[Federal Register Volume 62, Number 12 (Friday, January 17, 1997)]
[Notices]
[Pages 2648-2653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1258]


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DEPARTMENT OF COMMERCE
[A-834-805]


Notice of Final Determination of Sales at Less Than Fair Value: 
Beryllium Metal and High Beryllium Alloys From the Republic of 
Kazakstan

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

EFFECTIVE DATE: January 17, 1997.

FOR FURTHER INFORMATION CONTACT: Dorothy Tomaszewski at (202) 482-0631, 
or Erik Warga at (202) 482-0922, Office of Antidumping Investigations, 
Import Administration, International

[[Page 2649]]

Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC. 20230.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Rounds Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department regulations are to 
the current regulations, as amended by the interim regulations, 
published in the Federal Register on May 11, 1995 (60 FR 25130).

Final Determination

    We determine that beryllium metal and high beryllium alloys 
(``beryllium'') from the Republic of Kazakstan (``Kazakstan'') are 
being sold in the United States at less than fair value (``LTFV''), as 
provided in section 735 of the Tariff Act of 1930, as amended (``the 
Act''). The estimated margins are shown in the ``Suspension of 
Liquidation'' section of this notice.

Case History

    Since the preliminary determination on August 21, 1996 (61 FR 
44293, August 28, 1996 (``preliminary determination'')), the following 
events have occurred:
    In October 1996, we verified the respondents' questionnaire 
responses. Additional publicly available information on surrogate 
values was submitted by petitioner and respondents on November 15, 
1996, and November 22, 1996. Petitioner and respondents submitted case 
briefs on November 29, 1996 and rebuttal briefs on December 6, 1996. A 
public hearing was held on December 9, 1996. At the Department's 
request, additional information was filed by petitioner and respondents 
on December 10, 1996, and December 12, 1996. On December 19, 1996, and 
December 23, 1996, the Department received surrogate factor data from 
the Foreign Commercial Service Office in Lima, Peru.

Scope of Investigation

    The scope of this investigation is beryllium metal and high 
beryllium alloys with a beryllium content equal to or greater than 30 
percent by weight, whether in ingot, billet, powder, block, lump, 
chunk, blank, or other semifinished form. These are intermediate or 
semifinished products that require further machining, casting and/or 
fabricating into sheet, extrusions, forgings or other shapes in order 
to meet the specifications of the end user. Beryllium and high 
beryllium alloys within the scope of this investigation are 
classifiable under the Harmonized Tariff Schedule of the United States 
(``HTSUS'') 8112.11.6000, 8112.11.3000, 7601.20.9075, and 7601.20.9090. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this investigation is 
dispositive.

Period of Investigation

    The period of investigation (``POI'') is July 1, 1995, through 
December 31, 1995.

Separate Rates

    Respondents made no claim for receiving a separate rate. Therefore, 
lacking any information to support a conclusion that a separate rate is 
appropriate, the Department assigned a single Kazakstan-wide rate to 
all producers and exporters.

Fair Value Comparisons

    To determine whether sales of beryllium from Kazakstan to the 
United States were made at less than fair value, we compared Export 
Price (``EP'') to the Normal Value (``NV''), as specified in the 
``Export Price'' and ``Normal Value'' sections of this notice.

