[Federal Register Volume 64, Number 6 (Monday, January 11, 1999)] [Notices] [Pages 1599-1602] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-552] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-821-803] Titanium Sponge From the Russian Federation: 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. ----------------------------------------------------------------------- SUMMARY: On September 8, 1998, the Department of Commerce (``the [[Page 1600]] Department'') published the preliminary results of its administrative review of the antidumping finding on titanium sponge from the Russian Federation (``Russia''). The review covers the period August 1, 1996, through July 31, 1997. We gave interested parties an opportunity to comment on our preliminary results. We received comments from Titanium Metals Corporation (``the petitioner'') and rebuttal comments from AVISMA Magnesium-Titanium Works (``AVISMA'') and Interlink Metals & Chemicals S.A. and Interlink Metals, Inc. (collectively ``Interlink''). We did not receive any comments from TMC Trading International, Ltd., the other respondent in this review. After considering these comments, we have not changed the final results from those presented in the preliminary results of review. EFFECTIVE DATE: January 11, 1999. FOR FURTHER INFORMATION CONTACT: Mark Manning or Wendy Frankel, Office of AD/CVD Enforcement, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-3936 and (202) 482-5849, 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 (1998). Background On September 8, 1998, the Department published in the Federal Register (63 FR 47474) the preliminary results of its administrative review of the antidumping finding on titanium sponge from Russia. The Department has now completed the 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 subheading is provided for convenience and U.S. Customs purposes. Our written description of the scope of this proceeding is dispositive. Interested Party Comments We gave interested parties an opportunity to comment on our preliminary results. We received comments from the petitioner on October 8, 1998, and rebuttal comments from AVISMA and Interlink on October 13, 1998. We did not receive comments from any other party. Comment 1: The petitioner argues that the Department erred when it valued electricity with the electricity rate for industrial users from the Guayana region of Venezuela, as reported by the Venezuelan Chamber of Electric Industry, rather than with an industrial user rate for all of Venezuela. According to the petitioner, selecting this regional rate broke with the Department's past practice of valuing electricity with a country-wide rate. Specifically, the petitioner notes that the Department used a Brazilian-wide rate in the preliminary results for the 1994-1995 and 1995-1996 administrative reviews. See the petitioner's July 16, 1998, submission at 3, citing to Preliminary Results of Antidumping Duty Administrative Review: Titanium Sponge from the Russian Federation, 61 FR 39437, (July 29, 1996); and Preliminary Results of Antidumping Duty Administrative Review: Titanium Sponge from the Russian Federation, 62 FR 25920 (May 12, 1997). The petitioner also claims that there is no provision in the applicable statute that allows, or even mentions, subdividing a selected surrogate country for valuation purposes. In fact, the petitioner argues, the statute mandates the use of country-wide rates because it directs the Department to utilize a ``country'' to value the factors of production. Id. at 3. The petitioner contends that it is the Department's established practice to determine the economic comparability of a potential surrogate market economy country by examining the country-wide characteristics, such as the level of per capita Gross National Product, national distribution of labor and national growth rates. Id. at 3, emphasis in original. For this reason, the petitioner argues that the Department should be consistent and use country-wide prices for valuing the factors of production. The petitioner notes that both itself and Interlink submitted general- industry electricity rates for all of Venezuela and recommends that the Department, for the final results of review, use either of these two country-wide rates. According to Interlink and AVISMA (collectively ``the respondents''), the Department was correct to value electricity with the industrial user rate from the Guayana region of Venezuela. The respondents state that this region contains the country's largest industrial companies, including Venezuela's three aluminum producers. Furthermore, the respondents argue that EDELCA, the company that provides electricity to this region, is Venezuela's largest utility company and accounts for approximately 70 percent of Venezuela's total electricity production. In addition, the 177 industrial users EDELCA serviced in 1997 accounted for 25 percent of Venezuela's electricity consumption. See respondent's submission dated March 3, 1998 at 2. The respondents also contend that the Department is not required by statute or practice to use country-wide rates for valuing factors of production in nonmarket economy cases. The respondents argue that the Department addressed this issue in the Notice of Final Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol From the People's Republic of China, 61 FR 14057, 14062 (March 29, 1998), where the Department stated ``Since there is not sufficient information on the record to weigh the appropriateness of using one Indian state's electricity rates over those in another, we have based the surrogate value on the simple average of all Indian state rates found in the 1995 CMIE source.'' According to the respondents, the Department's decision to use a country-wide rate from India was based not on a requirement that it use a country-wide rate, but rather on a recognition that there was insufficient information on the record on which to base a decision to use a rate specific to a particular Indian state. See respondent's July 21, 1998 submission at 2. Moreover, the respondents claim that the Department's decision explicitly acknowledges that it would have used a rate specific to a particular state or region within the surrogate country if the information on the record suggested that this rate was a better indicator of the rate that AVISMA would likely pay if located in the surrogate country. Id. at 2. Therefore, argue the respondents, since the statute and past practices do not prohibit the Department from using a regional rate, and the record evidence indicates that the industrial-user electricity rate from the Guayana region is the most representative of the prices that AVISMA would pay if located in [[Page 1601]] Venezuela, the Department should continue to use this rate for the purposes of the final results of this review. Department Position: We agree with the respondents. Section 773(c)(4) of the Act instructs the Department to select a surrogate market economy country that is (1) at a comparable level of economic development to that of the nonmarket economy country and (2) produces merchandise that is comparable to the subject merchandise. The