[Federal Register Volume 62, Number 179 (Tuesday, September 16, 1997)]
[Notices]
[Pages 48601-48606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24469]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-821-803]


Titanium Sponge From the Russian Federation; Notice of Final 
Results of Antidumping Duty Administrative Review

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


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

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SUMMARY: On May 12, 1997, the Department of Commerce (the Department) 
published the preliminary results of the administrative review of the 
antidumping finding on titanium sponge from the Russian Federation 
(Russia). This notice of final results covers the review period of 
August 1, 1995 through July 31, 1996. This review covers one 
manufacturer, AVISMA Titanium-Magnesium Works (AVISMA), and three 
trading companies, Interlink Metals & Chemicals, S.A. (Interlink), TMC 
Trading International, Ltd. (TMC), and Cometals, Inc. (Cometals). We 
gave interested parties an opportunity to comment on the preliminary 
results. We received comments from AVISMA, Interlink, TMC, and Titanium 
Metals Corporation (TIMET), a petitioner. A hearing was held on June 
30, 1997 with both public and closed sessions. Based on our analysis of 
these comments, we have not changed the final results from those 
presented in the preliminary results of review.

EFFECTIVE DATE: September 16, 1997.

FOR FURTHER INFORMATION CONTACT: James Terpstra or Mark Manning, Office 
of AD/CVD Enforcement, Office 4, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone:

[[Page 48602]]

(202) 482-3965 and 482-3936 respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round 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 (1997).

Background

    On May 12, 1997, the Department published in the Federal Register 
(62 FR 25920) the preliminary results of the 1995-1996 administrative 
review of the antidumping finding on titanium sponge from Russia (33 FR 
12138, August 28, 1968). This notice of final results covers the review 
period for August 1, 1995 through July 31, 1996, covering one 
manufacturer, AVISMA, and three trading companies, Interlink, TMC, and 
Cometals. The Department has conducted this review in accordance with 
section 751 of the Act.

Scope of the Review

    The product covered by this administrative review is titanium 
sponge from Russia. Titanium sponge is chiefly used for aerospace 
vehicles, specifically, in construction of compressor blades and 
wheels, stator blades, rotors, and other parts in aircraft gas turbine 
engines. Imports of titanium sponge are currently classifiable under 
the harmonized tariff schedule (HTS) subheading 8108.10.50.10. The HTS 
item number is provided for convenience and Customs' purposes. The 
written description remains dispositive as to the scope of the product 
coverage.
    The review period (POR) is August 1, 1995 through July 31, 1996, 
covering one manufacturer, AVISMA, and three trading companies, 
Interlink, TMC, and Cometals.

