[Federal Register Volume 62, Number 157 (Thursday, August 14, 1997)]
[Notices]
[Pages 43504-43513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21583]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-820]
Notice of Final Results of Antidumping Duty Administrative
Review: Ferrosilicon From Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On April 8, 1997, the Department of Commerce (the Department)
published the preliminary results of its administrative review of the
antidumping duty order on Ferrosilicon from Brazil. This review covers
exports of this merchandise to the United States by two manufacturers/
exporters, Companhia Brasileria Carbureto de Calcio (``CBCC'') and
Companhia Ferroligas Minas Gerais-Minasligas (``Minasligas''), during
the period March 1, 1995, through February 29, 1996.
We gave interested parties an opportunity to comment on the
preliminary results. Based on our analysis of the comments received and
the correction of certain clerical and computer programming errors, we
have changed our results from those presented in our preliminary
results, as described below in the comment section of this notice. The
final results are listed below in the section ``Final Results of
Review.''
EFFECTIVE DATE: August 14, 1997.
FOR FURTHER INFORMATION CONTACT: Cameron Werker or Sal Tauhidi, AD/CVD
Enforcement Group II, Office Four, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3874 and (202) 482-4851, respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act), by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
[[Page 43505]]
regulations codified at 19 C.F.R. part 353 (April 1, 1996).
SUPPLEMENTARY INFORMATION:
Background
On April 8, 1997, the Department of Commerce (the Department)
published in the Federal Register (67 FR 16763) the preliminary results
of review of the antidumping duty order on ferrosilicon from Brazil
(March 14, 1994, 59 FR 11769). On May 8, 1997 and May 15, 1997, we
received case and rebuttal briefs from the respondents, CBCC and
Minasligas, and from petitioners, SKW Metals & Alloys, Inc. and Aimcor
Inc. At the request of both petitioners and respondents, we held a
hearing on May 22, 1997. In response to questions raised by the
Department at the hearing, the petitioners submitted additional
information on June 11, 1997, regarding the Department's product
concordance program with respect to the distinction between lumps and
fines. (For more information on lumps and fines, see Comment 1 below.)
The Department has now completed this administrative review in
accordance with section 751(a) of the Act.
Scope of Review
The merchandise subject to this review is ferrosilicon, a ferro
alloy generally containing, by weight, not less than four percent iron,
more than eight percent but not more than 96 percent silicon, not more
than 10 percent chromium, not more than 30 percent manganese, not more
than three percent phosphorous, less than 2.75 percent magnesium, and
not more than 10 percent calcium or any other element. Ferrosilicon is
a ferro alloy produced by combining silicon and iron through smelting
in a submerged-arc furnace. Ferrosilicon is used primarily as an
alloying agent in the production of steel and cast iron. It is also
used in the steel industry as a deoxidizer and a reducing agent, and by
cast iron producers as an inoculant.
Ferrosilicon is differentiated by size and by grade. The sizes
express the maximum and minimum dimensions of the lumps of ferrosilicon
found in a given shipment. Ferrosilicon grades are defined by the
percentages by weight of contained silicon and other minor elements.
Ferrosilicon is most commonly sold to the iron and steel industries in
standard grades of 75 percent and 50 percent ferrosilicon. Calcium
silicon, ferrocalcium silicon, and magnesium ferrosilicon are
specifically excluded from the scope of this review. Calcium silicon is
an alloy containing, by weight, not more than five percent iron, 60 to
65 percent silicon, and 28 to 32 percent calcium. Ferrocalcium silicon
is a ferro alloy containing, by weight, not less than four percent
iron, 60 to 65 percent silicon, and more than 10 percent calcium.
Magnesium ferrosilicon is a ferro alloy containing, by weight, not less
than four percent iron, not more than 55 percent silicon, and not less
than 2.75 percent magnesium.
Ferrosilicon is currently classifiable under the following
subheadings of the Harmonized Tariff Schedule of the United States
(HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000,
7202.29.0010, and 7202.29.0050. The HTSUS subheadings are provided for
convenience and customs purposes. Our written description of the scope
of this review is dispositive. Ferrosilicon in the form of slag is
included within the scope of this order if it meets, in general, the
chemical content definition stated above and is capable of being used
as ferrosilicon. Parties that believe their importations of
ferrosilicon slag do not meet these definitions should contact the
Department and request a scope determination.
Product Comparison
In accordance with section 771(16) of the Act, we considered all
products produced by CBCC and Minasligas, covered by the description in
the ``Scope of the Review'' section, above, and sold in the home market
during the POR, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product based on the following criteria: (1) The grade of ferrosilicon
(i.e., standard, high purity and low aluminum); (2) the percentage
range, by weight, of silicon content; and (3) the sieve size.
Although we have used the sieve size category as a matching
criterion in past reviews, we reconsidered the matching criteria for
CBCC and Minasligas in light of additional data on the record in this
review. Although cost differences among sieve size categories do not
exist, we considered whether the merchandise was a ``lump'' or a
``fine'' in making our product comparisons because sales of
ferrosilicon fines command significantly lower market prices than sales
of ferrosilicon lumps. In addition, it appears that the two products
have different end-uses. Lumps are defined as having a minimum
dimension of equal to or greater than one millimeter and fines as
having a minimum dimension of less than one millimeter. We did not
consider any difference in sieve size ranges within the lump or fine
categories in determining the most appropriate product comparison
because significant price differences within the lump or fine sieve
size category did not exist.
Verification
As provided in section 782(i) if the Act, on February 17 through
28, 1997, we verified information provided by CBCC and Minasligas by
using standard verification procedures, including onsite inspection of
one of the respondent's production facilities (CBCC), the examination
of relevant sales and financial records, and original documentation
containing relevant information. The results of those verifications are
outlined in the public versions of the verification reports dated March
19, 1997, on file in room B-099 of the main Commerce building.
Comment 1: Fines and Lumps. The petitioners contend that the
dimensions used by the Department to define lumps and fines in the
preliminary results were confusing and left gaps because the Department
defined lumps and fines based on a minimum and maximum dimension,
respectively. As a result, the petitioners claim that merchandise with
one dimension smaller or larger than the established maximum and
minimum ranges cannot be classified as either lumps or fines. The
petitioners argue that in the final results, the Department should use
a distinction that defines lumps and fines based only on a maximum or a
minimum dimension. Consistent with their argument, petitioners noted at
the May 22, 1997, hearing, that the Department's use of the minimum
dimension to define both lumps and fines in the product concordance
program, was in fact, correct.
