[Federal Register Volume 62, Number 135 (Tuesday, July 15, 1997)]
[Notices]
[Pages 37970-37990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18445]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-122-047]


Elemental Sulphur From Canada; Final Results of Antidumping Duty 
Administrative Reviews

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

ACTION: Notice of final results of antidumping duty administrative 
reviews.

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SUMMARY: On August 30, 1996, the Department of Commerce (the 
Department) published in the Federal Register the preliminary results 
of the administrative reviews of the antidumping duty finding on 
elemental sulphur from Canada. The reviews cover the periods December 
1, 1992 through November 30, 1993, and December 1, 1993 through 
November 30, 1994. We gave interested parties an opportunity to comment 
on our preliminary results. Based upon our analysis of the comments 
received we have changed the results from those presented in the 
preliminary results of review.

EFFECTIVE DATE: July 15, 1997.

FOR FURTHER INFORMATION CONTACT: Donald Little or Maureen Flannery, 
Antidumping/Countervailing Enforcement, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; 
telephone: (202) 482-4733.

SUPPLEMENTARY INFORMATION:

Background

    On December 17, 1973, the Department of the Treasury published in 
the Federal Register (38 FR 34655) the antidumping finding on elemental 
sulphur from Canada. On November 26, 1993 and December 6, 1994, the 
Department published in the Federal Register notices of opportunity to 
request an administrative review of this antidumping finding for the 
periods December 1, 1992 through November 30, 1993 (58 FR 62326), and 
December 1, 1993 through November 30, 1994 (59 FR 62710), respectively.
    With respect to the 1992/1993 administrative review, on December 
30, 1993, Pennzoil Sulphur Company (Pennzoil), a domestic producer of 
elemental sulphur, requested that we conduct an administrative review 
of Alberta Energy Co., Ltd. (Alberta), Allied-Signal Inc. (Allied), 
Brimstone Export (Brimstone), Burza Resources (Burza), Fanchem, Husky 
Oil Ltd. (Husky), Mobil Oil Canada, Ltd. (Mobil), Norcen Energy 
Resources (Norcen), Petrosul International (Petrosul), Saratoga 
Processing Co., Ltd. (Saratoga), and Sulbow Minerals (Sulbow). On 
December 21, 1993, Petrosul requested revocation of the finding in 
part, with respect to itself. The review was initiated on January 18, 
1994 (59 FR 2593).
    With respect to the 1993/1994 administrative review, on December 
29, 1994, Pennzoil requested that we conduct an administrative review 
of Alberta, Husky, Mobil, Norcen, and Petrosul. On December 28, 1994, 
Petrosul requested revocation of the finding, in part, with respect to 
itself, and, on December 30, 1994, Mobil requested an administrative 
review of its sales. The review was initiated on January 13, 1995 (60 
FR 3193).
    On August 30, 1996, the Department published in the Federal 
Register the preliminary results of these reviews of the antidumping 
finding on elemental sulphur from Canada (61 FR 45937). We held a 
public hearing on December 11, 1996. The Department has now conducted 
these reviews in accordance with section 751 of the Tariff Act of 1930, 
as amended (the Act).

Scope of the Review

    Imports covered by these reviews are shipments of elemental sulphur 
from Canada. This merchandise is classifiable under Harmonized Tariff 
Schedule (HTS) subheadings 2503.10.00, 2503.90.00, and 2802.00.00. 
Although the HTS subheadings are provided for convenience and for U.S. 
Customs purposes, the written description of the scope of this finding 
remains dispositive.
    The periods of review are December 1, 1992 through November 30, 
1993, and December 1, 1993 through November 30, 1994. The 1992/1993 
review covers eleven companies, and the 1993/1994 review covers five 
companies.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994. Pursuant to section 291(a)(2)(B) of the 
Uruguay Round Agreements Act (URAA), the provisions of that Act apply 
only to reviews requested on or after January 1, 1995. Thus, although 
the 1993/1994 review was initiated after the effective date of the 
amendments pursuant to the URAA, those provisions do not apply to this 
review.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case and rebuttal briefs from Pennzoil 
and Freeport-McMoRan Inc. (petitioners), Husky, and Mobil.

Comment 1

    Husky argues that the Department incorrectly assigned all of the 
common costs for a particular Husky facility solely to liquid 
production when the majority of the work and the costs in that facility 
related to forming of sulphur for later sale. Husky argues that there 
are three ``direct'' functional units within this facility--remelt 
(remelting sulphur which has been poured to block), block (pouring 
sulphur on the ground when it cannot be sold) and forming (forming 
liquid sulphur into solid shapes). Husky asserts that the Department 
determined again in these reviews that of those three units, only the 
remelt and block units incur joint costs--i.e., costs applicable to the 
production of liquid sulphur. Husky argues that the ``common'' costs 
(e.g., cost associated with road maintenance) at the facility relate to 
the entire complex. Husky contends that those common costs cover all 
three direct functional units. Husky asserts that in its questionnaire 
responses in the 1992/93 and 1993/94 reviews, Husky defined all of the 
merchandise produced for this complex as formed sulphur. Husky contends 
that it was therefore unnecessary to split the common costs among the 
three direct functional units within the facility. Husky argues that if 
all of the costs, both direct and

[[Page 37971]]

common, were being allocated to the same product, the common cost at 
this facility did not need to be split by functional unit.
    Husky argues that, in calculating the preliminary margin, the 
Department split Husky's submitted costs for the facility between 
liquid and formed sulphur. Husky contends that the Department correctly 
designated the direct cost centers as either joint or formed costs 
consistent with the structure of this facility and the same categories 
of costs incurred in another Husky facility. However, Husky argues that 
the Department erred by failing to allocate any common costs to formed 
sulphur. Husky argues that the common costs are not allocable solely to 
liquid, but are costs incurred to operate the three functional units. 
Husky asserts that allocating all of the common costs to liquid sulphur 
belies not only the fact that the majority of the common costs relate 
solely to forming the sulphur but also the Department's method of 
allocating the common costs at other Husky facilities. Husky argues 
that the Department should revise its calculation to (a) split the 
common costs among the direct units in this facility, and (b) allocate 
to liquid sulphur only the costs associated with the joint functional 
units.
    Petitioners argue that Husky mischaracterizes the Department's 
treatment of the common costs at this facility, and that the Department 
properly treated the costs at this facility as costs common to the 
production of liquid and formed sulphur. Petitioners assert that the 
Department allocated the costs of this common cost center to liquid and 
formed sulphur equally on a per unit basis. Petitioners contend that 
the Department include the same per-unit amount of common costs in the 
cost of manufacturing (COM) of liquid and formed sulphur because it 
treated those as common costs incurred for both liquid and formed 
sulphur production, consistent with the Department's treatment of such 
costs in the 1991/92 review. Petitioners argue that the Department 
should reject Husky's argument that the Department should allocate the 
common costs to the other direct cost centers at this facility based on 
the costs in those cost centers.
    Petitioners argue that under Husky's allocation method the per-unit 
COM for liquid sulphur would fall. Petitioners argue that this result 
would be distortive because the record shows that the cost incurred for 
handling and storing liquid sulphur are significant. Further, 
Petitioners assert that Husky incurs most if not all of these common 
costs regardless of whether this facility's sulphur is formed or sold 
in liquid form. Thus, Petitioners argue, the per-unit COM of liquid and 
formed sulphur should contain the same per-unit amount of these common 
costs based on the total costs divided by the volume of sulphur that is 
sold in either liquid or solid form.
    Petitioners argue that, unlike the general facilities costs of the 
sulphur handling at another Husky facility, the common costs in this 
cost center are not merely indirect overhead costs incurred for the 
other cost centers. In addition, Petitioners contend that the sulphur 
handling at this other Husky facility has a larger number of separate 
direct cost centers than at this facility. Petitioners argue that the 
Department treated certain direct cost centers as common costs 
allocated equivalently to liquid and formed sulphur on a per-unit 
basis. Petitioners argue that the Husky facility that is the subject of 
this comment had rail facilities and liquid off-loading capability, but 
that Husky identified no separate cost centers for these operations at 
this facility. Petitioners contend that some or all of the direct costs 
associated with these facilities therefore must be recorded in the 
common cost center. Petitioners argue that these common costs should be 
properly treated as common costs included in the COM of liquid and 
formed sulphur on an equivalent per-unit basis.
    Petitioners contend that Husky's assertions regarding the nature of 
this facility's cost centers are unsupported by the record because 
Husky failed to provide a description of each cost center at this 
facility and to identify the costs included in each cost center, as 
explicitly required by the supplemental cost questionnaire. Petitioners 
argue that the Department should reject Husky's argument that the 
Department should reallocate the common costs at this facility.
    Department Position: We agree with Husky that the ``common'' costs 
for a particular facility should be allocated to all of the direct cost 
centers at that facility. For the preliminary results, common (general) 
costs for all facilities were allocated to sulphur based on the direct 
cost centers which relate to the functional units within the facility. 
While certain cost centers were considered joint or ``common'' at one 
Husky facility and allocated equivalently to liquid and formed sulphur 
on a per-unit basis, these cost centers contained direct expenses which 
were applicable to both liquid and formed sulphur. At the facility 
subject to this comment, it is appropriate to treat the costs in this 
``common'' cost center as indirect. The other reported sulphur cost 
centers at this facility are direct; because this facility must incur 
common (indirect) expenses, it is reasonable to conclude that those 
indirect expenses are included in the ``common'' cost center. 
Therefore, we have treated these costs as general expenses and 
allocated them to all functional units of the facility based on the 
direct cost centers.

Comment 2

    Husky argues that the Department significantly overstated the 
amount of depreciation applicable to the sulphur production at the 
facility discussed above by categorizing the ``common'' costs for the 
facility as direct costs. Husky asserts that, consistent with what it 
expected to be the Department's final decision in the 1991/92 review, 
in this review it provided a depreciation allocation based on direct 
costs. Husky argues that the Department accepted the depreciation 
figures submitted on a direct cost basis for Husky's other facilities; 
however, for this facility the Department altered Husky's submitted 
calculation, which Husky argues was entirely consistent with its 
calculations at its other facilities, by reclassifying the common costs 
for this facility from a common cost to a direct cost category.
    Husky points out that it allocated depreciation on the basis of the 
direct costs incurred at each facility. Husky argues that, like the 
sulphur costs, the gas/oil costs factored into the allocation ratio 
were limited to the direct costs charged to the leaseholds and, 
accordingly, do not include the common costs associated with those 
functional units. Therefore, Husky argues, by adding the common cost 
for this facility to sulphur costs for purposes of the depreciation 
allocation without adding the common costs for the gas facilities to 
total costs, the Department significantly overstated the ratio and 
allocated a disproportionate share of the depreciation expense to 
sulphur.
    Petitioners argue that, if the Department were to exclude the 
common sulphur handling costs at this facility as Husky argues, the 
percentages of depreciation allocated to the sulphur handling at this 
facility would be drastically reduced from those used in the 
preliminary results of these reviews. Petitioners argue that the 
Department's operating cost method for allocating facility-wide 
depreciation is based on the assumption that the relative operating 
expenses incurred in a particular part of a plant is a measure of the 
relative significance of the physical plant, and thus depreciation, for 
that part of the plant.

[[Page 37972]]

    Petitioners argue that, under the depreciation allocation 
methodology adopted by the Department in the 1991/92 review, the 
Department included all sulphur handling costs, including indirect 
costs, in the calculation of relative amounts of plant-wide 
depreciation allocated to gas processing assets and sulphur handling 
assets. Petitioners assert that the Department should reject Husky's 
argument that without adding the common costs for gas facilities to 
total facilities costs for purposes of the depreciation allocation, the 
Department significantly overstated the ratio of direct sulphur 
expenses to direct facility-wide expenses and allocated a 
disproportionate share of depreciation expenses to sulphur. Petitioners 
contend that Husky failed to report liquid sulphur storage costs 
incurred at the gas processing facility after the point of sulphur 
recovery, and that a portion of the general facilities costs at that 
facility are therefore attributable to liquid sulphur storage. 
Petitioners argue that including these liquid storage costs and the 
associated general facilities costs in the calculation of depreciation 
would increase the depreciation attributable to the sulphur handling 
assets at this facility. Petitioners also argue that the absence of gas 
processing general facilities costs from the calculation of 
depreciation is due to Husky's failure to report those costs. 
Petitioners argue that this failure should not result in the exclusion 
of these common sulphur handling costs from the calculation of 
depreciation. Petitioners argue that excluding the common costs for 
this facility from the depreciation calculation rewards Husky for its 
failure to allocate depreciation by the methodology adopted by the 
Department in the 1991/92 review. Petitioners contend that Husky's 
characterization of the common costs of this facility as indirect costs 
is unsupported by the record, as Husky identified those costs as direct 
in its supplemental questionnaire responses. Petitioners argue that 
Husky failed to provide a description for each cost center or 
functional unit, and to identify the costs included in each. 
Petitioners contend that, in light of Husky's failure to provide this 
information, there is absolutely no basis for any adjustment of the 
Department's allocation of depreciation based on Husky's unsupported 
assertions.
    Department Position: We agree with Husky. Consistent with the 
Department's practice in these reviews, Husky allocated depreciation 
based on direct costs charged to each functional unit at each facility. 
Husky treated these expenses as indirect in the cost calculation 
submitted to the Department. Absent any evidence on the record 
indicating that these expenses are direct, we believe it is reasonable 
to treat these common expenses as indirect. Accordingly, we did not 
include these expenses in the allocation of depreciation. We agree that 
including common costs for sulphur while excluding common costs for gas 
results in the allocation of a disproportionate share of depreciation 
expenses to sulphur. Therefore, we have not included the ``common'' 
cost center for this facility in the calculation of depreciation for 
these reviews.

Comment 3

    Husky argues that the Department inadvertently included the block 
costs from one facility in the calculation of the costs of another 
Husky facility for the 1993/94 review. Husky argues that there is no 
basis to have done so. Husky argues that the Department must therefore 
deduct these expenses in the final results.
    Petitioners argue that the Department determined in the preliminary 
results that ``[s]ince [this facility] poured sulphur to block during 
this review period, and did not report block storage costs, we have 
added to the COM for [this facility] the block storage costs and 
depreciation expense calculated for the [other facility].'' Petitioners 
argue that the record establishes that the Department's determination 
was entirely proper. Petitioners assert that block storage was not 
listed among the direct cost centers identified for the particular 
facility. Petitioners argue that the Department should not assume that 
a particular reported cost relates to pouring sulphur to block given 
Husky's failure to describe these costs as required by the Department's 
cost deficiency questionnaire. Petitioners argue that, accordingly, the 
Department should continue to include the block storage costs from the 
other facility in the cost calculation for this facility.
    Department Position: We disagree with Husky. The record shows that 
the facility in question incurred block storage costs. As noted by 
petitioners, we stated in the preliminary analysis memo that because 
block storage costs were not reported for the one facility, we used the 
block storage cost and depreciation allocated to block storage 
calculated for another Husky facility as best information available 
(BIA) and added it to the COM for the one facility for which Husky did 
not report block storage costs.