Analysis of Comments Received

Comment 1: Application of Facts Available Against TMC

    Petitioner argues that TMC has not acted to the best of its ability 
to comply with the Department's requests for information. Petitioner 
states, ``from the inception of the administrative review, TMC has 
orchestrated a prolonged deception in each of its responses, concerning 
its activities and the existence of affiliated parties.'' In addition, 
petitioner claims that TMC's submissions are ``only a partial 
accounting of its history and affiliations.'' Therefore, petitioner 
argues that the application of adverse facts available to TMC is 
warranted.
    Petitioner argues that TMC is a false front. Petitioner claims that 
TMC is trying to have the Department believe that AVISMA would abandon 
experienced trading companies for TMC, which, petitioner claims, does 
not have experience in or knowledge of the worldwide titanium market. 
In addition, petitioner argues that TMC is not operated similar to any 
other company in the titanium sponge industry. For example, petitioner 
claims that TMC's reported sales and profit are not representative of a 
normal, arm's-length trading company being supplied by an unaffiliated 
producer. Petitioner points to the information on the record which 
demonstrates that TMC's profit is higher than the average commission 
income received by trading companies in the titanium sponge industry.
    To support its argument that TMC is misrepresenting itself, 
petitioner points out that TMC only began providing more information on 
its activities, ownership, and affiliation after the deadline for 
submitting new information had expired. Petitioner asserts that the 
deadline for the submission for new information was March 16, 1997, in 
accordance with 19 CFR 353.31(a)(ii). Petitioner argues that the 
Department should reject TMC's April 3, 1997 submission, which 
petitioner argues provides new information that was not verified by the 
Department because it was provided on the last day of verification. 
Petitioner argues that all changes to submissions should be presented 
at the beginning of verification, which should have included the 
information in TMC's April 3, 1997 submission. Petitioner asserts that 
the information provided in this submission is ``new information and 
worthless for the purpose of determining affiliation'' and ``not 
susceptible to verification.'' Petitioner claims that none of these 
submissions were in response to a Departmental query, but new 
information submitted on its own. At a minimum, petitioner argues that 
the Department should return and disregard all of TMC's submissions 
dated after March 16, 1997. Also included in these untimely 
submissions, are TMC's audited financial statements, which were 
submitted on March 28, 1997.
    Petitioner states that it believes that AVISMA controls and is 
affiliated with TMC and that TMC tried to manipulate the review process 
to prevent the Department from learning of this affiliation in order 
for AVISMA to indirectly obtain a zero dumping margin. Petitioner 
claims that the original questionnaire requested that TMC list all 
affiliated companies and TMC failed to disclose several affiliated 
parties. Given another opportunity through its supplemental 
questionnaires, petitioner claims that TMC still failed to fully 
disclose its affiliated companies, and TMC falsely certified that its 
responses were complete and accurate. Petitioner characterizes TMC as 
reluctantly deciding to disclose the true owner(s) of TMC once it 
realized that the Department would be questioning the distribution of 
TMC's profits on the last day of verification. Petitioner alleges that 
TMC's late disclosure of this owner indicates that TMC must believe 
that this disclosure is detrimental to its position.
    Petitioner states that the Department has two choices for adverse 
facts available. We could either use the ``All Others'' rate of 83.96 
percent or calculate a new rate by classifying TMC's dividend/royalty 
as a direct expense and allocate it only to the merchandise sold to the 
U.S. during the period of review. Finally, petitioner argues that TMC 
did not accurately and completely answer the questionnaire in a timely 
manner to the best of its ability.
    Petitioner claims that the Department is unable to make a decision 
on affiliation due to the incomplete information on the record. 
Petitioner asserts that, ``the Department cannot simply assume benign 
neglect on TMC's part or that the omissions led to harmless error. 
Given the still incomplete record in this case, it is impossible to 
discern the extent to which TMC has prejudiced the final results. These 
problems render all of TMC's responses unreliable.'' Petitioner argues 
that if the Department chooses to use TMC responses, it would set a 
precedent for future respondents that if they fail to provide timely, 
complete, and accurate responses, there should be ``no fear of 
sanction.'' Therefore, petitioner argues that the evidence supports 
applying adverse facts available because TMC failed to cooperate with 
the Department and did not act to the best of its ability to comply 
with the Department's requests for information.
    TMC argues that the application of facts available is unwarranted 
because of TMC's cooperation and timeliness in responding to the 
Department's requests for information and at verification.
    With regard to timeliness, TMC claims that it responded to the

[[Page 48603]]

