[Federal Register Volume 63, Number 173 (Tuesday, September 8, 1998)]
[Notices]
[Pages 47478-47480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24071]



[[Page 47478]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-834-803]


Titanium Sponge from the Republic of Kazakhstan: Preliminary 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to requests from Ust-Kamenogorsk Titanium and 
Magnesium Plant, Specialty Metals Company, and Oremet Titanium Inc., 
the Department of Commerce is conducting an administrative review of 
the antidumping finding on titanium sponge from the Republic of 
Kazakhstan. This notice of preliminary results covers the period August 
1, 1996 through July 31, 1997. This review covers one manufacturer/
exporter, Ust-Kamenogorsk Titanium and Magnesium Plant, and one trading 
company, Specialty Metals Company.
    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 (POR) 
without regard to dumping duties. 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 29, 1997, Ust-Kamenogorsk Titanium and Magnesium Plant 
(UKTMP), Specialty Metals Company (SMC), and Oremet Titanium Inc. 
(Oremet) requested that the Department conduct an administrative review 
of the antidumping finding on titanium sponge from the Republic of 
Kazakhstan (Kazakhstan) for one manufacturer/exporter, UKTMP, and one 
trading company, SMC, covering the period August 1, 1996 through July 
31, 1997. 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 the 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 Kazakhstan, the 
Russian Federation (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, the 
date of publication in the Federal Register of the ITC's 
determinations. See Notice of Revocation of Antidumping Findings and 
Antidumping Duty Order and Termination of Five-Tear (``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 Kazakhstan. 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.

United States Price (USP)

UKTMP and SMC

    SMC is located in a market-economy country. Since SMC owns 65 
percent of UKTMP and manages the operations of UKTMP under a long-term 
management contract, we are considering both companies to constitute 
one entity and are calculating one rate that will apply to both SMC and 
UKTMP.
    In calculating the USP for SMC, we used export price, as defined in 
section 772(a) of the Act. For date of sale, we used the sales invoice 
date because this is the date when the price and quantity are set. We 
excluded those sales made to the United States which the respondents 
identified as having entered the United States under temporary 
importation bond (TIB). At this time, because merchandise entered under 
a TIB is not entered for consumption, such merchandise is not subject 
to the antidumping finding. See Titanium Metals Corp. v. The United 
States, 901 F. Supp 362 (CIT 1995). Respondents provided information 
regarding TIB entries, and we are currently confirming this information 
through Customs and National Census Bureau data.
    We calculated export price based on the price to unaffiliated 
purchasers in the United States. We made deductions, where appropriate, 
for ocean freight, insurance, brokerage and handling, and inland 
freight. SMC 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