Comment 4

    Husky argues that the Department's resort to BIA for a particular 
facility has no basis in fact or law. Husky contends that it explained 
in the 1991/92 review and subsequent reviews that, unlike its 
production at other facilities, sulphur formed at this facility was not 
actually produced by Husky. Husky argues that the sulphur at this 
facility is purchased from another company's gas production. Husky 
asserts that, in the 1991/92 review, it supplied the Department with 
all of its data from this facility and the Department refused to 
consider that data. Husky argues that the Department's decision to 
disregard its 1991/92 determination and impose BIA on Husky in these 
reviews was based in large part on the Department's mischaracterization 
of its prior decision to exclude that facility's costs. Husky contends 
that what the Department fails to mention in trying to distinguish 
1991/92 from the reviews at issue here is that Husky did not base its 
reported costs at that facility in the 1991/92 review solely on its 
purchase price. Husky argues that it also provided the Department with 
lease statistics which Husky argues the Department was uninterested in 
using to account for that facility's costs. Husky argues that as it 
prepared questionnaire responses for the subsequent reviews, it had no 
reason to believe that the Department's position would change with 
regard to this facility, particularly when the facts did not.
    Furthermore, Husky argues that, had the Department asked 
specifically for this facility's costs in these reviews, Husky would 
have provided whatever data was available, exactly as it had done in 
1991/92. Husky asserts that the Department's request that Husky account 
for the costs of 90% of its production is not the same as a request for 
this particular facility's costs. Husky contends that the record in 
this case delineates clearly Husky's internal distinction between 
sulphur that is produced from Husky's own oil and gas and purchased 
sulphur. Husky argues that it is undisputed that purchased sulphur is 
not considered production by Husky in the normal course of business. 
Husky argues, ``[b]efore [Commerce] may find any non-compliance on the 
part of the parties to the proceeding, there must be a clear and 
adequate communication requesting the information.'' Usinor Sacilor, 
Sollac, and GTS v. United States, 872 F.Supp. 100, 1010 (CIT 1994). 
Husky argues that as a matter of law, therefore, the Department's 
failure to distinguish its rejection of Husky's data from this

[[Page 37973]]

particular facility in the prior review or, under the circumstances, to 
make its request for the identical data more precise, limits the 
Department's discretion to penalize Husky with BIA, cooperative or 
otherwise. Accordingly, Husky argues that, as in 1991/92, this facility 
should be excluded from the analysis.
    Husky argues that even if the Department's request for this 
facility's costs had been clear, allocating the highest costs to this 
facility is not reasonable. Husky asserts that the Department's 
statutory mandate with respect to calculating costs and constructed 
value is to base those calculations on the actual costs incurred. Husky 
contends that this edict does not wane merely because a respondent 
fails to spell out every nuance of its costs. Husky argues that even if 
the Department resorts to cooperative BIA, the Department is not 
relieved of the obligation to make an inference reflective of the 
respondent's actual costs (i.e., a neutral inference). Husky argues 
that assuming the Department did make a clear request for this 
facility's data in these reviews, the Department was by no means 
compelled to penalize Husky by allocating to this facility the highest 
costs of any of Husky's facilities. Husky argues that the Department 
should determine the weighted-average cost of Husky's other reported 
facilities and allocate that per-unit cost over the volume of sulphur 
which flows through this particular facility. Husky asserts that the 
Department would, at the very least, calculate a weighted-average cost 
reflective of the apparent differences in Husky's various facilities 
and Husky's actual costs.
    Petitioners argue that, regardless of what occurred in the 1991/92 
review, the Department clearly required Husky in this review to report 
costs at all facilities accounting for 90% of Husky's sulphur 
production. Petitioners contend that, as the Department found, Husky's 
submitted sulphur production volume data show that it was necessary to 
report this facility's cost to satisfy that requirement. Petitioners 
argue that this facility's sulphur is Husky production under any normal 
definition of production. Petitioners assert that Husky owns and 
operates the facility's sulphur handling facilities, and thus incurred 
sulphur production costs under the Department's methodology. Moreover, 
Petitioners argue, in the cost deficiency questionnaire, the Department 
specifically requested that Husky provide the 1994 operating statements 
for this facility. Petitioners assert that by requesting the operating 
statement for this facility, the Department not only clearly indicated 
that it considered costs at this facility necessary in this review, but 
that it required Husky to report those costs because this facility's 
operating statement contains sulphur handling costs.
    Petitioners dispute Husky's claim that even if the Department's 
request for this facility's costs was not clear, assigning the highest 
COM calculated for any other Husky plant to this facility is not 
reasonable and the Department should instead base the cost at this 
facility on the weighted-average cost of the other Husky facilities. 
Petitioners argue that the Department's established practice is to use 
adverse BIA when a respondent fails to provide necessary and requested 
information; otherwise, respondents would have no incentive to provide 
information. Petitioners note that Husky cites the recent amendments to 
the statute for the proposition that the Department's statutory mandate 
with respect to calculating costs and constructed value is to base 
those calculations on the actual costs incurred. Petitioners argue 
that, in this case, Husky prevented the Department from calculating its 
cost of production and constructed value based on the actual costs 
Husky incurred by withholding its production costs at this facility. 
Furthermore, Petitioners assert that, in the recent amendments to the 
statute, Congress codified the Department's adverse BIA practice and 
added a provision that specifically permits the Department to make 
adverse inferences when a party fails to cooperate by withholding 
requested information, as Husky did in this review. Therefore, 
Petitioners argue, the Department should apply adverse BIA to determine 
costs at this facility.
    Department Position: We disagree with Husky. It was appropriate for 
the Department to apply BIA to this particular facility because Husky 
failed to report costs for the facility. As the petitioner noted, we 
specifically asked for the operating statements for this facility in 
the supplemental cost questionnaire. We also asked for costs for 
facilities accounting for 90% of Husky's sulphur production. Although 
Husky purchased the sulphur from another company's gas production, the 
record shows that Husky owns and operates the sulphur handling 
facilities. As the Department determined in the 1991/92 review, the 
sulphur costs which should be reported are the sulphur handling costs 
(i.e., those sulphur costs incurred after the sulphur recovery unit). 
Husky incurs these costs for the sales of its sulphur from this 
facility. Therefore, sulphur from this facility would be considered 
Husky production and the costs should have been reported as Husky 
reported the production volume from this facility. Because the costs 
from this facility were not used in a previous administrative review 
does not mean that Husky can unilaterally decide that such costs need 
not be reported in another administrative review of the same case, 
especially when Husky was requested specifically to report such costs.
    We agree with petitioners that the COM applied to the production 
from this facility should be adverse since Husky did not report the 
required cost, but disagree that we should use the highest cost for 
each component of the COM from the other Husky facilities to determine 
the COM for this facility. Therefore, we have continued to apply the 
highest COM from a facility which was reported to this facility's 
production volume.

Comment 5

    Husky argues that the costs of pouring liquid sulphur to block are 
not logically allocated to sulphur production. Husky argues that, in 
the preliminary decision in these reviews, the Department allocated 
sulphur block costs at a particular Husky facility over the total of 
the volume of sulphur poured to block and the volume of liquid and 
formed sulphur produced. Husky argues that the Department did not 
allocate sulphur handling costs over this same volume. Husky asserts 
that the Department ignored the block volumes in allocating the sulphur 
handling costs but then included block volumes in weight averaging the 
COM. Husky contends sulphur poured to block cannot be sulphur 
production for purposes of weighing costs if it is not production for 
purposes of allocating those costs. Husky argues that sulphur block is 
a cost associated with Husky's primary operations of oil and gas 
production. Husky argues that it pours sulphur to block to produce 
natural gas and/or oil. Husky argues that the costs incurred to pour 
sulphur to block are indistinguishable from costs incurred to convert 
corrosive hydrogen sulphide to elemental sulphur. Husky contends that, 
while the Department has said that Husky's block costs should be 
allocated to sulphur because Husky has the choice of either selling the 
liquid sulphur, forming it for overseas sale, or pouring it to block, 
Husky's only real choice is to sell the sulphur. Husky argues that if 
it does not sell the sulphur it must either cease natural gas or oil 
production or pour the resultant sulphur on the ground. Husky asserts

[[Page 37974]]

that the Department itself acknowledged in the prior review that 
ceasing gas/oil production is not a realistic choice.
    Further, Husky argues that the fact that it maintains no inventory 
value for block sulphur and has not remelted significant volumes of 
block in years undermines the inference that Husky pours sulphur to 
block as a means of long-term storage. Husky contends that it pours to 
block as a means of disposal, the only means currently available to 
Canadian gas/oil producers. Husky argues that the Department's decision 
to allocate block costs to sulphur is further complicated by the fact 
that sulphur is not sold at many Canadian gas/oil facilities but 
instead poured to block as an unavoidable consequence of gas/oil 
production. Husky contends that sulphur handling facilities do not 
exist at some plants and the sulphur must be poured to block because it 
cannot be sold. Husky argues that for the Department to allocate block 
costs to sulphur at a plant that contains sulphur handling facilities, 
yet ignore block costs incurred at facilities where there are no 
sulphur handling facilities, is inconsistent with the Department's 
prior decision to make cost determinations on a company-wide basis. 
Husky argues that block cost is either a gas/oil cost or a sulphur 
cost, and that if a facility cannot allocate the cost over sulphur 
(because none is sold), the cost allocation methodology will invariably 
differ from facility to facility. Husky argues that, based on these 
inherent inconsistencies, the Department should eliminate the block 
cost from the sulphur cost and treat the cost as a cost of Husky's 
primary operation.
    Petitioners argue that the Department unequivocally rejected 
Husky's argument that block storage costs should be associated with oil 
and natural gas production in the final results of the 1991/92 review. 
Petitioners argue that Husky has not raised any new arguments or cited 
new facts that would warrant reconsideration of this determination. 
Petitioners contend that, although Husky claims that it pours sulphur 
to block as a means of disposal, Husky has publicly acknowledged that 
its sulphur storage facilities are designed to enable it to stockpile 
sulphur for later sale. Petitioners contend that, in light of the 
foregoing, the Department should reject Husky's argument that its 
sulphur block storage costs should not be attributed to sulphur 
production.
    Department Position: We disagree with Husky. Consistent with the 
Department's decision in the 1991/92 review, we determined that block 
costs are appropriate to include as part of the cost of producing 
sulphur. We stated, in the 1991/92 review, that:

    * * * inclusion of the direct operating and general facility 
costs related to sulphur block storage in CV is appropriate * * * 
all costs incurred after the liquid sulphur recovery unit relate to 
the production of sulphur. At this point in the production process, 
Husky has the choice of either selling the liquid sulphur, forming 
it for overseas sale, or pouring it to block for long-term storage. 
All of these choices relate to selling sulphur, either currently or 
in the future. Accordingly, we consider it appropriate to include, 
as part of the cost of producing sulphur, all costs incurred in the 
block storage lease.

Elemental Sulphur From Canada; Final Results of Antidumping Finding 
Administrative Review, 61 FR 8239 (March 4, 1996) (1991/92 Final)

    Husky has not raised new arguments or presented new evidence that 
would warrant a reconsideration of this determination.
    We disagree with Husky that the Department would be inconsistent 
with its decision to make cost determinations on a company-wide basis 
by including the block from some facilities and ignoring block costs 
from facilities which do not have sulphur handling facilities. Because 
sulphur poured to block must be remelted and then processed through 
either liquid or forming facilities before it can be sold, block 
sulphur is not considered finished production. We required Husky to 
account for at least 90 percent of its total production volume in 
reporting costs. A facility which does not have sulphur handling 
facilities and, therefore, does not produce sulphur for sale, would not 
be a facility Husky was required to report. Therefore, the Department 
would not be inconsistent because the weighted-average cost of 
manufacturing of sulphur would include the sulphur costs from 
facilities representing 90 percent of Husky's sulphur production as 
required.

Comment 6

    Husky argues that if the sulphur poured to block is considered 
production, as the Department preliminarily decided in these reviews, 
it should be treated consistently. Husky contends that either sulphur 
poured to block must be considered a separate type of liquid sulphur, 
with only block costs allocated to the block production, or, at the 
very least, the total costs incurred for sulphur production at a 
particular facility must be allocated over total production, including 
the quantity of sulphur poured to block. Husky argues that, in its cost 
responses in the current reviews, it allocated the costs charged to the 
functional unit associated with block over the total sulphur handling 
throughput and block production. Husky maintains that the remaining 
costs were allocated over the sulphur handling throughput quantity to 
arrive at a single cost for marketable sulphur. Husky argues that it 
used the sulphur handling throughput quantity in the calculation of the 
weighted-average cost for all Husky-produced sulphur. Husky argues that 
because block sulphur does not flow through any units other than the 
sulphur block leasehold, it is in effect, a different product and 
accordingly Husky calculated a separate per-unit cost for this product. 
Husky argues that if block sulphur is to be considered production at 
all, it should be defined as a separate product with separate costs. 
Husky argues that, under that approach, only the costs of the lease 
associated with block costs would be charged to block sulphur. Husky 
contends that, if block sulphur is not treated as a separate liquid 
product, the Department must reallocate all costs over the block and 
sulphur handling throughput volumes. Husky contends that it is a well-
established principle of accounting that costs increase when throughput 
decreases. Accordingly, Husky contends, if the block volume had been 
processed at the sulphur handling facility the cost would have 
decreased significantly. Husky argues that the Department's failure to 
allocate all sulphur production costs over the total of block volume 
and sulphur handling throughput volume and its decision to include the 
block volume in weight averaging the COM significantly distort the 
facility's actual costs and must be remedied.
    Petitioners assert that, contrary to Husky's allegations, there is 
nothing inconsistent about the Department's treatment of block storage 
volume. Petitioners argue that it is the Department's longstanding 
practice to calculate the weighted-average COM based on the 
respondent's production volume at each facility whose costs are 
included in the weighted-average COM. Petitioners argue that the volume 
of liquid sulphur production at a plant is the volume of liquid sulphur 
produced, regardless of whether that sulphur is sold in liquid form, 
formed for the purpose of overseas shipments, or inventoried in block 
form for later sale. Petitioners contend that contrary to Husky's 
argument that block sulphur inventory is not marketable, the Department 
determined in the 1991/92 review that liquid sulphur poured to block 
has inventory value and that Husky has publicly acknowledged its

[[Page 37975]]

sulphur storage facilities are designed to enable it to stockpile 
sulphur for later sale. Accordingly, petitioners argue, the Department 
properly included block volume in its calculation of the weighted-
average COM of Husky sulphur.
    Petitioners argue that the Department calculated per-unit sulphur 
handling costs in a manner that is both logical and consistent with its 
longstanding practice. Petitioners assert that the Department 
calculated per-unit sulphur handling costs by dividing the total cost 
incurred at each sulphur handling leasehold by the quantity of sulphur 
passing through that leasehold. Petitioners assert that this approach 
properly recognizes that direct operating costs are a function of 
throughput. Petitioners contend that the record establishes that the 
sulphur poured to block passes exclusively through the sulphur block 
leasehold and does not pass through the other sulphur handling 
leaseholds. Petitioners argue that volumes that do not pass through the 
sulphur handling leaseholds cannot be included in the calculation of 
per-unit costs; to do so would artificially reduce Husky's per-unit 
sulphur handling costs. Petitioners argue that Husky's claim that per-
unit direct operating costs at the various sulphur handling leaseholds 
would decrease if block volume were to pass through them is purely 
speculative. Petitioners assert that, as throughput increases, total 
operating costs will increase as well. More importantly, petitioners 
assert, if the Department were to adopt Husky's methodology and include 
the volume poured to block in calculating per-unit sulphur handling 
costs, the portion of sulphur handling costs allocated to block storage 
would never be included in the COM of sulphur. Petitioners argue that 
block sulphur is sold only after it is remelted and because the costs 
of the block storage are not included in the costs of remelting block 
sulphur, the portion of sulphur handling costs allocated to the 
quantity of sulphur poured to block would never be captured.
    Petitioners contend that Husky's argument that the Department 
should treat block sulphur as a separate product would be directly 
inconsistent with the Department's treatment of block storage costs in 
the 1991/92 review. Petitioners assert that there is no legal or 
factual basis for treating block sulphur as a separate product. 
Petitioners contend that Husky's proposed treatment of block storage 
costs artificially reduces the COM of sulphur.
    Department Position: We have determined that block storage costs 
are appropriately included in the cost of producing sulphur and that 
sulphur poured to block is not considered production. See our response 
to comment 5. Further, we do not consider sulphur poured to block to be 
a separate liquid sulphur product. Because we do not consider sulphur 
poured to block sulphur production, we have not included the volume of 
sulphur poured to block in allocating sulphur costs and weight-
averaging the COM, and, therefore, have not allocated any sulphur costs 
to sulphur poured to block.

