[Federal Register Volume 62, Number 205 (Thursday, October 23, 1997)]
[Notices]
[Pages 55215-55218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28154]
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DEPARTMENT OF COMMERCE
INTERNATIONAL TRADE ADMINISTRATION
[A-570-832]
Pure Magnesium From the People's Republic of China: Preliminary
Results of Antidumping Duty New Shipper Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
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SUMMARY: In response to a request from one manufacturer/exporter,
Taiyuan Heavy Machinery Import and Export Corporation, the Department
of Commerce is conducting a new shipper administrative review of the
antidumping duty order of Pure Magnesium from the People's Republic of
China. The review covers the period May 1, 1996, through October 31,
1996.
We have preliminarily determined that U.S. sales have been made
below the normal value (``NV''). If these preliminary results are
adopted in our final results of administrative review, we will instruct
the U.S. Customs Service to assess antidumping duties based on the
difference between Export Price (``EP'') and NV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: October 23, 1997.
FOR FURTHER INFORMATION CONTACT: Everett Kelly or Brian Smith, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230; telephone: (202) 482-4194 or (202) 482-1766, respectively.
SUPPLEMENTARY INFORMATION: 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, as
amended (``the Act''), by the Uruguay Round Agreements Act (``URAA'').
In addition, unless otherwise indicated, all citations to the
Department's regulations are to those codified at 19 CFR Part 353
(April 1997). Where appropriate, references are made to the
Department's final regulations, codified at 19 CFR 351 (62 FR 27296),
as a statement of current departmental practice.
Background
On November 3, 1997, the Department of Commerce (``the
Department'') received a request from Taiyuan Heavy Machinery Import
and Export Corporation (``Taiyuan'') for a new shipper review pursuant
to section
[[Page 55216]]
751(a)(2)(B) of the Act and section 19 CFR 353.22(h) of the
Department's regulations.
Section 751(a)(2) of the Act and section 19 CFR 353.22(h) of the
Department's regulations govern determinations of antidumping duties
for new shippers. These provisions state that, if the Department
receives a request for review from an exporter or producer of the
subject merchandise stating that it did not export the merchandise to
the United States during the period covered by the original less-than-
fair-value investigation (the ``POI'') and that such exporter or
producer is not affiliated with any exporter or producer who exported
the subject merchandise during that period, the Department shall
conduct a new shipper review to establish an individual weighted-
average dumping margin for such exporter or producer, if the Department
has not previously established such a margin for the exporter or
producer. The regulations require that the exporter or producer shall
include in its request, with appropriate certifications: (i) the date
on which the merchandise was first entered, or withdrawn from
warehouse, for consumption, or, if it cannot certify as to the date of
first entry, the date on which it first shipped the merchandise for
export to the United States or if the merchandise has not yet been
shipped or entered, the date of sale; (ii) a list of the firms with
which it is affiliated; and (iii) a statement from such exporter or
producer, and from each affiliated firm, that it did not, under its
current or a former name, export the merchandise during the POI (19 CFR
353.22(h)(2)).
Taiyuan's request was accompanied by information and certifications
establishing the effective date on which it first shipped and entered
pure magnesium. Taiyuan also has no affiliated companies and therefore
is not affiliated with any person or corporation which exported pure
magnesium from the People's Republic of China (``PRC'') during the POI.
Based on the above information, the Department initiated this new
shipper review of Taiyuan (Notice of Initiation of New Shipper
Antidumping Duty Administrative Review: Pure Magnesium from the
People's Republic of China (61 FR 69067 December 31, 1996)). The
Department is now conducting this review in accordance with section 751
of the Act and section 19 CFR 353.22.
Taiyuan submitted responses to the Department's antidumping
questionnaire and the Department attempted to verify this information
at the facilities of Taiyuan and its supplier in May 1997.
Scope of Review
The product covered by this review is pure primary magnesium
regardless of chemistry, form or size, unless expressly excluded from
the scope of this investigation. Primary magnesium is a metal or alloy
containing by weight primarily the element magnesium and produced by
decomposing raw materials into magnesium metal. Pure primary magnesium
is used primarily as a chemical in the aluminum alloying,
desulfurization, and chemical reduction industries. In addition, pure
primary magnesium is used as an input in producing magnesium alloy.