CBCC states that although the criteria chosen by the Department for
defining fines are not perfect, it agrees that the Department's
criteria generally makes sense from a market point of view. Citing the
Department's April 1, 1997 Concurrence Memorandum, CBCC contends that
because the selling price of ferrosilicon of less than 1mm in diameter
is lower than ferrosilicon of 1mm higher in diameter, the criteria used
by the Department in this review appear to be reasonable.
DOC Position: We agree with the petitioners. While the product
concordance program developed by the Department in the preliminary
results defined lumps and fines in terms of minimum dimensions, we
stated in the Federal Register notice that we used a
[[Page 43506]]
maximum dimension to define fines and a minimum dimension to define
lumps (see Notice of Preliminary Results of Antidumping Duty
Administrative Review: Ferrosilicon from Brazil, 62 FR 16763 (April 8,
1997)). We agree that this inconsistency in the parameters defining
lumps and fines was confusing, and that we should use the same
parameters in the narrative definition and the product concordance
program. Since none of the parties dispute that our product concordance
program accurately matched lumps and fines to the appropriate
comparison products, we have revised the language in the ``Product
Comparisons'' section of this notice rather than alter the concordance
program. See the ``Product Comparisons'' section, above.
Comment 2: The Sales Below Cost Test. Minasligas and CBCC contend
that the Department overstated the quantity of home market sales below
cost by comparing a domestic price that was exclusive of value added
taxes (VAT) to a cost of production (COP) which was inclusive of VAT.
Minasligas and CBCC argue that such a comparison results in an
inequitable comparison and creates below cost sales where none would
have otherwise existed. Minasligas and CBCC further maintain that in
order to produce a fair comparison, it is the Department's practice to
compare COP and the domestic price on the same basis. To support their
claim, Minasligas and CBCC cite the Department's practice of comparing
the net COP and the net home-market prices on the same basis in
Ferrosilicon from Brazil: Final Results of Administrative Review, 61 FR
59407, 59410 (November 22, 1996) (Ferrosilicon from Brazil 96).
Minasligas and CBCC further contend that the Department's Import Policy
Bulletin at 94.6 states that ``both the net COP and the net home market
prices should be on the same basis.''
Petitioners agree that if the Department excludes VAT from the home
market net prices that are compared to COP, it is proper to exclude VAT
paid on material inputs from COP in order to make an ``apples-to-
apples'' comparison. However, petitioners contend that the Department
should include in COP the amounts for PIS (Program Intergracao Social)
and COFINS (Social Contributions on Gross Sales) taxes that CBCC
excluded from the direct materials costs that the Department used for
the preliminary results calculations. Citing Silicon Metal from Brazil:
Final Results of Antidumping Duty Administrative Review and
Determination Not to Revoke in Part, 62 FR 1976 (January 14, 1997)
(Silicon Metal from Brazil 97), the petitioners contend that the
Department determined that PIS and COFINS taxes are gross revenue taxes
and, therefore, are not taxes that a buyer pays directly when
purchasing materials. In order for the COP to reflect the full purchase
price of the materials, petitioners claim that the Department's policy
is to add to CBCC's reported material costs the hypothetical values
that CBCC reported as PIS and COFINS taxes on its material inputs.
For these reasons, the petitioners contend that for the final
results, the Department should exclude VAT from the cost of manufacture
(COM) used to calculate COP, but should include PIS and COFINS taxes.
In addition, petitioners maintain that PIS and COFINS taxes should be
included in the calculation of constructed value (CV) for the same
reasons explained above.
DOC Position: We agree with petitioners and respondents that we
incorrectly compared COPs inclusive of VAT to VAT-exclusive home market
prices for purposes of the preliminary results. Therefore, for purposes
of the final results, we excluded VAT (ICMS and IPI) taxes from the
calculation of COP for purposes of performing the sales below cost
test, as we excluded these taxes from the home market prices.
In addition, for reasons fully explained in Comments 8 and 26 of
Silicon Metal from Brazil: Final Results of Antidumping Duty Review 61
FR 4673, 46764 (September 5,1996) (Silicon Metal from Brazil 96) and
also in Comment 4 below, we agree with the petitioners that the
Department should not reduce materials costs in COP and CV by amounts
for PIS and COFINS taxes claimed by CBCC and Minasligas. As stated in
Silicon Metal from Brazil 96, ``PIS and COFINS taxes are gross revenue
taxes, and therefore are not taxes that a buyer pays directly when
purchasing materials. For this reason, in order for COP to reflect the
complete cost of materials, the costs the Department uses in its
calculation of COP must not be net of any hypothetical tax amounts that
are presumably imbedded within the purchase price of the materials.''
Furthermore, we note that PIS and COFINS are internal taxes. In this
review, these taxes are paid by the supplier on the revenue generated
from the sale of material inputs. As such, in order for the COP to
reflect the full purchase price of the materials, we must add to its
reported material costs the hypothetical values that CBCC reported as
PIS and COFINS taxes on its material inputs. Thus, in accordance with
our determination in Silicon Metal from Brazil 96, we determine that
these taxes are not imposed directly upon the merchandise or components
thereof, and as a result have no statutory basis to deduct them from
the cost of manufacture used to calculate COP and CV. (See also Silicon
Metal from Argentina, Final Determination of Sales at Less Than Fair
Value, 56 FR 37891, 37893 (August 9, 1991) (Silicon Metal from
Argentina 91)).
However, we disagree with petitioners that CBCC excluded PIS and
COFINS taxes from its direct materials cost. Although CBCC provided
these taxes separately in its questionnaire response, we found at
verification that the direct material costs reported by CBCC included
both PIS and COFINS taxes. Similarly, Minasligas also reported, and we
verified, that its direct material costs were inclusive of PIS and
COFINS. Therefore, for purposes of the preliminary results, the COP for
both respondents was calculated inclusive of PIS and COFINS. We have
made no changes in the final results for PIS and COFINS taxes.
Comment 3: Advance Exchange Contracts (ACCs) on U.S. Sales.
Minasligas claims that by using ACCs to finance its export sales, the
company obtains payment prior to shipment. Minasligas argues that in
the final results the Department should recognize the economic benefit
arising from prepayment and allow Minasligas to offset its imputed
credit expenses with negative imputed credit expenses or credit revenue
resulting from prepayment. Specifically, Minasligas contends the
following:
(1) The ACCs are directly related to U.S. sales. Minasligas
maintains that the Department was able to identify exactly which ACCs
were associated with each U.S. sale and the product is fixed at the
time the ACC is signed and cannot be changed. Therefore, Minasligas
asserts that the ACCs are secured in advance for export sales of
ferrosilicon;
(2) The Department found that bank charges incurred between the
date Minasligas receives an ACC and the date the merchandise is shipped
from the plant were directly related to the U.S. sales and subsequently
used these expenses to calculate imputed credit costs in the
preliminary results. Minasligas argues that this demonstrates a direct
relationship between the ``credit revenue'' reported by Minasligas and
the U.S. sales;
(3) The Department's rejection of Minasligas' negative imputed
credit expense contradicts the Department's regulations which state
that the Department will make a circumstance-of-sale (COS) adjustment
for selling expenses ``which bear a direct
[[Page 43507]]
relationship to the sales compared.'' Minasligas contends that the
negative credit expenses are a direct result of a specific U.S. sale of
ferrosilicon because without a U.S. sale there would be no credit
revenue; and
(4) The Department's treatment of ACCs is contrary to its
treatment of identical credit expenses in prior and parallel
proceedings involving Minasligas.