Export Price

    We calculated EP in accordance with section 772(a) of the Act, 
because the subject merchandise was sold directly to the first 
unaffiliated purchaser in the United States prior to importation. 
Although respondents have a U.S. subsidiary, Beryllium Metals 
International Ltd. (``BMI''), calculation of constructed export price 
(``CEP'') under section 772(b) is not otherwise warranted for purposes 
of the final determination based on the facts of this investigation. It 
has been the Department's longstanding and well-recognized practice 
that a transaction will be considered an export price sale, despite the 
involvement of an affiliate in the United States where: (1) The 
merchandise in question was shipped directly from the manufacturer to 
the unrelated buyer, without being introduced into the physical 
inventory of the related selling agent; (2) this was the customary 
commercial channel for sales of this merchandise between the parties 
involved; and (3) the related selling agent in the United States acted 
only as a processor of documentation and a communication link with the 
unrelated buyer. (See, e.g., Final Determination of Sales at Less Than 
Fair Value: Large Newspaper Printing Presses and Components Thereof, 
Whether Assembled or Unassembled, From Germany (61 FR 38166, 38175, 
July 23, 1996)). Verification findings confirm that the merchandise is 
not taken into the physical inventory of the U.S. subsidiary. Because 
there has only been one sale, we conclude that there is no ``customary 
commercial channel.'' Therefore, we are continuing to disregard this 
criterion for purposes of this final determination. Finally, 
verification findings confirmed the limits on BMI's authority to 
finalize sales and that BMI is acting solely as a processor of 
documentation and communications link (see November 8, 1996, 
verification report at page 6). Therefore, we conclude that the sale in 
question is properly characterized as an EP sale.
    We calculated EP based on packed, CIF U.S. port prices to 
unaffiliated purchasers in the United States, as appropriate, based on 
the same methodologies in the preliminary determination with the 
following exceptions: we made minor corrections to certain movement 
charges pursuant to verification findings.

Normal Value

    When the Department is investigating imports from a non-market 
economy (``NME''), section 773(c)(1) of the Act directs us to base NV 
on the NME producer's factors of production, valued in a comparable 
market economy that is a significant producer of comparable 
merchandise. Therefore, as in the preliminary determination, we 
calculated NV based on factors of production reported by the Kazak 
Joint-Stock Company of Ulba Metallurgical Plant (``Ulba''), the sole 
Kazakstani producer of subject merchandise.
    To calculate NV, the verified per-unit factor quantities were first 
multiplied by Peru values; the resulting products were then summed. We 
then added amounts for overhead, general expenses (including interest) 
(``SG&A''), profit, and, packing expenses incident to placing the 
merchandise in condition packed and ready for shipment to the United 
States.
    We made adjustments to the reported factors of production to 
reflect actual production experience for 1991 and 1993, based on 
verification findings.

Valuation of Factors

    As in our preliminary determination, we have relied on Peru as the 
primary surrogate country in accordance with section 773(c)(4) of the 
Act. Accordingly, we have continued to calculate NV using Peru prices 
for the Kazakstani producer's factors of

[[Page 2650]]

production. We have obtained and relied on publicly-available 
information wherever possible.
    Except as noted below, we applied surrogate values to the factors 
of production in the same manner as in our preliminary determination. 
For a complete discussion of surrogate values, see the Calculation 
Memorandum, dated January 10, 1996. Surrogate overhead was based on the 
experience of a silicomanganese producer in Brazil; SG&A and profit 
were based on the experience of an aluminum producer in Peru; and 
packing expenses were based on 1995 Peru import statistics data.

Kazakstan-Wide Rate

    Kazakstan identified what we believe to be the only Kazakstani 
exporter, Kazak Joint-Stock Company of Atomic Energy and Industry 
(``KATEP''), and producer, Ulba, that sold beryllium to the United 
States during the POI. Both have responded in this investigation. We 
compared the respondents' sales data with U.S. import statistics for 
time periods including the POI and found no indication of unreported 
sales. Accordingly, we have based the Kazakstan-wide rate on the 
weighted-average of the margins calculated in this proceeding, 
excluding zero or de minimis margins, if any.

Verification

    As provided in section 776(b) of the Act, we verified the 
information submitted by respondents for use in our final 
determination. We used standard verification procedures, including 
examination of relevant accounting and production records and original 
source documents provided by respondents.

Interested Party Comments

Comment 1: Use of Respondents' Verified Data

    Petitioner argues that the discrepancies uncovered at verification 
between the factor information submitted and the factor information 
verified, as well as the discovery of information never reported, would 
support a decision by the Department to reject respondents' data in 
favor of basing the final determination on facts otherwise available 
(i.e., the information submitted in the petition).
    Respondents assert that the Department has no basis for rejecting 
its sales and factors of production information on the record. 
According to respondents, all sales and production data were submitted 
in a timely manner to the Department and verified. While its reported 
factor data was modified during verification, respondents argue that 
these revisions should not be rejected as ``untimely'' because the 
revisions were a result of adjusting reported standard factor input 
information to reflect actual factor input information. Finally, 
respondents argue that even if its revised factor information was 
deemed untimely, the verified data should nevertheless be used as 
``facts otherwise available.''