Pure primary magnesium encompasses:
(1) Products that contain at least 99.95% primary magnesium, by
weight (generally referred to as ``ultra-pure'' magnesium);
(2) Products containing less than 99.95% but not less than 99.8%
primary magnesium, by weight (generally referred to as ``pure''
magnesium); and
(3) Products (generally referred to as ``off-specification
pure'' magnesium) that contain 50% or greater, but less than 99.8%
primary magnesium, by weight, and that do not conform to ASTM
specifications for alloy magnesium.
``Off-specification pure'' magnesium is pure primary magnesium
containing magnesium scrap, secondary magnesium, oxidized magnesium or
impurities (whether or not intentionally added) that cause the primary
magnesium content to fall below 99.8% by weight. It generally does not
contain, individually or in combination, 1.5% or more, by weight, of
the following alloying elements: aluminum, manganese, zinc, silicon,
thorium, zirconium and rare earths.
Excluded from the scope of this investigation are alloy primary
magnesium (that meets as specifications for alloy magnesium), primary
magnesium anodes, granular primary magnesium (including turnings, chips
and powder), having a maximum physical dimension (i.e., length or
diameter) of one inch or less, secondary magnesium (which has pure
primary magnesium content or less than 50% by weight), an remelted
magnesium whose pure primary magnesium content is less than 50% by
weight.
Pure magnesium products covered by this order are currently
classifiable under Harmonized Tariff Schedule of the United States
(HTSUS) subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00,
8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope is dispositive.
Separate Rates
In proceedings involving non-market-economy (``NME'') countries,
the Department begins with a rebuttable presumption that all companies
within the country are subject to government control and thus should be
assessed a single antidumping duty deposit rate. To establish whether a
firm is sufficiently independent from government control to be entitled
to a separate rate, the Department analyzes each exporting entity under
a test arising out of the Final Determination of Sales at Less Than
Fair Value: Sparklers from the People's Republic of China (56 FR 20588,
May 6, 1991) and amplified in Final Determination of Sales at Less Than
Fair Value: Silicon Carbide from the People's Republic of China (59 FR
22585, May 2, 1994) (``Silicon Carbide''). Under the separate rates
criteria, the Department assigns separate rates in nonmarket economy
cases only if the respondent can demonstrate the absence of both de
jure and de facto governmental control over export activities.
1. De Jure Control
Taiyuan has placed on the administrative record documents to
demonstrate absence of de jure control; the ``Law of the People's
Republic of China on Industrial Enterprises Owned by the Whole
People,'' adopted on April 13, 1988, (the Industrial Enterprises Law),
and the 1992 regulations that supplemented it, ``Regulations for
Transformation of Operational Mechanisms of State-Owned Industrial
Enterprises'' (Business Operation Provisions). We have analyzed these
laws in previous cases and have found them to sufficiently establish an
absence of de jure control of companies ``owned by the whole people,''
such as Taiyuan. (See, e.g., Final Determination of Sales at Less than
Fair Value: Furfuryl Alcohol from the People's Republic of China
(``Furfuryl Alcohol'') 60 FR 22544 (May 8, 1995)). The Industrial
Enterprises Law provides that enterprises owned by ``the whole people''
shall make their own management decisions, be responsible for their own
profits and losses, choose their own suppliers, and purchase their own
goods and materials. The Business Operation Provisions confer upon
state-owned enterprises the responsibility for making investment
decisions, the right to dispose of retained capital and assets, and the
authority to form joint ventures and to merge with other enterprises.
Taiyuan also states that pure magnesium does not appear on any
government lists regarding export
[[Page 55217]]
provisions or export licensing, and that no quotas are imposed on pure
magnesium. In sum, in prior cases, the Department examined both the
Industrial Enterprises Law and the Business Operations Provisions, and
found that they establish an absence of de jure control. We have no new
information in this proceedings which would cause us to reconsider this
determination with regard to Taiyuan.
2. De Facto Control
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the EPs are set by or subject to the
approval of a governmental authority; (2) whether the respondent has
authority to negotiate and sign contracts and other agreements; (3)
whether the respondent has autonomy from the government in making
decisions regarding the selection of management; and (4) whether the
respondent retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of
losses (see Silicon Carbide and Furfuryl Alcohol).