Department's initial and six supplemental questionnaires within the 
deadlines established by the Department and submitted additional 
factual information within the 180-day regulatory deadline. In 
addition, TMC claims that it submitted its audited financial statements 
as soon as the company's first audit was completed, in advance of 
verification. TMC points out that the Department's verification report 
reveals ``no material inaccuracies in the information submitted by TMC, 
nor does it indicate that there were any items that could not be 
verified.''
    TMC cites CAFC court rulings which rule that facts available may be 
warranted when a large portion of the questionnaire response is 
submitted past the Department's deadline or when the respondent did not 
comply with a Department's request for information. See Ansaldo 
Componenti S.p.A. v. U.S., 628 F.Supp. 198, 205 (CIT 1986); Olympic 
Adhesives, Inc. v. U.S., 708 F.Supp. 344 (CIT 1989), rev'd, 899 F.2d 
1565 (Fed. Cir. 1990); Daewoo Elec. Co. v. U.S., 712 F.Supp. 931, 944 
(CIT 1989). TMC states that its actions are consistent with the CAFC 
court rulings in that facts available are not justified in this case.
    TMC also argues that TIMET had several opportunities to comment on 
any inadequacies found in TMC's supplemental questionnaire responses 
and in the verification report, but chose not to comment.
    TMC asserts that TIMET's argument that the Department should reject 
TMC's March 5, 1997 and April 3, 1997 submissions because they are 
untimely is misplaced. First, TMC claims that it submitted the April 3, 
1997 by the Department's established deadline and during, not after, 
verification, stating that verification took place April 3-4, 1997 
(noting a typographical error in the verification report). In addition, 
TMC's March 5, 1997 submission was submitted well within the 180-day 
deadline established by the Department for supplemental submissions.
    TMC also argues that information presented in its April 3, 1997 
submission was verified. TMC argues that, at verification, the 
Department requested information regarding TMC's affiliations, which 
included the information contained in TMC's April 3, 1997 submission. 
TMC asserts that the Department is not required to verify every piece 
of information, as stated in 19 CFR 353.36(c).
    TMC argues that petitioner inaccurately characterizes TMC's 
experience in the titanium sponge industry and AVISMA's rationale for 
hiring TMC as its distributor for marketing titanium sponge. In 
addition, TMC argues that petitioner's suggestion that the Department 
could classify TMC's dividend/royalty as a direct expense as adverse 
facts available is not consistent with Departmental practice. TMC 
asserts that, in these instances, the Department's practice is ``to 
assume related party payments are not at arm's length and, 
consequently, not adjust for them in its antidumping calculations.'' 
See Outokumpu Copper Rolled Products AB v. U.S., 850 F.Supp. 16, 22 
(CIT 1994).
    TMC argues that TIMET's arguments about TMC's profits are 
inappropriate and ``should not be viewed as signifying anything other 
than a well-run company.'' TMC characterizes TIMET's comparison of 
TMC's profits to those of a commission agent, who takes no risk, as 
unrealistic and inappropriate.
    Finally, TMC argues that if the Department determines that TMC and 
AVISMA are affiliated, the final results would not change, citing the 
Department's discussion of affiliation in the preliminary results. TMC 
points out that TIMET has not challenged this aspect of the preliminary 
results.