DOC Position

    Certain minor discrepancies in respondents' reported sales and 
factors of production data were discovered during verification. While 
the Department is always concerned over such discrepancies, we did not 
identify any attempt to mislead the Department or to distort 
information on the record, nor does the record indicate that 
respondents did not cooperate to the best of their ability. 
Accordingly, such errors will be corrected individually by the 
Department using revised information and do not warrant an overall 
application of adverse facts available for the final determination. 
(See, e.g., Certain Corrosion-Resistant Carbon Steel Flat Products from 
Korea; Final Results of Antidumping Duty Administrative Review 61 FR 
18558 (April 26, 1996).) The details of these errors and steps taken to 
correct them are set forth in the January 10, 1997, Final Determination 
Calculation Memorandum.

Comment 2: Selection of Appropriate Surrogate Country

    Petitioner argues that the Department should select Brazil as the 
primary surrogate country because (1) Brazil is comparable to Kazakstan 
in economic development and (2) Brazil is one of the few sources of the 
primary factor input required in the production of beryllium, beryl 
ore.
    Respondents counter that, since the preliminary determination, no 
new information has been placed on the record to justify the change in 
the surrogate country for Kazakstan from Peru to Brazil.

DOC Position

    We agree with respondents and continue to use Peru as the primary 
surrogate country for purposes of valuating Kazakstan's factors of 
production. Section 773(c)(4) of the Act requires the Department to 
value the NME producer's factors of production, to the extent possible, 
in one or more market economy countries that: (1) Are at a level of 
economic development comparable to that of the NME and (2) are 
significant producers of comparable merchandise. As noted in the 
preliminary determination, Peru is at a level of economic development 
comparable to Kazakstan in terms of per-capita gross national product 
(``GNP'') levels and distribution of the labor force in the varying 
sectors of the economy. Brazil's 1993 per-capita annual income was 
$2930 versus $1560 for Kazakstan and $1490 for Peru. Even though Brazil 
is endowed with the primary material input (beryl ore) used to produce 
beryllium, Brazil does not produce beryllium.
    As discussed in the preliminary determination, none of the 
potential surrogate countries produces merchandise comparable to the 
subject merchandise. Indeed, Kazakstan and the United States are the 
only known producers of beryllium. Absent information on a market 
economy country which produces beryllium and is at a level of economic 
development comparable to that of Kazakstan, the Department continues 
to use Peru as the primary surrogate country based on its comparable 
level of economic development for purposes of the final determination.

Comment 3: Use of 1995 Surrogate Country Factor Data

    Respondents argue that the Department must determine whether the 
factor values based on the 1995 UN data are broadly consistent with 
other measures of market value to ensure that the factor values used in 
the final margin calculation constitute a reasonable representation of 
the costs that a NME producer would face if it were to produce in a 
market economy. In particular, respondents identify five Peru values 
used in the preliminary determination which they allege to be 
unreasonable when compared to various broader benchmarks.
    Petitioner notes that if the Department were to perform such an 
exercise, this analysis should be applied in a consistent manner for 
all direct material factors.

DOC Position

    For the final determination, we have used Peru import statistics 
based on 1995 UN trade data as the primary source of surrogate factor 
values. The Department's analysis indicates, however, that several 
factor values derived from the 1995 Peru import statistics appear to be 
not reasonable. For example, the unit value based on 1995 Peru import 
statistics for one material factor is over twenty times the weighted-
average unit value based on import statistics from the five countries 
identified by the Department as

[[Page 2651]]

appropriate surrogates for Kazakstan (see preliminary determination).
    In order to assess whether material factor values derived from the 
1995 Peru import statistics are reasonable for the purpose of 
approximating the factor costs in Kazakstan, we compared all 1995 Peru 
material values to the weighted-average unit value based on import 
statistics from all five appropriate surrogate countries (see June 10, 
1996, Memorandum from David Mueller, Director, Office of Policy, to 
Gary Taverman, Division I Director, Office of Antidumping 
Investigations). Where differences between the unit value figures 
appeared unreasonable, we resorted to the weighted-average based on the 
five surrogate countries' data. (See January 10, 1996, Calculation 
Memorandum for further details).

