[Federal Register Volume 62, Number 67 (Tuesday, April 8, 1997)]
[Notices]
[Pages 16763-16768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8956]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-820]
Notice of Preliminary Results of Antidumping Duty Administrative
Review: Ferrosilicon From Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 8, 1997.
FOR FURTHER INFORMATION CONTACT: Jennifer Katt or Sal Tauhidi, AD/CVD
Enforcement Group II, Office Four, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-0498 or (202) 482-4851, respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act) are references to the provisions effective
January 1, 1995, the effective date of the amendments to the Act by the
Uruguay Round Agreements Act (URAA).
Preliminary Results
We preliminarily determine that sales of ferrosilicon from Brazil
have been made below normal value (NV). If these preliminary results
are adopted in our final results of administrative review, we will
instruct U.S. Customs to assess antidumping duties on all appropriate
entries.
Case History
On March 4, 1996 (61 FR 8238), the Department of Commerce (the
Department) published in the Federal Register a notice of ``Opportunity
to Request an Administrative Review'' of the antidumping duty order on
Ferrosilicon from Brazil covering the period March 1, 1995, through
February 29, 1996. In accordance with 19 CFR 353.22(a)(2), in March
1996, Companhia Brasileira Carbureto De Calcio (CBCC) and Companhia
Ferroligas Minas Gerais (Minasligas) (collectively the respondents)
requested that the Department conduct an administrative review of their
shipments of ferrosilicon to the United States during this period. On
April 25, 1996, the Department published a notice of initiation of
administrative review (61 FR 18379). The Department is now conducting
this administrative review in accordance with section 751 of the Act.
On May 8, 1996, the Department issued an antidumping duty
questionnaire to CBCC and Minasligas. This questionnaire instructed the
respondents to respond to sections A (corporate structure, accounting
practices, markets and merchandise), B (home market sales), C (United
States sales) and D (cost of production/constructed value) of the
questionnaire. CBCC and Minasligas submitted questionnaire responses in
July 1996. The Department issued supplemental questionnaires to CBCC
and Minasligas in September 1996, December 1996, and January 1997.
Responses to the supplemental questionnaires were received in October
1996, and January 1997.
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for completion of a preliminary determination if it
determines that it is not practicable to complete the review within the
statutory time limit. On November 26, 1996, the Department extended the
time limit for the preliminary results in this case. See Extension of
Time Limits of Antidumping Duty Administrative Review, (61 FR 64322)
(December 4, 1996).
In accordance with section 782(i) of the Act, we verified the sales
and cost questionnaire responses of CBCC and Minasligas during February
1997. The results of these verifications are outlined in the public
versions of the verification reports dated March 19, 1997, on file in
room B-099 of the main Commerce building.
Scope of Review
The merchandise subject to this review is ferrosilicon, a
ferroalloy generally containing, by weight, not less than four percent
iron, more than eight percent but not more than 96 percent silicon, not
more than 10 percent chromium, not more than 30 percent manganese, not
more than three percent phosphorous, less than 2.75 percent magnesium,
and not more than 10 percent calcium or any other element. Ferrosilicon
is a ferroalloy produced by combining silicon and iron through smelting
in a submerged-arc furnace. Ferrosilicon is used primarily as an
alloying agent in the production of steel and cast iron. It is also
used in the steel industry as a deoxidizer and a reducing agent, and by
cast iron producers as an inoculant.
Ferrosilicon is differentiated by size and by grade. The sizes
express the maximum and minimum dimensions of the lumps of ferrosilicon
found in a given shipment. Ferrosilicon grades are defined by the
percentages by weight of contained silicon and other minor elements.
Ferrosilicon is most
[[Page 16764]]
commonly sold to the iron and steel industries in standard grades of 75
percent and 50 percent ferrosilicon. Calcium silicon, ferrocalcium
silicon, and magnesium ferrosilicon are specifically excluded from the
scope of this review. Calcium silicon is an alloy containing, by
weight, not more than five percent iron, 60 to 65 percent silicon, and
28 to 32 percent calcium. Ferrocalcium silicon is a ferroalloy
containing, by weight, not less than four percent iron, 60 to 65
percent silicon, and more than 10 percent calcium. Magnesium
ferrosilicon is a ferroalloy containing, by weight, not less than four
percent iron, not more than 55 percent silicon, and not less than 2.75
percent magnesium. Ferrosilicon is currently classifiable under the
following subheadings of the Harmonized Tariff Schedule of the United
States (HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000,
7202.29.0010, and 7202.29.0050. Although the HTSUS subheadings are
provided for convenience and customs purposes, our written description
of the scope of this review is dispositive.