Minasligas and CBCC argue that in the event the Department
determines not to use the negative credit expenses or credit revenue
reported by the companies for its imputed U.S. credit calculation, the
credit calculation used by the Department in the preliminary results
contains several errors:
First, Minasligas and CBCC argue that the bank charges overstate
the credit period. Specifically, Minasligas and CBCC claim that the
bank charges represent the interest expense incurred between the date a
company receives an advance under an ACC and the date of payment by the
U.S. customer. Because the date of receipt of the advance can predate
the date of shipment from the plant, Minasligas and CBCC contend that
the bank charges overstate the imputed credit expense (an expense which
is intended to capture the cost of extending credit between the date
the merchandise is shipped to the customer and the date the respondent
receives payment from the customer). Minasligas and CBCC contend that
the Department should calculate imputed credit expenses using the
actual period between the date of shipment and the date of payment.
Furthermore, Minasligas asserts that in its preliminary results the
Department inadvertently double-counted the bank charges in the
calculation of normal value (NV). The bank charges were added both as
part of the reported direct selling expenses and as the imputed credit
expense. Finally, Minasligas argues that the Department erred by
calculating credit expenses based on a U.S. price which was inclusive
of VAT. Minasligas contends that it is the Department's practice to
calculate credit expenses on a price exclusive of VAT.
Petitioners agree with the Department's decision in the preliminary
results to disregard Minasligas' reported imputed credit revenue based
on the finding that ACCs are not directly tied to specific export
sales. The petitioners argue that the Department's preliminary finding
was correct because: (1) The export value of the sale was not fixed on
the date the ACC was signed; (2) the ACCs were obtained prior to the
U.S. date of sale for all of CBCC's U.S. sales and certain sales made
by Minasligas, and thus not directly tied to a specific U.S. sale for
future unspecified shipments; (3) the amount borrowed under certain
ACCs did not correspond exactly with the value of the U.S. sale which
was later shipped; (4) in certain cases, more than one ACC was used to
finance a single U.S. transaction; and (5) certain ACCs were used to
finance more than one U.S. export.
Moreover, the petitioners agree with Minasligas and CBCC that the
Department's practice to use the interest and bank charges Minasligas
paid for the ACCs to determine U.S. imputed credit expenses for each
U.S. sale is inconsistent with the Department's determination that ACCs
are not directly related to U.S. sales. For this reason, petitioners
argue that the Department should calculate U.S. imputed credit expenses
for Minasligas and CBCC in accordance with its established practice
(i.e., based on the period from the date of shipment from Minasligas's
plant to the date of payment by the U.S. customer).
DOC Position: We agree with petitioners that ACCs are not directly
tied to specific export sales at the time the ACC is opened, and
therefore, we determine that the advance resulting from the ACC does
not represent prepayment for an export sale. In fact, all parties agree
that, as of the date an ACC is opened with a bank, no tie exists
between an ACC and specific export sales. The link between ACC and sale
does not occur until the respondents present the issuing bank with the
export documentation for a given sale. Until that time, each respondent
is able to use the money from the ACC to finance any export sale of
ferrosilicon to any export market.
This fact pattern is similar to that of the Final Determination of
Sales at Less Than Fair Value: Industrial Nitrocellulose from Brazil,
55 FR 23,120 (June 6, 1990) (``Nitrocellulose''). (Upheld by the CIT,
March 2, 1995.) In Nitrocellulose, the Department disallowed a negative
credit expense adjustment because the respondent ``borrowed money which
was to be repaid with the proceeds from future unspecified export
sales'' and the Department found ``that the U.S. sales were not paid
for in advance.'' Therefore, for purposes of the final results, the
Department finds that the ACC bank loans are not directly related to
the U.S. sales. We have therefore continued to disallow the claimed
negative credit expenses and/or interest revenue.
Regarding the calculation of imputed credit expenses, we agree with
all parties that by using the reported bank charges, we calculated
credit using a period longer than that period normally captured by our
imputed credit calculation (i.e., the period between the date of
shipment from the plant and the date of payment from the customer).
Therefore, for purposes of the final results, we have calculated
imputed credit based on a credit period between the date of shipment
from the plant and the date of payment from the customer. In addition,
we have used the average ACC interest rates derived from the ACCs
examined at verification for each of the respondents. These interest
rates represent the actual interest rates received by each respondent
for U.S. dollar-denominated short-term loans. (See the Sales
Calculation Memorandums from Cameron Werker to the File for both CBCC
and Minasligas, each dated August 6, 1997, for further discussion of
the calculations of credit periods and interest rates.)
We also agree with CBCC and Minasligas that we double-counted bank
charges in the preliminary results. It is inappropriate to use bank
charges as a surrogate for credit expenses for specific U.S. sales
having determined that there is no direct link between an ACC and a
sale at the time the sale is made. In addition, the money received from
opening an ACC is used by each of the respondents as working capital to
finance future, unspecified export sales. As a result, each respondent
is then responsible for paying the bank interest on the loan. It is
reasonable to assume that these interest payments are captured by each
respondent in their respective ``Interest'' accounts. Therefore, the
Department has already captured these expenses as part of our interest
calculation, and thus, we have made no further adjustments for these
expenses (i.e., we did not include them as direct selling expenses).
Finally, regarding Minasligas contention that the Department
calculated credit expenses based on U.S. prices inclusive of VAT, we
note that at verification Minasligas was unable to substantiate its
claim that VAT charges are passed along to U.S. customers and are
included in the reported prices. Therefore, we have not made a
deduction from U.S. price for VAT.
Comment 4: Treatment of Taxes in the Calculation of Normal
Value(NV). A. PIS/OFINS Taxes. Minasligas and CBCC contend that the
Department's failure to deduct the PIS and COFINS taxes from NV for
price-to-price comparisons in accordance with 19 U.S.C. 1677b
(a)(6)(C)(iii) led to an unfair comparison since these taxes are paid
on home market sales but not on U.S. sales.
