[Federal Register Volume 63, Number 173 (Tuesday, September 8, 1998)]
[Notices]
[Pages 47474-47477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24070]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-821-803]
Titanium Sponge from the Russian Federation: Preliminary Results
of Antidumping Duty Administrative Review and Partial Revocation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review and partial revocation.
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SUMMARY: In response to requests from AVISMA Titanium-Magnesium Works;
the affiliated companies Interlink Metals, Inc., and Interlink Metals &
Chemicals, S.A.; TMC Trading International Ltd.; and Titanium Metals
Corporation, the Department of Commerce is conducting an administrative
review of the antidumping finding on titanium sponge from the Russian
Federation. This notice of preliminary results covers the period August
1, 1996 through July 31, 1997. This review covers one manufacturer/
exporter, AVISMA Titanium-Magnesium Works, and two trading companies,
TMC Trading International Ltd. and, collectively as one company,
Interlink Metals, Inc., and Interlink Metals & Chemicals, S.A.
We have preliminarily determined that no dumping margins apply
during this review period. If these preliminary results are adopted in
our final results of administrative review, we will instruct the U.S.
Customs Service to liquidate entries during the period of review
without regard to dumping duties. Furthermore, if these preliminary
results are adopted in our final results of review, this will be the
Interlink entities' third consecutive review with no dumping margins.
Therefore, in the final results we will revoke this finding with
respect to Interlink. Interested parties are invited to comment on
these preliminary results. Parties who submit arguments in this
proceeding are requested to submit with the argument: (1) A statement
of the issue; and (2) a brief summary of the argument.
EFFECTIVE DATE: September 8, 1998.
FOR FURTHER INFORMATION CONTACT: Wendy Frankel 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 (202) 482-
5849 and 482-3936, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act. In addition, unless otherwise
indicated, all citations to the Department of Commerce's regulations
refer to the regulations codified at 19 CFR part 351, 62 FR 27296 (May
19, 1997).
Background
The Department of Commerce (the Department) published an
antidumping finding on titanium sponge from the Union of Soviet
Socialist Republics (U.S.S.R.) on August 28, 1968 (33 FR 12138). In
December 1991, the U.S.S.R. divided into fifteen independent states. To
conform to these changes, the Department changed the original
antidumping finding into fifteen findings applicable to each of the
former republics of the U.S.S.R. (57 FR 36070, August 12, 1992).
On August 26, 1997, AVISMA Titanium-Magnesium Works (AVISMA) and
Interlink Metals & Chemicals, S.A. and Interlink Metals, Inc.
(collectively Interlink) requested that the Department conduct an
administrative review of the antidumping finding on titanium sponge
from the Russian Federation (Russia) for one manufacturer/exporter,
AVISMA, and one trading company, Interlink, covering the period August
1, 1996 through July 31, 1997. On August 27, 1997, Titanium Metals
Corporation (TIMET) requested that the Department conduct an
administrative review for the trading companies, Interlink and TMC
Trading International, Ltd. (TMC). On August 28, 1997, TMC requested
that the Department conduct an administrative review of its U.S. sales.
The Department published a notice of initiation of the review on
September 25, 1997 (62 FR 50292). Due to the complexity of the legal
and methodological issues presented by this review, the Department
postponed the date of the preliminary results of review by sixty days
on February 10, 1998 (63 FR 6721). The Department published a second
sixty day postponement of preliminary results of review on April 16,
1998 (63 FR 18885). The Department is conducting this administrative
review in accordance with section 751 of the Act.
On August 13, 1998, the International Trade Commission (ITC)
published in the Federal Register its determination that revocation of
the findings covering titanium sponge imports from the Republic of
Kazakhstan (Kazakhstan), Russia, and Ukraine and the antidumping duty
order covering imports of titanium sponge from Japan is not likely to
lead to continuation or recurrence of material injury to an industry in
the United States. Due to this determination the Department has revoked
the findings covering titanium sponge imports from Kazakhstan, Russia,
and Ukraine and the antidumping duty order covering titanium sponge
imports from Japan. This revocation is effective as of August 13, 1998.
See Notice of Revocation of Antidumping Findings and Antidumping Duty
Order and Termination of Five-Year (``Sunset'') Reviews: Titanium
Sponge from Kazakhstan, Russia, Ukraine, and Japan, (63 FR 46215,
August 31, 1998).