Comment 7

    Petitioners argue that Husky's failure to report crucial data and 
to follow the Department's methodology in calculating the COM and 
constructed value (CV) of its sulphur requires the use of total BIA to 
establish Husky's margin. Petitioners contend that the statute requires 
the Department to use BIA ``whenever a party * * * refuses or is unable 
to produce information requested in a timely manner and in a form 
required, or otherwise significantly impedes an investigation.'' 
Section 776(c) of the Act.
    Petitioners argue that, in view of the wholesale nature of Husky's 
failure to report required cost data and its general failure to follow 
the Department's methodology in calculating the COM and CV of its 
liquid and formed sulphur despite the Department's repeated explicit 
instructions to do so, the Department must resort to total (not 
partial) BIA for Husky. Petitioners assert that the Department applies 
partial BIA when a respondent's submission is deficient in limited or 
minor respects but as a whole is still considered reliable. Petitioners 
contend that the deficiencies in Husky's reported data are not limited 
or minor. First, petitioners argue that Husky failed to provide its 
production volume of liquid sulphur at all facilities, as required by 
the cost and supplemental cost questionnaires. Second, Husky did not 
provide the sulphur handling, storage and forming costs for the 
facilities accounting for 90% of its liquid and formed sulphur 
production. Third, Husky excluded the liquid sulphur handling costs at 
a particular facility from its weighted-average COM for liquid sulphur. 
Fourth, Husky did not include in its reported costs all of the sulphur 
production costs required by the Department's methodology, including 
costs associated with liquid storage at a particular facility. Fifth, 
Husky did not provide requested information to support the sulphur 
costs it elected to provide. Sixth, Husky did not follow the 
Department's methodology in allocating plant-wide depreciation expenses 
to sulphur and natural gas, and did not directly assign the cost of 
very significant sulphur handling assets to sulphur. Finally, Husky 
reported a COM for liquid sulphur that is based entirely on one 
particular facility. Petitioners argue that in such circumstances the 
Department does not apply partial BIA.
    Petitioners argue that, in the 1993/94 review, Husky reported a 
weighted-average COM and a CV for liquid sulphur in this review which 
is less than the public CV reported in the 1991/92 review, which the 
Department adjusted upward.
    Petitioners argue that Husky has not claimed its real sulphur 
production costs have decreased. Accordingly, petitioners assert, using 
the same methodology in this review as in the 1991/92 review should 
yield comparable CVs. Petitioners argue that Husky failed to even offer 
an explanation for the massive decrease in its reported costs in this 
review period. Petitioners argue that the enormous reduction in Husky's 
reported CV is in part attributable to identifiable fundamental 
deficiencies in Husky's reported data.
    Petitioners argue that, in selecting total BIA, the Department 
applies its established two-tier methodology. When a respondent submits 
questionnaire responses but fails to provide the information in a 
timely fashion or in the form required, Husky notes, the Department 
will normally assign to that company the higher of (1) the highest rate 
ever applicable to that company from the less-than-fair-value 
investigation or a prior administrative review, or (2) the highest 
calculated rate in the current review for any respondent. Petitioners 
assert, however, that the Department is not constrained by this 
methodology, particularly when use of an alternate source is necessary 
to make adverse inferences sufficient to induce cooperation and ensure 
that the application of BIA does not reward noncompliance. Petitioners 
argue that the 1992/93 review presents such a case. Petitioners contend 
that applying the Department's sulphur cost methodology to the 1992/93 
data reported by Husky, even without the costs Husky failed to provide, 
shows that the margin is dramatically higher than the highest rate 
previously assigned to Husky. Petitioners urge the Department to 
continue to apply its cost methodology to Husky for the final results, 
but as total BIA, making appropriate adverse inferences where Husky 
failed to provide requested information.

[[Page 37976]]

    Petitioners assert that the Department only departs from its two-
tier methodology in limited circumstances, i.e., where the application 
of that methodology would reward a respondent's noncompliance and 
therefore would not induce cooperation. Petitioners assert that such 
circumstances are not present in the 1993/94 review and that the 
Department departed from its two-tier method in establishing what 
petitioners term a BIA margin for Husky in the preliminary results. 
Petitioners argue that, if the Department calculates a rate for Husky 
in the 1992/93 review which is at all reflective of the actual margin, 
that rate will be the highest for Husky in any current or any preceding 
segment of this proceeding. Therefore, petitioners claim, that rate 
will be the proper rate to assign to Husky in the 1993/94 review under 
the two-tier methodology, even if Husky is deemed to be a cooperative 
respondent in the 1993/94 period. Petitioners urge the Department to 
assign to Husky, for the 1993-94 period, the rate calculated for Husky 
for the 1992-93 period. Petitioners contend that responses in the 1993/
94 review are at least as deficient as in the 1992/93 review yet the 
BIA margin in the 1993/94 review for Husky is less than one-third the 
margin for Husky in the 1992/93 review. Petitioners argue that Husky 
has no incentive to report its complete sulphur costs as required if 
the Department departs from its normal two-tier methodology and 
calculates a margin for Husky.
    Husky argues that there is no basis for imposing any BIA penalties 
on Husky. Husky asserts that, as the Department recognized in preparing 
the preliminary decision, Husky provided more than sufficient data for 
calculating Husky's cost of production. Husky cites the preliminary 
results of these reviews where the Department stated, ``* * * we are 
able to calculate a margin for Husky in each review using data which 
has been provided * * *.'' Husky contends that petitioners' request 
that additional BIA be applied or total BIA replace Husky's verifiable 
responses has no basis in law. Husky asserts that it is well 
established that the Department will rely on information submitted by 
the respondent even if the Department must make small adjustments to 
the data. See, e.g., Certain Fresh Cut Flowers from Mexico; Final 
Results of Antidumping Administrative Review, 57 FR 19597 (1992); Final 
Determination of Sales at Less Than Fair Value: Certain Small Business 
Telephone Systems and Subassemblies Thereof from Taiwan, 54 FR 42543 
(1989). Moreover, Husky notes that the Department has stated: ``in 
cases where the respondent has substantially cooperated with the 
Department * * *, we [the Department] do[es] not typically apply total 
BIA, but rather partial BIA to the particular deficiencies in a 
respondent's questionnaire response.'' Dynamic Random Access Memory 
Semiconductors of One Megabit or Above From the Republic of Korea; 
Final Results of Antidumping Administrative Review, 61 FR 20216 (1996). 
Husky argues that it provided all data necessary for the Department's 
analysis and to the extent that data required the Department's 
adjustment, the Department had the requisite information.
    Department Position: We agree with Husky that total BIA for Husky 
is not warranted. Husky has cooperated with the Department and provided 
sufficient information for the Department's analysis. In comments 8 
though 12, we have discussed the particular deficiencies alleged by 
petitioners. The Department's two-tier methodology does not apply in 
cases where we are applying partial BIA to particular deficiencies in a 
respondent's questionnaire responses, and therefore is inapplicable 
here. Thus, there is no question of the Department departing from its 
standard two-tier methodology in this case. In those instances where 
sufficient information was not provided, we applied partial BIA.
    Petitioners' comparison of Husky's public CV figure for 1991/92 
with its CV for 1993/94 is irrelevant. Each review is based on the 
facts specific to that review, and it is not unreasonable to conclude 
that Husky's costs changed significantly from one period to the next.

Comment 8

    Petitioners argue that the Department failed to account for sulphur 
general facilities costs in the calculation of depreciation expenses 
for Husky. Petitioners assert that in the 1991/92 review the Department 
included the general facilities costs assigned to sulphur and general 
facilities costs assigned to natural gas in the calculation of the 
relative amounts of plant-wide depreciation allocated to gas processing 
assets and sulphur handling assets. Petitioners argue that the 
Department failed to account for the sulphur general facilities costs 
in the calculation of depreciation expenses in the preliminary results. 
Petitioners argue that the department may have decided to depart from 
the 1991/92 methodology because Husky failed to report the general 
facilities costs it assigned to natural gas. Petitioners argue that 
this failure to report the natural gas general facilities costs should 
not result in the exclusion of the sulphur general facilities costs 
from the calculation of depreciation. Petitioners argue that the 
failure to account for the sulphur general facilities costs in the 
allocation of depreciation between sulphur and natural gas results in a 
misallocation of plant-wide depreciation expenses and rewards Husky for 
failure to provide the general facilities expense assigned to natural 
gas. Petitioners contend that this result runs contrary to the 
Department's BIA practice which holds that the application of BIA must 
be adverse and cannot reward a respondent for failing to provide 
requested information.
    Husky argues that the exclusion of general facilities costs in the 
calculation of depreciation in no way distorts the allocated ratio. 
Husky contends that, because it does not maintain a separately 
identifiable depreciation expense for sulphur handling assets, it was 
necessary for Husky to allocate a portion of plant-wide depreciation 
expenses to sulphur. Husky maintains that for that reason, it allocated 
depreciation at all of its reported facilities on the basis of sales 
value and, alternatively, on the basis of direct operating costs. Husky 
asserts that the Department accepted Husky's cost-based allocation and 
then applied the ratio in its preliminary decision. Husky argues that 
petitioners suggest that the Department add the general facilities 
expenses allocated to sulphur to the total cost figure for sulphur 
handling and add no equivalent gas/oil general facilities expenses to 
the total cost figure for the gas/oil plant. Husky contends that 
petitioners suggest this as punishment for Husky's failure to provide 
general facilities expenses related solely to gas and oil. Husky 
contends that gas/oil costs were not requested or needed by the 
Department in this review and are not subject to this or any other 
dumping order. Husky maintains that it cannot be penalized for its 
interest in protecting information sensitive to its primary commercial 
operations and outside the scope of the Department's jurisdiction. 
Husky asserts that, as the Department verified in the 1991/92 review 
and Husky explained in detail in a separate letter to the Department, 
separate general facilities expenses are maintained for sulphur 
handling at one of Husky's facilities. Husky argues that the Department 
has no basis to knowingly distort the calculation of depreciation by 
adding a cost to the numerator (sulphur handling costs) without making 
a corresponding

[[Page 37977]]

adjustment to the denominator (plant-wide costs). Husky maintains that 
its exclusion of the general facilities expenses in the allocation does 
not distort the resultant ratio. Husky argues that it excluded general 
facilities expenses from both the total, plant-wide direct cost figure 
and from the sulphur direct cost total. Husky argues that its 
allocation is reasonable and undistorted.
    Department Position: We agree with Husky. Excluding the general 
facilities expenses from the allocation of depreciation is not 
distortive and is reasonable. The general facilities expenses are 
indirect costs incurred to operate the plant which are not directly 
related to a particular function or product. When separate depreciation 
is not maintained for particular assets, using direct costs as the 
basis for the allocation of depreciation is reasonable. Even if we were 
to include indirect expenses in the allocation of depreciation, 
including the general facilities expenses related to sulphur handling 
while excluding general facilities expenses related to oil/gas from the 
calculation would be distortive. Therefore, we are continuing to use 
direct costs to allocate plant-wide depreciation for the final results.

Comment 9

    Petitioners argue that the Department understated depreciation for 
a particular complex. Petitioners assert that Husky failed to report 
whether it records separate depreciation for sulphur assets at that 
complex, including sulphur handling and storage facilities at Facility 
X and the pipeline connecting the gas plant to the sulphur handling 
facility. Petitioners assert that, in the 1991/92 review, the 
Department determined that it is distortive for antidumping purposes 
not to assign sulphur handling costs to sulphur, even if the respondent 
does not assign these costs to sulphur in its normal accounting 
records.
    Petitioners argue that, in light of this failure, the Department 
should conclude, in accordance with its BIA practice, that separate 
depreciation expenses are recorded. Petitioners contend that the 
correct amount of depreciation for the pipeline greatly exceeds the 
amount allocated by the Department and that such an allocation is 
distortive. Petitioners argue that, for the final results, the 
Department should recalculate the depreciation expenses for this 
complex by (1) reducing Husky's share of total depreciation at this 
complex by Husky's share of depreciation on the pipeline and (2) 
attributing Husky's share of depreciation on the pipeline exclusively 
to sulphur production.
    Furthermore, petitioners argue that Husky failed to report liquid 
storage costs at this complex. Petitioners contend that as a result of 
this failure, less of the complex-wide depreciation expenses at this 
complex are being allocated to sulphur production than would be the 
case if Husky had reported these costs. Petitioners argue that the 
Department should require Husky to report the liquid storage costs at 
this facility and should include such costs in the sulphur costs used 
in allocating plant-wide depreciation and in its calculation of COM and 
CV of Husky's liquid and formed sulphur in the final results.
    Husky argues that the Department overstated depreciation at this 
facility. Husky argues that petitioners assumes that Husky allocates a 
separate depreciation expense for sulphur handling at this facility in 
the normal course of business and should, therefore, not be permitted 
to allocate the cost. Husky asserts that it submitted actual costs to 
the Department and certified the reliability of that data to the 
Department. Husky argues that it clearly stated that ``[d]epreciation 
is not allocated to any products in the normal course of business.'' 
March 1, 1996 Husky Supplemental Questionnaire Response. Husky 
maintains that it cannot produce a separate depreciation expense for 
sulphur handling at this facility if one does not exist.
    Husky contends that it has reported all of the costs associated 
with sulphur handling at this facility, including its portion of the 
sulphur pipeline. Husky argues that a newspaper article describing this 
facility generally, and cited by petitioner in support of its argument 
in no way substitutes for Husky's certified submissions of factual 
data. Husky asserts that the numbers that appear in that article are 
not recorded or in any way related to Husky's books and cannot be 
verified by the Department and that the Department cannot base Husky's 
depreciation expense on a newspaper article when Husky has provided 
actual data. Husky argues that the depreciation at that facility was 
actually overstated because the Department included certain indirect, 
general facilities expenses in the allocation of depreciation. Husky 
asserts that the Department should recalculate the expenses in 
accordance with the allocation in Husky's case brief and supplemental 
cost response. See comment 2.
    Department Position: We agree with Husky. The record does not 
indicate that Husky maintains a separate depreciation expense for the 
sulphur handling facility at this particular facility. We agree with 
Husky that there is no basis in these reviews to use information from a 
newspaper article rather than information submitted by the respondent 
which is subject to verification. Therefore, it was appropriate for 
Husky to allocate depreciation to sulphur handling at this facility 
based on costs.

Comment 10

    Petitioners argue that the Department failed to use appropriate BIA 
for the COM for a sulphur-producing facility for which Husky failed to 
report costs. Petitioners point out that the Department used the 
highest COM calculated for a facility for which Husky reported cost 
data and applied that COM to this facility. Petitioners contend that, 
under the Department's established practice the COM of sulphur produced 
at the facility for which Husky did not report costs is considered 
higher than the COM of sulphur produced at the facilities for which 
Husky elected to provide cost data. (Otherwise, petitioners assert, 
Husky would have reported cost data for this facility.)
    Furthermore, petitioners argue, Husky incurred liquid loading and 
block storage costs (plus associated depreciation expenses) at the 
facility during the period of review (POR), and the COM calculated for 
the liquid sulphur facility which the Department used as BIA did not 
include amounts for these expenses. Petitioners argue that, 
accordingly, the Department improperly excluded costs that the record 
demonstrates were incurred at the facility in question. Petitioners 
assert that the Department has recognized that a calculated BIA margin 
may not exclude costs that the record shows the respondent incurred, 
citing the Notice of Amended Preliminary Determinations of Sales at 
Less Than Fair Value: Antidumping Duty Investigations of Pure and Alloy 
Magnesium from The Russian Federation and Pure Magnesium from Ukraine, 
60 FR 7519, 7520 (February 8, 1995). Petitioners argue that, in light 
of the fact the COM for this facility is presumed to be higher than the 
calculated COMs and the fact that the calculated liquid sulphur COM 
used by the Department as BIA does not include the costs of liquid 
loading, block storage and associated depreciation expenses incurred at 
the facility, the Department should recalculate COM for this facility 
by using the highest costs on record for each component of the COM of 
liquid sulphur as calculated at other Husky facilities for the final 
results.

