[Federal Register Volume 63, Number 99 (Friday, May 22, 1998)]
[Notices]
[Pages 28355-28357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13802]


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DEPARTMENT OF COMMERCE

International Trade Commission
[A-351-820]


Ferrosilicon From Brazil: 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 January 16, 1998, the Department of Commerce published the 
preliminary results of the administrative review of the antidumping 
duty order on Ferrosilicon from Brazil. This review covers exports of 
this merchandise to the United States by one manufacturer/exporter, 
Companhia de Ferro Ligas da Bahia, during the period March 1, 1996, 
through February 28, 1997.
    We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received, we 
have not changed the final results from those presented in the 
preliminary results.

EFFECTIVE DATE: May 22, 1998.

FOR FURTHER INFORMATION CONTACT: Wendy Frankel 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-
5849 or (202) 482-4851, respectively.


[[Page 28356]]



SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act) are references to the provisions effective 
January 1, 1995, the effective date of the amendments to the Act by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all references to the Department of Commerce's (the 
Department's) regulations refer to the regulations as codified at 19 
CFR part 353 (April 1, 1997).

Background

    The Department published the antidumping duty order on ferrosilicon 
from Brazil on March 14, 1994 (59 FR 11769). On January 16, 1998, the 
Department published the preliminary results of the 1996-1997 
administrative review of that antidumping duty order (63 FR 2661). On 
March 4, 1998, and March 16, 1998, we received case and rebuttal briefs 
from Companhia de Ferro Ligas da Bahia (Ferbasa), and Aimcor and SKW 
Metals & Alloys, Inc. (the petitioners). Based on our analysis of the 
comments received, we have not changed the final results from those 
presented in the preliminary results.

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.

Analysis of Comments Received

Comment 1
    Ferbasa maintains that the Department's recalculation of cost of 
manufacturing (COM) for ferrosilicon based on the six-month period, 
September 1, 1996 through February 28, 1997, instead of the twelve-
month fiscal year, January 1, 1996 through December 31, 1996, is 
inconsistent with the instructions set forth in the Department's 
questionnaire. Ferbasa notes the fact that, in a letter from the 
Department dated June 19, 1997, the Department allowed the company to 
report home market sales data for the six-month period. (See, the 
Department's letter from Holly Kuga to Gilvan Durao, Executive Director 
of Ferbasa.) At the same time, however, Ferbasa observes that it 
followed the Department's questionnaire instructions which allow 
respondents to report production costs on a fiscal-year basis in 
certain circumstances.
    Ferbasa adds that the Department verified its submitted fiscal year 
costs and notes that the recalculation of COM based on a six-month 
period is inconsistent with the full-year selling, general and 
administrative expenses (SG&A) and interest ratio calculations used by 
the Department to compute cost of production (COP) in the preliminary 
results of this case. For these reasons, Ferbasa contends that the 
Department must use the company's full fiscal-year cost data to compute 
COP for the final results of this administrative review.
    The petitioners argue that the Department correctly calculated 
Ferbasa's COM based on the six-month period rather than the submitted 
fiscal year data. The petitioners note that the Department reasonably 
recalculated COM based on the period of time which coincides with 
Ferbasa's reported home market sales data. Moreover, the petitioners 
maintain that the fact Ferbasa reported its cost data on a fiscal-year 
basis does not obligate the Department to use that information in its 
sales-below-cost analysis.
    The petitioners further note that both the fiscal year and the six-
month data were tested at verification and, therefore, the Department 
is not compelled to use only the submitted fiscal-year data. Finally, 
the petitioners conclude that the Department's normal calculation of 
SG&A and interest expense ratios based on the fiscal year data is 
appropriate.
Department's Position
    We agree with petitioners that it was appropriate in this case for 
us to revise Ferbasa's submitted COM figures to reflect the six-month 
period. Based on a timely request from Ferbasa, we permitted the 
company to limit its reporting of home market sales to only those 
months that were contemporaneous to its one U.S. sale. We further note 
that the Department's questionnaire reflects our general practice of 
allowing a respondent to report costs for its normal fiscal year if 
this fiscal period corresponds closely with the period under 
investigation or review.
    In the instant proceeding, although Ferbasa's fiscal year 
corresponds closely with the entire period under review it was not 
sufficiently correlated to the sales reporting period. We advised 
Ferbasa of our intent to examine at verification the extent to which 
the submitted fiscal year costs were representative of costs incurred 
during the six-month sales reporting period. (See, Cost Verification 
Agenda, October 27, 1997, Section IV. C., at 5.)
    Based on our testing at verification, we determined that the 
reported fiscal year costs were not reasonably reflective of the costs 
incurred to produce the subject merchandise sold during the six-month 
sales reporting period. (See, Memorandum to the Official File re: 
Verification of Cost of Production and Constructed Value Information 
(Cost Verification Report), at 2, and Section IV.C., at 10 (January 12, 
1998); see also,