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
subheading is provided for convenience and U.S. Customs purposes. Our
written description of the scope of this proceeding is dispositive.
Separate Rates
During the period of review (POR), AVISMA made direct sales of
subject merchandise to the U.S. market that were entered for
consumption. Due to these direct sales, AVISMA has requested a
separate, company-specific rate. The claimed ownership of AVISMA during
the POR is that of a publicly owned joint stock company, where 100
percent of the shares are owned by private individuals and private
companies. AVISMA asserted that the state owned zero percent of its
shares.
To establish whether a firm is sufficiently independent from
[[Page 47475]]
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
the Final Determination of Sales at Less Than Fair Value: Silicon
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994).
Under the separate rates criteria, the Department assigns separate
rates in nonmarket economy cases only if a respondent can demonstrate
the absence of both de jure and de facto government control over its
export activities. Since the Department did not verify the information
submitted by AVISMA to the record of this proceeding, we must rely upon
the information provided by AVISMA in its questionnaire responses in
order to determine whether there is an absence of either de jure or de
facto governmental control.
1. Absence of De Jure Control
An individual company may be considered for a separate rate if it
meets the following de jure criteria: (1) an absence of restrictive
stipulations associated with an individual exporter's business and
export licenses; (2) any legislative enactments decentralizing control
of companies; (3) any other formal measures by the government
decentralizing control of companies. AVISMA has placed on the
administrative record a number of documents demonstrating absence of de
jure control. These documents include laws, regulations, and provisions
enacted by the government of Russia, describing the deregulation of
Russian enterprises as well as the deregulation of the Russian export
trade. Specifically, these documents include the President of the
Russian Federation's Decree Number 721, that states ``a joint stock
company from the moment of its registration is out of the control of
Ministries, State and Local administrative organs and authorities.'' In
addition, AVISMA has placed on the record Article 49 of the Russian
Federation's Civil Code, which states ``Commercial organizations * * *
can have civil rights and civil obligation necessary for any kind of
activities, not prohibited by the regulation.'' ``Commercial
organization'' is defined to be an organization, whose activities are
aimed at gaining profit (Russian Federation Civil Code Article 50). See
AVISMA's questionnaire response dated November 26, 1997. Furthermore,
AVISMA claims that there are no licenses issued by any government
agency to AVISMA with regard to any aspect of AVISMA's production or
sales activity. Based on this information, we have concluded that there
was a de jure absence of governmental control over AVISMA.
2. Absence of De Facto Control
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto government control of
its export functions: (1) whether the export prices 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) it
retains the proceeds of its export sales and makes independent
decisions regarding disposition of profits or financing of losses.
In its questionnaire responses, AVISMA asserted the following: (1)
it establishes its own export price; (2) it negotiates contracts
without guidance from any governmental entities or organizations; (3)
it selects its own management; and (4) it retains the proceeds of its
export sales, uses profits according to its business needs, and has no
restrictions on the use of its retained foreign currency earnings. In
support of its claim that it is free of de facto government control,
AVISMA provided sample documents to one of its direct sales to the
United States. These documents include the sales contract, currency
control passport, commercial invoice, quality control shipping
document, and customs declaration. In addition, AVISMA provided its
audited financial statements from the two most recent fiscal years
(1995 and 1996) as well as the income statements for the first and
second quarters of 1997. This information supports a finding that,
during the POR, there was a de facto absence of governmental control of
export functions. Therefore, we have concluded that AVISMA is entitled
to a separate rate.
The Russia-Wide Rate
In past reviews of this finding, the Department has examined
several export companies not included in the instant review. One of
these exporters, Cometals Inc., had shipments that were reviewed and
received a positive margin. See Titanium Sponge From the Russian
Federation; Notice of Final Results of Antidumping Duty Administrative
Review, 62 FR 48601 (September 16, 1997) (Titanium Sponge 1996).
Therefore, we conclude that not all exporters of titanium sponge from
Russia are included in the instant review. Accordingly, we are applying
a single antidumping deposit rate--the Russia-wide rate--to all
manufacturers/exporters of titanium sponge from the Russian Federation
that have not received a company-specific rate in the current or prior
administrative reviews.