Ferrosilicon in the form of slag is included within the scope of
this order if it meets, in general, the chemical content definition
stated above and is capable of being used as ferrosilicon. Parties that
believe their importations of ferrosilicon slag do not meet these
definitions should contact the Department and request a scope
determination.
Period of Review
The period of review (POR) is March 1, 1995, through February 29,
1996.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by CBCC and Minasligas, covered by the description in
the ``Scope of the Review'' section, above, and sold in the home market
during the POR, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product based on the following criteria: (1) The grade of ferrosilicon
(i.e., standard, high purity and low aluminum); (2) the percentage
range, by weight, of silicon content; and (3) the sieve size.
Although we have used the sieve size category as a matching
criterion in past reviews, we are reconsidering the matching criteria
for CBCC and Minasligas in light of additional data on the record in
this review. Although cost differences among sieve size categories do
not exist, we considered whether the merchandise was a ``lump'' or a
``fine'' in making our product comparisons because sales of
ferrosilicon fines command significantly lower market prices than sales
of ferrosilicon lumps. In addition, it appears that the two products
have different end-uses. For purposes of these preliminary results, we
considered ferrosilicon pieces with a minimum dimension equal to or
greater than one millimeter to be lumps and ferrosilicon pieces with a
maximum dimension less than one millimeter to be fines. We did not
consider any difference in sieve size ranges within the lump or fine
categories in determining the most appropriate product comparison
because significant price differences within the lump or fine sieve
size category did not exist. Interested parties are requested to
comment on these matching criteria in the case briefs submitted in this
review.
For those sales where CBCC did not report the actual silicon weight
content because the chemical analysis certification documentation had
been destroyed, we assumed that the silicon content was 75 percent
because it was confirmed at verification that this merchandise was
marketed and sold to the U.S. customer as ``75 percent ferrosilicon.''
CBCC and Minasligas reported only one cost of manufacturing (COM)
for all three grades of ferrosilicon produced and sold during the POR.
Both companies stated that in the normal course of business, their
books and records do not capture any cost differences for producing
different grades of ferrosilicon. However, at verification, Minasligas
was able to identify some cost differences associated with the
production of high purity and low aluminum ferrosilicon. Where
Minasligas' U.S. sales of high purity or low aluminum ferrosilicon were
matched to home market sales of standard grade ferrosilicon, we
calculated a difference in merchandise (DIFMER) adjustment between the
products as follows: (1) We isolated the additional material, labor and
variable overhead costs used in the production of high purity and low
aluminum ferrosilicon; (2) we removed these costs from the variable
cost of manufacturing (VCOM) reported for standard grade ferrosilicon;
and (3) we added these costs to the VCOM reported for high purity and
low aluminum ferrosilicon. The DIFMER was then calculated, where
appropriate, to be the difference in the variable cost of manufacturing
between the product sold to the U.S. and the product sold in the home
market. (For a further discussion of the calculation of the DIFMER, see
the ``Concurrence Memorandum'' dated April 1, 1997, on file in room B-
099 of the main Commerce building.)
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the URAA, H.R.
Doc. No. 316, 103d Cong., 2d Sess at 870. (1994) (SAA), at 829-831, to
the extent practicable, the Department will calculate NV based on sales
at the same level of trade as the U.S. sale. When the Department is
unable to find sale(s) in the comparison market at the same level of
trade as the U.S. sale, the Department may compare sales in the U.S. to
foreign market sales at a different level of trade. See Final
Determination of Sales at Less than Fair Value; Certain Pasta from
Italy, 61 FR 30326 (June 14, 1996).
In order to determine whether there is a difference in level of
trade, the Department must find that two sales have been made at
different stages of marketing, or the equivalent. Different stages of
marketing necessarily involve differences in selling functions, but
differences in selling functions (even substantial ones) are not alone
sufficient to establish a difference in the level of trade. Similarly,
seller and customer descriptions (such as ``distributor'' and
``wholesaler'') are useful in identifying different levels of trade,
but are insufficient to establish that there is a difference in the
level of trade. See Porcelain-on-Steel Cookware from Mexico:
Preliminary Results of Antidumping Duty Administrative Review (61 FR
36551 (January 31, 1997)).