Department's regulations, at section 351.408(b), provide further guidance in selecting the appropriate surrogate country by stating that the Secretary will place primary emphasis on per capita GDP as the measure of economic comparability. As the petitioner notes, it is also the Department's practice to examine additional criteria, such as national growth rates and the national distribution of labor, when selecting the appropriate surrogate country. However, all of the above criteria and practices are used to select the surrogate country and are not relevant in selecting factor of production values within the surrogate country once selected. Section 773(c)(1)(B) of the Act states that the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate by the administering authority. In our effort to value the factors of production in an accurate manner, the Department uses both regional and country-wide market economy values where the record evidence demonstrates that such values provide the best available information by which to value the nonmarket economy producer's factors of production. In the instant case, the evidence on the record demonstrates that the Guayana region contains a high concentration of Venezuela's largest industrial users and accounts for 70 percent of Venezuela's total electricity production. Venezuela's three producers of aluminum, a product comparable to titanium, are located in Guayana and receive the industrial rate for this region. Furthermore, 177 industrial users in this region accounted for 25 percent of Venezuela's total electricity consumption in 1997. Although the respondent's data does not explicitly list what percent these 177 industrial users represent of all industrial consumption, we can infer from the fact that they account for 25 percent of all total electrical consumption (which includes residential, commercial, and industrial) that it must be a very high percentage. See respondent's submission dated March 3, 1998 at 2 and 3. For these reasons, we find that the rate for industrial users in the Guayana region of Venezuela is the most representative of the electricity prices AVISMA would pay if it were located in Venezuela. Comment 2: The petitioner contends that Interlink's request for revocation did not properly comply with 19 CFR 351.222(e). Therefore, the petitioner concludes that the Department could not have legally revoked the order as per Interlink's request. According to the petitioner, Interlink's September 21, 1998, submission withdrawing its request for revocation prevented the Department from running afoul of its own regulations. Interlink argues that its request for revocation complied with Department regulations, and the Department's September 8, 1998, preliminary notice of intent to revoke the finding in response to Interlink's request confirmed the correctness of Interlink's request. Moreover, Interlink claims that its withdrawal of request for revocation had nothing to do with the petitioner's argument that this withdrawal prevented the Department from running afoul of its regulations. Department Position: On September 8, 1998, the Department preliminarily determined to revoke the finding on titanium sponge from Russia as it applies to Interlink. Due to Interlink's September 21, 1998 withdrawal of its request for revocation, we do not need to consider any arguments concerning Interlink's request for revocation. Correction of Clerical Errors The Department found two clerical errors in our August 31, 1998 analysis memorandum, which describes the methodology we used in calculating normal value and U.S. price in this administrative review. On page 3 of this memorandum, we discussed our calculation of selling, general and administrative (``SG&A'') expenses and profit. Specifically, we defined SG&A expenses to equal the surrogate SG&A ratio multiplied by the cost of manufacture. Similarly, we defined profit to equal the surrogate profit ratio multiplied by the sum of the cost of manufacture and SG&A expenses. In both definitions, the Department mistakenly used the term ``cost of manufacture'' when we should have used the term ``adjusted cost of manufacture.'' Because our actual calculations correctly used adjusted cost of manufacture, this clerical error had no effect on our normal value calculation. Final Results of Review In the preliminary results, the Department stated that we would confirm the information provided by AVISMA, Interlink, and TMC regarding the existence of sales of subject merchandise to the United States that were entered under temporary importation bond (``TIB''). See preliminary results at 47476. We contacted the Customs Service and confirmed that certain entries of subject merchandise manufactured by AVISMA, Interlink, and TMC entered the United States under TIB during the period of review. See Memorandum to the File, ``Customs Service Confirmation of Temporary Importation Bond Entries'', dated December 30, 1998. For the reasons set out in the preliminary determination, and in the discussion of comments above, we determine that the following dumping margins exist: ------------------------------------------------------------------------ Margin Manufacturer/Exporter Time period (percent) ------------------------------------------------------------------------ Interlink Metals & Chemicals, 8/1/96-7/31/97........... 00.0 S.A.. TMC Trading International, 8/1/96-7/31/97........... 00.0 Ltd.. AVISMA Magnesium-Titanium 8/1/96-7/31/97........... 00.0 Works. Russia-wide rate............. 8/1/96-7/31/97........... 83.96 ------------------------------------------------------------------------ The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to the Customs Service. Since there were no sales with dumping margins, we will instruct Customs not to assess dumping duties on any shipments of subject merchandise exported by the above-referenced entities that entered the United States during the POR. [[Page 1602]] Furthermore, the following deposit requirements will be effective upon publication of this notice of final results of review for all shipments of titanium sponge from Russia 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 rates for subject merchandise manufactured and exported directly to the United States by AVISMA will be 0.00 percent; (2) the cash deposit rates for merchandise exported to the United States by Interlink Metals & Chemicals, S.A. and TMC Trading International, Ltd. will be 0.00 percent; (3) merchandise exported by manufacturers or exporters not covered in this review but covered in the original LTFV investigation or a previous administrative review and which 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. Notification to Interested Parties This notice also serves as a final reminder to importers of their responsibility under 19 CFR 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 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 351.306. See 63 FR 24391, 24403 (May 4, 1998). 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: January 5, 1999. Robert S. LaRussa, Assistant Secretary for Import Administration. [FR Doc. 99-552 Filed 1-8-99; 8:45 am] BILLING CODE 3510-DS-U