Intent To Revoke
On August 26, 1997, Interlink submitted a request, in accordance
with Section 351.222(b), that the Department revoke the finding
covering titanium sponge from the Russian Federation with respect to
its sales of this merchandise. In accordance with Section
351.222(b)(iii), Interlink submitted on December 10, 1997, a
certification that it had not sold the subject merchandise at less than
normal value for a three-year period, including this review period, and
would not do so in the future.
We preliminarily determine that Interlink sold titanium sponge from
Russia at not less than normal value during this review period. Based
on Interlink's three consecutive years of zero margins and the absence
of evidence to the contrary, we preliminarily determine that it is not
likely that Interlink will in the future sell titanium sponge at less
than normal value. Therefore, if these preliminary findings are
affirmed in our final results, we intend to revoke the order on
titanium sponge from Russia with respect to Interlink.
In the last two administrative reviews, we determined that
Interlink did not sell titanium sponge at less than fair value. See
Titanium Sponge 1996 and Titanium Sponge From the Russian Federation;
Notice of Final Results of Antidumping Duty Administrative Review, 61
FR 58525 (November 15, 1996). Additionally, as discussed below, we have
preliminarily determined that Interlink has not sold titanium sponge at
less than fair value during the period covered by this review.
Consequently, we preliminarily determine that because Interlink has
three consecutive years of zero or de minimis margins on titanium
sponge, Interlink is eligible for revocation of the finding on titanium
sponge from Russia under Section 351.222(b).
United States Price
AVISMA
We calculated U.S. price (USP) for AVISMA's sales to unaffiliated
purchasers in the United States based on export price (EP), as defined
in section 772(a) of the Act. For the date of sale, we used the sales
invoice date.
[[Page 47476]]
We made deductions, where appropriate, for inland freight, brokerage
and handling, international freight, marine insurance, and Russian
export charges. AVISMA did not claim any other adjustments to USP, nor
were any other adjustments allowed.
Interlink and TMC
For purposes of this review, we assigned a separate rate for
Interlink and TMC (which are located in market-economy countries)
because AVISMA, at the time of sale to these entities, did not have
knowledge of the ultimate destination of the merchandise. We calculated
USP for TMC based on EP. Interlink reported that its U.S. sales were EP
sales that were made to unaffiliated U.S. customers prior to
importation and customarily did not enter into the inventory of
Interlink Metals & Chemicals S.A.'s U.S. affiliate. When U.S. sales are
made in this manner, our practice is to examine several criteria in
order to determine whether the sales are EP sales. Those criteria are:
(1) Whether the merchandise was shipped directly from the manufacturer
to the unaffiliated U.S. customer; (2) whether this was the customary
commercial channel between the parties involved; and (3) whether the
function of the U.S. selling agent was limited to that of a ``processor
of sales-related documentation'' and a ``communications link'' with the
unaffiliated U.S. buyer. Where all three criteria are met, indicating
that the activities of the U.S. selling agent are ancillary to the
sale, the Department has regarded the routine selling functions of the
exporter as merely having been relocated geographically from the
country of exportation to the United States where the sales agent
performs them, and has determined the sales to be EP sales. Where one
or more of these conditions is not met, indicating that the U.S. sales
agent is substantially involved in the U.S. sales process, the
Department has classified the sales in question as constructed export
price (CEP) sales. See, e.g., Certain Cold-Rolled and Corrosion-
Resistant Carbon Steel Flat Products From Korea: Final Results of
Antidumping Duty Administrative Reviews, 63 FR 13,170 (March 18, 1998)
and Viscose Rayon Staple Fiber from Finland: Final Results of
Antidumping Duty Administrative Review, 63 FR 32,820 (June 16, 1998).
The record shows that during the POR Interlink Metals, Inc.,
Interlink's U.S. operation, was responsible for the sale of titanium
sponge to customers and that sales activities were generally performed
in the United States. Thus, we have preliminarily determined that
Interlink Metals, Inc. acted as more than a ``processor of sales-
related documentation'' and a ``communications link'' with the
unaffiliated U.S. buyer. Therefore, we based USP on CEP, as defined in
section 772(b) of the Act. For date of sale, we used the sales invoice
date for both TMC and Interlink. We excluded those sales made to the
United States which the respondents identified as having entered the
United States under temporary importation bond (TIB). We are currently
confirming the information provided by respondents regarding TIB
entries through Customs and National Census Bureau data.
