[Federal Register Volume 62, Number 152 (Thursday, August 7, 1997)]
[Notices]
[Pages 42492-42496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20734]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-821-807]
Ferrovanadium and Nitrided Vanadium From the Russian Federation:
Notice of Preliminary Results and Partial Recission of Antidumping Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results and Partial Recission of
Antidumping Duty Administrative Review.
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SUMMARY: In response to a request from Shieldalloy Metallurgical
Corporation (Shieldalloy), the petitioner, the Department of Commerce
(the Department) is conducting an administrative review of the
antidumping duty order on ferrovanadium and nitrided vanadium from the
Russian Federation (Russia). This notice of preliminary results covers
the period January 4, 1995, through June 30, 1996. The Department is
now rescinding this review in part with respect to one exporter,
Odermet, Ltd., who had no shipments of the subject merchandise during
the period of review. For the second exporter, Galt Alloys, Inc.(Galt),
the review indicates the existence of dumping margins during this
period for sales of merchandise from one producer.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results of administrative review, we will instruct the U.S.
Customs Service (Customs) to assess antidumping duties equal to the
difference between the export price (EP) and the NV. Interested parties
are invited to comment on these preliminary results. Parties who submit
argument in this proceeding are requested to submit with the argument:
(1) A statement of the issue; and (2) a brief summary of the argument.
EFFECTIVE DATE: August 7, 1997.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Mary Jenkins,
AD/CVD Enforcement II, Office 5, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4136 or (202) 482-1756, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended, (the Act) are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Rounds Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to the regulations as codified at 19 CFR part 353 (April 1, 1997).
Background
The Department published an antidumping duty order on
[[Page 42493]]
ferrovanadium and nitrided vanadium from the Russian Federation on July
10, 1995 (60 FR 35550).
The Department published a notice of ``Opportunity To Request an
Administrative Review'' of the antidumping duty order for this review
period on July 8, 1996 (61 FR 35712). On July 17, 1996, Shieldalloy
requested that the Department conduct an administrative review of the
antidumping duty order on ferrovanadium and nitrided vanadium from
Russia for exporters Galt and Odermet, Ltd. We published a notice of
initiation of the review on August 15, 1996 (61 FR 42416).
In a letter dated September 9, 1996, Odermet, Ltd., stated that it
made no shipments of the subject merchandise during the review period.
In response to our query, Customs provided no indication that Odermet
had shipped the merchandise during the review period.
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for the preliminary results of an administrative review if
it determines that it is not practicable to complete the review within
the statutory time limit of 245 days. On April 7, 1997, the Department
extended the time limit for the preliminary results in this case (see
Ferrovanadium and Nitrided Vanadium from the Russian Federation; Notice
of Extension of Time Limit for Antidumping Duty Administrative Time
Limit for Antidumping Duty Administrative Review, 62 FR 16542, April 7,
1997). The Department is conducting this administrative review in
accordance with section 751 of the Act.
Recission
We have determined that during the period of review (POR), Odermet
did not export the subject merchandise to the United States. Therefore,
we rescind this review with respect to Odermet.
Scope of the Review
The products covered by this administrative review are
ferrovanadium and nitrided vanadium, regardless of grade, chemistry,
form or size, unless expressly excluded from the scope of this order.
Ferrovanadium includes alloys containing ferrovanadium as the
predominant element by weight (i.e., more weight than any other
element, except iron in some instances) and at least 4 percent by
weight of iron. Nitrided vanadium includes compounds containing
vanadium as the predominant element, by weight, and at least 5 percent,
by weight, of nitrogen. Excluded from the scope of this order are
vanadium additives other than ferrovanadium and nitrided vanadium, such
as vanadium-aluminum master alloys, vanadium chemicals, vanadium waste
and scrap, vanadium-bearing raw materials, such as slag, boiler
residues, fly ash, and vanadium oxides.
The products subject to this order are currently classifiable under
subheadings 2850.00.20, 7202.92.00, 7202.99.5040, 8112.40.3000, and
8112.40.6000 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope is
dispositive.
The POR is January 4, 1995, through June 30, 1996, covering one
exporter, Galt.
Fair Value Comparisons
Galt, a U.S. company, reported that it purchased merchandise
produced by two producers--SC-Vanadium Tulachermet (Tulachermet) and
Chusovoy Metallurgical Works (Chusovoy)--and re-sold the merchandise to
customers in the United States and other countries via a warehouse in
Europe. Galt reported that neither producer is affiliated with Galt and
at the time of each producer's sale to Galt, neither producer knew the
ultimate destination of the merchandise. Thus, for purposes of the fair
value comparison, Galt's sales to its first unaffiliated U.S. customer
form the basis of export price.
However, these producers knew at the time of the sale that the
merchandise was destined for exportation. Further, the subject
merchandise was merely transhipped through the intermediate country.