[[Page 37978]]

    Husky argues that it did not ``elect'' facilities for which to 
report costs. Husky contends that it responded to the Department's 
request for costs accounting for 90% of Husky's production. Husky 
asserts that, based on the Department's lack of clarity regarding this 
facility and refusal to accept Husky's full and verifiable cost data at 
that facility in the 1991/92 review, Husky did not provide costs at 
that facility in this review. Husky argues that, given the confusion 
regarding the term ``production'' in this case and conflicting messages 
concerning the Department's interest in costs at this facility, there 
is no basis for inflating Husky's costs as petitioners suggest. Husky 
argues that the Department should reverse its decision to impose any 
BIA at this facility and to penalize Husky for confusion which Husky 
did not create.
    Department Position: We disagree with petitioners and, in part, 
with Husky. Husky should have reported the costs for this facility. In 
the supplemental cost questionnaires of February 2, 1996, we stated 
that Husky must account for at least 90% of its total production volume 
in reporting its costs. Furthermore, in those supplemental cost 
questionnaires, we specifically asked Husky to provide the operating 
statements for this facility:

    Please provide the 1993 operating statements for [          ]. 
If no operating statements are prepared for the facilities, or if 
such statements do not exist, provide complete expense, revenue, and 
production data, and provide copies of all internal management 
reports showing revenues, expenses, and production volumes of all 
products manufactured by the facilities during 1993.

Supplemental Questionnaire Concerning the 1992/93 Administrative Review 
of the Antidumping Duty Finding on Elemental Sulphur from Canada, 
February 2, 1996. Language in the supplemental questionnaire for the 
1993/94 period includes the same language, but requests information for 
1994. The name of the facility under discussion in this comment appears 
in brackets in both questionnaires.
    Furthermore, our decision not to use costs from this facility 
during the 1991/92 review period was based on the facts of that review, 
and in no way negates our requests for information regarding the 
facility in subsequent reviews, or precludes us from using the costs 
from that facility in future reviews. Further, use of the highest 
calculated COM from among facilities for which Husky reported costs is 
sufficiently adverse.

Comment 11

    Petitioners argue that the Department should exclude the production 
costs from a certain Husky facility from the weighted-average COM for 
the final results. Petitioners assert that Husky 1) failed to report 
labor costs for the sulphur handling facility, and 2) did not state 
whether the total depreciation amount determined for this particular 
facility was allocated to particular sections in the normal course of 
business, so that the Department cannot determine whether Husky records 
separate depreciation for the sulphur handling facility. Petitioners 
argue that, by utilizing this facility's cost, the Department permits 
Husky to manipulate foreign market value by self-selecting the 
facilities for which it is willing to provide cost data. The inclusion 
of this facility in the calculation of weighted-average COM, 
petitioners argue, further rewards Husky's failure to provide cost data 
for the facility discussed in Comment 10.
    Petitioners assert that, if the Department continues to include 
this facility's production costs in the calculation of the COM and CV 
of Husky's sulphur, it should adjust the reported production volume so 
that it reflects only Husky's share of the facility's production. 
Petitioners contend that, in the preliminary results calculations, the 
Department erred by using the total volume of liquid and formed sulphur 
sold at the facility, rather than Husky's share of total production, in 
its calculation of the weighted-average COM of Husky's liquid sulphur.
    Husky argues that the costs at this particular facility are 
legitimate and relevant to these reviews. Husky contends that 
Petitioners have themselves pointed out that it is established 
Department practice to calculate a weighted-average COM for subject 
merchandise based on the respondent's costs at all plants producing the 
subject merchandise. Husky argues that the Department must reject what 
it characterizes as petitioners' attempt to manipulate the Department 
into inflating and distorting Husky's verifiable, weighted-average 
costs.
    Department Position: We agree with Husky that it is the 
Department's practice to calculate a weighted-average COM for the 
subject merchandise based on the respondent's costs at all plants 
producing the subject merchandise. Therefore, we will continue to 
include costs from this facility in our calculation of the weighted-
average cost of Husky's sulphur production. However, we agree with 
petitioners that, in calculating that weighted-average cost for the 
preliminary results, we erred in assigning to this facility a weight 
based on all sulphur production at the facility; for the final results, 
we have assigned it a weight based on Husky's share of sulphur 
production at the facility, as we have done with other facilities in 
our calculation.

Comment 12

    Petitioners argue that the Department should make two adjustments 
to the calculation of Husky's general and administrative (G&A) 
expenses. First, the Department should exclude Husky's nonoperating 
income in its calculation of Husky's G&A expenses. Petitioners contend 
that Husky improperly offset its G&A expenses with nonoperating income 
which consists of rental income (for both review periods) and gains 
realized on the disposal of certain unidentified assets (for 1993/94). 
Petitioners assert that rental income represents income from a separate 
line of business and, in accordance with Department practice, should 
not be deducted from G&A expenses. Petitioners argue that, because 
there is no evidence on record that the gains realized on the disposal 
of certain assets were realized on the sale of sulphur assets and thus 
were linked to the production of subject merchandise, those gains 
should not be deducted from G&A.
    Petitioners argue that Husky failed to explain why reducing its G&A 
expenses with non-operating income is appropriate. Petitioners contend 
that it is Department practice, which has been upheld by the Court of 
International Trade, to require respondents to bear the burden of 
proving their right to adjustments. Koyo Seiko v. United States, Ct. 
No. 93-08-00448, slip op. 95-171 (CIT 1995); NSK, Ltd. v. United 
States, 825 F. Supp. 315, 321 (CIT 1993).
    In addition, petitioners contend that the Department improperly 
failed to include, in the calculation of G&A expenses for Husky, G&A 
expenses incurred by Husky on behalf of its parent, Husky Oil 
Operations Ltd. (HOOL).
    Husky contends that the Department properly included Husky's 
nonoperating income in, and excluded certain G&A expenses from, the 
calculation of Husky's G&A expenses. Husky argues that it reported G&A 
expenses in this review in accordance with the Department's decision in 
the 1991/92 review. Husky contends that, in that review, the Department 
included the nonoperating income amount for rental

[[Page 37979]]

income, after verifying that associated expenses were included in the 
reported cost. Husky contends that the Department was not concerned 
with inclusion of the rental income, as can be seen from the public 
verification report in that review. Husky argues that petitioners' 
general discussion of Department practice disregards the Department's 
practice in this case, the most relevant of the Department's recent 
decisions.
    Husky maintains that the Department also determined in the 1991/92 
review that it was unnecessary for Husky to include in G&A the G&A 
expenses considered to be insignificant. Husky maintains that, contrary 
to petitioners' understanding, HOOL performs all sale related services 
for Husky, which is the corporate parent. Husky argues that, based on 
the Department's decision to exclude the G&A expense incurred by Husky, 
the corporate parent, in the prior review and the overall 
insignificance of the expense, the Department should reject 
petitioners' request to include it.
    Department Position: We agree with Husky. For these reviews, Husky 
reported that these non-operating expenses were related to production. 
Because we have no evidence to the contrary, we have continued to 
include these items in the calculation of G&A.
    Because sales of subject merchandise are handled by HOOL, a portion 
of G&A incurred by HOOL is relevant to sulphur production. The 
corporate parent, Husky, does not maintain its own personnel and the 
portion of Husky G&A expenses which are not incurred by a Husky 
subsidiary and which could be allocated to sales of all Husky 
merchandise including sulphur is not significant in these reviews. 
Therefore, we have continued to exclude the G&A incurred by Husky from 
the calculation of G&A allocated to sulphur.

Comment 13

    Petitioners argue that the Department should include at least a 
portion of sulphur recovery costs in its calculation of the COM and CV 
of Husky's sulphur. Petitioners argue that the Department should 
require Husky to report the costs of sulphur recovery at each of the 
facilities for which it reported costs, in accordance with: (1) 19 
U.S.C. section 1677b(e)(1)(A), which expressly requires that the cost 
of ``fabrication or other processing of any kind'' be included in CV; 
(2) generally accepted cost accounting principles, which require all 
post-split-off costs to be included in the cost of producing by-
products; (3) the Department's practice in cases in which by-products 
are the subject merchandise, which requires that all-after separation 
costs be included in CV; (4) the Department's practice in cases in 
which by-products are not the subject merchandise, which requires that 
all after-separation costs be assigned to the by-product; (5) the 
Department's cost initiation memorandums in the 1992/93 and 1993/94 
administrative reviews in which the Department included the cost of the 
``sulphur plant'' (sulphur recovery unit) and ``plant supporting 
facilities'' (sulphur handling) in its calculation of the cost of 
producing sulphur; (6) record evidence that the sales values of sulphur 
and natural gas on a per metric ton basis were roughly equivalent from 
the mid-1980s through the early 1990s; and (7) the extensive record 
evidence that sulphur revenues were, and continue to be, important 
considerations in decisions to develop and operate major sour gas 
facilities.
    Petitioners contend that, although the Department determined not to 
include all such costs in the COM and CV of sulphur in the 1991/92 
administrative review, it did not consider whether a portion of sulphur 
recovery costs should be allocated to sulphur production. Petitioners 
argue that at least a portion of sulphur recovery costs should be 
allocated to sulphur production for the reasons enumerated above and 
because Husky made the decision to sell sulphur in both the home market 
and the United States during the POR and derived significant revenues 
from those sales. Accordingly, petitioners argue, the Department should 
require Husky to submit sulphur recovery cost data and include at least 
a portion of these costs in the COM and CV calculated for Husky for the 
final results.
    Husky argues that petitioners suggest that the Department resurrect 
the most fundamental of all of the decisions made in the 1991/92 
review--the split-off point for the sulphur by-product. Husky contends 
that, contrary to petitioners' allegations, the Department absolutely 
and unequivocally considered whether a portion of the sulphur recovery 
costs should be allocated to sulphur production in the 1991/92 review. 
Husky argues that the first half of the Department's decision in the 
1991/92 review was that the only costs allocable to sulphur are those 
incurred subsequent to the split-off point, the point at which sulphur 
exits the sulphur recovery unit. Husky contends that petitioners have 
not supported and cannot support its position that costs incurred prior 
to the split-off point are in any way allocable to the sulphur by-
product, particularly when the facts have not changed.
    Department Position: We agree with Husky. In the 1991/92 review, we 
determined that sulphur is a by-product and that all costs incurred up 
to and including the sulphur recovery unit of the gas processing 
facility (the split-off point) are allocable solely to natural gas 
production. We determined that Husky must incur the costs in the 
sulphur recovery unit in order to refine natural gas. Only costs 
incurred after the liquid sulphur exits the sulphur recovery unit of 
the gas processing facility relate to the production of sulphur. See 
1991/92 Final (Comment 3). The production process has not changed since 
the 1991/92 final, and petitioners have submitted no new information 
for the Department to reverse this issue. Therefore, consistent with 
the 1991/92 final we are not assigning any costs of the sulphur 
recovery unit to sulphur production.

Comment 14

    Petitioners argue that the Department erred in using the weighted-
average calculated cost for liquid and formed sulphur in this review as 
BIA for Husky's sales of powdered sulphur. Petitioners agree with the 
Department's determination, in the preliminary results of the 1992/93 
review, that Husky failed to report the required cost data for powdered 
sulphur. Petitioners assert that the Department must presume, as BIA, 
that the margin on Husky's U.S. sales of powdered sulphur is higher 
than the margin on its sales for which it provided cost information. 
Petitioners argue that the Department should apply the highest non-
aberrational margin calculated for any of Husky's sales during the 
period of review (POR) as BIA for each of Husky's U.S. sales of 
powdered sulphur.
    Husky argues that it was unable to provide the sulphur cost data in 
its original sales response because the company which produced powdered 
sulphur was sold during the POR. Husky contends that it tried in good 
faith to gather the requested data and did not refuse to cooperate or 
significantly impede the proceeding. For this reason, Husky asserts 
that the Department is under no legal obligation to impose a more 
severe BIA rate for the powdered sulphur in question.
    Department Position: We agree with Husky. Husky has cooperated with 
the Department in this review. The Department stated in Antifriction 
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From 
France, et al.; Final Results of Antidumping Duty Administrative 
Reviews, Partial Termination of Administrative Reviews, and Revocation 
in Part of Antidumping Duty Orders, 60 FR 10900 (February 28, 1995), 
that:


[[Page 37980]]


    In cases where the overall integrity of the questionnaire 
response warrants a calculated rate, but a firm failed to provide 
certain FMV information (i.e., corresponding HM sales within the 
contemporaneous window or CV data for a few U.S. sales), we applied 
the second-tier BIA rate * * * and limited its application to the 
particular transactions involved. See Final Results of Antidumping 
Administrative Reviews and Revocation in Part of the Antidumping 
Duty Order, Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from France, et al., 58 FR 39729, 39739 
(July 26, 1993).

Accordingly, we applied, as partial BIA for the powdered sulphur 
transactions where Husky was unable to provide us with the requested 
information, the highest rate ever applicable to Husky in this or any 
previous review. Therefore, we have continued to apply Husky's 
calculated margin on sales of liquid and formed sulphur from this 
review as BIA.

Comment 15

    Petitioners argue that Husky failed to provide required information 
regarding its property, plant and equipment writedowns. Petitioners 
note that the Department's supplemental cost questionnaire in the 1992/
93 review specifically required Husky to state whether changes in 
expected future cash flows from sulphur reserves were taken into 
account in property, plant and equipment writedowns, and if so, to 
report these writedowns. Petitioners argue that Husky did not answer 
these questions based on the Department's finding in the Final Results 
of the 1991-1992 Administrative Review that such writedowns were 
inapplicable to sulphur. Petitioners allege that the Department's 
finding in the 1991/92 review that writedowns are for property, plant 
and equipment at the plant were inapplicable to sulphur is erroneous 
because the writedowns are for property, plant and equipment, at a 
particular plant, including the sulphur handling plant and equipment 
located after the point of recovery. Since all costs are incurred after 
the point of sulphur recovery at one particular plant, petitioners 
further argue that Husky should report any writedown of property, plant 
and equipment for the 1992/93 review.
    Husky argues that property, plant and equipment writedown 
information is unnecessary to the Department's analysis. Husky contends 
that, since petitioners did not appeal the Department's decision to 
exclude the writedown in the 1991/92 review, when all the costs for the 
particular facility in question were reported, petitioners have no 
basis for its complaint in this review.
    Department Position: We agree with Husky that writedowns are for 
property, plant and equipment at the plant are not necessary for our 
analysis. In the 1991/92 review, we excluded Husky's property, plant 
and equipment writedown from the calculated sulphur costs. In that 
review, we determined that ``since such costs are associated entirely 
with exploration and development of mineral reserves, we consider this 
type of writedown to be a cost incurred prior to the sulphur production 
split-off point. As such we consider these costs to be part of Husky's 
natural gas operations.'' 1991/92 Final. There are no facts specific to 
these reviews that warrant our including a portion of property, plant 
and equipment writedown in the cost of sulphur. Therefore, we have 
continued to exclude the property, plant and equipment writedown for 
the calculation of COM.