Department's Position

    While we are concerned that TMC did not fully disclose the nature 
of its relationship to AVISMA in its initial questionnaire responses, 
we have determined that this deficiency did not materially impair our 
review in this case. Therefore, we have not used adverse facts 
available against TMC.
    In its response to our first questionnaire, TMC stated that it is a 
wholly owned subsidiary of TMC (Holdings), Limited, whose share capital 
is owned by Valmet S.A. The ultimate parent of Valmet S.A. is Valmet 
Group Limited. Bank Menatep of Russia is a minority shareholder of 
Valmet Group Limited. We note and are concerned by TMC's failure to 
initially disclose, in response to our questionnaire, the fact that 
Bank Menatep has a major presence on AVISMA's board of directors. Such 
facts clearly are material to our consideration of the nature of any 
relationship between TMC and AVISMA. Although we did not specifically 
ask TMC whether any of its parent companies were affiliated with 
AVISMA, either directly or indirectly through another affiliated 
company, we did ask questions aimed at obtaining a complete picture of 
the relationship between TMC and AVISMA. To the extent TMC was aware 
that Bank Menatep was affiliated with AVISMA and failed to report it, 
we would view that as impeding this review. On the other hand, the 
record of this case is not clear on this point. The questions asked did 
not specifically seek this information; rather, the questions focused 
on the structure and operations of Valmet Group Ltd., Valmet S.A., and 
TMC. Moreover, the record of this case indicates that Bank Menatep is a 
minority non-controlling shareholder of Valmet Group Limited. As such, 
it is not clear how much TMC knew or should have known about Bank 
Menatep's various operations. Indeed, Bank Menatep's financial 
statement, later submitted by TMC, shows it to be a large commercial 
bank with extensive holdings in numerous entities. Additionally, as 
discussed below, TMC's substantial cooperation and compliance with our 
numerous questionnaires indicate that rejecting TMC's response in toto 
is not warranted. Therefore, on balance, we do not believe it 
reasonable to reject TMC's entire response. We also note that, as 
stated in the preliminary results, we do not believe it is necessary to 
address this issue of possible affiliation between TMC and AVISMA for 
purposes of this review because the determination will not affect our 
analysis. We must rely on TMC's sales to the United States regardless 
of a determination on affiliation.
    With regard to the timeliness of TMC's questionnaire responses and 
submissions, we believe that TMC has provided its submissions in a 
timely manner because its submissions were provided earlier than the 
180-day regulatory deadline for the submission of new information, in 
accordance with 19 CFR 353.31(a)(ii) (i.e., March 17, 1997), and its 
questionnaire responses were submitted within deadlines established by 
the Department. The Department's regulations at 19 CFR 353.31(b) state 
that the Department ``may request any person to submit factual 
information at any time during a proceeding'' (emphasis added). TMC's 
April 3, 1997 submission was provided on the first day of verification 
in response to the Department's April 1, 1997 supplemental 
questionnaire. Therefore, at verification, we accepted the new 
information provided in TMC's April 3, 1997 submission because it was 
requested by the Department at a previous date.
    In addition, TMC cooperated with the Department's requests for 
information and at verification. As noted by TMC, the Department's 
April 16, 1997 verification report does not refer to any lack of 
cooperation on the part of TMC when questioned on its affiliations.
    With regard to whether or not the information in TMC's April 3, 
1997 submission was verified, we disagree

[[Page 48604]]

with the petitioner. As the verification report indicates, TMC's 
responses were verified without any major discrepancies. As a normal 
part of our verification procedures, and in particular because of the 
question of affiliation in this case, we examined TMC's corporate 
structure and the nature of any affiliation with other partners in 
great detail. This exercise necessarily involves asking for and 
collecting additional support documentation. Given the completeness and 
success of the verification, and the fact that the collected 
information did not materially affect our analysis, we chose not to 
visit another location to further evaluate this matter.
    Petitioner's speculations on the existence of an affiliation 
between AVISMA and TMC are not relevant to this proceeding. The 
Department issued several supplemental questionnaires on this issue and 
analyzed each submission with regard to whether further information 
should be requested. In addition, at verification, we examined 
documents relevant to the affiliation issue, and noted at the time that 
``we found no documentation that would lead us to believe that AVISMA 
and TMC have other dealings besides what was presented in its 
response.'' Id. at 4. Should this question become relevant in our 
analysis in future administrative reviews, we may further examine the 
issue of affiliation between TMC and AVISMA. For purposes of this 
review, the information on the record indicates that an affiliation 
determination is not relevant to our determination of the dumping 
margins for TMC and AVISMA. As stated in our preliminary results, 
because AVISMA did not export to the United States and did not have 
knowledge of the ultimate destination of the merchandise sold through 
TMC, ``all relevant sales to the United States are captured in our 
analysis without making an affiliation determination.'' See Preliminary 
Results of Antidumping Duty Administrative Review: Titanium Sponge from 
the Russian Federation, 62 FR 25920, 25921 (May 12, 1997).