Therefore, in accordance with section 773(a)(3), normal value is
determined in the country of origin using the factors of production
methodology, as discussed below.
Both Tulachermet and Chusovoy responded to the Department's initial
antidumping questionnaire, but Chusovoy did not respond to the
Department's supplemental questionnaire. Tulachermet has continued to
cooperate with the Department's requests for information.
Under section 776(a)(2) (A) and (B) of the Act, the Department
shall use facts otherwise available in making its determinations if an
interested party withholds or fails to provide information at the time
and in the manner requested. In this instance, the NV information
necessary to calculate antidumping duties for Galt's sales of Chusovoy-
produced merchandise is not on the record because Chusovoy failed to
provide requested information by the established deadline. The limited
information that Chusovoy submitted is so incomplete that it cannot
serve as a reliable basis for reaching the applicable determination in
this review. As a result, pursuant to sections 776(a) and 782(e) of the
Act, the Department must resort to facts available.
Section 776(b) of the Act permits the Department to use an adverse
inference in selecting from facts available if the Department finds
that an interested party has not cooperated to the best of its ability
in responding to a request for information. By failing to respond,
Chusovoy has not cooperated to the best of its ability. Therefore, we
find it appropriate to apply adverse facts available with regard to
Galt's sales of Chusovoy-produced merchandise. At the same time, both
Galt and its second Russian supplier, Tulachermet, fully cooperated
with the Department. Thus, under section 776(b) of the Act, an adverse
inference is not warranted with respect to sales of Tulachermet's
merchandise.
The information submitted by Galt and Tulachermet meets the
requirements of section 782(e) of the Act:
(1) The information is timely;
(2) The information is verifiable;
(3) The information is not so incomplete that it cannot serve as a
reliable basis for our determination;
(4) These parties have acted to the best of their abilities in
providing the requested information; and
(5) The information can be used without undue difficulties.
Accordingly, we have relied upon the information submitted by Galt and
Tulachermet.
Consistent with our current practice, we have calculated a single
rate applicable to the exporter, Galt. This rate reflects the use of
adverse facts available for Galt's sales of Chusovoy merchandise as
well as calculated margins for Galt's sales of Tulachermet merchandise
(see, e.g., Final Determination of Sales at Less Than Fair Value: Pure
Magnesium From Ukraine, 60 FR 16433, March 30, 1995). However, we will
continue to examine whether, given the facts of this case, applying
separate ``combination rates'' (i.e., rates for each specific exporter/
producer combination) would be more appropriate. Therefore, we invite
comments from interested parties on this issue.
Selection of Adverse Facts Available Rate for Sales of Chusovoy-
Produced Merchandise
Section 776(b) authorizes the Department to use as adverse facts
[[Page 42494]]
available information derived from the petition, a final determination
from a segment of the proceeding, or other information placed on the
record. Because information from the petition and prior segments of the
proceeding constitute secondary information, the Department must, to
the extent practicable, corroborate that secondary information from
independent sources reasonably at its disposal, as stated in section
776(c) of the Act.
In light of Chusovoy's failure to respond, we have determined that
the information in the petition is the most appropriate facts
available. To corroborate that information, we reviewed the data
submitted and the assumptions petitioners made in calculating estimated
dumping margins in the petition. As discussed in detail in
``Corroboration of FA Rates,'' Memorandum to Jeffrey P. Bialos,
Principal Deputy Secretary for Import Administration, from the
Ferrovanadium Team, dated July 31, 1997 (Corroboration Memo), we
compared the petition's bases for U.S. price (now export price),
factors of production, and surrogate values to independent data from
the period of investigation. See also Preliminary Results of
Antidumping Duty Administrative Review and Partial Termination of
Administrative Review: Fresh Garlic from the People's Republic of China
(61 FR 68229, 68230, December 27, 1996), Preliminary Results and
Partial Rescission of Antidumping Duty Administrative Review: Certain
Cased Pencils From the People's Republic of China (62 FR 1734, 1735,
January 13, 1997), and Preliminary Results of Antidumping Duty
Administrative Review Certain Carbon Steel Butt-Weld Pipe Fittings From
Thailand (62 FR 16541, 16542, April 7, 1997).
Based on our analysis, we determined that the elements of the
petition calculation are reliable and, with one adjustment, have
probative value. During the LTFV investigation, we determined that the
principal raw material used by respondents to produce the subject
merchandise, vanadium slag, was of significantly lower quality than the
material upon which the petitioner estimated its surrogate value (see
also discussion below under ``Normal Value''). Therefore, we have
adjusted the valuation of the vanadium slag factor in the petition to
reflect this difference in quality. With this adjustment, the
corroborated rate derived from the petition is 88.63% .