Comment 16

    Mobil argues that it supplied the information requested by the 
Department and that the Department cannot apply BIA simply because it 
lacks the information that it believes is necessary to calculate a 
margin, but which it never requested. Mobil argues that, in this case, 
it clearly supplied the Department with a complete set of data that 
fully answers the questions asked. Mobil states that it even went so 
far as to calculate two separate sets of cost data in an effort to 
comply with the Department's requirements. Mobil argues that should 
these complete responses for some reason had not satisfied the 
Department, then the Department had an obligation to ask subsequent 
questions or give Mobil notice that its response was deficient before 
resorting to BIA.
    Mobil argues that, to the extent that the Department gave Mobil 
notice it had concerns about it response to the original questionnaire, 
Mobil responded by supplying the Department with alternative data. 
Mobil argues that the Department resorted to BIA without informing 
Mobil of any deficiencies in this second set of data, and, apparently 
without even considering it.
    Mobil argues that the Department may not properly apply BIA when a 
respondent has provided all of the information requested. Mobil cites 
Olympic Adhesives, Inc. v. United States, (Olympic Adhesives) 899 F.2d 
1565, 1574 (Fed. Cir. 1990), which states that section 1677e(b) 
``clearly requires noncompliance with an information request before 
resort to the best information rule is justified * * *.'' and Usinor 
Sacilor, Sollac, and GTS v. United States, 872 F.Supp. 1000, 1010 (CIT 
1994), which Mobil contends stated that the Department erred in 
applying BIA when respondent reported product codes according to actual 
yield strength, rather than industry standards, in absence of the 
explicit Department instructions. Mobil argues that this is true even 
if the Department discovers that it has not asked the right questions. 
Mobil cites Olympic Adhesives, 899 F.2d at 1574, which states that the 
Department ``may not properly conclude that resort to the best 
information rule is justified in circumstances where a questionnaire is 
sent and completely answered, just because the ITA concludes that the 
answers do not definitely resolve the overall issue presented.'' Mobil 
also cites to Outokumpu Copper Rolled Prods. AB v. United States, 
(Outokumpu Copper) 829 F. Supp. 1371, 1386 (CIT 1993).
    Mobil argues that in Outokumpu Copper (829 F. Supp. At 1387), the 
Department attempted to resolve an apparent conflict in the record by 
asking a supplemental question, but did not specifically refer to the 
conflict nor request the respondent to clarify its responses. Mobil 
contends that, because the respondent's answer did not resolve the 
issue, the Department applied BIA. Mobil notes that the CIT reversed 
this decision based on the fact that the respondent had completely 
answered the question asked, stating that if Commerce desired an 
explanation of the alleged conflict, it should have expressly requested 
one. Mobil also cites to Hussey Copper, Ltd v. United States, 852 F. 
Supp. 1116, 1120 (CIT 1994), which Mobil contends argues that Commerce 
erred in rejecting respondent's constructed prices because the 
respondent had no reason to believe that its methodology was 
impermissible and the Department had never indicated during the review 
that the method was unacceptable.
    Petitioners argue that Mobil failed to make a good faith effort to 
respond to the Department's cost questionnaires, and did not provide 
cost data that could possibly be used to calculate the COP and CV of 
its sulphur. Petitioners contend that in the preliminary results, the 
Department thoroughly considered the question of whether Mobil 
cooperated with the Department in this review and for a multitude of 
very good reasons determined that Mobil failed to provide a significant 
amount of requested information. Petitioners contend that Mobil's 
argument that it has been cooperative and has responded to the best of 
its ability is merely a reflection of the fundamental strategy that 
Mobil has pursued throughout this

[[Page 37981]]

proceeding. Petitioners contend that Mobil's strategy has been to claim 
that sulphur is a waste product and that, for that reason, Mobil does 
not maintain separate cost data for sulphur in its normal accounting 
system, and, therefore cannot report sulphur costs in a manner that 
would permit its actual sulphur COP and CV to be determined. 
Petitioners contend that this claim is false, that sulphur is a 
commercial product that is the source of substantial revenues to Mobil 
and other Canadian producers. Petitioners argue that Mobil has reported 
that it does not separately account for any of the joint products of 
natural gas production, including what it describes as its primary 
products such as oil, gas, condensates, and NGLs.
    Petitioners argue that, if Mobil's accounting system does not 
routinely record sulphur cost data separately, that does not mean that 
Mobil does not have in its possession, or have access to, the 
information necessary to comply with the Department's information 
requests. Petitioners contend that, while it may be true that under 
Mobil's normal accounting system the costs of producing and handling 
sulphur are labeled as something other than sulphur costs or that 
sulphur costs are commingled with certain other costs of producing the 
joint products, Mobil somewhere has a record of, or access to, cost 
data for sulphur that could be used to provide the costs that the 
Department has determined are sulphur production costs. Petitioners 
argue that, despite this, Mobil has made no real effort to derive 
sulphur costs from the information that it does have or could obtain 
from the operators of its facilities.
    Petitioners maintain that the record conclusively establishes that 
information sufficient to comply with the Department's requests was 
readily available to Mobil. Petitioners argue that Husky provided cost 
information for certain facilities, but that Mobil did not. Petitioners 
argue that, if sufficient data are available for facilities operated by 
parties other than Mobil to comply with the Department's requests, then 
Mobil also possesses sufficient information for facilities it owns and 
operates. Petitioners argue that Mobil admitted that its records 
contain full details of all costs incurred at the facility it owned and 
operated, including sulphur handling cost, yet failed to provide the 
required information for that facility. Petitioners contend that the 
record also reflects that where Mobil made even a limited effort to 
obtain requested data, it was successful. Petitioners cite, as an 
example, Mobil's ability to obtain estimates of sulphur forming cost 
for some sulphur-producing facilities it did not operate merely by 
making telephone calls to plant operators, and its ability to provide 
what Mobil described as liquid sulphur handling costs for certain 
facilities.
    Petitioners contend that Mobil attempts to diminish the importance 
of its failure to report the information requested by the Department by 
claiming that the Department asked Mobil to report costs using a 
methodology tailored to Husky's accounting system. Petitioners maintain 
that, contrary to this claim, the questions asked by the Department 
were not tailored to Husky's accounting system; rather, during the 
1991/92 review, the Department determined what it believed to be the 
proper methodology for calculating the COP and CV of sulphur. 
Petitioners argue that, in the final results of review of the 1991/92 
review, the Department determined that the sulphur recovery unit must 
be included in the COM of sulphur, and that this methodology was 
reflected in the cost deficiency questionnaire sent to Mobil, which 
required these costs to be included in the reported COM of sulphur. 
Petitioners also argue that Husky, like Mobil, reported that it does 
not separately account for sulphur in its accounting system; however, 
petitioners argue, Husky, for the most part, broke out costs in the 
manner required by the questionnaire. Petitioners contend that the same 
data were available to Mobil, and that there is no evidence that Mobil 
made any attempt to obtain these data.
    Petitioners maintain that Mobil is attempting to manipulate the 
outcome of this review by claiming that the Department can only use the 
sulphur cost data that it chose to report, which are unrepresentative, 
grossly understated, and allocated to sulphur using a patently wrong 
allocation method. Petitioners argue that the Department should reject 
this approach because, in circumstances such as these, it has been the 
Department's consistent practice to apply total BIA. Petitioner state 
that this case is analogous to Fresh Cut Flowers From Mexico; Final 
Results of Antidumping Duty Administrative Reviews, 60 FR 49569 
(September 26, 1995), where the Department found respondents that had 
submitted multiple questionnaire responses to be uncooperative because 
answers to the Department's supplemental questionnaires were 
misleading, and significantly impeded the progress of the review.
    Petitioners argue that this case is distinguishable from Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate from Canada: Final Results of Antidumping 
Duty Administrative Reviews 61 FR 13815 (March 28, 1996) (Carbon Steel 
from Canada). Petitioners contend that, unlike the respondent in Carbon 
Steel from Canada, Mobil provided costs that were unusable and severely 
understated, and that in Carbon Steel from Canada, the respondent had 
provided complete information for the mill producing the vast majority 
of the subject merchandise and supporting documentation for its 
reported costs. Petitioners contend that Mobil did not provide complete 
information for any facilities which produce Mobil-owned sulphur for 
sale, nor did it provide any supporting documentation for the costs 
that it chose to provide.
    Petitioners argue that, contrary to Mobil's assertions that it 
answered the questions asked and provided usable data (see comments 18-
23), Mobil did not provide useable cost data in either Appendix SQ-13 
or Appendix SQ-11 of its supplemental response. Instead of complying 
with the Department's instruction that it report all costs incurred 
after sulphur recovery, Mobil reported what it described as the total 
operating costs (less those costs that could be clearly identified as 
costs incurred prior to the split-off point) incurred in the production 
of all products at each facility which produces ``marketable'' sulphur.
    Petitioners claim that Mobil used an inappropriate methodology, the 
barrel of oil equivalent (BOE) methodology, to allocate a portion of 
the costs to liquid sulphur production. According to petitioners, 
Mobil's BOE methodology should not be used because the market value of 
sulphur derives from its value in fertilizer production rather than its 
thermal heat value. Petitioners state that, in the 1991/92 
administrative review, the Department was unable to verify the basis 
for the BOE Mobil assigned to sulphur, and noted in the verification 
report that this methodology, ``might not be an appropriate basis for 
the allocation of joint costs.'' Petitioners cite Mobil's supplemental 
response where Mobil reported that it employs the BOE methodology to 
account for the appropriate volume of natural gas and oil reserves on a 
uniform basis. In the supplemental response, petitioners claim, Mobil 
specifically noted that sulphur is not usually included in the 
determination of reserve volumes, and that the only time that BOE is 
used for sulphur is in conjunction with equalization of sulphur volumes 
in a planning or performance management study. Petitioners further 
argue that Mobil's BOE method is not consistent

[[Page 37982]]

with Statement of Financial Accounting Standard Board (FAS) No. 19. In 
summary, petitioners claim that the allocation of costs to sulphur 
based on a BOE allocation factor is erroneous, understates the cost of 
producing sulphur, and therefore cannot be used to derive COM. 
Petitioners claim that Mobil was inconsistent in the application of the 
BOE methodology because it did not apply the BOE allocation factor to 
its total plant costs. Instead, Mobil applied the BOE factor to its 
total plant costs ``less those costs that could be clearly identified 
as costs incurred prior to the split-off point.'' Thus, petitioners 
argue, Mobil applied its artificially low BOE allocation factor only to 
the costs which the Department determined to be sulphur costs, and to 
certain other costs which Mobil could not identify as non-sulphur 
costs.
    Petitioners further argue that Mobil made significant improper 
offsets to the costs reported in Appendix SQ-11 of the supplemental 
response. Petitioners note that, for some facilities, Mobil offset the 
reported plant costs with net income from ``contract services,'' and 
for other facilities, Mobil offset the reported costs by an amount for 
``joint interest recoveries.'' Petitioners contend that Mobil provided 
no explanation of why such offsets are necessary and provided no 
support for the calculation of the cost data contained in Appendix SQ-
11.
    Department Position: We disagree with Mobil. Mobil did not provide 
the cost data we requested. In the original questionnaires, we 
specified that, if the subject merchandise were manufactured at more 
than one facility, the reported COM should be the weighted-average 
manufacturing cost from all facilities. Mobil responded that it 
provided the weighted-average COM of sulphur for all facilities which 
produced marketable sulphur. Mobil did not base the weighted-average 
COM in the original responses on costs from all its facilities which 
produced sulphur or even all facilities that produced marketable 
sulphur.
    We further disagree with Mobil's claim that it provided the data 
requested by the Department in its response to the Department's 
supplemental cost questionnaire. (Any reference to question 11 of the 
Department's 1992/93 supplemental cost questionnaire also pertains to 
question 12 of the Department's 1993/94 supplemental cost 
questionnaire. Any reference to question 14 of the Department's 1992/93 
supplemental cost questionnaire also pertains to question 15 of the 
Department's 1993/94 supplemental cost questionnaire.) In question 11 
of our February 2, 1996 supplemental cost questionnaire, we requested 
that Mobil ``provide detailed worksheets breaking out costs for 1994 
for producing and handling sulphur by cost center or functional cost 
area,'' to ``clearly describe how, for each facility, the costs in the 
worksheet were determined and identify the source of your numbers,'' 
and to ``include in the worksheets the costs before the allocation, 
explain what those costs represent, and clearly show the allocation 
factor used.'' We asked further that Mobil ``clearly explain the 
allocation methodology and the allocation base, and why you chose that 
methodology for your reported costs.'' See Mobil 1992/93 and 1993/94 
supplemental cost questionnaires both dated February 2, 1996 at 2-3. In 
Appendix SQ-13 of Mobil's supplemental cost questionnaire responses, 
Mobil reported a single cost amount for each of the facilities for 
which it reported costs. The narrative explanation provided in the 
response states that the costs provided in that appendix were generally 
obtained from information provided by facility handlers, which 
indicates that these costs include forming, loading, and general 
facilities expenses.
    First, we note that, in response to the questions regarding the 
supplemental cost questionnaires which Mobil raised at the meeting on 
February 8, 1996 with Department officials (see Memorandum from Karin 
Price to the File, dated February 20, 1996, ``Meeting and telephone 
conversation with counsel for Mobil Oil Canada, Ltd. in the 92/93 and 
93/94 reviews of elemental sulphur from Canada'' (Mobil Memorandum)), 
the Department stated that Mobil should provide cost information as 
recorded in its records. However, we also requested that Mobil provide 
a statement received in the normal course of business from each 
facility which it does not operate, and explain how these statements 
were used to determine the reported sulphur costs. See Mobil 
Memorandum. Mobil did not provide any such statements, nor did it 
explain any attempts made to obtain such statements. We also requested, 
in question four of the supplemental cost questionnaires, that Mobil 
provide its operating statements for two specific facilities in each 
review. We requested that, if Mobil were unable to provide those 
operating statements, it alternatively provide complete expense, 
revenue, and production data and all internal management reports 
showing this information for all products manufactured by the facility. 
Mobil provided only the audited financial statement for one facility. 
However, Mobil is not the operator of that facility and did not provide 
a copy of any statements it received from that facility in the ordinary 
course of business. The financial statement did not include the 
detailed information that would normally be included on an operating 
statement. Furthermore, Mobil did not provide the detailed information 
we requested as an alternative to an operating statement.
    Mobil responded that it did not have operating statements as 
contemplated by the Department for two owned and operated facilities 
specifically requested by the Department. Mobil prepared ``income 
statements'' for these facilities for the purposes of the supplemental 
cost questionnaire response. Mobil states on pages 6-7 of its 
supplemental cost questionnaire responses that the statements were 
prepared from information in the financial database used to prepare 
Appendix SQ-11 of the supplemental cost questionnaire responses, as 
well as from Mobil's audited financial statements. The information in 
the income statements indicates that Mobil has more detail regarding 
its costs for the two facilities than is provided in Appendix SQ-13.
    We disagree with Mobil that the costs reported in Appendix SQ-13 
should not have been broken out to the extent Mobil could do so. 
Appendix SQ-13 was provided in response to our request in question 14 
of the supplemental cost questionnaire for an explanation of how the 
costs for each facility were weight averaged to determine the COM to 
provide worksheets showing the calculation. For the facilities for 
which Mobil reported liquid sulphur costs as well as formed sulphur 
costs, the total cost amount had to be split between liquid handling 
costs and forming costs. However, Mobil provided no explanation or 
detail as to how this was done.
    Mobil has claimed in its briefs that the information necessary for 
the Department's margin calculations is alternatively provided in 
Appendix SQ-11. The Department requested that Mobil provide costs for 
its facilities accounting for at least 90 percent of its sulphur 
production volume. However, Mobil has only reported liquid sulphur 
costs for a few facilities which represent less than 90% of production. 
The information provided in Appendix SQ-11 shows that Mobil should also 
have included costs for several other of its facilities in order to 
provide costs corresponding to 90% of production, as requested by the 
Department.
    The BOE methodology used to allocate costs to sulphur in Appendix 
SQ-11 is based on a relative energy

[[Page 37983]]

content and is generally used to equate volumes of oil and gas. Gas and 
oil are energy sources and therefore it is appropriate to use the BOE 
methodology to uniformly account for volumes of oil and gas reserves. 
Sulphur is not purchased for its heat or energy content and therefore 
an allocation based on BOE is not appropriate. Mobil also stated that 
it excluded certain costs that it determined were related to oil and 
gas. We cannot determine whether the costs reported in Appendix SQ-11 
are representative of Mobil's sulphur production costs and which costs 
are included. Mobil stated, regarding the information in Appendix SQ-
11, in a letter dated April 2, 1996, it was aware that ``the Department 
does not intend to use that information to calculate COP and CV.'' 
Therefore, we cannot rely upon the data in Appendix SQ-11 to calculate 
COP and CV in these reviews.
    We further disagree with Mobil's claim that we had an obligation to 
ask subsequent questions if we were not satisfied with Mobil's 
responses. When a respondent has been asked for certain information in 
the questionnaire and sent a supplemental with more specific requests 
for data, and has not provided it, that response is deficient. Not only 
did the Department send the supplemental questionnaire to Mobil, 
Department officials met with Mobil and clarified what we wanted Mobil 
to report. See Mobil Memorandum.
    We have found the deficiencies to be so extensive that Mobil's 
responses cannot be used to calculate a margin. Although Mobil states 
that it provided the information available to it in its records, it did 
not provide the operating statements requested to show how its reported 
costs were obtained. Mobil did not report costs for facilities 
accounting for 90 percent of production volume as requested. We are not 
able to determine if the data Mobil provided in Appendix SQ-11 is 
representative of sulphur handling costs. Mobil did not provide any 
support for the cost data provided in Appendix SQ-13. Therefore, we are 
continuing to apply total BIA to Mobil.
    We have addressed the specific deficiencies we found with Mobil's 
cost questionnaire responses in comments 17-22 below.