Comment 2: Reported Entered Values

    Petitioner alleges that Interlink may have used the price that 
Interlink paid to AVISMA as the entered value of the imported titanium 
sponge reported to the U.S. Customs Service (Customs). Petitioner 
states that the reported entered values are not equivalent to the gross 
sales prices less moving expenses. Petitioner claims that Interlink 
appears to have undervalued its entries and, therefore, underpaid the 
dumping cash deposits and Customs duties.
    If this is the case, petitioner argues that this price may not be 
used because the merchandise was not clearly destined for export to the 
United States (given that AVISMA did not have knowledge of the final 
destination of the merchandise), as stated in Nissho Iwai decision. See 
Nissho Iwai American Corp. v. U.S., 982 F.2d 505,509 (Fed.Cir. 1992). 
Therefore, petitioner states that AVISMA-Interlink sales may not be 
used as the basis for entered values.
    AVISMA and Interlink argue that this issue was raised in the last 
administrative review and concerns Interlink and Customs, not the 
Department or TIMET. AVISMA and Interlink report that Interlink is 
working with Customs, ``the United States government agency that is, by 
law, responsible for these matters, to resolve any issues related to 
the proper valuation of consumption entries.''

Department's Position

    We agree with AVISMA and Interlink that any questions concerning 
the proper valuation of consumption entries is a matter to be resolved 
by the Customs Service. The Department has conveyed petitioner's 
allegations to Customs.
    Regarding the appropriate basis for export price in this review, 
our concern is that we have the correct sales price (i.e., the price 
between the exporter who had knowledge that the shipment was destined 
to the U.S. and the first unaffiliated U.S. customer). The record of 
this case indicates that AVISMA did not have prior knowledge that the 
final destination of the shipment in question was the United States. 
Because there is no affiliation between Interlink and the U.S. 
customer, we are satisfied that the reported sales price is the 
appropriate basis for the export price.

Comment 3: Interlink's U.S. Sales

    Petitioner alleges that the Interlink sales used in the calculation 
of its dumping margin are not bona fide sales for commercial purposes 
and should be disregarded. Petitioner alleges that Interlink sales 
which entered the United States under temporary importation bonds 
(TIBs) are priced lower than the Interlink sales entered for 
consumption which are used to calculate the dumping margin. In 
addition, petitioner states that these sales are considerably higher 
than U.S. and world prices of titanium sponge for the review period. 
Petitioner states that the Department has disregarded sales when the 
prices were significantly higher than world market prices and it 
believed that the respondent had artificially set prices. See Notice of 
Final Determination of Sales at Less Than Fair Value: Manganese Metal 
from the People's Republic of China, 60 FR 56045, 56046 (November 6, 
1995); Chang Tieh Industry Co., Ltd. v. U.S., 840 F.Supp. 141, 146 (CIT 
1993). Insofar as petitioner argues that Interlink's sales used to 
calculate the dumping margin were not made on commercial terms, it 
asserts that Interlink's sales should be disregarded and the Department 
should apply adverse facts available as Interlink's dumping margin.
    AVISMA and Interlink disagree with petitioner's characterization of 
Interlink's sales. AVISMA and Interlink argue that the sales in 
question were made on different sales terms than sales that entered 
under TIBs (i.e., Interlink assumed responsibility for all expenses and 
was the importer of record). AVISMA and Interlink argue that the sales 
entered under TIBs were sold on an ``in warehouse in Europe'' basis, 
where the customer took possession in Europe and was responsible for 
payment for all additional movement expenses, including the movement 
expenses to the United States.