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of the factors of production if (1) the subject merchandise is exported 
from a non-market economy (NME) country, and (2) the available 
information does not permit the calculation of normal value under 
section 773(a) of the Act. 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 for Kazakhstan in 
any previous proceedings, we are considering Kazakhstan to be a NME 
country for purposes of this review. Therefore, because UKTMP is 
located in Kazakhstan, 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 UKTMP, in accordance with section 773(c)(1) of the Act and section 
351.408 of the Department's regulations. We determined that Indonesia 
is comparable to Kazakhstan in terms of per capita gross national 
product (GNP), the growth rate in per capita GNP, and the national 
distribution of labor. In addition, Indonesia is a significant producer 
of comparable merchandise. Therefore, in accordance with section 
773(c)(4) of the Act, we selected Indonesia as a comparable surrogate 
on the basis of the above criteria and have used publicly available 
information relating to Indonesia to value the various factors of 
production, except as indicated below. See the Memorandum from Jeff 
May, Acting Director, Office of Policy, to Holly A. Kuga, Senior 
Director, Office of AD/CVD Enforcement, October 20, 1997, and the 
Memorandum from Jeff May, Acting Director, Office of Policy, to Holly 
A. Kuga, Senior Director, Office of AD/CVD Enforcement, June 15, 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 using 
Indonesian import data 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. Since 
UKTMP purchased titanium slag from both market and non-market economy 
suppliers, consistent with the Department's practice, we valued this 
input with the market economy price, regardless of the supplier. The 
most recent Indonesian import statistics that we were able to find for 
chlorine and hydrochloric acid were Indonesia's 1993 import statistics, 
as reported in the United Nation's publication, Commodity Trade 
Statistics, 1993. Since the UN statistics are reported in U.S. dollars, 
we did not adjust for the effects of inflation. We were unable to find 
information from Indonesia or from any of the other potential surrogate 
countries in order to value carnallite and spent electrolyte. For 
carnallite, we used the Indian price for dolomite, a commodity similar 
to carnallite, 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 Titanium Sponge 
From the Russian Federation; Notice of Final Results of Antidumping 
Duty Administrative Review 62 FR 48601 (September 16, 1997) (also see 
Titanium Sponge From the Russian Federation; Preliminary Results of 
Antidumping Duty Administrative Review 62 FR 25920, 25922, (May 12, 
1997). In order to value spent electrolyte, we used the surrogate value 
for potassium chloride because spent electrolyte is 75 percent 
potassium chloride.
     Pursuant to section 351.408(c)(3) of the Department's 
regulations, we valued direct labor by using the regression-based wage 
rate for Kazakhstan as posted on the Import Administration Internet web 
site.
     For electricity, we used the ``extra large industry user'' 
rate from Indonesia's electricity tariff schedule that UKTMP would have 
received had it been an electricity consumer in Indonesia during the 
period of review (POR). This decision was based on finding that UKTMP's 
level of electricity usage during the POR was similar to the profile of 
``large industrial user'' in Magnesium From Russia (page 16446). To 
confirm that UKTMP would have received this rate, we divided the 
average number of kilowatt hours used during each month of the POR by 
the number of hours in a month, which demonstrated that UKTMP's 
kilowatt use was higher than the minimum necessary to receive the 
``extra large industrial user'' rate in effect in Indonesia. Since the 
Indonesia rate was for 1994, and expressed in rupiahs, we adjusted this 
rate in order to account for the effects of inflation.
     We were unable to obtain recent publicly available 
information for Indonesian truck and railway rates. Therefore, we used 
the truck and railway rates as reported by the U.S. Embassy in Jakarta, 
Indonesia and transmitted to the Department in September 1991 via cable 
(Jakarta 12078). This information was obtained for the antidumping duty 
investigation of Certain Butt-Weld Pipe Fittings from the PRC. Since 
these 1991 rates were reported in rupiahs per metric ton per kilometer, 
we inflated them to take into account the effects of inflation.
     In regard to packing materials, we used the 1996 UN import 
statistics from Indonesia that were provided by the petitioner for 
polyethylene film and argon. We valued sheet steel by using Indonesia's 
1994 import statistics, as reported in the United Nation's publication, 
Commodity Trade Statistics, 1994. Since the UN data is reported in U.S. 
dollars, we did not adjust for the effects of inflation. We valued 
labor used in packing with the above-referenced regression-based labor 
rate for Kazakhstan.
     For factory overhead, selling, general and administrative 
(SG&A) expense, and profit, we used information from the calendar 1996 
income statement of a Philippine producer of various aluminum products. 
The Philippines, although not the primary surrogate country in this 
review, is one of the countries that the Department has identified as a 
comparable market economy country and a potential surrogate for 
Kazakhstan.

 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:

[[Page 47480]]



------------------------------------------------------------------------
                                                                Margin
          Manufacturer/exporter                 Period        (percent)
------------------------------------------------------------------------
Specialty Metals Company/Ust-Kamenogorsk
 Titanium and Magnesium Plant (one
 entity)................................     8/1/96-7/31/97         0.00
Kazakhstan-wide rate....................    8/1/96--7/31/97        83.96
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure of our 
preliminary results of review 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 section 351.402(f) of the Department's regulations 
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. 98-24071 Filed 9-4-98; 8:45 am]
BILLING CODE 3510-DS-P