In calculating USP for TMC and Interlink, we made deductions, where
appropriate, for ocean freight, warehouse expenses, insurance,
brokerage and handling, inland freight, and U.S. duty and terminal
handling charges. Additionally, in accordance with section 772 (d) of
the Act and the Department's practice in non-market economy (NME) cases
involving CEP sales, in calculating USP for Interlink we made
deductions for U.S. credit and indirect selling expenses and the profit
allocated to these U.S. expenses (see Notice of Final Determination of
Sales at Less Than Fair Value: Bicycles From the People's Republic of
China 61 FR 19026 (April 30, 1996)). TMC and Interlink did not claim
any other adjustments to USP, nor were any other adjustments allowed.
Surrogate Country Selection
Section 773(c)(1) of the Act provides that the Department shall
determine normal value on the basis of the value of the factors of
production if (1) the subject merchandise is exported from a NME
country, and (2) the available information does not permit the
calculation of normal value under section 773(a) of the Act. In
previous proceedings, the Department has considered Russia to be a NME
country. See Final Determination of Sales at Less Than Fair Value: Pure
Magnesium and Alloy Magnesium from the Russian Federation (Magnesium
From Russia), 60 FR 16440 (March 30, 1995); and Final Determination of
Sales at Less Than Fair Value: Ferrovanadium and Nitrided Vanadium from
the Russian Federation, 60 FR 27957 (May 26, 1995). Section 771(18)(C)
of the Act states that ``any determination that a foreign country is a
nonmarket economy country shall remain in effect until revoked by the
administering authority.'' Because NME status has not been revoked in
any previous proceeding for Russia, we are considering Russia to be a
NME country for purposes of this review. Therefore, because AVISMA is
located in Russia, we have applied surrogate values to the factors of
production to determine normal value.
We calculated normal value based on factors of production provided
by AVISMA, in accordance with Section 773(c)(1) of the Act and section
351.408 of the Department's regulations. We determined that Venezuela
is comparable to Russia in terms of per capita gross national product
(GNP), the growth rate in per capita GNP, and the national distribution
of labor. In addition, Venezuela is a significant producer of
comparable merchandise. See Memorandum to the File, Titanium Sponge
from the Russian Federation; Surrogate Country Selection, dated July 2,
1997. Therefore, in accordance with section 773(c)(4) of the Act, we
selected Venezuela as a comparable surrogate on the basis of the above
criteria and have used publicly available information relating to
Venezuela to value the various factors of production, except as
indicated below. See Memorandum from Jeff May, Acting Director, Office
of Policy, to Holly A. Kuga, Senior Director, Office of AD/CVD
Enforcement, October 20, 1997, and Memorandum from Jeff May, Acting
Director, Office of Policy, to Holly A. Kuga, Senior Director, Office
of AD/CVD Enforcement, January 27, 1998.
Normal Value
To determine normal value, in accordance with section 773(c)(3) of
the Act, we valued the factors of production as follows (for further
discussion, see the Analysis Memorandum for the Preliminary Results of
Administrative Review, dated August 31, 1998):
Except as noted below, we valued raw materials and by-
products using the Venezuelan import data obtained by Interlink from
the Commodity Trade Statistics Section, United Nations Statistics
Division, (UN import statistics) for the calendar year 1996. We
adjusted certain factor values to reflect the actual purity used in the
production of the subject merchandise. We valued chlorine using the
average of the calendar 1996 and 1997 price quotes that respondents
obtained from a Venezuelan chlorine producer. We were unable to find
publicly available information from Venezuela or from any of the other
potential surrogate countries in order to value ilmenite, rutile
concentrate and carnallite concentrate. For ilmenite, we used the 1995
Brazilian price that was reported in the 1995-1996 administrative
review of this finding. We valued rutile concentrate using the 1997
Australian
[[Page 47477]]
price provided by Interlink. For carnallite concentrate, we used the
Indian price for dolomite, a commodity similar to carnallite
concentrate, that was reported in the antidumping duty investigation of
magnesium from Russia (see Notice of Final Determination of Sales at
Less Than Fair Value: Pure Magnesium and Alloy Magnesium From the
Russian Federation 60 FR 16440, 16449 (March 30, 1995)) (Magnesium From
Russia) and used to value carnallite concentrate in the 1995-1996
administrative review of this finding. Since we obtained values for
ilmenite and carnallite concentrate that are in U.S. dollars, we did
not adjust for the effects of inflation.