Taiyuan asserted the following: (1) It establishes its own EPs; (2)
it negotiates contracts, without guidance from any governmental
entities or organizations; (3) it makes its own personnel decisions;
and (4) it retains the proceeds of its export sales, uses profits
according to its business needs and has the authority to sell its
assets and to obtain loans. During verification proceedings, Department
officials viewed such evidence as sales documents that showed Taiyuan
sales prices were negotiated solely by Taiyuan and its customer. In
addition, the Department generally noted no significant indication of
government involvement in Taiyuan's business operations. Taiyuan
officials are appointed by a bureau of the provincial government, not
the central government and there are no other known exporters under the
control of the provincial government. Sales documents reviewed
indicated that Taiyuan sales prices were negotiated solely by Taiyuan
and its customer. In addition, the Department reviewed sales payments,
bank statements and accounting documentation that provided evidence
that Taiyuan received payment in U.S. dollars, which was deposited into
its bank account after being converted to RMB (see Taiyuan Sales
Verification Report at pg 7). This information, taken in its entirety,
supports a finding that there is de facto an absence of governmental
control of export functions. Consequently, we have preliminarily
determined that Taiyuan has met the criteria for the application of
separate rates (see Notice of Final Determination at Less Than Fair
Value: Persulfates from the Peoples Republic of China, 62 FR 27222, May
19, 1997).
Fair Value Comparisons
To determine whether sales of the subject merchandise by Taiyuan to
the United States were made at less than fair value, we compared the EP
to the NV, as described in the ``Export Price and Constructed Export
Price'' and ``Normal Value'' sections of this notice, below.
Export Price and Constructed Export Price
The Department used EP, in accordance with section 772(a) of the
Act, because the subject merchandise was sold directly by the PRC
exporter to unrelated parties in the United States prior to importation
into the United States and the constructed EP methodology was not
warranted based on the facts of record.
We calculated EP based on packed, FOB foreign-port prices to
unrelated purchasers in the United States. We made deductions for
foreign inland freight, loading, and port handling expenses, valued in
a surrogate country. To value freight, we used Indonesia freight rates
from a 1991 cable from the U.S. Embassy in Jakarta (see Preliminary
Determination of Sales at Less Than Fair Value: Certain Carbon Steel
Butt-Weld Pipe Fittings from the PRC, 56 FR 66831, December 26, 1991).
We selected India as the primary surrogate country for reasons
explained in the ``Normal Value'' section below.
Normal Value
In every case conducted by the Department involving the PRC, the
PRC has been treated as an non-market economy (``NME'') country. None
of the parties to this proceeding has contested such treatment.
Accordingly, we calculated NV in accordance with section 773(c) of the
Act, which applies to non-market economy countries. In accordance with
section 773(c)(4) of the Act, we must, to the extent possible, value
the factors of production in one or more market economy countries that
(1) are at a level of economic development comparable to that of the
non-market economy country, and (2) are significant producers of
comparable merchandise. We first determined that India, Pakistan,
Egypt, Sri Lanka and Indonesia are each at a level of economic
development comparable to the PRC in terms of per capita gross national
product (``GNP''), the growth rate in per capita income, and the
national distribution of labor. However, none of the countries are
significant producers of the subject merchandise. Accordingly, we
considered whether any of the potential surrogates produce comparable
merchandise. As stated in previous cases, the material inputs used to
produce magnesium and aluminum are different. However, according to
both U.S. Bureau of Mines and Department of Commerce experts, both (1)
are light metals in terms of molecular weight; (2) are produced using
an electrolytic process, and (3) share some common end uses (e.g., dye
casting) (see Notice of Final Determination: Pure and Alloy Magnesium
from the Peoples Republic of China (60 FR 16437,16440, March 30, 1995)
(``the PRC Magnesium Investigation'')). Therefore, in this
administrative review, we have determined that aluminum constitutes
comparable merchandise in the context of surrogate selection.
The Department has determined that Indonesia and India are the
countries most comparable to the PRC in terms of overall economic
development and both are significant producers of comparable
merchandise (aluminum) (see the PRC Magnesium Investigation). We have
selected India as a reasonable surrogate country because it meets the
Department's criteria for surrogate country selection. Where we could
not find surrogate values from India, we valued those factors using
values from Indonesia.