Comment 4: Time Period for Factors of Production

    Respondents state that Ulba produced the subject merchandise 
through 1991 and had several months of production of subject 
merchandise in 1993; however, Ulba ceased production of subject 
merchandise at the end of 1993. Respondents note that the factors of 
production used in 1991 differ from those used in 1993. Under these 
circumstances, respondents argue that the Department should use 1991 
factor input data to calculate normal value because 1991 data reflects 
input usages applied for an entire year of uninterrupted production 
and, therefore, better reflects actual production experience. 
Respondents also contend that 1991 data be used because it is closest 
to the year that the subject merchandise sold during the POI was 
produced. In contrast, respondents argue, 1993 factor data (the last 
calendar year in which there was significant production) is an 
unreliable indicator of respondents' production process because the 
Kazakstani production facility was in the process of shutting down; 
therefore, the 1993 usages were unusually high when compared to usage 
rates during previous years.
    Petitioner argues that the Department should use the 1993 data 
because these factor quantities best reflect the factors that 
respondents would have used if they had produced beryllium during the 
POI. Petitioner asserts that contemporaneity is an important factor in 
determining which year's factors to use. According to petitioner, the 
fact that production data for 1993 reflects higher usage levels in 
comparison to 1991 is not a result of irregular production for that 
year; rather, it is the particular chemistry of inputs used in any 
particular year that will affect input usage. Therefore, petitioner 
maintains that the factors of production should be based on the 
production information closest in time to the POI--1993.

DOC Position

    The subject merchandise sold to the United States during the POI 
was produced long before the POI (although the actual time period of 
production is unknown). Not only is it unclear when the merchandise 
imported during the POI was produced, there is no evidence of which 
factors were used. Therefore, we must choose between the two years for 
which we have factor information, both of which are long removed from 
the period of production.
    Where necessary information is not available on the record, and 
where a respondent has cooperated to the best of its ability, Section 
776 of the Act directs the Department to use non-adverse facts 
available in place of unavailable information. In these circumstances, 
we do find it significant that the 1993 period is closer in time to the 
POI. Therefore, we determine that the use of 1993 factor input data is 
appropriate in calculating normal value.

Comment 5: Overhead and SG&A

    Petitioner contends that its production experience as a beryllium 
producer is the only reasonable basis on which to value factory 
overhead and SG&A for a beryllium producer. In support of this 
argument, petitioner notes that (1) no data exists for either factory 
overhead or SG&A from a Peru producer of subject merchandise and (2) 
the Department determined that there is no other product comparable to 
beryllium in terms of production processes or inputs. Given these 
circumstances, petitioner asserts that the only market-economy producer 
of beryllium available for valuing these costs is the U.S. producer 
(i.e., petitioner).
    Additionally, petitioner argues that its overhead costs do not 
account for expenses incurred for certain materials used by 
respondents, although the Department believed these expenses were 
included in the petitioner's overhead rate for the preliminary 
determination. Finally, petitioner contends that the Department should 
adjust petitioner's reported overhead rate to account for capacity and 
utilization.
    Respondents counter that the information on the record concerning 
petitioner's calculation of its overhead and SG&A rates confirms that 
the factory overhead and SG&A rates that petitioner reported are 
unreasonably high. According to respondents, it appears that 
petitioner's calculation of its overhead and SG&A rates included line 
item expenses irrelevant to the production of subject merchandise. In 
the event that the Department decides to use petitioner's information, 
respondents recommend that the Department consider (1) the clerical 
error noted by petitioner in calculating its overhead rate and (2) the 
respondents' revised calculation of the SG&A rate based on petitioner's 
financial data for 1994 and 1995.