[[Page 43508]]
Minasligas and CBCC assert that these taxes are directly related to
home market sales since they are generated directly by sales of
ferrosilicon in the home market. Minasligas and CBCC further assert
that the Department should account for these taxes in the final results
by making a circumstance of sale (COS) adjustment as directed by 19
U.S.C. 1677b(a)(6)(C)(iii), or an adjustment to NV under 19 U.S.C.
1677b (a)(6)(B)(iii).
Petitioners contend that the Department was correct in using a NV
that was not reduced by PIS and COFINS taxes. Citing section 773(a)
(6)(B)(iii) of the Act, the petitioners argue that NV may only be
reduced by taxes imposed directly upon the foreign like product or
components thereof. The petitioners further contend that this language
is identical to that of section 772(d)(1)(C), the parallel provision in
effect prior to the enactment of the URAA, which they claim provided
for an upward adjustment to the U.S. price.
To support their argument, petitioners cite Silicon Metal from
Argentina 91. In that case, petitioners contend that the Department
determined that taxes similar to the PIS and COFINS taxes were not
taxes directly imposed upon the merchandise or components thereof and,
therefore, did not qualify for an adjustment to U.S. price. As in
Silicon Metal from Argentina 91, petitioners maintain that the taxes at
issue in this case do not qualify for a COS adjustment pursuant to
773(a)(6)(C)(iii) of the Act for the same reason that they do not
qualify for an adjustment to NV. Petitioners state that the
Department's regulations specify that the Department will limit
allowances for differences in the circumstances of sales ``to those
circumstances which bear a direct relationship to the sales compared''
(see 19 CFR section 353.56(a)(1)). In this instance, petitioners argue
that the PIS and COFINS taxes are not imposed on ferrosilicon sales
transactions, but instead, are assessed on gross receipts from
operations, including sales and other revenues, but excluding revenues
from export sales. Consistent with the Department's determinations in
the 1993-1994 and 1994-1995 administrative reviews on silicon metal
from Brazil, petitioners maintain that PIS and COFINS are not directly
related to specific sales and do not qualify for a COS adjustment. For
these reasons and for the similar reasons presented in Comment 2, the
petitioners argue that the Department was correct not to adjust NV or
U.S. price by PIS and COFINS taxes.
DOC Position: We agree with petitioners. As stated in Comment 2
above, information on the record demonstrates that the PIS and COFINS
taxes are taxes on gross revenue exclusive of export revenue. Thus,
these taxes are not imposed on the merchandise or components thereof.
Therefore, because these taxes cannot be tied directly to ferrosilicon
sales, we have no statutory basis to deduct them from NV. This position
is consistent with our practice in Silicon Metal from Argentina 91 at
Comment 8 and Comment 26. We also agree with petitioners that because
the PIS and COFINS taxes are gross revenue taxes, they do not bear a
direct relationship to home market sales and, therefore, do not qualify
for a COS adjustment. Therefore, for the purposes of these final
results, we have not made an adjustment to NV for PIS and COFINS taxes.
B. VAT Incurred on Material Inputs. CBCC argues that the Department
improperly included VAT (ICMS and IPI) in the calculation of CV. CBCC
maintains that CV inclusive of VAT incurred on the purchase of material
inputs led to an unfair comparison in the preliminary results. CBCC
contends that in a tax scheme such as Brazil's, a respondent may be
able to show that VAT on inputs did not in fact constitute a cost of
materials for the exported product within the meaning of 19 U.S.C.
1677b(e)(1)(A). Citing Silicon Metal from Brazil 96, CBCC contends that
Article VI of the GATT and Article 2 of the Tokyo Round Antidumping
Code requires that dumping assessments be tax neutral and that this
requirement has continued under the Agreement on Implementation of
Article VI of the GATT. CBCC further contends that the above-referenced
cite states that the URAA explicitly amended the antidumping law to
remove consumption taxes from the home market price and eliminated the
addition of taxes to U.S. price, so that no consumption tax is included
in the price in either market. CBCC also contends that the Statement of
Administrative Action states that this amendment was intended to result
in tax neutrality which is the Department's guiding principle for
dealing with VAT. For these reasons, CBCC asserts that it is improper
for the Department to compare CV inclusive of VAT to a U.S. price
exclusive of VAT, without first determining whether the VAT paid on the
material inputs is a cost of materials for the exported product.
The petitioners argue that the Department was correct in including
VAT (ICMS and IPI) paid on ferrosilicon material inputs in CV.
Petitioners contend that the source of the language on tax neutrality
that CBCC refers to in Silicon Metal from Brazil 96 only addresses
adjustments for taxes paid on sales of the final product in price-based
margin calculations but does not address taxes paid on inputs and the
treatment of those taxes in CV-based margin calculations. Rather,
petitioners contend that the Department's treatment of taxes on inputs
used to produce exported merchandise in calculating CV is directly
governed by the statute. Petitioners state that section 773(e)(1) of
the Act provides that the CV of imported merchandise shall be an amount
equal to the sum of the cost of materials. Furthermore, petitioners
argue that section 773(e) provides that ``* * * that the cost of
materials shall be determined without regard to an internal tax in the
exporting country imposed on such materials or their disposition which
are remitted or refunded upon exportation of the subject merchandises
produced from such materials.''
Therefore, petitioners contend, the plain language of the statute
states that a home market tax that is directly applicable to materials
used in the manufacture of merchandise exported to the United States
constitutes an actual cost of producing the exported merchandise
unless, and only if, the tax is remitted or refunded upon the
subsequent exportation of that merchandise. Petitioners argue that it
is undisputed that CBCC paid ICMS and IPI taxes on inputs it used to
produce exported ferrosilicon and that these taxes were not remitted or
refunded upon exportation. As a result, petitioners maintain that the
Department followed its established practice (see Silicon Metal from
Brazil 96) of including ICMS and IPI taxes in CV.
The petitioners further assert that CBCC's claim that the
Department must determine whether CBCC paid more VAT on inputs used to
produce exported ferrosilicon than it collected on home market sales of
ferrosilicon has already been rejected by the Department. Again citing
Silicon Metal from Brazil 96, petitioners argue that the Department, in
accordance with section 773(e) of the Tariff Act, did not account for
the reimbursement to the respondents of ICMS and IPI taxes by means of
home market sales of silicon metal.
DOC Position: We made only price-to-price comparisons for purposes
of these final results. Therefore, since we did not resort to the use
of CV, it was not necessary to address the above issue.