Comment 17

    Mobil argues that the Department did not request that it supply the 
cost of pouring sulphur to block as part of its sulphur handling costs. 
Mobil adds that, in any event, the plant cost data include block costs. 
Mobil asserts that the Department states that it had specifically 
requested that Mobil supply block costs in questions 11 and 14 of the 
1992/93 supplemental cost questionnaire and in questions 12 and 15 of 
the 1993/94 supplemental cost questionnaire and that Mobil failed to do 
so. Mobil contends that the question 14 did not require Mobil to report 
its block costs. Furthermore, Mobil argues, the block costs were 
included in Mobil's response to question 11.
    Mobil argues that in its cost response it reported sulphur handling 
costs as defined by the Department in the preliminary results of the 
1991/92 review and the underlying memorandum which, Mobil argues, 
specifically excluded block costs. Mobil asserts that question 14 of 
the supplemental cost questionnaire first asked Mobil to explain how 
the costs from each facility were weight-averaged to determine the 
reported COM, and then indicated that the reported costs should include 
costs associated with pouring sulphur to block. Mobil argues that it 
met with Department officials because the costs it originally reported 
did not include block costs. Mobil contends that the Department told it 
not to recalculate its costs in response to the questionnaire, but 
simply to explain how the reported cost figure was calculated. Mobil 
states that it acknowledged in its supplemental response, filed a few 
weeks later, that it was aware that in the recently-released final 
results of the 1991/92 review, the Department had reversed its position 
on block costs; the Department decided that they should now be 
included. Mobil argues that it did not know how to apply this 
determination because it was made with respect to Husky, and because 
Mobil did not have time to ascertain block costs before the 
questionnaire due date. Accordingly, Mobil asserts, it indicated in its 
supplemental response that it needed guidance from the Department on 
how to treat block costs.
    Furthermore, Mobil argues, in its initial response, omitting block 
costs was in full accordance with the Department's policy at the time. 
Mobil contends that the case analyst did not require Mobil to change 
its previously-submitted costs by adding block costs and that the 
Department failed to give Mobil any guidance as to how to comply with 
the Department's recent change regarding inclusion of block costs. 
Mobil contends that the Department may not apply BIA for failing to 
provide information that was never requested.
    Mobil argues that block costs are included in the second set of 
cost data supplied by Mobil to the Department in response to question 
11 of the supplemental cost questionnaire. Mobil argues that the 
reported costs under this alternative methodology include more costs 
than the Department requested. Mobil contends that the response to 
question 11 is fully responsive in that it reported the costs 
associated with producing and handling sulphur incurred after the point 
at which hydrogen sulphide is split off from the main gas stream. Mobil 
first explained that it accounts for costs on a facility, rather than a 
product basis and that, in any event, no costs were attributed to 
sulphur in its accounting system. Mobil contends that the only way to 
respond to the Department's request was to report all operating costs 
incurred at the facilities, including overhead, less those costs that 
could be clearly identified as costs incurred prior to the split-off 
point. Mobil asserts that it provided a detailed breakdown of costs, on 
a plant-by-plant basis, for all of its sulphur-producing plants.
    Mobil argues that because its normal accounting system does not 
break out costs on a product-specific basis, Mobil allocated the costs 
between the various products produced at each plant by using the 
allocation basis that it routinely uses for internal purposes. Mobil 
argues that these costs include all of the costs specifically 
identified by the Department, including the costs for pouring sulphur 
straight to block. Mobil notes that these costs included a number of 
costs incurred before the split-off point. However, Mobil argues that 
it should not be penalized for supplying the Department with a 
conservative figure that represents an overstatement of cost.
    Petitioners contend that the Department's supplemental cost 
questionnaire specifically and unambiguously required Mobil to report 
its block sulphur costs. Petitioners agree with the Department's 
determination in the preliminary results of these reviews that Mobil 
could not refuse to respond to a request for information based on a 
preliminary determination in a previous review. In response to Mobil's 
argument that the Department did not require the submission of new cost 
data in the supplemental response, petitioners claim that the language 
of the supplemental cost questionnaire clearly requires Mobil to report 
block sulphur costs.
    Petitioners argue that the costs provided by Mobil in Appendix SQ-
11 are not sufficient because they neither separately break out any of 
the costs associated with producing and handling sulphur, nor do they 
break out block sulphur costs.
    Department Position: We disagree with Mobil. We specifically 
required in question 11 of the cost supplemental

[[Page 37984]]

questionnaire, that ``all costs after the split-off point in the joint 
production process for refining natural gas and elemental sulphur 
should be reported, such as costs associated with sulphur recovery, 
pouring sulphur straight to block, * * *.'' Question 14 of the 
supplemental cost questionnaire required that ``the reported cost of 
manufacturing should include costs * * * associated with pouring 
sulphur straight to block * * *.'' Regardless of Mobil's presumption 
that the Department excluded block costs in the preliminary results of 
the 1991/92 review, we required that block costs be included in the 
reported COM of these reviews. Despite the Department's request, Mobil 
presumed that the block costs were not necessary in these reviews 
because the final results of the 1991/92 review were still pending. 
That such costs were not used in the preliminary results of a previous 
administrative review does not mean that a respondent can unilaterally 
decide that such costs need not be reported in another administrative 
review of the same case, especially when it was specifically requested 
to report such costs. Mobil was required to be guided by the explicit 
language of the questionnaire to which it was responding.
    While Mobil argues that it provided block costs in response to 
question 11 in Appendix SQ-11, it stated that the provided costs 
include a number of costs before the split-off point and it did not 
segregate any sulphur costs or indicate if and where block costs were 
reported. We disagree with Mobil that such costs are necessarily 
conservative and represent an overstatement because these costs were 
allocated using an inappropriate methodology. See response to comment 
16.

Comment 18

    Mobil argues that it provided production costs for at least 90% of 
its production. Mobil contends that in its original response, it 
reported the handling costs for as many plants as it could. Because 
Mobil did not operate the vast majority of facilities which produced 
sulphur Mobil owned (i.e., owned but not operated facility), Mobil 
claims, it had to rely on its operators to gather this data. Mobil 
argues that it reported the handling costs to the best of its ability 
given the limitations imposed by the failure of each of the operators 
to cooperate. Mobil argues that the plant cost data provided by it in 
its supplemental cost response included sulphur handling costs for all 
of its production. Thus, Mobil argues, it fully responded to the 
Department's request for cost data for at least 90 percent of its 
sulphur production. Mobil argues that the Department ignored the 
alternative data in Appendix SQ-11.
    Petitioners argue that Mobil failed to provide cost data for 
facilities that account for 90 percent of its production. Petitioners 
claim that, in reporting costs used to calculate COP and CV, Mobil 
based the COM of liquid sulphur on data from only a small number of 
self-selected facilities as contained in Appendix SQ-13. Petitioners 
assert that these plants account for much less than 90% of Mobil's 
production of liquid sulphur. While petitioners acknowledge that 
Appendix SQ-11 contains selected cost data for all of Mobil's 
facilities, they assert that this cost data is not sulphur production 
costs, but improperly allocated costs that understate the COM of 
Mobil's sulphur. Petitioners further note that Mobil was aware that the 
Department did not intend to use the data in Appendix SQ-11 to 
calculate the COP and CV of sulphur.
    Department Position: We disagree with Mobil. Mobil did not report 
costs for its facilities accounting for 90% of its sulphur production 
in Appendix SQ-13. Appendix SQ-13 contains Mobil's reported weighted-
average COM. Mobil provided only a single cost figure for each facility 
reported and did not breakdown or explain the figure or provide support 
documentation. While Mobil did report alternative information on all of 
its facilities in Appendix SQ-11, the data provided was not based on 
sulphur production costs. Mobil provided total facility costs and 
stated that it excluded certain costs that it determined were solely 
related to oil and gas. Mobil did not provide any support documentation 
or an explanation of what costs were provided. Therefore, we cannot 
determine whether the costs reported in Appendix SQ-11 are 
representative of Mobil's sulphur production costs and which costs are 
included. As noted in our response to comment 16, the submitted 
information in Appendix SQ-11 is not sufficient to calculate COP and 
CV.

Comment 19

    Mobil argues that it provided a detailed breakdown of costs. Mobil 
argues that the Memorandum from Holly Kuga to Joseph Spetrini, 
``Whether to Use Best Information Available for Husky Oil Ltd. and 
Mobil Oil Canada, Ltd. in the 1992/93 Administrative Review of 
Elemental Sulphur for Canada,'' dated June 4, 1996, and also Memorandum 
from Holly Kuga to Joseph Spetrini, ``Whether to Use Best Information 
Available for Husky Oil Ltd. and Mobil Oil Canada, Ltd. in the 1993/94 
Administrative Review of Elemental Sulphur for Canada,'' dated June 4, 
1996, (collectively, Decision memorandum) states that Mobil failed to 
provide a detailed breakdown of costs as requested in question 11 of 
the supplemental cost questionnaire, and notes that Appendix SQ-13 of 
Mobil's supplemental cost questionnaire listed a single cost amount for 
each plant. Mobil argues that the Department's reasoning is faulty for 
two reasons. First, Mobil argues, Appendix SQ-13 responded not to 
question 11, but to question 14, which simply required Mobil to explain 
how it had weight-averaged the costs from the different plants to 
arrive at the cost of production reported in the original response. 
Mobil contends that question did not ask for a detailed breakdown of 
costs.
    Secondly, Mobil argues that it provided in Appendix SQ-11 a 
detailed, plant-by-plant breakdown of costs as the Department requested 
in question 11. In this question, the Department asked Mobil to provide 
all costs of sulphur incurred after the gas split-off point, including 
the cost of the sulphur recovery unit.
    Mobil asserts that in its Decision Memorandum, the Department 
stated that it would not even consider Appendix SQ-11 on the grounds 
that it included costs in the sulphur recovery unit which the 
Department had decided should not be included in the cost of 
production. Mobil states that the Department accused Mobil of failing 
to provide a detailed breakdown of costs as requested in Question 11, 
and yet refused to consider Mobil's completely responsive answer on the 
grounds that it contained ``irrelevant'' costs.
    Petitioners argue that Mobil failed to provide a detailed breakdown 
of costs as required in question 11 of the supplemental questionnaire. 
Petitioners assert that, although Mobil claims that the requested 
breakdown of costs was contained in Appendix SQ-11, this data does not 
satisfy the requirements of question 11 because it fails to identify 
any of the cost incurred in producing sulphur and it does not clearly 
describe how the costs were determined. Petitioner maintains that Mobil 
failed to provide any support for the cost data contained in Appendix 
SQ-11.
    Department Position: We disagree with Mobil. Question 11 required 
Mobil to provide worksheets which were to include a ``description of 
each cost center or functional unit, and identify the costs included in 
each.'' As noted above in Comment 16, Appendix SQ-

[[Page 37985]]

 11, which was provided in response to question 11, does not contain a 
breakdown of costs sufficient to determine where and how sulphur 
handling costs are included in the reported costs. We required Mobil to 
provide detailed worksheets breaking out costs for producing and 
handling sulphur by cost center and functional cost area. We also 
required Mobil to clearly describe how, for each facility, the costs in 
the worksheets were determined, and identify the source of the numbers 
and to clearly explain the allocation methodology and the allocation 
base, and why Mobil chose this methodology for reporting its cost. The 
data in SQ-11 does not satisfy the requirements of question 11. 
Appendix SQ-11 does not identify any of the costs incurred in producing 
sulphur nor does it describe how the costs were determined. Mobil also 
failed to provide any support for the cost data contained in Appendix 
SQ-11.
    Our discussion of Appendix SQ-13 in the Decision Memorandum does 
not indicate that Appendix SQ-13 was provided in response to question 
11. Mobil provided cost information in both Appendix SQ-11 and Appendix 
SQ-13. In question 14, we required Mobil to show how the worksheets 
provided in response to question 11 tie to the worksheets provided in 
response to question 14. Appendix SQ-13 was provided in response to 
question 14. Therefore, the response to question 14 should have tied to 
the worksheet provided in response to question 11. Based upon all of 
the above, the Department concluded that Mobil's response with respect 
to the requested cost breakout was seriously deficient.

Comment 20

    Mobil points out that the Department stated in its Decision 
Memorandum that Mobil failed to provide statements from operators of 
the plants operated by parties other than Mobil and to explain how 
these were used to calculate the sulphur handling costs. Mobil argues 
that the statements from the operators used to determine the reported 
sulphur handling costs are in the record and that the underlying data 
was available for verification.
    Mobil argues that in question 4 of the supplemental cost 
questionnaire, the Department asked Mobil to provide operating 
statements for two plants in each review, or, ``if no operating 
statements are prepared for the facilities * * * provide complete 
expense, revenue, and production data * * *.'' Mobil argues that it 
provided a copy of the audited financial statement for one of the 
plants, which Mobil believed to be responsive to the request for an 
operating statement. Mobil also asserts that it explained that since it 
did not prepare an operating statement for the other plant in the 
ordinary course of business, it had followed the alternative method 
specified in the question and prepared an income statement from the 
financial database used to generate Mobil's financial statements. Mobil 
argues that since the statement included complete expense, revenue, and 
production data, Mobil fully complied with the alternative specified in 
the questionnaire. The Decision Memorandum, Mobil asserts, merely 
states that Mobil had been requested to supply an operating statement, 
but ignored the fact that the Department had directed Mobil to provide 
expense, revenue, and production data in the event the operating 
statement did not exist. Mobil claims that the Department concluded 
that it could not rely on the income statement because it was not kept 
in the ordinary course of business.
    Petitioners argue that Mobil failed to provide operating statements 
of its plants which were operated by parties other than Mobil, and 
failed to explain how costs of those plants were used to calculate its 
sulphur handling costs as required by the supplemental cost 
questionnaires. Petitioners contend that the Department clearly 
required Mobil to provide these operating statements, and Mobil offered 
no explanation for its failure to comply with the Department's 
requests.
    Petitioners argue that Mobil failed to provide the operating 
statements for two of Mobil's plants in each review which were 
requested in question four of the Department's supplemental cost 
questionnaires. Petitioners argue question 4 stated that, if no 
operating statements were prepared, or such statements did not exist, 
Mobil was to provide complete expense, revenue, and production data, as 
well as internal management reports. Petitioners assert that the 
Department clarified this request by asking Mobil to provide statements 
received in the normal course of business. Petitioners contend that 
Mobil's submission of financial statements in lieu of operating 
statements for one of the two plants was unresponsive to the 
Department's request. Petitioners claim that the financial statements 
do not contain the majority of the requested information and Mobil 
offered no reason for the appropriateness of substituting financial 
statements for operating statements. Petitioners note that Mobil also 
did not submit revenue and production volume statements received in the 
normal course of business. For the second plant in both reviews, 
petitioners contend, Mobil did claim that operating statements were 
unavailable but submitted income statements which do not detail 
revenues and production volumes for the products produced at that 
plant. According to petitioners, these statements should not be relied 
upon because they were prepared solely for the purposes of this review 
rather than in the normal course of business.
    Department Position: As noted in the Mobil Memorandum, we spoke 
with counsel for Mobil and clarified some specific questions about the 
cost supplemental questionnaire. We stated that:

    With regard to question 11 in the 92/93 review and 12 in the 93/
94 review, * * * Mobil should include an explanation as to how the 
statements received from facilities where Mobil is not the operator 
were used to determine the reported sulphur costs, that the costs 
included in the reported sulphur costs should be identified, and 
that a sample statement from each facility should be submitted.''