In implementing these principles in this review, we examined
information regarding the selling activities of the producers/exporters
associated with each stage of marketing, or the equivalent. In
reviewing the selling functions reported by the respondents, we
considered all types of selling activities, both claimed and unclaimed,
that had been performed. In analyzing whether separate LOTs existed, we
found that no single selling activity was sufficient to warrant a
separate LOT (see Notice of Proposed Rulemaking and Request for Public
Comments, 61 FR 7307, 7348 (February 27, 1996)). Pursuant to section
773(a)(7)(B)(i) of the Act and the SAA at 827, in identifying levels of
trade for EP and home market sales, we considered the selling functions
reflected in the starting price of these transactions before any
adjustments.
[[Page 16765]]
In addition, we examined any claimed LOTs reported by each
respondent in response to our initial and supplemental questionnaires.
When examining claimed LOTs, we analyzed the selling activities
associated with the classes of customers and marketing stages the
respondents reported. In applying this analysis, we expect that, if
claimed LOTs are the same, the functions and activities of the seller
should be similar. Conversely, if a party claims that LOTs are
different for different groups of sales, the functions and activities
of the seller should be dissimilar. The Department not only examines
the types of selling activities, but weighs the overall function
performed for each claimed level of trade.
In accordance with section 773(a)(7)(A) of the Act, in comparing
U.S. sales to NV sales, the Department will adjust the NV to account
for any difference in level of trade if two conditions are met. First,
the sales must in fact be made at different levels of trade, which can
exist only if there are differences between the actual selling
functions performed by the seller at the level of trade of the U.S.
sale and the level of trade of the NV sale. Second, there must be a
difference in price comparability, as evidenced by a pattern of
consistent price differences between sales at the different levels of
trade in the market in which NV is determined.
Based on our analysis of the selling functions performed by each
respondent, we found that a single level of trade exists in each
market. We then compared selling functions in the U.S. market and in
the home market and found them to be similar. We find, therefore, that
sales in the home market and in the U.S. market are at the same level
of trade.
Fair Value Comparisons
To determine whether sales of ferrosilicon by CBCC and Minasligas
to the United States were made at less than fair value, we compared the
export price (EP) to the normal value (NV), as described in the
``Export Price'' and ``Normal Value'' sections of this notice. In
accordance with section 777A(d)(2) of the Act, we compared the EP of
individual transactions to the weighted-average NV of contemporaneous
sales of the foreign like product.
Export Price
For CBCC and Minasligas, we calculated EP, in accordance with
subsections 772 (a) and (c) of the Act because the subject merchandise
was sold directly to the first unaffiliated purchaser in the United
States prior to importation and constructed export price was not
otherwise warranted based on the facts of record.
For both respondents, we calculated EP based on packed prices to
the first unaffiliated customers in the United States. In accordance
with section 772(c)(2)(A) of the Act, we made deductions, where
appropriate, for freight expenses between the plant and the port,
foreign brokerage and handling, warehousing expenses, ocean freight,
and marine insurance expenses.
The questionnaire instructs respondents to report all costs,
charges or expenses incurred in bringing the subject merchandise from
the original place of shipment in the exporting country to the
unaffiliated customer's place of delivery. At verification we
discovered that Minasligas had not reported marine insurance expenses
incurred on U.S. sales made on a CIFFO basis, and that CBCC had not
reported the chemical analysis and weight inspection fees incurred on
U.S. sales. Section 776(a)(2) of the Act provides that if an interested
party withholds information that has been requested by the Department,
fails to provide such information in a timely manner or in the form or
manner requested, significantly impedes a determination under the
antidumping statute, or provides information which cannot be verified,
the Department shall use facts available in reaching the applicable
determination. Because CBCC and Minasligas failed to provide the data
requested by the Department regarding marine insurance expenses and
chemical analysis and weight inspection fees prior to verification, the
Department is compelled to use facts available with regard to these
expenses.