Comment 5: Home Market Credit Expenses. Minasligas argues that
because Minasligas did not have short-
[[Page 43509]]
term borrowings during the POR, the Department understated the short-
term borrowing rate used to calculate home market credit expenses by
utilizing the ``taxa referential'' (TR). However, Minasligas contends
that the TR rate is only a reference rate published by the Brazilian
Central Bank and that Brazilian companies do not have access to this
rate. In addition, Minasligas asserts that the TR rate is
unrealistically low when compared to other short-term rates offered by
commercial banks during the POR. For the final results, Minasligas
contends that the Department should calculate home market credit
expenses using a rate obtained from a commercial lender in effect
during the POR such as those contained on the record in this
proceeding. Minasligas contends that this practice is consistent with
the Department's treatment of home market credit expenses calculated
for Ferbasa in Ferrosilicon from Brazil 96.
The petitioners contend that the Department's use of the TR rate to
calculate home market credit expenses and inventory carrying cost is
consistent with the Department's previous practice. In this regard,
petitioners cite Certain Cut-to-Length Carbon Steel Plate from Brazil:
Final Results of Antidumping Duty Administrative Review (62 FR 18,486,
18,487 (April 15, 1997)) (Cut-to-Length Plate from Brazil) where the
Department determined that the TR rate is a benchmark comparable to a
prime rate published by the Bank of Brazil and, therefore, used the TR
rate to calculate home market credit expenses. Petitioners further
claim that Minasligas itself stated that the TR rate was established to
measure the cost of credit and that it is also the rate most widely
used by companies in Brazil to determine the interest rate for short-
term borrowing. (See Final Redetermination on Remand: Ferrosilicon from
Brazil, LFTV Investigation (January 17, 1996) (Final Redetermination on
Remand).)
Further, the petitioners argue that under established Department
practice, ``it is up to a respondent to substantiate and document any
adjustment or claim to the Department.'' (See Silicon Metal From Brazil
97.) Petitioners maintain that Minasligas failed to provide the
Department with any evidence that the alternative interest rates on the
record constitute ``published commercial bank prime short-term lending
rates.'' The petitioners contend that Minasligas' submission of the
monthly short-term borrowing rates of a commercial bank, BEMGE, that
were in effect during the POR, were in fact only a fax listing 30-day
interest rates for the period December 1994 through May 1996.
Petitioners assert that Minasligas failed to provide any evidence that
the listed rates were published or that they constitute prime rates.
Similarly, petitioners also contend that no evidence exists to support
Minasligas' claim that the bank lending rate published by the
International Monetary Fund (IMF) constitutes prime rates or commercial
bank interest rates for business loans. Rather, petitioners assert that
the IMF rate is not a published commercial interest rate for short-term
business loans, but rather a rate at which banks, not companies, can
borrow. For these reasons, the petitioners argue that the Department
properly used the TR rate in calculating Minasligas' home market
imputed credit expenses.
DOC Position: We agree with petitioners. Consistent with Cut-to-
Length Plate from Brazil, we determine that the TR rate is a benchmark
comparable to a prime rate published by the Bank of Brazil. Therefore,
in the absence of actual home market short-term borrowings and the lack
of substantiated evidence that Minasligas could have borrowed at the
interest rates provided at verification, we have used the TR rate as
the interest rate in the calculation of imputed home market credit.
Further, in response to Minasligas' argument that the Department did
not use the TR rate in the preceding review of this case, we note that
the company in question had actual home market short-term borrowings
and, therefore, it was not necessary to resort to the use of the TR
rate.
Comment 6: Date of Sale. Minasligas submits six arguments on the
date of sale. First, Minasligas contends that the Department erred when
it changed the date of sale for one U.S. sale reported as sold prior to
the POR to within the POR. Minasligas argues that there is no sales
document on the record justifying the use of a sale date within the POR
for the sale in question. Moreover, Minasligas asserts that by using
the date within the POR as the date of sale, the Department incorrectly
used a date of sale that was subsequent to the date of shipment from
the plant. Minasligas maintains that, as stated in the questionnaire,
the date of sale cannot occur after the date of shipment. Therefore,
Minasligas contends that the sale was improperly included in the
calculation of export price in the preliminary results.
Second, Minasligas contends that the Department's position to
exclude several U.S. sales of merchandise produced by Minasligas from
the calculation of export price is supported by past Department
practice. (See Silicon Metal from Brazil 96 and Silicon Metal From
Brazil 97.)
Third, Minasligas contends that the issue as to whether to conduct
a review and what sales to consider within the POR for dumping purposes
are two different determinations which involve the two different
concepts of entry and sale. In reviews where a respondent had one or
more entries during the POR, Minasligas asserts that the Department's
practice is to review the respondent's sales to determine the
antidumping duty margin and, in accordance with section 751(a)(2), use
this margin to assess the entries during the POR. In reviews where the
respondent had no entries during the POR, Minasligas contends that the
Department normally conducts a no shipment review.
Fourth, Minasligas contends that the Department is not required to
tie sales to entries. (See Silicon Metal from Brazil 96.) Minasligas
further contends that when the Department reviews all sales to an
importer during the POR, the Department relies on the date of such
sales to determine whether they are within the POR. The date of entry
is of no relevance because the date of sale is the date on which the
basic terms of the sale, particularly price and quantity, are agreed
upon by the buyer and the seller. (See Department's 1996 Questionnaire,
Appendix 1 at 5, Glossary of Terms.)
Fifth, Minasligas further argues that petitioners' arguments repeat
that which was already rejected by the Department in the above-
referenced final determinations. Finally, Minasligas also notes that
all the determinations cited by the petitioners in support of their
argument predate the determinations cited by Minasligas. For all of
these reasons, Minasligas asserts that for the final results, the
Department should determine Minasligas' antidumping duty rate based on
Minasligas' sales during the POR and exclude from its dumping analysis
sales which fall outside the POR.
Petitioners argue that regardless of the date of sale, the statute,
legislative history, intended purpose of administrative reviews, and
established Department practice require that the margin calculations in
administrative reviews be based on entries that were made into the U.S.
Customs territory during the POR. According to petitioners, the
quantity, the ship date, and the name of the consignee of at least one
of the sales in question is identical to the Piers Import/Export
Reporting Service data indicating that this sale entered the United
States during the POR. The petitioners, therefore, conclude that the
Department should
[[Page 43510]]
include the sale in question in the final results margin calculations.
Morever, the petitioners argue that although these sales had dates
of sale prior to the POR, these sales entered the U.S. customs
territory during the POR and should therefore be included in the
calculation of export price (see e.g., High-Tenacity Rayon Filament
Yarn from Germany: Final Results of Antidumping Duty Administrative
Review, 61 FR 51,421, 51,422 (October 2, 1996)). The petitioners argue
that these entries have never been reviewed and that by excluding these
sales, Minasligas' dumping margin for the preliminary results was
understated.