Accordingly, for Galt's sales of Chusovoy-produced merchandise, we
have applied the recalculated petition rate of 88.63 percent.
Galt's Export Price and Constructed Export Price
As Galt is located in a market-economy country and is not
affiliated with a Russian producer or exporter, we are calculating a
separate rate for this reseller (see Bicycles From the PRC; Final
Determination of Sales at Less Than Fair Value, 61 FR 19026, 19027
(April 30, 1996)). During the POR, Galt took possession of the Russia-
produced merchandise outside of the United States and then sold the
merchandise to unaffiliated customers in the United States.
For Galt's sales of subject merchandise produced by Tulachermet,
when the merchandise was sold directly to the first unaffiliated
purchaser in the United States prior to importation and when
constructed export price (CEP) methodology was not otherwise indicated,
we calculated the export price (EP) of the subject merchandise sold to
the United States in accordance with section 772(a) of the Act. Where
Galt's sales to the first unaffiliated purchaser took place after
importation into the United States, we based the price in the United
States on CEP, in accordance with section 772(b) of the Act.
We calculated EP based on the price to unrelated purchasers in the
United States. We made deductions, where appropriate, for the following
movement expenses incurred in market economy currencies and provided by
market economy suppliers: foreign brokerage and handling, ocean
freight, marine insurance, U.S. brokerage and handling, U.S. inland
freight, and U.S. duty charges. We valued inland freight expenses
incurred in bringing the subject merchandise from the Russian plant to
the reseller's warehouse using surrogate data based on South African
freight costs. We selected South Africa as the surrogate country for
the reasons explained in the ``Surrogate Country Selection'' section of
this notice.
For CEP sales, we made additional deductions for Galt's direct and
indirect selling expenses, including inventory carrying costs, incurred
with regard to economic activities in the United States, as well as
repacking, warehousing, and credit expenses, pursuant to section
772(d)(1) of the Act. Galt reported its indirect selling expenses on a
fixed, per-unit basis. We have recalculated these expenses as a
percentage of sales value, based on information in Galt's questionnaire
response, consistent with the manner in which the Department normally
calculates indirect selling expenses. We deducted an amount for CEP
profit by applying Galt's profit rate to the sum of selling expenses
incurred in the United States, in accordance with section 772(f) of the
Act.
No other adjustments to EP or CEP sales were claimed or allowed.
Surrogate Country Selection
As noted above, NV is determined in Russia, the country of origin,
in accordance with section 773(a)(3) of the Act. Because the Department
considers Russia an NME country and the producers of the merchandise
exported by Galt are located in Russia, we are not able to determine NV
on the basis of these producers' costs and prices. Section 773(c)(1) of
the Act provides that the Department shall determine the NV on the
basis of the value of the factors of production if (1) the subject
merchandise is exported from an NME country, and (2) the available
information does not permit the calculation of NV under section 773(a)
of the Act. Therefore, we have applied surrogate values to factors of
production to determine NV.
We determined that South Africa is comparable to the Russian
Federation in terms of per capita gross national product and the
national distribution of labor (See ``Ferrovanadium and Nitrided
Vanadium from Russia: Nonmarket Economy Status and Surrogate Country
Selection,'' Memorandum to David Binder from David Mueller, October 29,
1996). In addition, South Africa is a significant producer of
ferrovanadium. Therefore, we chose South Africa as an appropriate
surrogate on the basis of the above criteria and have used publicly
available information relating to South Africa wherever possible to
value the various factors of production.
Normal Value
To determine the NV for Galt sales of merchandise produced by
Tulachermet, we valued the factors of production as discussed in the
Valuation Memorandum dated July 28, 1997, on file in the Central
Records Unit. The values used are summarized below:
We valued most raw materials and packing materials based
on South African domestic prices in South Africa's Mineral Industry
1995/96 (SAMI 95/96) and unit prices, reported net of taxes, based on
South African import data from Southern African Customs Union Trade
Statistics (SACU Trade Statistics).
For vanadium slag, we valued a portion of Tulachermet's consumption
at the market economy price Tulachermet paid for South African slag
consumed during the POR. The balance
[[Page 42495]]
of Tulachermet's POR slag consumption was Russian-sourced slag, which
contained a substantially lower concentration of vanadium pentoxide. We
were unable to find any surrogate value data for vanadium slag of this
quality. As facts available, we used Tulachermet's purchase price for
South African slag as the surrogate value and adjusted it downward to
account for the difference in vanadium pentoxide content, using the
same adjustment made in the LTFV investigation.