DOC Position

    In evaluating appropriate surrogate factor rates for SG&A and 
overhead, it is important to note that information does not exist on 
overhead and SG&A figures from a beryllium producer in a country that 
is economically comparable to Kazakstan. As discussed above and in the 
preliminary determination, the only known beryllium producer in the 
world, other than the Kazakstani producer, is the U.S. petitioner. The 
Department's regulations provide clear instructions that U.S. surrogate 
values are to serve only as a last resort (see 19 CFR 353.52(b)). This 
is true even when such values are not available from an industry 
producing the same merchandise (see 19 CFR 353.52(b)(1)).
    Given that the only source of industry-specific overhead and SG&A 
rates is the petitioner, we considered the economic comparability of 
the surrogate country to Kazakstan an important criterion for selecting 
appropriate surrogate factor data to approximate Kazakstan's overhead 
and SG&A rates. While the specific processes differ, the complexity and 
duration of the production processes for different light metals are 
comparable and thus, unlikely to generate differences in overhead and 
SG&A between the beryllium industry and other light metals industries. 
Therefore, in this case, we determine that overhead and SG&A figures 
based on production experience of a light metal industry (e.g., 
aluminum, silicomanganese) in an appropriate surrogate country are a 
reasonable approximation of Kazakstan's overhead and SG&A costs 
incurred in the production of beryllium. For SG&A and profit, we 
applied ratios based on financial data from a Peru aluminum producer. 
Absent detailed overhead data from Peru, we applied an overhead ratio 
based on financial data from a silicomanganese producer in Brazil for 
the final determination. While Brazil, as noted earlier, is not among 
the five countries most similar to Kazakstan in terms of economic 
development, we determine that it is comparable, and far

[[Page 2652]]

more similar to Kazakstan than is the United States. Moreover, the 
regulations, at 19 CFR 353.52(b)(2), indicate that even a foreign 
country which is not a level of economic development comparable to the 
home market country is preferable to the United States as a source of 
surrogate value information.

Comment 6: Basket-Product-Category Import Statistics

    Petitioner contends that the Department should apply product-
specific world-market prices to value beryllium-containing material 
inputs rather than data on Peru imports under broad basket categories. 
Because there is no beryllium producer or beryllium industry in Peru, 
petitioner notes that it is highly unlikely that Peru import statistics 
used to value beryllium-containing material inputs in the preliminary 
determination contain any imports of beryllium-containing materials. 
Instead, petitioner recommends the use of world market prices based on 
U.S. import statistics which provide more representative values 
available for the beryllium-containing inputs.
    Respondents counter that the Department should reject petitioner's 
alternative source of data to calculate surrogate values for beryllium-
containing materials. According to respondents, the Department's policy 
and practice provide no justification to abandon data obtained from the 
primary surrogate country because some alternative country (i.e., the 
United States) offers more product-specific price information. Further, 
with respect to the U.S. Geological Survey (``USGS'') data used to 
value beryl ore in the preliminary determination, respondents maintain 
that petitioner did not provide any reason to question the accuracy of 
this data source. Therefore, respondents recommend continued use of 
USGS data for valuing beryl ore in the final determination.

DOC Position

    We agree, in part, with petitioner. For those beryllium-containing 
inputs for which we used UN import statistics based on basket product-
categories in the preliminary determination, we used for the final 
determination 1995 import statistics from the European Union with more 
product-specific categories as data which more accurately reflects the 
values for these inputs.
    With respect to the USGS value for beryl ore, the unit value based 
on USGS data is specific to the particular material input used in the 
production process. Further, there is no information on the record to 
dispute the validity of this data. Therefore, we continued to rely on 
the USGS data for valuing beryl ore in the final determination.

Comment 7: Incorrect Surrogate Values for Certain Material Inputs

    Petitioner contends that the Department incorrectly valued a 
certain material input using import data for a different material. For 
the final determination, petitioner urges the Department to use 1994 
U.S. data specific to the material input in question to value the 
material input.

DOC Position

    We agree, in part, with petitioner. Verification findings indicated 
that two varying types of the material in question were used in the 
production of beryllium from Kazakstan. It was possible to identify 
product categories that correspond to each type of material input. 
Given that data corresponding to the materials from the primary 
surrogate country is available for consideration, the use of U.S. data 
suggested by petitioner was not required. Therefore, for the final 
determination, we are valuing the two material inputs based on 1995 
Peru import data with corresponding product categories.