DOC Position: We agree with Minasligas regarding its first point,
that the Department erred when it changed the date of sale for one U.S.
sale reported as sold prior to the POR to within the POR. After
reviewing the sales documentation for this sale, we found that the
verification report was incorrect with respect to the actual date of
sale for this transaction. As a result, we determine that Minasligas
correctly reported the date of sale for this transaction in its sales
listing. However, we have included this sale in our final analysis
based on the fact that this sale was shipped during the POR.
We agree with petitioners regarding the review of sales entered
during the POR in export price situations. It has been the Department's
practice to calculate dumping margins for export price sales based on
sales entered during the POR. In fact, the antidumping questionnaire
issued in this review specifically required companies to ``report each
U.S. sale of merchandise entered for consumption during the POR,
except: (1) For EP sales, if you do not know the entry dates, report
each transaction involving merchandise shipped during the POR. * * *''
We note that, in response to these questionnaire instructions,
Minasligas reported certain sales with dates of sale prior to the POR.
Minasligas appears, therefore, to have complied with the questionnaire
instructions by reporting sales shipped or entered during the POR
regardless of whether the date of sale was within the POR. Moreover,
Minasligas does not deny that these sales were shipped or entered
during the POR. Therefore, for these final results, we have included
all such sales in our analysis.
Comment 7: The Dumping Margin Calculation. CBCC contends that the
Department incorrectly calculated the dumping margin as a percentage of
total U.S. sales value based on net U.S. prices, rather than gross unit
prices. In doing so, CBCC claims that the Department overstated the
dumping margin.
Petitioners contend that section 731(2)(B) of the Act requires that
whenever the Department determines that foreign merchandise is being
sold in the United States at less than fair value, there shall be
imposed upon such merchandise an antidumping duty in an amount equal to
the amount by which the NV exceeds the export price (or constructed
export price) for the merchandise. Therefore, petitioners assert that
by using the aggregate export prices for all U.S. sales as the
denominator in the calculation of the dumping margin, the Department
calculated CBCC's weighted-average dumping margin in accordance with
the statute.
DOC Position: We disagree with CBCC. CBCC's margin was calculated
in accordance with the Department's standard methodology of using
aggregate value of net export prices to derive total U.S. sales value.
(See Notice of Final Determination at LTFV: Certain Steel Concrete
Reinforcement Bars from Turkey, 62 FR, 9737, (March 4, 1997).)
Therefore, we have made no change for the final results.
Comment 8: Calculation of General and Administrative (G&A) and
Interest Expense. Minasligas contends that the Department overstated
the G&A used in the calculation of COP in the preliminary results.
Specifically, Minasligas argues that the Department calculated a G&A
rate as a percentage of the cost of sales based on the figures reported
by Minasligas and Delp Enganharia Mecanica S.A. (Delp) in their
financial statements and then mistakenly applied this rate to a COM
which included VAT. Minasligas contends that due to the fact that VAT
is neither an income nor an expense, VAT is not reflected in sales
revenue or cost of sales on the income statement. To support its
contention, Minasligas cites the Department's remand proceeding
relating to the final determination of ferrosilicon from Brazil where
the Department stated that it was incorrect to apply the calculated
interest factor and profit percentage to a COM inclusive of VAT. (See
Memorandum from Peter Scholl, Senior Accountant to Catherine Miller,
Program Manager, January 17, 1996, Remand of July 20, 1995,
Consolidated Court 90. 94-03-00182). Minasligas, therefore, contends
that because VAT was not part of the cost of sales upon which the G&A
rate was calculated, the Department should apply the G&A rate to a COM
exclusive of VAT.
Similarly, CBCC contends that in the preliminary results the
Department overstated G&A and interest expenses used in the calculation
of CV. Specifically, CBCC argues that the G&A expenses and interest
expenses were overstated because the Department applied these ratios on
a COM that included VAT. Because the countries in which CBCC and its
parent company are located (i.e., Brazil and Belgium, respectively) are
countries with a VAT system, CBCC asserts that for the final results
the Department should deduct ICMS from COM to calculate the G&A and
interest expense. CBCC provided revised calculations for G&A and
interest.
Although petitioners agree with Minasligas and CBCC that the
Department overstated G&A and interest expenses when it calculated
those expenses using a COM inclusive of VAT paid on inputs, petitioners
contend that CBCC's revised percentages are wrong. First, petitioners
maintain that CBCC failed to include PIS and COFINS taxes in its
calculations of CV. Second, petitioners argue that CBCC did not use the
correct ratios for calculating G&A and interest.
DOC Position: We agree with all parties that it was incorrect to
apply the calculated ratios for G&A and interest to a COM inclusive of
VAT in the calculation of COP. However, we note that both respondents
reported G&A and/or interest expenses based on a COM inclusive of VAT.
Thus, for purposes of the final results, we calculated the G&A for
Minasligas and G&A and interest expenses for CBCC used in the
calculation of COP, based on the COM exclusive of VAT. For the reasons
stated in Comment 2 above, we have continued to include PIS and COFINS
taxes in COP (see Cost Calculation Memorandums for Minasligas and CBCC,
each dated July 28, 1997, for further discussion). Since we made only
price-to-price comparisons for purposes of these final results, it was
not necessary to address this issue with respect to CV.
Comment 9: Calculation of Depreciation Expense for Minasligas.
Petitioners argue that the Department understated depreciation in its
COP and CV calculations by using the amount reported by Minasligas
which understated depreciation in the current period as a result of its
use of accelerated depreciation in prior years. For the final results,
petitioners contend that the Department should recalculate depreciation
for Minasligas, eliminating any prior year's accelerated depreciation.
Minasligas argues that it has historically used accelerated
depreciation in its financial records and
[[Page 43511]]
such methodology is consistent with Brazilian GAAP. Minasligas
maintains that the Department has accepted its use of accelerated
depreciation in prior proceedings.
DOC Position: We disagree with petitioners that Minasligas'
depreciation calculation is unacceptable because it is based on
accelerated depreciation. Minasligas' methodology of depreciation is
based on its financial records, which are consistent with Brazilian
GAAP and do not distort actual costs. In this regard, the Department's
position is consistent with the decision of the Court of International
Trade, which supported the Department's calculation of depreciation
based on a respondent's actual financial records which do not distort
actual costs. Moreover, in previous silicon metal reviews, we have used
accelerated depreciation where Minasligas has historically reported
depreciation on this basis for purposes of its financial statements
(see Silicon Metal From Brazil 97). Moreover, we have applied this
practice in other instances (see Final Determination of Sales at Less
Than Fair Value Foam Extruded PVC and Polystyrene Framing Stock from
the United Kingdom; 61 FR 51411, 51418 (October 2, 1996)) and Laclede
Steel Co. v. United States, 18 CIT 965, 975 (1994)). Therefore, for
purposes of these final results of review, we have continued to use
Minasligas' reported depreciation in calculating COP and CV.