Pursuant to Section 351.408(c)(3), we valued direct labor
by using the regression-based wage rate for Russia as posted on the
Import Administration Internet website.
For electricity, we used the simple average of the 1996
and 1997 electricity rates for industrial users in Guayana, Venezuela,
as reported by the Venezuelan Chamber of the Electric Industry. To
value natural gas, we used the 1996 price of gas in Venezuela as
reported by the International Energy Agency's (IEA's) publication
Energy Prices and Taxes, 4th Quarter 1997. Since this price was
reported in U.S. dollars per tonne of oil equivalent, we converted the
IEA price into a U.S. dollar per metric ton measure. AVISMA reported
its consumption of natural gas in tons of reference fuel. Using the
conversion rate in the calculation memorandum in Magnesium From Russia,
we converted AVISMA's natural gas consumption into a metric ton
measure.
To value railcar freight in Russia, we used the Venezuelan
rates obtained by the petitioner from the national Venezuelan railway
authority. This rate is on a per kilometer, per ton basis. We were
unable to find truck rates from Venezuela or from any of the other
potential surrogate countries. Therefore, we used the Brazilian
trucking rates, provided by Interlink, that were used in the 1995-1996
administrative review of this finding.
For packing materials, we used the 1996 UN import
statistics from Venezuela provided by Interlink. We valued labor used
in packing with the above-referenced regression-based labor rate for
Russia.
We valued selling, general and administrative expenses and
profit using the 1997 income statement for CVG Industria Venezolana De
Aluminio C.A., a major aluminum producer in Venezuela.
We were unable to find information on factory overhead for
an appropriate company or industry from Venezuela or from any other
potential surrogate country. Therefore, as in the 1995-1996
administrative review of this finding, we valued factory overhead using
cost data reported in the public record of the antidumping
administrative review of silicon metal from Brazil. In the instant
review, we relied on public cost data in the 1996-1997 antidumping
administrative review of silicon metal from Brazil.
We included in normal value, where appropriate, movement
expenses incurred in bringing the subject merchandise from the Russian
plant to the resellers' warehouses. We valued railcar freight in Russia
using the Venezuelan rates obtained by the petitioner from the national
Venezuelan railway authority. We valued railcar freight and brokerage
in Finland using the prices AVISMA reported in the public version of
the section C response that it submitted in the instant review. We
valued the Russian customs fee, paid by AVISMA on its exports of
subject merchandise, using the Venezuelan exportation fee as reported
by the Department's commercial service personnel in Caracas, Venezuela.
Currency Conversion
We made currency conversions in accordance with section 773A(a) of
the Act, based on rates certified by the Federal Reserve Bank and Dow
Jones Business Information Services.
Preliminary Results
As a result of this review, we preliminarily determine that the
following weighted-average dumping margins exist:
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Margin
Manufacturer/exporter Period (percent)
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Interlink Metals & Chemicals, S.A....... 8/1/96-7/31/97 0.00
TMC Trading International, Ltd.......... 8/1/96-7/31/97 0.00
AVISMA Titanium-Magnesium Works......... 8/1/96-7/31/97 0.00
Russia-wide rate........................ 8/1/96-7/31/97 83.96
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Parties to this proceeding may request disclosure of our
preliminary results within five days of publication of this notice and
any interested party may request a hearing within 30 days of
publication. Any hearing, if requested, will be held 44 days after the
date of publication, or the first working day thereafter. Interested
parties may submit case briefs and/or written comments no later than 30
days after the date of publication. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in such briefs or comments,
may be filed no later than 35 days after the date of publication. The
Department will publish a notice of the final results of the
administrative review, which will include the results of its analysis
of issues raised in any such written comments or at the hearing, within
120 days from the publication of the preliminary results.
The final results of this review shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
the determination. The Department shall determine, and Customs shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and normal value may vary from the
percentages stated above. The Department will issue appraisement
instructions directly to Customs.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f) 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 administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)). This notice is
published in accordance with section 777(i) of the Act.
Dated: August 31, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24070 Filed 9-4-98; 8:45 am]
BILLING CODE 3510-DS-P