Comment 8: Adjustment to the Surrogate Labor Rate

    Petitioner contends that the surrogate labor rate used in the 
preliminary determination was understated and should be adjusted to 
account for (1) normal hours and days worked in Peru; (2) salary 
bonuses mandated by law in Peru; and (3) a skilled level of labor, as 
used in the beryllium industry in Kazakstan.

DOC Position

    We agree with petitioner and have adjusted the labor rate used at 
the preliminary determination to account for (1) normal hours and days 
worked in Peru and (2) annual salary bonuses mandated by law. As noted 
in Price Waterhouse's publication, Doing Business in Peru, eight hours 
is a normal work day in Peru with a work week not exceeding 48.11 
hours. In order to avoid overstating the number of hours worked per 
day, we based our calculation of number of hours worked per day on a 
six-day work week to reflect an eight-hour work day. Additionally, 
annual salary bonuses mandated by Peruvian law were not reflected in 
the labor rate used in the preliminary determination. Therefore, we are 
also adjusting the labor rate in the final determination to reflect 
this portion of labor cost.
    However, we continued to use the International Labor Organization's 
(``ILO'') earnings per day rate as the base for the labor rate because 
it is a labor rate for manufacturing specific to the non-ferrous basic 
metal industry in Peru. The Price Waterhouse ``skilled'' average 
monthly wages in Peru, recommended by petitioner as a preferable rate 
to the ILO rate because it is a skilled labor rate, is not specific to 
any industry. Further, it is not clear whether the average monthly 
wages are gross or net of employee contributions; it is clear from 
information on the record that the ILO rate reflects gross earnings 
(i.e., employee's contributions are included in this earnings figure). 
Therefore, we continued to use the ILO rate as the base labor rate for 
the final determination.

Comment 9: Circumstance-of-Sale Adjustments

    Petitioner contends that the Department is required by the Act to 
adjust normal value to account for differences in circumstances of 
sale. In particular, petitioner argues that imputed credit expenses and 
the value of a price markup between the Kazakstani producer and its 
U.S. subsidiary should be added to NV.
    Respondents counter that verification findings show that payment 
for the reported sale was received from the U.S. customer in advance of 
the payment terms agreed to in the sales contract; therefore, there is 
no basis on which to calculate imputed credit expenses for the reported 
U.S. sales transactions. Additionally, respondents assert that 
petitioner's request to adjust NV to account for an alleged commission 
payment should also be denied because there is no evidence on the 
record that a commission was made at arm's length.

DOC Position

    We agree with respondents. Section 773 (a) (6) (C) of the Act 
allows NV to be increased or decreased for differences in circumstances 
of sale as long as ``it has been established to the satisfaction of the 
administering authority'' that such adjustments are warranted. (See, 
also Notice of Final Determination: Bicycles from the PRC, 61 FR 19031, 
19032 (April 30, 1996)).
    An adjustment to NV for imputed credit expense is not warranted in 
this case. Because such expenses are usually included in the financial 
statements used as the basis for calculating SG&A, it is assumed any 
credit expense is captured in the SG&A figure calculated under the 
factors of production methodology, unless demonstrated otherwise. (See, 
Sulfanilic Acid from the

[[Page 2653]]

PRC: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review, 61 FR 53702, 53709 (1996) and Final 
Determination of Sales at Less Than Fair Value: Helical Spring Lock 
Washers from the PRC, 58 FR 48833, 48839 (1993)).
    Further, the price markup reflected in sales invoice documentation 
between the Kazakstani producer and its U.S. subsidiary is considered 
an intra-company transfer and does not warrant any adjustment to NV. As 
respondents correctly note, the Department generally allows adjustments 
only for commission payments to unaffiliated parties; however, in this 
case, the Kazakstani producer and the U.S. subsidiary are considered to 
be affiliated parties for purposes of this investigation. (See, also, 
Federal Mogul Corp. v. United States, 918 F. Supp. 386, 413-414 (CIT 
1996)). Therefore, no adjustment to NV for commissions is warranted 
because the record does not provide any information to suggest that any 
commission payment from the Kazakstani producer to its U.S. subsidiary 
was made at arm's length.