Comment 10: Calculation of G&A Expenses. Petitioners claim that the
Department failed to include amounts for social contributions in the
reported G&A expense despite the fact that the Department has a
longstanding practice of including social payments such as severance,
social security or pension expenses in the G&A expense. Petitioners
argue that the Department should include provisions for social
contributions in the calculation of the G&A expense.
Minasligas argues that petitioners misinterpreted Minasligas'
financial statements because the social contributions are not a cost of
producing the merchandise, but a federal tax similar to the income tax
levied by the government as a percentage of profit. Minasligas further
argues that the social contributions are not social payments such as
social security or pension expenses which were properly reported either
as part of direct labor costs or as part of the G&A expenses for
administrative employees.
DOC Position: We agree with Minasligas. The social contributions at
issue are a type of federal income tax which is deducted from profit.
All other social charges and fringe benefits were properly accounted
for either as part of direct labor costs or as part of G&A expenses.
Accordingly, no adjustment has been made for the final results.
Comment 11: Calculation of Indirect Selling Expenses. Petitioners
contend that the Department determined per-unit indirect selling
expenses for Minasligas by multiplying the gross-unit price for home
market sales by an indirect selling expense ratio. Petitioners state
that, in calculating the ratio, the Department divided the sum of the
monthly company-wide indirect selling expenses by the sum of the
monthly sales values for all products during the POR. However, the
petitioners claim that in calculating the monthly values, the
Department incorrectly added rather than subtracted the value of
returned merchandise. In doing so, petitioners argue that the
Department overstated the denominator of the indirect selling expense
ratio, thus understating the ratio, which in turn understated the
calculated per-unit indirect selling expenses.
Regarding CBCC, the petitioners claim that CBCC allocated indirect
selling expenses among its products to the relative sales volume of
those products. Petitioners note that the Department's verification
report in this proceeding states that ``because indirect selling
expenses are a value-based expense, CBCC should have allocated the
total commercial department expenses over the value of merchandise sold
during the POR, not the tonnage sold.'' Petitioners further note that,
while at verification, the Department did not collect data regarding
the total value of CBCC's sales of silicon metal and calcium carbide
during January and February 1996. As a result, it is not possible to
perform the proper allocation of indirect selling expenses based on
sales value. Therefore, petitioners argue that the Department should
request CBCC to provide a worksheet and supporting documentation
showing the total sales value of the above products for January and
February 1996.
DOC Position: We made only price-to-price comparisons for purposes
of these final results. Therefore, since we did not resort to the use
of CV, it was not necessary to address the above issues.
Comment 12: Conversion of U.S. Sales Prices Denominated in U.S.
Dollars. The petitioners contend that the prices for Minasligas' U.S.
sales were negotiated in U.S. dollars and paid for in U.S. dollars.
However, Minasligas reported the gross unit price for its U.S. sales in
Brazilian reais. Petitioners maintain that the Department used these
Brazilian-currency prices in its preliminary results margin
calculations. Petitioners cite Silicon from Brazil 96 and 97, as the
Department's established practice of using the actual U.S. price in the
currency in which it was originally denominated on the date of sale,
and to avoid any unnecessary currency conversion. Therefore, for the
final results, the petitioners contend that the Department should use
U.S. dollar-denominated gross prices reported in the sales listing,
rather than the Brazilian-reais denominated gross unit prices, as the
starting U.S. price for calculating the dumping margin.
DOC Position: We agree in part with petitioners. It is established
Department policy to use the actual U.S. price in the currency in which
it was originally denominated on the date of sale and to avoid any
unnecessary currency conversion. (See Ferrosilicon from Brazil,
(January 14, 1997).) In this case, Minasligas reported its U.S. sales
in Brazilian currency rather than U.S. dollars. However, at
verification, we were able to confirm the accuracy of the Brazilian
currency amounts reported by Minasligas because, in addition to the
commercial invoice (denominated in U.S. dollars), Minasligas also
issues a Brazilian-denominated invoice which we examined for selected
U.S. sales. Further, for purposes of the preliminary results, we did
convert the U.S. sales prices reported in Brazilian currency to U.S.
dollars on the date of sale for purposes of calculating Minasligas'
margin. We have continued this practice for these final results as
Minasligas' U.S. dollar prices are not on the record.
Comment 13: Calculation of Depreciation for CBCC. The petitioners
argue that in its preliminary results, the Department failed to take
into account idle asset depreciation for a certain number of furnaces.
The petitioners contend that record evidence indicates that the
furnaces were idle during a portion of the POR. Therefore, petitioners
maintain that the Department should include in COP/CV the total
depreciation expenses for the furnaces for the periods during which
those furnaces were idle.
CBCC claims that the furnaces which were idle during the POR are
fully depreciated since they were built in 1934 and 1947. CBCC states
that there is no factual justification for allocating depreciation
expense for idle assets which were fully depreciated.
DOC Position: We agree with CBCC. At verification, we confirmed
that the furnaces at issue were fully depreciated long before the POR.
Accordingly, we determine that the adjustment to COP
[[Page 43512]]
proposed by the petitioners is not warranted here. Since we made only
price-to-price adjustments or purposes of these final results, it was
not necessary to address this issue with regards to CV.
Comment 14: Calculation of Interest Expense. The petitioners argue
that in the preliminary results the Department incorrectly calculated
CBCC's financial expenses based on the consolidated financial statement
of its Belgian parent company, Solvay & Cie. The petitioners claim that
it was incorrect to use the consolidated financial statements because
Solvay & Cie's actual financial expense is less than one half of the
financial expense actually incurred by CBCC. Therefore, the petitioners
contend that calculating financial expenses using a ratio based on
Solvay & Cie's consolidated financial statements resulted in a gross
understatement of the financial expenses actually incurred by CBCC.
Thus, for the final results, the petitioners assert that the Department
should calculate financial expenses based on CBCC's financial
statements.