Section 776(b) of the Act provides that adverse inferences may be
used if the party has failed to cooperate by not acting to the best of
its ability to comply with requests for information. See also the
Statement of Administrative Action (SAA) at 870. Because CBCC and
Minasligas failed to report marine insurance expenses and chemical
analysis and weight inspection fees, despite the Department's request
for such data, and because the respondents provided no explanation for
the lack of data, each company has failed, to date, to cooperate to the
best of its ability with respect to these expenses. Thus, the
Department has determined that, in selecting among the facts otherwise
available to apply to these unreported U.S. expenses, an adverse
inference is warranted. Consequently, as facts otherwise available, we
have assigned the highest marine insurance expense incurred on a U.S.
sale during the POR to all of Minasligas' U.S. sales made on a CIFFO
basis and the highest chemical analysis and weight inspection fees
incurred on a U.S. sale to all of CBCC's U.S. sales.
We made additional company specific adjustments as follows:
Minasligas
We calculated Minasligas' EP based on FOB Brazilian port and
CIFFO prices. We added the amount of marine insurance revenue which
was collected by Minasligas with regard to one U.S. sale during the
POR. We disallowed Minasligas' claim for duty drawback for mineral
coal because it was determined at verification that import duties on
mineral coal were suspended upon importation. Therefore, Minasligas
does not receive any duty drawback when ferrosilicon is exported.
Finally, we corrected the reported date of sale for two transactions
to reflect the actual date of sale confirmed at verification.
CBCC
We calculated CBCC's EP based on FOB Brazilian port prices. We
disallowed CBCC's claim for interest revenue as an offset to the
reported credit expenses and instead used the actual bank charges
incurred on each U.S. sale as the cost of extending credit to the
U.S. customer. (For a further discussion of this issue, see the
``Normal Value'' section of this notice, below.)
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared each respondent's volume of home market sales of foreign
like product to the volume of U.S. sales of the subject merchandise in
accordance with section 773(a)(1)(C) of the Act. Since the aggregate
volume of home market sales of the foreign like product was greater
than five percent of the aggregate volume of U.S. sales of the subject
merchandise, and there was no evidence indicating that a particular
market situation in the exporting country did not permit a proper
comparison, we determined that the home market was viable for CBCC and
Minasligas. Therefore, in accordance with section 773(a)(1)(B)(i) of
the Act, we based NV on the prices at which the foreign like products
were first sold for consumption in the exporting country. We calculated
NV as noted in the ``Price to Price Comparisons'' and ``Price to
Constructed Value'' sections of this notice, below.
Cost of Production Analysis
Because we disregarded sales below the cost of production (COP) in
the last completed segment of the proceeding for CBCC and Minasligas
(i.e., the LTFV investigation) we had reasonable grounds to believe or
suspect that sales
[[Page 16766]]
of the foreign product under consideration for the determination of NV
in this review may have been made at prices below the COP, as provided
by section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section
773(b)(1) of the Act, we initiated COP investigations of sales by CBCC
and Minasligas in the home market. (See the Memorandum to the File from
Laurel LaCivita, dated May 3, 1996, on file in room B-099 of the main
Commerce building.)
Before making any fair value comparisons, we conducted the COP
analysis described below for CBCC and Minasligas.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of each respondent's cost of materials and
fabrication employed in producing the foreign like product, plus
amounts for selling, general and administrative expenses (SG&A) and
packing costs. We relied on the COP amounts reported by CBCC and
Minasligas except in the following specific instances where the
reported costs were determined to be improperly valued:
CBCC
1. We reallocated the reported labor and overhead expenses for
July, 1995, through February 1996, based on the actual production
capacity.
2. We recalculated the cost of charcoal for all charcoal
consumed in the production process using the purchased unit cost
obtained at verification.
3. We recalculated the reported factory overhead for January
1996, to include depreciation expenses on idle assets.
Minasligas
1. We reallocated the reported variable overhead cost based on
the actual production tonnage rather than the number of furnaces
used.
2. We recalculated the reported weighted-average cost used to
average monthly COP costs to correct an error discovered at
verification.
3. We adjusted the reported G&A expense to deduct reforestation
maintenance costs which had been reported twice in the COP/CV
response.
4. We disallowed Minasligas' claim for negative interest
expenses and instead, set the interest expense equal to zero.
B. Test of Home Market Prices
We compared the adjusted weighted-average COP for each respondent
to home market sales of the foreign like product as required under
section 773(b) of the Act, in order to determine whether these sales
had been made at prices below the COP within an extended period of time
in substantial quantities, and whether such prices were sufficient to
permit the recovery of all costs within a reasonable period of time. On
a product-specific basis, we compared the COP to the reported home
market prices less any applicable movement charges, taxes, rebates,
commissions and other direct and indirect selling expenses.