Department's Position

    We disagree with petitioner that there is a basis for disregarding 
the sales in question. There is no evidence that these sales involve 
``artificially set prices.'' Moreover, it is apparent that the higher 
prices merely reflect the fact that the sales in question were made on 
different terms of sale. Interlink submitted the sales and entry 
documentation for the sales in question in response to the Department's 
February 4, 1997 request. See Letter from Wilmer, Cutler & Pickering to 
Robert S. LaRussa, February 11, 1997. We note that the documentation 
reports the price charged to Interlink's customer and the sales terms 
are reported as ``delivered, duty paid.'' In addition, the Customs 
entry document reports that Interlink paid the 83.96 percent 
antidumping cash deposit for the sales in question. The customs duty 
and antidumping cash deposit account for much of the difference between 
these prices and the ``in warehouse in Europe'' price level. See 
Analysis Memorandum for the Final Results of 1995/1996 Administrative 
Review of the Antidumping Finding of Titanium Sponge from the Russian 
Federation for further discussion of our analysis.

Comment 4: Future Entries of Subject Merchandise

    Petitioner argues that the Department should establish a single 
cash deposit rate for all respondents in this review. Although the 
Department did not

[[Page 48605]]

establish a single rate in the 1994/1995 review, petitioner argues that 
the circumstances differ in this review because AVISMA changed its 
selling practices and made sales under this new sales structure, and 
the record states that TMC became the sole distributor of AVISMA's 
titanium sponge in November 1995. Petitioner adds that respondents 
acknowledge that TMC knows the ultimate destination of merchandise it 
sells through resellers, and, therefore, TMC is the true exporter. 
Petitioner refers to cases where the Department has applied a 
``knowledge test,'' which determines whether the non-NME reseller 
qualifies as an exporter. See Final Results of Antidumping Duty 
Administrative Reviews; Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof From France, 57 FR 28360, 28427 
(June 24, 1992); Final Determination of Sales at Less Than Fair Value; 
Ferrovanadium and Nitrided Vanadium From the Russian Federation, 60 FR 
27957, 27959 (May 26, 1995).
    In addition, petitioner claims that Interlink will never again be 
the exporter and the Department will not be able to calculate a 
separate margin for Interlink, unless Interlink purchases from another 
entity which does not have knowledge of the ultimate destination. 
Therefore, petitioner argues that because TMC will be the only exporter 
for future entries of titanium sponge, the dumping margin found for TMC 
should be the cash deposit rate for all future entries by any 
respondent until the next final results of review are published.
    AVISMA and Interlink argue that TIMET is incorrect regarding: (1) 
The meaning of the marketing arrangement between Interlink and TMC; (2) 
what TMC knew about the destination of the Interlink sales covered by 
this review; and (3) the future AVISMA/TMC/Interlink marketing 
arrangements for titanium sponge sales. AVISMA and Interlink argue that 
TMC had only a general awareness of Interlink's sales plans and did not 
know the destination of each sale made by Interlink (an arrangement 
similar to TMC's sales relationship with AVISMA). In addition, AVISMA 
and Interlink state that, because of the circumstances of the sale, TMC 
could not and did not know who or in what country the customer was 
located. Finally, AVISMA and Interlink argue that petitioner is 
incorrect in asserting that Interlink will never again be an exporter 
because, as stated in the last review, the relationship between AVISMA 
and its resellers is continuing to evolve and sales may be based on a 
different distribution approach in the future.

Department's Position

    We disagree with petitioner's assertion that Interlink will never 
again be an exporter of the subject merchandise and that the 
application of a single dumping margin for all exporters is 
appropriate. Speculation on the future relationships between AVISMA and 
its resellers is not relevant to this administrative review. What is 
relevant is that during this review, AVISMA was able to sell directly 
to TMC, Interlink, and Cometals. Due to the proprietary nature of the 
information on the record, please see the Analysis Memo for a further 
discussion of the Department's position.