Mobil Memorandum

    Mobil did not provide the statements from each facility as 
requested or any other source documents in response to question 11. 
Mobil did not explain any attempts made to obtain such statements from 
each operator. While Mobil maintains that the alternative data to 
operating statements provided in response to question four is fully 
responsive, we do not agree that the financial statement and the 
``income statements'' prepared for the supplemental cost responses 
sufficiently answered the Department's request for complete revenue, 
expense and production data for all products manufactured by the 
facilities.
Comment 21
    Mobil claims that, by submitting the information provided in 
Appendix SQ-13 of its supplemental questionnaire response, it was fully 
responsive to question 14 of the Department's supplemental cost 
questionnaire. Question 14 also requested Mobil to ``separately 
identify the variable and fixed costs, as requested in questions 3.B.2 
and 3.B.3 of the questionnaire.'' Mobil points out that it responded to 
this question by stating that it had weight-averaged the handling costs 
from the individual plants based on the quantity of sulphur produced 
and sold, and included a worksheet demonstrating the calculation. 
Further, Mobil states, it noted in its response that it was unable to 
segregate these costs into fixed and variable components as this 
information was unavailable to it.

[[Page 37986]]

Mobil claims that it then noted in its supplemental response that, 
because sulphur handling occurs when the sulphur is destined for sale, 
the cost of the entire operation should be considered to be variable.
    Mobil argues that it answered the question as asked, yet the 
Department states that Mobil should have broken out its costs in more 
detail to the extent it could do so in the Decision Memorandum. Mobil 
argues that it cannot be given BIA for failing to provide information 
that was never requested. Mobil challenges the Department's claim in 
the Decision Memorandum that Mobil could have provided a more detailed 
response than that provided in Appendix SQ-13 based on the fact that 
Mobil prepared a detailed income statement for a particular plant in 
response to Question 4 of the supplemental cost questionnaire. Mobil 
argues that the income statement shows that it contains no detail of 
sulphur handling, because Mobil does not break out these costs in its 
accounting system.
    Mobil argues that the Department was incorrect in stating in the 
Decision Memorandum that the forming costs reported in Appendix SQ-11 
for each plant with forming facilities had been used to calculate the 
cost of formed sulphur in Appendix SQ-13. Thus, Mobil asserts, the 
Department was also incorrect in concluding that it was able to break 
out its sulphur costs to some extent. In fact, states Mobil, it used 
the information in Appendix 13 to include the forming costs separately 
in Appendix SQ-11. Mobil argues that, in the 1992/93 review, the 
reverse is true. Mobil added the forming costs from Appendix SQ-13 to 
Appendix SQ-11 to avoid double counting. Mobil argues that, in the 
1993/94 review, the forming costs were not added.
    Petitioners argue in support of the Department's use of BIA because 
Mobil's cost data contained in Appendix SQ-13 did not adequately 
respond to question 14 of the supplemental questionnaire. Petitioners 
note that questions 11 and 14 specifically required Mobil to report 
detailed information for the costs used to calculate the COP and CV of 
its sulphur. As a result of Mobil's failure to report its sulfur costs 
in the manner requested by the Department, petitioners claim that it is 
unclear what costs were included in the COMs reported in Appendix SQ-
13. Petitioners argue that Mobil's response failed to include such 
major cost elements as block storage, liquid sulphur transfer, 
remelting, and depreciation. Petitioners contend that neither appendix 
provided an explanation for the calculation of per-unit costs reported 
in Appendix SQ-13.
    Department Position: We agree with petitioners. Mobil reported a 
single cost for each of the facilities for which it reported costs in 
Appendix SQ-13. It is unclear what costs were included in the COMs 
reported in Appendix SQ-13. Also, for the facilities for which Mobil 
reported liquid sulphur costs as well as formed sulphur costs, the 
total costs amount had to be split between liquid handling costs and 
forming costs. Mobil provided no explanation or detail as to how this 
was done. Mobil stated in its response that it generally relied on 
information provided by facility operators, but did not explain what 
this information contained or provide any support. Therefore, we have 
no explanation for the calculation of per-unit costs reported in 
Appendix SQ-13 and cannot rely on this data.

Comment 22

    Mobil argues that the Department may not penalize it for reporting 
its data in a manner that differs from typical cost accounting methods. 
Mobil argues that the decision to apply BIA appears to be a decision to 
penalize Mobil for failing to report sulphur handling costs in a manner 
that the Department would prefer. Mobil argues that, if the Department 
persists in applying BIA to a company that has reported its costs to 
the best of its ability, it is informing that company that it can never 
satisfy the Department and will always be subject to a BIA rate. Mobil 
argues that this conflicts with the Department's own stated policy, as 
well as judicial authority.
    Mobil cites Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556 
(Fed. Cir. 1984), which involved an International Trade Commission 
(ITC) injury determination, where the Federal Circuit rejected an 
interpretation that would authorize agencies to impose particular 
accounting methods on companies according to agency needs. Mobil notes 
that the court stated:

    [I]t is inflating out of all proportion the importance of the 
laws with which the lower court deals to expect that business people 
and corporate accountants would keep their books with an eye to an 
obscure and wholly arbitrary statutory geographic region, which a 
relatively small Government agency might declare for the purposes of 
one antidumping injury investigation.

Id. At 1561. Mobil argues that the CIT similarly cautioned the 
Department against overextending its authority during investigations: 
``Commerce's desire to obtain documentation should not fly in the face 
of established business practice, and should not be transformed into a 
do-or-die requirement,'' citing Industrial Quimica del Nalon, S.A. v. 
United States, 15 CIT 240, 244 (CIT 1991).
    Mobil argues that the Department itself has acknowledged that it 
cannot penalize a respondent for failing to maintain business records 
in a particular manner or for using an allocation method that the 
Department subsequently rejects. Mobil argues that in a case closely 
analogous to this one, Carbon Steel Plate from Canada (61 FR at 13815), 
at comment 7, the Department accepted the respondent's reported costs 
for one production location as a proxy for costs at another production 
location. Mobil argues that the respondent, like Mobil, did not 
maintain records that would enable it to calculate the actual cost of 
producing the subject merchandise at each of its plants. Mobil argues 
that the Department accepted costs from one plant as a surrogate for 
total costs based on three factors that are also present in this case: 
(1) the nature of the respondent's accounting system prevented more 
detailed reporting; (2) the Department verified the respondent's 
inability to provide more specific costs; and (3) the respondent's 
alternative methodology was a conservative estimate of costs. In 
addition, Mobil argues that the Department accepted respondent's 
allocation of indirect selling expenses because the respondent did not 
maintain records of the actual indirect selling expenses of each of its 
markets as a matter of normal business procedure. Mobil also cites 
Smith-Corona Group v. United States 713 F. 2d 1568, 1580 (Fed. Cir. 
1983), in which, it argues, the Department properly accepted 
respondent's allocation of rebates based on actual figures when the 
company did not maintain records directly tying each rebate to a 
particular sale; Zenith Elecs. Corp. v. United States, No. 90-07-00339, 
slip-op. 94-148 (CIT 1994), in which, it argues, the Department 
properly declined to adopt petitioners adverse allocation methodology 
for discounts given that the respondent reported the information in the 
best manner it could, given its accounting system; Final Results of 
Antidumping Duty Administrative Review; Certain Cold-Rolled Carbon 
Steel Flat Products from Germany, 60 FR 65264 (December 19, 1995), in 
which, it argues, the Department accepted respondent's data because the 
necessary records were not maintained; Final Determination of Sales at 
Less than Fair Value: High Capacity Pagers from Japan, 48 FR 28682 
(June 23,

[[Page 37987]]

1983), in which, it argues, the Department allowed an adjustment for 
technical services, including certain allocated costs, because they 
were reasonably calculated and actual data were not kept as ordinary 
business records.
    Mobil argues that a decision to resort to BIA is even less 
justifiable when the respondent, recognizing the limitations of its 
accounting system, provides the Department with alternative data or 
methodologies. Mobil cites Federal-Mogul Corp. v. United States, 918 F. 
Supp. 386, 410 (CIT 1996) (citing Allied-Signal Aerospace Co. v. United 
States 996 F. 2d 1185, 1193 (Fed. Cir. 1993)), and notes that the CIT 
stated that the Department may not resort to BIA by ignoring certain 
data, which the respondent had provided as an alternative reporting 
method, simply because it does not like it.
    Petitioners argue that, in light of the fundamental deficiencies in 
the data provided by Mobil, the Department properly relied on total BIA 
to establish Mobil's margin in the preliminary results. Petitioners 
argue that, in addition, the Department properly recognized that Mobil 
had in its possession or had access to information sufficient to comply 
with the Department's requests for information and to calculate COM of 
its sulphur in accordance with the methodology adopted by the 
Department in the 1991/92 review. Petitioners conclude that the 
Department should assign to Mobil, as BIA, the highest rate ever 
assigned to Mobil in this proceeding.
    Department's Position: We disagree with Mobil that we have 
penalized it for not keeping its books in the manner we would prefer. 
As detailed in the Decision Memorandum and discussed in comment 16, 
Mobil did not provide operating statements, block storage sulphur 
costs, any support or explanation of the costs included in the reported 
COM and did not report the costs for the percentage of production 
volume requested. These were items (1) that Mobil could have provided 
to the Department or (2) if they were unable to provide them, for which 
Mobil should have explained why it could not respond sufficiently to 
the Department's requests. Mobil did not explain or document what steps 
were taken to obtain sulphur production costs and support documents 
from each facility. Mobil did not explain or detail the costs included 
nor provide support for the reported COM. In light of these 
deficiencies, it is appropriate to apply BIA to Mobil.

Comment 23

    Mobil argues that the Department should not reject Mobil's 
responses and resort to BIA without conducting verification. Mobil 
argues that if the Department's decision is not an effort to penalize 
Mobil for not maintaining more detailed cost records, then it must be 
based on a belief that Mobil's accounting system contains more detail 
than it has supplied. Mobil argues that it has clearly and repeatedly 
explained that its cost system does not allow it to respond to the 
Department's standard questionnaire in the detail required. Mobil 
argues that the Department verified during the 1991/92 review that 
Mobil's cost accounting system differs significantly from the systems 
the Department normally encounters. Mobil argues that as a result of 
the cost verification by the Office of Accounting, the Department 
concluded that ``[t]he cost accounting details included in both of the 
company's submissions were limited primarily by the constraints of 
Mobil's accounting system,'' and that the system ``does not allow for 
the level of detail contemplated by the Department's suggested 
format.'' (Cost of Production and Constructed Value Verification 
Report, 1991/92 Administrative Review (September 27, 1994) at 6.) Mobil 
argues that in this review the Department appears to have ignored the 
findings of its own cost analysts and concluded that Mobil's accounting 
system has more detail than Mobil has divulged. Mobil argues that the 
Department has no basis for this assumption. Mobil argues that each of 
its submissions is accompanied by sworn statements that attest to the 
completeness and accuracy of the information. Mobil argues that the 
Department's own verifications support its statements. Mobil argues 
that, if the Department were somehow convinced that Mobil's assertions 
were false or that the facts had changed substantially, the Department 
could have verified the information. Mobil asserts that the Department 
declined its suggestion that the Department verify Mobil 1993/94 
response concurrently with the verification of the 1994/95 response.
    Mobil argues that it was informed that the Department would prefer 
to address Mobil's unique cost situation in the 1994/95 review. Mobil 
argues that the verification of its cost system in the 1994/95 review 
will come too late to rectify the results of this review. Mobil 
contends that, if the Department persists in applying BIA in the final 
results of the 1993/94 review, it will be subjected to unjustifiably 
high antidumping duty cash deposit rates. Mobil also argues, that 
improperly applying BIA to Mobil may unfairly delay Mobil's ability to 
qualify for revocation of the order. Mobil argues that, by declining to 
conduct verification, the Department failed to follow its regular 
practice of first providing a respondent with an opportunity to satisfy 
the Department that it has provided complete responses before resorting 
to BIA. Mobil cites Rautaruukki Oy v. United States, No. 93-09-00560, 
slip-op. 95-56 (CIT 1995) (quoting International Trade Administration 
Revisions to 19 CFR Part 353, 54 FR 12742, 12766 (March 28, 1989)), in 
which the CIT stated ``prior to resorting to best information 
available, the Department as a matter of practice often * * * permits a 
respondent to correct a deficiency during the verification process * * 
*.'' Mobil argues that because the Department did not verify Mobil's 
responses, Mobil was never given the opportunity to demonstrate that 
its responses were complete even though it was available at all times 
during the course of this review for verification.
    Petitioners argue that the Department should not verify Mobil's 
cost responses. Petitioners argue that, as set forth in detail in 
Section II.A., the record conclusively establishes that information 
sufficient to comply with the Department's information requests was 
available to Mobil. Petitioners argue that the record also establishes 
that Mobil made no real effort to supply this information, and that 
there is no need to verify what the record already establishes. 
Petitioners contend that, as a matter of law, the Department has no 
obligation to verify the unrepresentative and understated sulphur cost 
data that Mobil chose to report, because those cost data cannot be used 
to calculate the COP and CV of Mobil's sulphur. Petitioners argue that 
the Department has routinely canceled verification in instances where a 
respondent has not provided usable cost data in its questionnaire 
responses, and that the Department has already verified that Mobil 
misreported its forming costs at one of its sulphur producing 
facilities.
    Department's Position: We agree with petitioners, in part. We do 
not necessarily verify respondents' information in each administrative 
review. Furthermore, the purpose of verification is to verify the 
information submitted to the Department in questionnaire responses. It 
is not an opportunity for respondents to submit additional information. 
While we often will permit, at the beginning of verification, minor 
corrections to the response that were found in preparing for 
verification, verification is not an

[[Page 37988]]

opportunity to correct for deficiencies in the questionnaire responses. 
If, as in the present case, we find prior to verification that the 
information is so deficient that we would not be able to use it, then 
we do not proceed with verification. To do otherwise would be a waste 
of resources. See for example, Chrome-plated Lug Nuts From Taiwan; 
Preliminary Results of Antidumping Duty Administrative Review and 
Termination in Part, July 8, 1996 (61 FR 35725), where two companies 
informed us prior to verification that we would not be able to 
reconcile data. Because we found prior to verification that Mobil had 
not adequately responded to our requests for information, it was not 
appropriate to verify the deficient information. Regarding Mobil's 
comments about the 1994/95 review, we treat each segment of the 
proceeding separately. Our decision not to verify in the 1993/94 review 
was based on the information on the record for that review. Issues 
arising in the 1994/95 review will be considered based on what is on 
the record of that review.