Comment 10: U.S. Sales Transactions in the Final Margin Calculation

    Petitioner asserts that all U.S. sales transactions involving 
Kazakstani beryllium invoiced and shipped during the POI should be 
included in the final margin calculation. In particular, petitioner 
argues that the Department should continue to consider the sale of 
certain off-specification beryllium as part of the reported U.S. sale 
transaction because verification findings confirmed that the price 
adjustments at issue were post-sale price adjustments, rather than new 
sales occurring outside the POI. In support of this argument, 
petitioner notes that respondents stated for the record that the date 
of sale was unaffected by any modifications to the sale contract after 
shipment. Finally, petitioner argues that the Department should include 
the unreported U.S. sales transaction discovered at verification.
    Respondents assert that the sale of the off-specification material 
did not meet the specifications of the sales contract within the POI 
but was only shipped at the same time as the POI contract's 
merchandise. According to respondents, because of the lengthy 
negotiations following the shipment of the off-specification 
merchandise, the final sale (and agreement to price) of this 
merchandise was not formally concluded until after the POI.
    Additionally, respondents argue that the unreported U.S. sale 
discovered at verification constitutes a sample shipment of 
insignificant quantity of merchandise outside of the scope of the 
investigation (i.e., not characterized as ingot, billet, powder, lump, 
chunk, blank, or other semi-finished form). Therefore, respondents 
recommend the Department to disregard this sale for purposes of the 
final margin calculation.

DOC Position

    We agree with petitioner and continue to include the reported sales 
of off-specification merchandise with post-sale price adjustments in 
the final margin calculation. Verification findings indicated that the 
merchandise in question was sold pursuant to the sales contract and 
invoice issued during the POI.
    With respect to the unreported sale discovered at verification, 
respondents are correct in characterizing this sale as a transaction of 
insignificant quantity. Therefore, we have excluded this transaction 
from the final margin calculation.

Comment 11: Verified International Freight and Customs Expenses

    For the final determination, petitioner asserts that the Department 
should adjust export price for (1) line item expenses omitted from 
reported international freight charge and (2) under-reported Customs 
duties payments.

DOC Position

    We agree with petitioner and used the verified international 
freight and Customs duties charges in the final margin calculation.

Comment 12: Inflation Adjustment for Non-Contemporaneous Data

    Respondents maintain that in the preliminary determination the 
Department erred in converting 1994 values to 1995 values by 
multiplying U.S. dollar-denominated prices by foreign currency 
inflation rates without adjusting for changes in the value of the 
foreign currency relative to the U.S. dollar. Respondents argue that, 
where appropriate, the Department should account for both foreign 
currency inflation and exchange rate fluctuations.

DOC Position

    We agree with respondents and, where appropriate, adjusted factor 
values to account for both foreign currency inflation and exchange rate 
fluctuations between the U.S. dollar and the foreign currency.

Continuation of Suspension of Liquidation

    In accordance with section 733(d)(1) and 735(c)(4)(B) of the Act, 
we are directing the Customs Service to continue to suspend liquidation 
of all entries of beryllium from Kazakstan, that are entered, or 
withdrawn from warehouse for consumption, on or after August 28, 1996 
(the date of publication of the preliminary determination in the 
Federal Register). The Customs Service shall continue to require a cash 
deposit or posting of a bond equal to the estimated amount by which the 
normal value exceeds the export price as shown below. These suspension 
of liquidation instructions will remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                                Margin  
               Manufacturer/producer/exporter                 percentage
------------------------------------------------------------------------
Ulba Metallurgical Plant/KATEP..............................      16.56 
Kazakstan-Wide Rate.........................................      16.56 
------------------------------------------------------------------------

    The Kazakstan-Wide rate applies to all entries of subject 
merchandise except for entries from exporters that are identified 
individually above.

ITC Notification

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

    Dated: January 10, 1997.
Robert LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-1258 Filed 1-16-97; 8:45 am]
BILLING CODE 3510-DS-P