[[Page 28357]]

Memorandum to the Official File re: Adjustments to Cost of Production 
and Constructed Value (January 12, 1998).)
    Accordingly, in reaching our preliminary determination we relied on 
the actual costs incurred to produce the subject merchandise during the 
six-month period contemporaneous to the reported sales. This approach 
is consistent with the Department's obligation to ensure that the 
calculations are based on costs which ``* * * reasonably reflects and 
accurately captures all of the actual costs incurred in producing * * * 
the product under investigation or review.'' (See, Statement of 
Administrative Action accompanying the URRA, H.R. 5110, H.R. Doc. No. 
103-316, vol. 1 (1994) at 834 (SAA); see also Final Results of 
Antidumping Duty Administrative Reviews: Certain Cold-Rolled and 
Corrosion-Resistant Carbon Steel Flat Products From Korea, 63 FR 13170, 
13192 (March 18, 1998), where the Department determined that the POR 
costs differed from the company's fiscal year costs, and after 
reviewing the information, based the margin calculations on the POR 
costs rather than on the fiscal year costs.) Accordingly, we continue 
to rely on costs incurred during the six-month period in these final 
results.
    As to Ferbasa's comment that the Department's general practice of 
calculating SG&A and interest expense based on the fiscal year requires 
that COM be based on that same period, we disagree. The Department 
normally calculates SG&A and interest expenses over the closest 
corresponding fiscal year's audited financial statements. We then use 
these ratios to determine the per-unit SG&A and interest expense 
associated with each product. This calculation measures, over a full 
fiscal year, the level of G&A expenses associated with the company's 
sales. The basis for calculating these ratios over the full fiscal year 
is not because it is the exact same period as that examined for the 
cost calculation, but rather because using the annual ratio is most 
reflective of these type of expenses, which are typically incurred 
unevenly throughout the year. (See Final Determination of Sales at Less 
Than Fair Value: Oil Country Tubular Goods from Argentina, 60 FR 
33,539, 33,549 (June 28, 1995); and Final Determination of Sales at 
Less Than Fair Value: Hot-Rolled Carbon Steel Flat Products, Cold-
Rolled Carbon Steel Flat Products, Corrosion-Resistant Carbon Steel 
Flat Products, and Cut-to Length Carbon Steel Plate from Canada, 58 FR 
37105, 37113 (July 9, 1993).)
Comment 2
    Ferbasa contends that the Department should not have included 
valued added taxes (IPI and ICMS) in the calculation of constructed 
value (CV). According to Ferbasa, section 773(a)(6)(B) of the Act 
provides for the exclusion of home market consumption taxes from normal 
value (NV) in order to maintain a tax neutral comparison for purposes 
of measuring whether dumping has occurred.
    The petitioners contend that the Department properly included the 
IPI and ICMS taxes in CV. According to the petitioners, section 773(e) 
of the Act provides that any home market tax imposed on export goods 
should be included in CV unless the tax is refunded or remitted upon 
exportation. The petitioner argues that Ferbasa has not stated nor did 
the verification conclude that these IPI and ICMS taxes have been 
remitted or refunded upon exportation.
Department's Position:
    Because the NV in these final results was based on Ferbasa's home 
market prices and not on CV, this issue is moot. Therefore, we are not 
addressing it here.

Final Results of Review

    Our final results are unchanged from those presented in our 
preliminary results. Therefore, the dumping margin for Ferbasa remains 
at zero percent for the period March 1, 1996, through February 28, 
1997.
    The following deposit requirement will be effective for all 
shipments of subject merchandise from Brazil 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 the reviewed 
company will be zero; (2) for merchandise exported by manufacturers or 
exporters not covered in this review but covered in previous reviews or 
the original less-than-fair-value (LTFV) investigation, the cash 
deposit rate will continue to be the rate published in the most recent 
final results or determination for which the manufacturer or exporter 
received a company-specific rate; (3) if the exporter is not a firm 
covered in this review, a previous review, or the LTFV investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the manufacturer of the merchandise in the final 
results of this review, earlier review or the LTFV investigation, 
whichever is the most recent; (4) if neither the exporter nor the 
manufacturer is a firm covered in this or any previous reviews, the 
cash deposit will be 35.95 percent, the ``All Others'' rate made 
effective by the antidumping duty order (59 FR 11769, March 14, 1994).
    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) of the Department's 
regulations. 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 terms of the APO 
is a sanctionable violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 14, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-13802 Filed 5-21-98; 8:45 am]
BILLING CODE 3510-DS-P