C. Results of the COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of a
respondent's sales of a given product were at prices less than the COP,
we did not disregard any below-cost sales of that product because we
determined that the below-cost sales were not made in ``substantial
quantities.'' Where 20 percent or more of a respondent's sales of a
given product were at prices less than the COP, we disregarded the
below-cost sales because such sales were found to be made within an
extended period of time in ``substantial quantities'' in accordance
with sections 773(b)(2) (B) and (C) of the Act, and based on
comparisons of price to weighted-average COPs for the POR we determined
that the below-cost sales of the product were at prices which would not
permit recovery of all costs within a reasonable period of time, in
accordance with section 773(b)(2)(D) of the Act. Where all
contemporaneous sales of a specific product were at prices below the
COP, we calculated NV based on CV, in accordance with section 773(a)(4)
of the Act.
We found that, for certain ferrosilicon products, CBCC and
Minasligas made home market sales at below COP prices within an
extended period of time in substantial quantities. Further, we found
that these sales prices did not permit for the recovery of costs within
a reasonable period of time. We therefore excluded these sales from our
analysis in accordance with section 773(b)(1) of the Act.
D. Calculation of CV
For those ferrosilicon products for which we could not determine
the NV based on home market sales either because (1) There were no
contemporaneous sales of a comparable product or (2) all
contemporaneous sales of the comparison product failed the COP test, we
compared export prices to CV. In accordance with section 773(e)(1) of
the Act, we calculated CV based on the sum of the COM of the product
sold in the United States, plus amounts for home market selling,
general and administrative expenses (SG&A), home market profit and U.S.
packing costs. We calculated each respondent's CV based on the
methodology described in the ``Calculation of COP'' section of this
notice, above. In accordance with section 773(e)(2)(A), we used the
actual amounts incurred and realized by CBCC and Minasligas in
connection with the production and sale of the foreign like product, in
the ordinary course of trade, for consumption in the foreign country to
calculate home market SG&A and profit. In accordance with section
773(e) of the Act, we added to CV the amount of ICMS/IPI taxes incurred
on purchases of raw material inputs for CBCC. For Minasligas, we added
to CV the greater of either (1) the actual home market IPI/ICMS taxes
paid on raw material inputs or (2) the amount of ICMS tax collected by
the Brazilian government on export sales. (See Final Results of
Administrative Review: Silicon Metal from Brazil, 62 FR 1970 1976
(January 14, 1997)).
Price to Price Comparisons
Where there were contemporaneous sales of the comparison product
that passed the COP test, we based NV on home market prices. For each
of the respondents, we made adjustments, where appropriate, for
physical differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act. (For a discussion of the calculation of
the DIFMER, see the ``Product Comparisons'' section of this notice,
above.) In addition, we deducted home market packing costs and added
U.S. packing costs in accordance with sections 773(a)(6) (A) and (B) of
the Act.
CBCC and Minasligas reported negative U.S. credit expenses (i.e.,
credit revenue) based on their claims that unique financing
arrangements for export sales, called advance exchange contracts
(ACCs)), allowed the respondents to receive payment for their U.S.
sales prior to the date of shipment. At verification we determined that
ACCs work as follows. A producer goes to a Brazilian bank that it has a
line of credit with, and applies for an ACC. At this time, the producer
must specify the product to be exported. The name of the export
country, customer and the value of particular sales may be specified,
but these variables are not fixed. On the date the ACC is signed by the
bank, the producer receives the value of the ACC in Brazilian Reais. At
a later date, the producer must present documentation to the bank
proving that the money obtained under the ACC was used to produce
merchandise for exportation (e.g., the commercial invoice, bill of
lading, etc.). After receiving the merchandise, the U.S. customer pays
the bank directly. Once the bank has received payment, the Brazilian
bank
[[Page 16767]]
charges the producer bank fees equal to the interest charged for the
number of days the ACC was outstanding (i.e., the number of days
between the date the producer received the money under the ACC and the
date the U.S. customer paid the bank).