Comment 24

    Mobil argues that the Department improperly applied total, rather 
than partial, BIA. Mobil argues that it is the Department's practice to 
apply partial BIA when a respondent's submitted information is 
deficient in only limited respects, and cites as an example, Ad Hoc 
Committee of AZ-NM-TX-FL Producers of Gray Portland cement v. United 
States, 865 F. Supp. 857, 863 (CIT 1994), aff'd on other grounds, 68 F 
3d 487 (Fed. Cir. 1995). Mobil contends that the Department generally 
accepts a respondent's U.S. sales data, even if the cost data is found 
to be deficient, and cites as examples, Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determination: 
Dynamic Random Memory Semiconductors of One Megabit and Above from the 
Republic of Korea, 57 FR 49066 (October 29, 1992); Final Results of 
Antidumping Duty Administrative Review and Revocation, in part of the 
Antidumping Duty Order: Certain Cut Flowers from Colombia 56 FR 50554 
(October 7, 1991), in which the Department stated, ``While continuing 
to use the verified sales portion of their response, BIA was only used 
for that portion of the response which was unverifiable.''); and 
Silicon Metal from Brazil; Final Results of Antidumping Duty 
Administrative Review, 59 FR 42806, (August 19, 1994) (comment 1), in 
which, Mobil argues, the Department accepted portions of respondent's 
cost response that were not deficient, and noted that some of the areas 
of concern were related to the methodology used, rather that the 
accuracy of the submitted data. Thus, Mobil argues, the Department's 
decision to reject Mobil's sales data is inexplicable given that it 
apparently found no deficiencies in Mobil's sales response. Mobil 
further argues that the Department found Mobil to be cooperative and 
yet still applied total BIA. Mobil argues that, if the Department finds 
Mobil's cost data to be deficient, despite the fact that it is 
complete, it should at least use Mobil's U.S. sales data in calculating 
a margin.
    Mobil notes that the Department issued a preliminary determination 
in Certain Cut-to-Length Carbon Steel Plate from Sweden; Preliminary 
Results of Antidumping Duty Administrative Review, 61 FR 51898 (October 
4, 1996) (Steel from Sweden), in which Mobil argues the Department 
decided to apply total BIA because of deficiencies in the cost data, 
even though the sales data was verified. Mobil contends that the 
Department noted that there were no alternative sets of cost data for 
the Department to use. Mobil argues that, in this case, the Department 
has several alternatives, including petitioners' data as adjusted by 
the Department to initiate the sales-below-cost allegation; Mobil's 
verified 1991/92 cost data (adjusted for inflation), which the 
Department verified; and Husky's reported liquid sulphur cost. Thus, 
Mobil argues, the factors that necessitated total BIA in Steel from 
Sweden are not present in Mobil's case.
    Petitioners disagree with Mobil. Petitioners argue that, as set 
forth in Section II.A., Mobil deliberately withheld a substantial 
amount of requested information from the Department and has attempted 
to manipulate the outcome of this review by arguing that the Department 
must use the cost data it chose to report which, as set forth in 
Section II.B., are unrepresentative, understated, and allocated to 
sulphur using a patently wrong allocation method. Petitioners argue 
that it is consistent with the statute and Department practice to apply 
total BIA to Mobil in these circumstances. Furthermore, petitioners 
argue, it is Department practice to reject a respondent's submitted 
information in toto where a respondent fails to provide reliable cost 
data. Petitioners contend that the Department has recognized that if it 
were to utilize a respondent's sales information when a respondent 
fails to provide usable cost information, respondents would be in a 
position to manipulate the outcome of reviews by supplying only that 
information which the respondent wants the Department to use in its 
margin calculations.
    Department's Position: We disagree with Mobil. Our determination to 
apply total BIA in this case, rather than partial BIA, is proper and in 
accordance with both the Department's stated practice in this area, and 
the law effective for these reviews. See Final Determination of Sales 
at Less Than Fair Value: Grain-Oriented Electrical Steel From Italy, 59 
FR 33952 (July 1, 1994) (``The rejection of a respondent's 
questionnaire responses in toto and use of BIA is appropriate and 
consistent with past practice in instances where a respondent has 
failed to provide verifiable COP information.'' (Citing as examples of 
past practice Final Determination of Sales At Less Than Fair Value: 
Certain Forged Stainless Steel Flanges From Taiwan, 58 FR 68859 
(December 29, 1993) and Final Determination of Sales At Less Than Fair 
Value: Certain Hot-Rolled Lead & Bismuth Carbon Steel Products From 
France, 58 FR 6203 (January 27, 1993).))
    Where the Department determines that parts of a respondent's 
submitted cost data are reliable, BIA ``plugs'' may be used to fill in 
gaps created by missing or unreliable data. In the present case, 
however, Mobil's cost response was found to have extensive deficiencies 
rendering the entire cost response unusable. See comments 16 and 18 
above. Therefore, in accordance with the Department's practice, we have 
applied cooperative total BIA to Mobil in these reviews.
    Contrary to Mobil's contention, Silicon Metal From Brazil is 
consistent with the above practice. In that case, the Department stated 
that, while there were areas in which the costs were not appropriately 
quantified, ``we have not found these deficiencies to be so significant 
or pervasive as to call into question the accuracy of the entire [cost] 
response.'' (59 FR 42806, 42807; August 19, 1994). Accordingly, in that 
case the Department relied on BIA only ``in the instances where [it] 
found insufficient verification support.'' Id. at 42807. For the cost 
in general, the Department used the respondent's data in reaching the 
final results in that review. Id. Similarly, in DRAMs From Korea, cited 
by Mobil, the Department once again relied on BIA only for those 
portions of the cost response found to have ``insufficient verification 
support''. DRAMs From Korea, 54 FR 15467,15471 (March 23, 1993). For 
the methodological issues, where appropriate, ``the costs were 
recalculated to quantify or value that particular cost element.'' Id. 
By contrast, in the present case, we do not have

[[Page 37989]]

usable cost data for Mobil. Without such data, the Department cannot 
calculate an appropriate foreign market value (FMV), and thus cannot 
perform sales comparisons. See also, Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Pasta From Turkey, 61 FR 30309, 
30312 (June 14, 1996).
    Furthermore, even if the Department were to contemplate use of an 
alternative to total BIA in this situation, we note that no appropriate 
alternative data is available to use as BIA for FMV in this case. Mobil 
suggests that the Department use as BIA the company's reported costs 
for the previous period,--i.e., the 1991/92 review. However, in past 
cases, the Department has specifically rejected this type of 
application even under both the new statutory provisions concerning the 
basis for the use of facts available enacted through the URAA, and the 
pre-URAA provisions. For example, in Steel From Sweden, the case cited 
by Mobil, the Department not only rejected the respondent's entire cost 
database, but further rejected application of any alternative to total 
facts available. In applying total facts available, the Department 
specifically rejected use of actual costs from a previous review 
because ``[i]f the Department were to rely on such data, a respondent 
would have no incentive to report its costs once it was satisfied with 
the verified costs from a particular review period.'' Steel From 
Sweden, 62 FR 18396 (April 15, 1997). The same concern is also present 
in the instant case. In this type of application, manipulation of 
either the U.S. price or the FMV component of the margin calculation 
has the potential to have a dramatic impact on the dumping margin.
    Mobil's other suggested alternatives--i.e., petitioners' data used 
in its below-cost allegation, or, alternatively, another respondent's 
CV data reported in the present reviews, would also be inappropriate. 
The cost data submitted by petitioners in these reviews is not public 
data and is therefore not available for consideration as BIA. With 
respect to applying another respondent's CV data, it would not be 
appropriate to use the ranged public CV data submitted by Husky as BIA 
in this case. First, for that part of Husky's cost data that was 
applied and adjusted by the Department in calculating COM and CV in 
these reviews, no ranged public data were reported. Second, the 
reported public CV is an unadjusted figure which cannot properly 
reflect CV without further adjustment. Husky's public cost and 
production data lacks the proper detail to make appropriate adjustments 
to the public CV figure. Accordingly, no appropriate public data would 
be available for consideration as BIA in this case.

Comment 25

    Mobil argues that, even if the Department's decision to apply BIA 
is correct, its decision to apply a BIA rate that is itself based on 
partial BIA cannot be supported. Mobil argues that, although the 
Department has discretion in its choice of BIA, the CIT cautioned in 
National Steel Corp. v. United States, 913 F. Supp. 593, 597 (CIT 1996) 
(National Steel) (citing Rhone Poulenc, Inc. v. United States, 899 F.2d 
1185, 1191 (Fed. Cir. 1990)) that it must exercise that discretion in 
light of the ``Basic requirement of the BIA rule * * * to determine 
margins as accurately as possible.'' Mobil also cites to National Steel 
870 F. Supp. 1130, 1136 (CIT 1994) (quoting Manifattura Emmepi S.p.A. 
v. United States 799 F. Supp. 110, 115 (CIT 1992)), in which the CIT 
stated that there must be a ``rational relationship * * * between the 
`data chosen and the matter to which they are to apply.' '' Mobil 
contends that in National Steel, the court found that the Department's 
choice of BIA might have been aberrant based on the fact that a 
significant portion of the respondent's sales had margins well below 
the selected rate.
    Mobil argues that, in this case, the Department's decision to base 
Mobil's BIA rate on Husky's rate, which, it argues, is itself based, to 
a significant extent, on BIA, violates the Department's own consistent 
policy of using another respondent's rate only if that rate is a non-
BIA rate. Mobil argues that, in the 1991/92 review in this case, the 
Department rejected the petitioners' suggestion that the Department 
apply to Mobil, as a BIA rate, the rate applied to Petrosul, since the 
latter was itself a BIA rate. Mobil also cites Roller Chain, Other Than 
Bicycle, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews 57 FR 3745 (January 31, 1992) in which it argues 
the Department selected, as BIA, the highest non-BIA rate of any firm 
in a prior review; Roller Chain Other Than Bicycle, from Japan: Final 
Results of Antidumping Duty Administrative Review, 57 FR 43697 
(September 22, 1992), in which it notes that the BIA rate remained 
unchanged in the final results; Drycleaning Machinery from Germany; 
Final Results of Antidumping Duty Administrative Review, 56 FR 66838 
(December 26, 1991), in which it argues, as BIA, the Department chose 
another respondent's non-BIA rate; Final Results of Antidumping Duty 
Administrative Review and Revocation, in part of the Antidumping Duty 
Order: Certain Cut Flowers from Colombia, 56 FR 50554 (Comment 6) 
(October 7, 1991), in which it argues, as BIA for non-responding firms, 
the Department chose the highest non-BIA rate from any review; and Saha 
Thai Steel Pipe Co. v. United States, 828 F. Supp. 57, 63 (CIT 1993), 
in which the CIT stated, ``In selecting the BIA rate for a given 
subsidy program, Commerce asserts its practice is to select the highest 
published non-BIA rate for the identical program in the same country.''
    Mobil argues that, contrary to the Department's own stated 
practice, as upheld by the CIT, the Department has simply applied the 
rate chosen for Husky which itself is partially based on BIA. Mobil 
argues that this is clearly improper.
    Mobil argues that the standards that govern the Department's choice 
of BIA are now more stringent as a result of the dictates of the 1994 
Antidumping Code (Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994), and argues that the code 
makes it clear that the Department must have some rational basis in its 
choice of BIA. Mobil notes that paragraph 7 in Annex II of the Code 
establishes the standards that govern the choice of BIA, and, Mobil 
argues, cautions the administering authority to exercise its discretion 
to use BIA with ``special circumspection.'' Mobil argues, that to 
ensure that some rational basis exists between the choice of BIA and 
the respondent's actual antidumping margin, the Code directs the 
authority to check the information used to support its choice of BIA 
with information from other independent sources, ``such as published 
price lists, official import statistics and customs returns, and from 
the information obtained from other interested paries during the 
investigation.'' Mobil argues that, based on these criteria, the 
Department would not be able to support its choice of BIA in Mobil's 
case because it has not even attempted to choose a BIA based on 
information that the Department perceives to be the best alternative to 
Mobil's own reported costs.
    Petitioners argue that the application of Husky's rate to Mobil, as 
BIA, is fully consistent with Department practice. Petitioners argue 
that Husky's rate is a calculated rate in this review, and that the 
fact that certain elements of Husky's costs were based on BIA does not 
alter this fact. Petitioners argue that there have been numerous 
instances where the Department has used rates that were, in part, based 
on BIA to establish a total BIA rate for another company, and that 
indeed, a significant percentage of the

[[Page 37990]]

rates calculated by the Department have an element of BIA in them. 
Petitioners maintain that Mobil's argument that it would be 
inconsistent with Department practice to apply Husky's rate to Mobil, 
as BIA, should be rejected.
    Department's Position: We disagree with Mobil. It is the 
Department's long-standing practice to use partial BIA with respect to 
a respondent and apply that rate, as BIA, to other firms who have 
failed to provide adequate responses. In this case, Husky's rate is a 
calculated rate, and, therefore, is appropriate as BIA for Mobil. We 
also disagree with Mobil that we have not exercised caution in choosing 
the rate. We have followed the law and have chosen a rate that is 
consistent with Department practice. As we stated in the preliminary 
results notice for these reviews, the applicable statute and 
regulations are as they existed on December 31, 1994. These reviews are 
not subject to the 1994 Antidumping Code and therefore it does not 
apply. Accordingly, the Department's established second-tier BIA 
practice in this case is required by the law applicable in these 
reviews. Therefore, for these final results, as BIA, we have continued 
to apply Husky's rate to Mobil.

Final Results of the Reviews

    As a result of our reviews, we finally determine that the following 
margins exist for the periods December 1, 1992 through November 30, 
1993, and December 1, 1993 through November 30, 1994:

------------------------------------------------------------------------
                                                                 Margin 
          Manufacturer/exporter               Time period         \5\   
---------------------------------------------------------------(percent)
Alberta Energy Co., Ltd.................     12/1/92-11/30/93   \1\ 5.56
                                             12/1/93-11/30/94   \1\ 5.56
Allied-Signal Inc.......................     12/1/92-11/30/93  \2\ 40.38
Brimstone Export........................     12/1/92-11/30/93  \2\ 40.38
Burza Resources.........................     12/1/92-11/30/93  \2\ 40.38
Fanchem.................................     12/1/92-11/30/93  \2\ 40.38
Husky Oil Ltd...........................     12/1/92-11/30/93      40.38
                                             12/1/93-11/30/94       3.38
Mobil Oil Canada, Ltd...................     12/1/92-11/30/93  \3\ 40.38
                                             12/1/93-11/30/94  \3\ 40.38
Norcen Energy Resources.................     12/1/92-11/30/93  \2\ 40.38
                                             12/1/93-11/30/94  \4\ 40.38
Petrosul International..................     12/1/92-11/30/93  \2\ 40.38
                                             12/1/93-11/30/94  \2\ 40.38
Saratoga Processing Co., Ltd............     12/1/92-11/30/93  \4\ 28.90
Sulbow Minerals.........................     12/1/92-11/30/93  \2\ 40.38
                                                                        
------------------------------------------------------------------------
\1\ No shipments or sales subject to this review. The firm has no       
  individual rate from any segment of this proceeding. As a result, the 
  firm will be subject to the ``all others'' rate.                      
\2\ Non-cooperative total BIA rate.                                     
\3\ Cooperative total BIA rate.                                         
\4\ No shipments to the United States during the period of review. Rate 
  is the rate established during the immediately preceding              
  administrative review.                                                

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between U.S. price and FMV may vary from the percentage 
stated above. The Department will issue appraisement instructions 
directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of these final results of administrative review for all 
shipments of elemental sulphur from Canada entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Tariff Act: (1) the cash 
deposit rates for the reviewed companies will be those rates 
established in the final results of the most recent review in which the 
company was involved; (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 either of these reviews, a prior 
review, or the original less than fair value (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 
these or any previous review, or the LTFV investigation, the cash 
deposit rate will be the ``new shipper'' rate of 5.56 percent 
established in the first review conducted by the Department in which a 
``new shipper'' rate was established. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CR 353.34(d)(1). 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. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: July 7, 1997.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-18445 Filed 7-14-97; 8:45 am]
BILLING CODE 3510-DS-P