Comment 5: U.S. Credit Expense

    Petitioner claims that the Department may have committed a 
ministerial error by not including credit cost in its margin 
calculations. Petitioner argues that the Department should make an 
adjustment for credit based on the terms of sale.
    AVISMA and Interlink argue that petitioner is referring to a 
citation to the Department's regulations which would only apply to 
reviews based on requests filed with the Department on or after July 1, 
1997 (section 351.701; 62 FR 27296, 27416-17 (May 19, 1997)). In 
addition, AVISMA and Interlink claim that the Departmental practice is 
to not make circumstance of sale adjustments in cases involving non-
market economies. See Final Determinations of Sales at Less Than Fair 
Value: Oscillating Fans and Ceiling Fans from the People's Republic of 
China, 56 FR 55271, 55276 (October 25, 1991); Final Determination of 
Sales at Less Than Fair Value: Certain Helical Spring Lock Washers from 
the People's Republic of China, 58 FR 48833, 48839 (September 20, 1993) 
(Lock Washers); Final Determination of Sales at Less Than Faire Value: 
Saccharin from the People's Republic of China, 59 FR 58818, 58823 
(November 15, 1994); Final Determination of Sales at Less Than Fair 
Value: Manganese Metal from the People's Republic of China, 60 FR 
56045, 50-51 (November 6, 1995).

Department's Position

    We disagree with petitioner that we should make an adjustment for 
credit based on the terms of sale. If this proceeding occurred in a 
market-economy country, we would adjust normal value for the imputed 
credit calculated on the sales to the United States, in accordance with 
section 773(a)(6)(C)(iii) of the Act. However, in cases involving non-
market economies (NMEs), Departmental practice is to not adjust for 
differences in the circumstances of sale (COS), such as imputed credit. 
See Lock Washers, DOC Position to Comment 4 at 48839.
    Section 773(a)(6)(C) of the Act states that COS adjustments to 
normal value are only required upon a sufficient showing that 
differences in circumstances of sale exist justifying the adjustment. 
In this case, the only information we have regarding credit costs in 
the Brazilian home market is the financial statements of the Brazilian 
producers. These statements do not specify whether Brazilian home 
market sales include any particular selling expenses. Therefore, we do 
not have any basis upon which to determine whether adjustment to the 
surrogate expenses is appropriate. Given the imprecise nature of the 
information on selling expenses, we have no basis to conclude that such 
adjustments are warranted in this case. See Final Determination of 
Sales at Less Than Fair Value: Bicycles from the People's Republic of 
China, DOC Position to Comment 1, 61 FR 19026, 19031 (April 30, 1996).

Comment 6: Value of Steel Sheet

    AVISMA and Interlink argue that the Department's value for steel 
sheet is far in excess of the cost that one would expect to pay for 
this ``relatively minor input,'' and the SITC category used by the 
Department is incorrect and should not be used in the calculation of 
normal value. AVISMA and Interlink provided: (1) Information regarding 
the types of steel covered by the SITC classification used by the 
Department; (2) alternative HS classifications which AVISMA and 
Interlink believe are more appropriate; and (3) Brazilian import data 
for the HS classifications for steel.
    AVISMA and Interlink claim that, although the Department used the 
same SITC category in the prior review, there was apparently an 
arithmetic error for this input which AVISMA and Interlink did not 
recognize because the value appeared to be reasonable. In the current 
review, although now the calculation is arithmetically correct, AVISMA 
and Interlink claim that the cost for steel sheet far exceeds any 
reasonable expectation of a cost for a minor input. Therefore, AVISMA 
and Interlink argue that the Department must reject its value for steel 
sheet because it clearly overstates the value of steel and does not 
produce a reasonable result.
    AVISMA and Interlink state the SITC classification used by the 
Department is comprised of two HS categories: 7208.44 and 7208.45. 
AVISMA and Interlink state that the difference between the two HS 
categories is the thickness of the