We have disallowed CBCC's and Minasligas' claimed credit revenue/
negative U.S. credit expenses for purposes of the preliminary results
because we do not consider the ACCs to be directly related to the U.S.
sales made during the POR. Evidence on the record indicating that the
ACC was not directly linked with the U.S. sales in question is as
follows: (1) The export country, customer, and value of the sale were
not fixed on the date the ACC was signed; (2) ACCs were obtained prior
to the U.S. date of sale for all of CBCC's U.S. sales and certain sales
made by Minasligas. Therefore, the ACC did not pertain to a particular
U.S. sale but instead pertained to future unspecified shipments; (3)
the amount borrowed under certain ACCs did not correspond exactly with
the value of the U.S. sale which was later shipped; (4) in certain
instances, more than one ACC was used to finance a single U.S.
transaction; and (5) certain ACCs were used to finance more than one
U.S. export. (For a further discussion of ACCs, see the ``Concurrence
Memorandum'' dated April 1, 1997, on file in room B-099 of the main
Commerce building.)
In accordance with section 773(a)(6)(C) of the Act, the Department
makes circumstance of sale (COS) adjustments to NV in order to account
for the difference in credit terms between U.S. and home market sales.
Because CBCC and Minasligas receive financing for their export sales
prior to the date of shipment and the U.S. customer pays the Brazilian
bank directly, the respondents do not forego payment from the U.S.
customer but instead pay bank charges on U.S. sales. These bank charges
represent the interest expense incurred between the date the respondent
received an advance under an ACC and the date the U.S. customer paid
the bank. For purposes of calculating U.S. credit expenses, we have
used the actual bank charges incurred on each U.S. sale as the cost of
extending credit to the customer. (See the CBCC and Minasligas
``Verification Reports'' dated March 19, 1997, on file in room B-099 of
the main Commerce building.)
Pursuant to section 773(a)(6) of the Act, we made deductions, where
appropriate, from the starting price for rebates, inland freight and
IPI taxes. With respect to ICMS taxes for Minasligas, we deducted the
difference between the ICMS tax incurred on the home market sale and
the claimed ICMS tax on the U.S. sale. For CBCC, we deducted the
reported ICMS tax. We made circumstance of sale adjustments to NV for
direct expenses, where appropriate, in accordance with section
773(a)(6)(C)(iii) of the Act. In doing so, we deducted home market
credit expenses and, where appropriate, added U.S. credit expenses,
U.S. chemical analysis and weight inspection fees, and U.S. port
charges. Neither CBCC nor Minasligas had any short-term borrowings
during the POR. Therefore, we calculated credit expenses for all home
market sales using the average ``taxa referential'' rate offered on
short-term transactions during the POR by the Central Bank of Brazil.
In addition, for sales made on a consignment basis, we recalculated the
credit period to include the number of days between the date the
consignee was invoiced for the merchandise it consumed and the date the
respondent received payment from the home market customer. In addition,
we considered the date of sale for consignment sales to be the date
that the respondent invoiced the customer for the merchandise the
consignee notified the respondent it had consumed.
We made company-specific-adjustments for price-to-price comparisons
as follows:
CBCC
We calculated NV based on packed, FOB plant and CIF prices to
unaffiliated customers. We added the amount of interest revenue
actually collected on home market sales in instances where the customer
paid late. Section 773(a)(1)(B) of the Act directs that we calculate NV
on the basis of the price at which the ``foreign like product is first
sold.'' Foreign like product, in turn, is defined by section 771(16) of
the Act as merchandise that is produced in the same country and by the
same person as the merchandise which is the subject of the
investigation. Therefore, because CBCC sold only self-produced
merchandise to the United States, the statute prohibits using sales of
merchandise produced by persons other than CBCC in the calculation of
normal value. Accordingly, we excluded from the calculation of NV all
re-sales of merchandise which was not produced by CBCC.
In addition, we excluded all sales reported in the home market
database which were determined to be either cancelled or reported twice
in the sales listing. We did not deduct reported IPI taxes for four
home market customers because it was determined at verification that
the ferrosilicon these customers purchased was used to produce
merchandise for exportation. Therefore, these customers were exempt
from paying IPI taxes during the POR. Finally, we calculated a packing
cost for one sale where no packing cost was reported because the sale
was actually packed in bags.
We adjusted for commissions as follows: Where commissions were paid
on some, but not all, home market sales used to calculate NV, and no
commissions were paid on a U.S. sale used to calculate export price, we
deducted the home market commission from NV and added to NV the lesser
of either (1) The indirect selling expenses incurred on the U.S. sale
or (2) the weighted-average amount of the commissions paid on the home
market sales. We recalculated U.S. inventory carrying costs as follows:
(1) The credit period was recalculated using the number of days in
inventory at the plant confirmed at verification; and (2) because CBCC
had no short-term borrowings during the POR, we calculated U.S.
inventory carrying costs using the average ``taxa referential'' rate
offered on short-term transactions by the Central Bank of Brazil. (See
the ``Concurrence Memorandum'' dated April 1, 1997, and the
verification report dated March 19, 1997 on file in room B-099 of the
main commerce building.)