DOC Position: We disagree with the petitioner. The Department's
established policy is to calculate interest expense incurred on behalf
of the consolidated group of companies to which the respondent belongs,
based on consolidated financial statements, regardless of whether or
not the respondent's financial expense is higher than that of the
controlling entity. This practice recognizes two facts: (1) The
fungible nature of invested capital resources such as debt and equity
of the controlling entity within a consolidated group of companies, and
(2) the controlling entity within a consolidated group has the power to
determine the capital structure of each member country within its
group. (See Aramid Fiber Formed of Poly ParaPhneylene Terephthalamide
From the Netherlands; Final Results of Antidumping Administrative
Review, 62 FR 136 (July 16, 1997), Silicon Metal From Brazil 97, Final
Determination at Less Than Fair Value: Ferrosilicon from Brazil: 59 FR
732, 736 (January 6, 1994) and Cambargo Correa Metais, S.A. v. United
States, Slip Op. 93-163 (CIT August 13, 1993.) Therefore, for these
final results, we have calculated CBCC's net interest expense based on
the consolidated financial statements of its parent company, Solvay &
Cie.
Comment 15: Interest Income as an Offset to Interest Expenses. The
petitioners argue that the Department should not make an adjustment to
the reported interest expense for the amount of interest income
reported on CBCC's financial statement. The petitioners claim that it
is CBCC's responsibility to substantiate and document any adjustment or
claim to the Department. Since CBCC provided no information in its
questionnaire response regarding the interest income earned, the
petitioners assert that the Department should calculate the financial
expense ratio without any offset for interest income.
CBCC contends that in its questionnaire response CBCC calculated
consolidated financial expenses based solely on interest expense
without any deduction for interest income. CBCC argues that should the
Department depart from its well-established practice of using
consolidated financial expenses, CBCC requests the opportunity to
submit all information needed to support its interest income.
DOC Position: As explained in our response to Comment 14, we have
used CBCC's consolidated financial expenses. Therefore, we have made no
adjustments to the reported consolidated interest for interest income
as CBCC did not report interest income on a consolidated basis.
Comment 16: Alleged Errors in the Calculation of CV. Minasligas
asserts that the Department did not make any price-to-CV comparisons in
the preliminary results, but in the event that the Department resorts
to the use of CV in the final results, Minasligas contends the
following:
(1) That the Department incorrectly calculated the field CVTAX as
equal to the greater of the VAT paid on inputs or the VAT collected on
export sales in the computer margin program. Minasligas argues that the
statute does not require that VAT collected on export sales be included
in CV. Minasligas asserts that the Department's position, which is
currently challenged in the Court of Appeals for the Federal Circuit
(see Aimcor et al. v. United States, Slip Op. 95-130 (July 20, 1995) at
20 et seq.), is that only taxes on material inputs which are not
remitted or refunded upon export are included in CV as a part of the
cost of material. Minasligas argues that if tax collections on sales
exceed payments on inputs, the Department should make the required
adjustments in calculating the foreign unit price in dollars (FUPDOL).
(2) That the Department failed to deduct home market imputed credit
expenses from the calculation of CV, resulting in an overstatement of
the FUPDOL because the COS adjustment only added U.S. credit expenses.
(3) That the Department erred when it weight-averaged the profit
rate based on sales quantity rather than sales value. Instead,
Minasligas contends that the Department should have calculated the
average home market profit using its normal methodology (i.e., the sum
of the total profit for each transaction divided by the total COP value
for all the transactions). Morever, Minasligas argues that under its
normal methodology, the Department calculates an overall profit rate
for the transactions weighted on value rather than quantity.
With respect to the first issue, petitioners contend that the
Department's margin calculations demonstrate that the Department
included VAT paid on inputs in CV, not ICMS tax collected on export
sales. Further, the petitioners claim that the Department properly
included those taxes in CV because they are a cost of materials for the
reasons presented in Comment 4 (B).
With respect to the third issue, the petitioners contend that a
review of the profit margin calculation shows that the Department did
not do what Minasligas claims the Department did and, in fact, did what
Minasligas claims the Department should have done. The petitioners
argue that the Department first determined the aggregate value of net
home market prices for all of the above-cost sales and the aggregate
COP for those sales. The Department then subtracted the aggregate COP
from the aggregate value of net home market prices for above-cost
sales, thereby determining the aggregate amount of profit for those
sales. This aggregate profit amount was then divided by the aggregate
COP to arrive at a profit ratio. Thus the petitioners assert that,
contrary to Minasligas's claims, the Department properly calculated the
profit ratio.
DOC Position: We made only price-to-price comparisons for purposes
of these final results. Therefore, since we did not resort to the use
of CV, it was not necessary to address the above issues.
Final Results of Review
As a result of our analysis of the comments received, we determine
that the following margins exist for the period March 1, 1995 through
February 29, 1997:
------------------------------------------------------------------------
Percent
Manufacturer/exporter margin
------------------------------------------------------------------------
CBCC......................................................... 0.00
Minasligas................................................... 3.51
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. For assessment
purposes, we have calculated importer-specific ad valorem duty
assessment rates for the merchandise based on the ratio of the
[[Page 43513]]
total amount of antidumping duties calculated for the examined sales
during the POR to the total quantity of sales examined during the POR.
This method has been upheld by the courts. (See e.g., Antifriction
Bearings (Other Than Tapered Roller Bearings) from France, Germany,
Italy, Japan, Singapore, and the United Kingdom; Final Results of
Antidumping Duty Administrative Reviews, 61 FR 2081, 2083 (January 15,
1997); FAG Kugelfischer Georg Schafer KgaAv. United States, No. 92-07-
00487, 1995 Ct. Int'l Trade LEXIS 209, at CIT*10 (September 14, 1995),
aff'd. No. 96-1074 1996 U.S. App. Lexis 11544 (Fed. Cir. May 1996).
The Department will issue appraisement instructions directly to the
Customs Service. Individual differences between United States price and
NV may vary from the percentages stated above. Furthermore, the
following deposit requirements will be effective upon publication of
these final results of review for all shipments of ferrosilicon from
Brazil entered, or withdrawn from warehouse, for consumption on or
after the publication date, as provided by section 751(a)(1) of the
Act, and will remain in effect until publication of the final results
of the next administrative review: (1) The cash deposit rates for the
reviewed companies will be those rates listed above except for CBCC,
which had a de minimis margin, and whose cash deposit rate is therefore
zero; (2) for previously reviewed or investigated companies not listed
above, the cash deposit rate will continue to be the company-specific
rate published for the most recent period; (3) if the exporter is not a
firm covered in this review, a prior review, or the original LTFV
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise; and (4) if neither the exporter nor the manufacturer
is a firm covered in this or any previous review or in the LTFV
investigation conducted by the Department, the cash deposit rate will
be 91.06 percent, the ``all others'' rate established in the LTFV
investigation.
This notice serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. Sec. 1675(a)(1)) and 19 CFR
353.22.
Dated: August 6, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-21583 Filed 8-13-97; 8:45am]
BILLING CODE 3510-DS-P