[[Page 48606]]

sheet. AVISMA and Interlink argue that the more narrow thickness 
category is more appropriate because lighter drums are preferred in the 
titanium sponge industry since they are easier to handle and are less 
expensive to make and transport. Further, AVISMA and Interlink argue 
that the U.S. Department of Transportation's Research and Special 
Programs Administration issued regulations which state that steel drums 
which contain hazardous wastes must meet a minimum thickness 
requirement of 0.92 mm and have a nominal thickness of 1.0 mm. AVISMA 
and Interlink report that the greatest thickness of steel in the 
regulations is 1.9 mm.
    AVISMA and Interlink further argue that the HS classification 
7208.45 contains specialty steel sheet, while HS classification 
7208.35, the only other HS category of hot-rolled steel sheet with a 
thickness of less than 3 mm, contains the commodity type hot-rolled 
steel sheet. Therefore, AVISMA and Interlink believe that the 
Department should value steel sheet from HS classification 7208.35 or a 
weighted-average of HS categories 7208.35 and 7208.45.

Department's Position

    We disagree with AVISMA and Interlink that the SITC category used 
to value steel sheet is incorrect, given the evidence on the record. 
AVISMA did not provide any specifications of the steel sheet used for 
producing steel drums in any of its questionnaire responses. Because of 
the absence of this information, the Department determined in the 
preliminary results that the SITC category for steel sheet used in the 
previous administrative review would be appropriate to value steel 
sheet for this instant review. Parties did not file comments on the 
Department's use of the SITC category for steel sheet in the previous 
review.
    AVISMA's and Interlink's argument that there was an arithmetic 
error in the previous review should have been raised in the previous 
review. Because there is no information on the record of this case 
describing the specifications of the steel sheet used by AVISMA, we are 
not in the position to make a determination on the thickness of the 
steel used. Therefore, we determined that the use of the basket SITC 
category to value steel sheet is appropriate for this review.

Final Results of Review

    As a result of the comments received, we did not revise our 
preliminary results and determined that the following margins exist:

------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter             Review period     (percent) 
------------------------------------------------------------------------
Russia-wide rate........................     8/1/95-7/31/96        83.96
Cometals, Inc...........................     8/1/95-7/31/96        28.31
Interlink Metals & Chemicals............     8/1/95-7/31/96         0.00
TMC Trading International...............     8/1/95-7/31/96         0.00
------------------------------------------------------------------------

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The following 
deposit requirement will be effective for all shipments of titanium 
sponge from Russia entered, or withdrawn from warehouse, for 
consumption on or after the publication date of the final results of 
this administrative review, as provided by section 751(a)(1) of the 
Act: (1) The cash deposit rate for merchandise manufactured and 
exported to the United States directly by AVISMA will be the Russia-
wide rate established in these final results of review; (2) the cash 
deposit rates for merchandise exported to the United States by 
Interlink, TMC, or Cometals will be those rates established for 
Interlink, TMC, or Cometals in these final results of review; (3) for 
merchandise exported by manufacturers or exporters not covered in this 
review but covered in the original LTFV investigation or a previous 
review 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; (4) for Russian manufacturers or exporters not covered 
in the LTFV investigation or in this or prior administrative reviews, 
the cash deposit rate will continue to be the Russia-wide rate; and (5) 
the cash deposit rate for non-Russian exporters of subject merchandise 
from Russia that were not covered in the LTFV investigation or in this 
or prior administrative reviews will be the rate applicable to the 
Russian supplier of that exporter. These deposit rates, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.
    Further, because the rates for Interlink and TMC have been 
determined to be zero, we will instruct Customs to liquidate all 
exports of the subject merchandise during the POR by Interlink and TMC, 
without regard to the antidumping duty. As stated in the preliminary 
results, we found that AVISMA's and Cometals' exports during the POR 
entered the United States under temporary importation bonds, which are 
not subject to the antidumping order. The Department will issue 
appraisement instructions directly to the U.S. Customs Service.
    This notice also serves as a final 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 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 the only reminder to parties subject to 
administrative protective order (APO) in this review 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. 1675(a)(1)).

    Dated: September 9, 1997.
Jeffrey P. Bialos,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-24469 Filed 9-15-97; 8:45 am]
BILLING CODE 3510-DS-P