Minasligas
We calculated NV based on packed, FOB plant and CIF prices to
unaffiliated customers. For those home market shipments which
Minasligas claimed were made pursuant to long-term contracts, we based
the date of sale on the invoice date because, based on information
gathered at verification, we did not find the essential terms of sale
(i.e., price and quantity) to be fixed on the date of contract.
Specifically, we noted that the prices and quantities were frequently
modified after the date of the contract, there were no penalties
imposed by Minasligas in instances where the customer did not purchase
the quantity specified in the contract, and the shipping schedules
specified by the customer were frequently changed and/or not met. (For
a further discussion of Minasligas' long-term contracts, see the
``Concurrence Memorandum'' dated April 1, 1997, on file in room B-099
of the main Commerce building.) We corrected the reported payment date
for one transaction to reflect the actual payment date confirmed at
verification.
Price to Constructed Value Comparisons
Where we compared export prices to CV, we deducted from CV the
weighted-average home market direct selling
[[Page 16768]]
expenses and added the product specific U.S. direct selling expenses in
accordance with sections 773(a)(8) and 773(a)(6)(iii) of the Act.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the official exchange rates in effect on the dates
of the U.S. sales as certified by the Federal Reserve Bank of New York.
Section 773A(a) of the Act directs the Department to use a daily
exchange rate in order to convert foreign currencies into U.S. dollars,
unless the daily rate involves a ``fluctuation.'' In accordance with
the Department's practice, we have determined that a fluctuation exists
when the daily exchange rate differs from a benchmark by 2.25 percent.
The benchmark is defined as the rolling average of rates for the past
40 business days. When we determine that a fluctuation exists, we
substitute the benchmark for the daily rate.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margins exist for the period March
1, 1995 through February 29, 1996:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
CBCC......................................................... 2.27
Minasligas................................................... 7.98
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of the date of publication. Any
hearing, if requested, will be held 44 days after the publication of
this notice, or the first workday thereafter. Interested parties are
invited to comment on the preliminary results. Parties who submit
arguments in this proceeding are requested to submit with each
argument: (1) A statement of the issue: and (2) a brief summary of the
argument. All case briefs must be submitted within 30 days of the date
of publication of this notice. Rebuttal briefs, which are limited to
issues raised in the case briefs, may be filed not later than 37 days
after the date of publication. The Department will publish a notice of
the final results of this administrative review, which will include the
results of its analysis of issues raised in any such written comments
within 120 days from the publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between EP and NV may vary from the percentages stated
above. Upon completion of this review, the Department will issue
appraisement instructions directly to the Customs Service. The final
results of this review shall be the basis for the assessment of
antidumping duties on entries of merchandise covered by the
determination and for future deposits of estimated duties. For duty
assessment purposes, we calculated an importer-specific assessment rate
by aggregating the dumping margins calculated for all U.S. sales to
each importer and dividing this amount by the total quantity of subject
merchandise sold to each of the respective importers. This specific
rate calculated for each importer will be used for the assessment of
antidumping duties on the relevant entries of subject merchandise
during the POR.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of ferrosilicon from Brazil entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rate for CBCC and Minasligas
will be the rates established in the final results of administrative
review, except if the rate is less than 0.5 percent, ad valorem and,
therefore, de minimis within the meaning of 19 CFR 353.6, the cash
deposit rate will be zero; (2) for merchandise exported by
manufacturers or exporters not covered in this review but covered in
the original less than fair value (LTFV) investigation or a previous
review, the cash deposit rate will continue to be the company-specific
rate published in the most recent period; (3) if the exporter is not a
firm covered in this review, a previous review, or the LTFV
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise; and (4) if neither the exporter nor the manufacturer
is a firm covered in this or any previous reviews, the cash deposit
rate will be 35.95 percent, the ``All Others'' rate made effective by
the antidumping duty order (59 FR 11769, March 14, 1994). These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: April 1, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-8956 Filed 4-7-97; 8:45 am]
BILLING CODE 3510-DS-P