Petitioner and respondent submitted publicly available information
on surrogate values for the Department's consideration. The factors
used to produce pure magnesium include materials, labor, and energy. To
calculate NV, the reported factor quantities were multiplied by the
appropriate surrogate values from India for the different inputs. To
value each factor of production, we used, where possible, publicly
available information. We have preliminarily accepted Taiyuan's
reporting of its suppliers' factors of production based on its entire
fiscal year rather than the POR because POR production was limited. For
purposes of calculating NV, we valued reported PRC factors of
production (adjusted based on verification findings) as follows, in
accordance with section 773(c) of the Act:
The factors of production for which we used surrogate values
included: raw materials, packing materials, labor, diesel fuel,
electricity, truck freight, factory overhead, selling, general and
administrative and profit we used
[[Page 55218]]
public information from various sources. See October 16, 1997,
Calculation Memorandum for details. Reported raw materials include:
ferrosilicon, dolomite, calcinate dolomite, flux (powder), flux (lump),
sulphuric acid, fluorite powder, sulphur powder, and barium chloride.
Reported packing materials include: wooden crates, plastic bags, and
steel straps.
With regard to labor, the Department has concluded that, while
wages and per-capita GNP are positively correlated, there is a great
variation in the wage rates of the market economy countries that the
Department treats as being economically comparable. As a practical
matter, this means that the result of an NME case can vary widely
depending on which of several economically comparable countries is
selected as the surrogate. In order to eliminate the variability of
wage rates in countries with similar per capita GNPs, we used a
regression-based wage rate.
See October 16, 1997, Calculation Memorandum for details of
valuation of factors of Production.
Verification
As provided in section 782(i) of the Act, we verified information
provided by the respondent by using standard verification procedures,
including on-site inspection of the respondent's facilities, the
examination of relevant sales and financial records, and selection of
original documentation containing relevant information. Our
verification findings are outlined in the verification report.
Currency Conversion
We made currency conversions pursuant to section 773A(a) of the Act
and section 353.60 of the Department's regulations based on the rates
certified by the Federal Reserve Bank.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following margin exists for the period May 1, 1996, through October 31,
1996:
------------------------------------------------------------------------
Percent
Manufacturer/producer/exporter margin
------------------------------------------------------------------------
Taiyuan Heavy Machinery Import and Export Corporation......... 83.92
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Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 days
of publication. Any hearing, if requested, will be held at the earliest
convenience of the parties but not later than 34 days after the date of
publication or the first business day thereafter. Case briefs from
interested parties may be submitted not later than 20 days after the
date of publication. Rebuttal briefs, limited to issues raised in the
case briefs, may be filed not later than 27 days after the date of
publication. The Department will issue the final results of this new
shipper administrative review, including the results of its analysis of
issues raised in any such written comments or at a hearing, within 90
days of issuance of these preliminary results. Upon completion of this
new shipper review, the Department will issue appraisement instructions
directly to the Customs Service. The results of this review shall be
the basis for the assessment of antidumping duties on entries of
merchandise covered by this review and for future deposits of estimated
duties.
Furthermore, upon completion of this review, the posting of a bond
or security in lieu of a cash deposit, pursuant to section
751(a)(2)(B)(iii) of the Act and section 353.22(h)(4) of the
Department's interim regulations, will no longer be permitted and,
should the final results yield a margin of dumping, a cash deposit will
be required for each entry of the merchandise.
The following deposit requirements will be effective upon
publication of the final results of this new shipper antidumping duty
administrative review for all shipments of pure magnesium from the PRC
entered, or withdrawn from warehouse, for consumption on or after the
publication date, as provided by section 751(a)(1) of the Act: (1) The
cash deposit rate for the reviewed company will be that established in
the final results of this new shipper administrative review; (2) the
cash deposit rate for all other PRC exporters will continue to be
108.26 percent, the PRC-wide rate established in the LTFV and (3) the
cash deposit rate for non-PRC exporters of subject merchandise will be
the rate applicable to the PRC supplier of that exporter.
investigation.
These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.36 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 new shipper administrative review and notice are in accordance
with section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and
Section 19 CFR 353.22(h) 1996.
Dated: October 16, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-28154 Filed 10-22-97; 8:45 am]
BILLING CODE 3510-DS-P