moreover,
petitioners argue, because Eletrosilex's calculation was inaccurate and
incomplete, the Department is required to use BIA for Eletrosilex's
inventory holding gains/losses.
Department's Position: We rejected Eletrosilex's submitted
inventory holding gains and losses calculation because we found certain
inconsistencies which render that calculation unacceptable. In its
calculation, Eletrosilex failed to follow our questionnaire
instructions to layer inventory by month, and identify when the
finished goods and direct materials were produced or purchased (see
question C.5 of the Department's questionnaire and cost verification
exhibit 22). As explained with respect to RIMA in comment 23,
Eletrosilex cannot shift to the Department the burden of correcting the
calculation where, as here, doing so would require substantial
inventory identification and the performance of numerous calculations.
Thus, we have denied Eletrosilex and adjustment for inventory carrying
gains/losses. Furthermore, we do not agree with petitioners that we
must use BIA. There is no legal or policy precedent which requires the
Department to resort to BIA when we deny an adjustment that a
respondent failed to accurately and adequately substantiate.
Comment 35: Eletrosilex argues that the preliminary results
analysis memorandum shows that in making adjustments for secondary
material replacement costs, the Department improperly transcribed
numbers for the months of September and October under column ``b.''
Department's Position: We agree, and corrected this error in these
final results of review.
Comment 36: Eletrosilex argues that the Department double-counted
some of its G&A expenses. It claims that this occurred because of
Eletrosilex's bookkeeping method. Eletrosilex states that it included
in its variable and fixed overhead some of the salaries and costs
attributable to administrative functions at its manufacturing facility
at Copitao Eneas. However, Eletrosilex's auditors did not consider
these costs to be variable and fixed factory overhead, and included
them instead in G&A. Thus, they were included in both Eletrosilex's
reported factory overhead and in the G&A expenses recorded on its
audited financial statement. Because the Department's methodology for
calculating G&A was to devise a ratio of G&A to cost of goods sold,
utilizing figures drawn from the financial statements, and multiplying
the ratio by Eletrosilex's COM (which includes overhead), Eletrosilex
argues that the salaries and costs attributable to administrative
functions at its manufacturing facility at Copitao Eneas were, in
effect, double-counted. Therefore, these costs should be removed from
the COM. Doing so would also lower Eletrosilex's calculated interest
expenses, Eletrosilex argues, because these too were calculated by
applying a ration to the COM.
Petitioners argue that there is no evidence on the record of this
review to support the claim that Eletrosilex included salaries and
costs attributable to administrative functions at its Copitao Eneas
facility in its reported fixed or variable overhead. This information
was first submitted, petitioners argue, in Eletrosilex's case brief
and, therefore, to accept this information would be a violation of 19
CFR Sec. 353.31(a)(3).
Department's Position: We reviewed the schedules provided by
Eletrosilex and concur that our preliminary adjustment overstates cost.
However, the Department does not believe that Eletrosilex's suggestion
of reducing submitted COM is the best way to correct the cost
overstatement. Instead, we have reduced the G&A figure used to
calculate the Department's G&A factor by the amount of the salaries and
costs attributable to administrative functions. We used this
methodology because these production costs were correctly submitted as
a cost of manufacturing. Furthermore, we adjusted the cost-of-sales
figures used in both the G&A and interest factor calculation to account
for Eletrosilex's reclassification of costs.
With regard to petitioners' argument that Eletrosilex's information
is untimely and therefore in violation of 19 CFR Sec. 353.31(a)(3), we
have determined that the respondent's information is already on the
record of this review. It can be found in cost verification exhibit 7
and in exhibit 5 of the June 10, 1994 submission. Therefore, we have
allowed this information to remain on the record of this review.
Comment 37: Eletrosilex argues that the test for sales below cost
was flawed due to errors in methodology, analysis, and transcription.
First, it claims that each of the errors noted in comments 32-36 are
applicable to the Department's computation of COP. Eletrosilex claims
that the correction of these errors will result in a substantially
reduced COP. Second, according to Eletrosilex, the Department erred in
its calculation of the home market price to be compared to COP by
deducting a charge for home market credit using the short-term interest
rate charged by the state bank of Minas Gerais, rather than
Eletrosilex's own actual short-term borrowing rate. Third, Eletrosilex
argues that the Department erred in not comparing home market sales
price at the time of sale to the COP for the month of sale. With
hyperinflation, that comparison is truer than using the month of
payment and a deflation index.
Petitioners argue, with regard to the last point, that Eletrosilex
reported in its November 1, 1993, questionnaire response (at 16) that
the home market sales prices reported in its sales listing are
``increased to incorporate the projected inflation rate between the
date of sale and the actual date of payment.'' In light of this method
of reporting, petitioners claim that it would be improper to compare
Eletrosilex's unadjusted prices at the time of sale to its COP for the
month of sale because it is the Department's practice to subtract
inflation adjustments from the home market sales prices used in the COP
comparison when those prices include adjustments for anticipated
inflation (See Ferrosilicon from Brazil, Notice of Amended Final
Determination of Sales at Less Than Fair Value, 59 FR 8598, February
23, 1994) (Ferrosilicon from Brazil Amended Final Determination).
Department's Position: With regard to Eletrosilex's first point,
the Department applied to the cost test the same determinations that it
made with respect to CV as described in our responses to comments 33-
36. The issue Eletrosilex raised in comment 32 does not apply to COP
because we do not use any imputed values in the computation of COP.
With respect to Eletrosilex's second point, we used the same interest
rate to calculate credit (which we deducted from the price to be
compared to COP) that we used in the computation of credit that we
included in CV. Therefore, see Department's position to comment 32,
where this issue is addressed with respect to CV. With regard to
Eletrosilex's third point, we agree with petitioners that the record
indicates that Eletrosilex's selling prices include an element for
anticipated inflation between the date of sale and the date of payment,
and that it would, therefore, be incorrect to compare Eletrosilex's
unadjusted prices at the time of sale to the COP of the month of sale.
See Ferrosilicon from Brazil Amended Final Determination. Hence, in
these final results of review, as in the preliminary results of review,
we have
[[Page 46776]]
compared Eletrosilex's home market prices to the COP of the month of
payment.
Final Results of Review
As a result of our analysis of the comments received, we determine
that the following margins exist for the period July 1, 1992, through
June 30, 1993:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter (percent)
------------------------------------------------------------------------
CBCC....................................................... 16.81
Minasligas................................................. 0.00
Eletrosilex................................................ 0.00
RIMA....................................................... 31.60
------------------------------------------------------------------------
The Department shall determine, and the 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 Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of these final results of review for all shipments of
silicon metal from Brazil entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a)(1) of the Tariff Act, and will remain in effect until the final
results of the next administrative review:
(1) The cash deposits rates for the reviewed companies will be
those rates listed above; (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 manufacture of the merchandise; and (4) if neither the exporter
nor the manufacturer is a firm covered by this or any previous review
conducted by the Department, the cash deposit rate will be 91.06
percent, the ``all others'' rate established in the LTFV investigation.
This notice serves as a final 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
assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. Sec. 1675(a)(1)) and 19
CFR Sec. 353.22.
Dated: August 27, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22679 Filed 9-4-96; 8:45 am]
BILLING CODE 3510-DS-M