As discussed in the Valuation Memorandum, the Department received
information in this proceeding that the 90% vanadium pentoxide prices
used in the LTFV adjustment methodology were based on Russian material
prices. According to information obtained from an industry publication,
Metal Bulletin, it is not possible to determine prices of 90% vanadium
pentoxide from market economy counties during that period. In the
absence of any other means to adjust the slag value, we are applying
the LTFV methodology for the preliminary results as facts available. In
doing so, we recognize that the 90% vanadium pentoxide prices used to
establish the adjustment ratio represent merchandise from a non-market
economy. However, it is the only information on the record with which
to make the adjustment. As such, the resulting relationship between 90%
vanadium pentoxide, produced from low-grade slag equivalent to Nizhni-
Tagil slag, and 98% vanadium pentoxide, produced from high-grade South
African slag, is the best available means to account for the
substantial disparity between the material to be valued and the
material from which the surrogate value is derived.
We were also unable to obtain surrogate values for vanadium
trioxide and pre-alloyed vanadium. As facts available, we valued these
materials based on South African vanadium pentoxide and ferrovanadium
prices, respectively, adjusted for differences in vanadium content.
For sulfuric acid, we used the average, tax-exclusive, price
reported by a South African vanadium producer.
Finally, we were unable to identify any comparable surrogate value
for the chemical input boron anhydride. The quantity of this material
used to produce ferrovanadium is a very small amount. For the
preliminary results, we have calculated NV without surrogate material
costs for this factor.
To value truck and rail freight, we used the South African
rail rate used in the LTFV investigation. We adjusted this rate for
inflation, using a wholesale price index published by the International
Monetary Fund. We relied on this rate for both truck and rail
transportation of input materials and for foreign inland freight
because we were unable to find any other suitable surrogate freight
value.
Tulachermet did not report the distance from its supplier of two
packing materials. As facts available, we have used the farthest
distance reported by Tulachermet for any supplier in calculating the
surrogate freight costs for these materials.
For electricity, we used the average POR rate for
industrial users as published by the South African state utility
company, ESKOM. For natural gas, we used the South African POR price
provided to us by ESKOM.
For labor, we used the skilled and unskilled wage rates
for the South African metallurgical industry reported to us by a South
African producer of vanadium.
For factory overhead, selling, general, and administrative
(SG&A) expenses and profit, we calculated ratios from the 1995 Annual
Report of the South African ferrovanadium manufacturer Highveld Steel
and Vanadium Co., Ltd.
Preliminary Results
As a result of this review, we preliminarily determine that the
following weighted-average dumping margin exists:
------------------------------------------------------------------------
Margin
Exporter Period (percent)
------------------------------------------------------------------------
Galt Alloys, Inc........................ 1/4/95-7/31/96 34.73
------------------------------------------------------------------------
Parties to this proceeding may request disclosure within five days
of publication of this notice and any interested party may request a
hearing within 10 days of publication. Any hearing, if requested, will
be held 44 days after the date of publication, or the first working day
thereafter. Interested parties may submit case briefs and/or written
comments no later than 30 days after the date of publication. Rebuttal
briefs and rebuttals to written comments, limited to issues raised in
such briefs or comments, may be filed no later than 37 days after the
date of publication. The Department will publish a notice of the final
results of the administrative review, which will include the results of
its analysis of issues raised in any such written comments or at the
hearing, within 120 days from the issuance of these preliminary
results.
The final results of this review shall be the basis for the
assessment of antidumping dumping duties on entries of merchandise
covered by the determination and for future deposits of estimated
duties. The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between EP and NV may vary from the percentages stated above. The
Department will issue appraisement instructions directly to Customs.
Further, the following deposit requirements will be effective upon
completion of the final results of this administrative review for all
shipments of ferrovanadium and nitrided vanadium from the Russian
Federation entered, or withdrawn from warehouse, for consumption on or
after the publication date of the final results of this administrative
review, as provided by section 751(a)(1) of the Act: (1) The cash
deposit rates for Galt will be the producer-specific rates established
in the final results of this administrative review; (2) for merchandise
exported by manufacturers or exporters not covered in this review but
covered in the original LTFV investigation and have a separate rate,
the cash deposit rate will continue to be the most recent rate
published in the final determination or final results for which the
manufacturer or exporter received a company-specific rate; (3) for
Russian manufacturers or exporters not covered in the LTFV
investigation, the cash deposit rate will continue to be the Russia-
wide rate of 108.00 percent; and (4) the cash deposit rate for non-
Russian exporters of subject merchandise from Russia who were not
covered in the LTFV investigation or in this administrative review,
will also be the Russia-wide rate. These deposit rates, when imposed,
shall remain in effect until publication of the final results of the
next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26(b) to file a certificate regarding
the reimbursement of antidumping duties prior to liquidation of the
relevant entries during these review periods. Failure to comply with
this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and published in
accordance with section 777(i).
[[Page 42496]]
Dated: July 31, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-20734 Filed 8-6-97; 8:45 am]
BILLING CODE 3510-DS-P