[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48793-48796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23328]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-834-803]
Titanium Sponge From the Republic of Kazakhstan; Notice of
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 a request from Titanium Metals Corporation, the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping finding on titanium sponge from the Republic
of Kazakhstan (Kazakhstan). This notice of preliminary results covers
the period August 1, 1997 through July 31, 1998. This review covers one
manufacturer/exporter and one trading company.
We preliminarily determine that no sales were made below normal
value during this review period. If this preliminary result is 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 this preliminary result. 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, 1999.
FOR FURTHER INFORMATION CONTACT: Mark Manning, Office of AD/CVD
Enforcement, Office 4, Group II, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
3936.
Applicable Statute
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 19 CFR Part 351 (1998).
Background
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 28, 1998, Titanium Metals Company (Timet) requested that
the Department conduct an administrative review of the antidumping
finding on titanium sponge from Kazakhstan for one manufacturer/
exporter, Ust-Kamenorgorsk Titanium and Magnesium Plant (UKTMP), and
one trading company, Specialty Metals Corporation (SMC), covering the
period August 1, 1997 through July 31, 1998. The Department published a
notice of initiation of the review on September 29, 1998 (63 FR 51893).
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 on May 10, 1999 (64 FR 25024). 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
finding covering titanium sponge imports from Kazakhstan. 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-Year (``Sunset'') Reviews: Titanium Sponge from
Kazakhstan, Russia, Ukraine, and Japan, 63 FR 46215 (August 31, 1998).
Scope of 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)
[[Page 48794]]
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 Determination
To establish whether a company operating in a nonmarket economy
(NME) is sufficiently independent to be entitled to a separate rate,
the Department analyzes each exporting entity under the test
established in the Final Determination of Sales at Less Than Fair
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May
6, 1991) (Sparklers), as amplified by 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) (Silicon Carbide). Under this policy,
exporters in NMEs are entitled to separate, company-specific margins
when they can demonstrate an absence of government control, both in law
and in fact, with respect to export activities. Evidence supporting,
though not requiring, a finding of de jure absence of government
control over export activities includes: (1) An absence of restrictive
stipulations associated with the individual exporter's business and
export licenses; (2) any legislative enactments decentralizing control
of companies; and, (3) any other formal measures by the government
decentralizing control of companies. De facto absence of government
control over exports is based on four factors: (1) Whether each
exporter sets its own export prices independently of the government and
without the approval of a government authority; (2) whether each
exporter retains the proceeds from its sales and makes independent
decisions regarding the disposition of profits or financing of losses;
(3) whether each exporter has the authority to negotiate and sign
contracts and other agreements; and, (4) whether each exporter has
autonomy from the government regarding the selection of management. See
Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.
In the final results of the 1996-1997 review of titanium sponge
from Kazakhstan, the Department granted a separate rate to UKTMP and
SMC. See Titanium Sponge From the Republic of Kazakhstan: Final Results
of Antidumping Duty Administrative Review (64 FR 1598, January 11,
1999). While UKTMP and SMC received a separate rate in the previous
segment of this proceeding, it is the Department's policy that separate
rates questionnaire responses must be evaluated each time a respondent
makes a separate rate claim, regardless of any separate rate the
respondent received in the past. See Manganese Metal from the People's
Republic of China, Final Results and Partial Recission of Antidumping
Duty Administrative Review, 63 Fed. Reg. 12441 (March 13, 1998). In the
instant review, UKTMP and SMC submitted a complete response to the
separate rates section of the Department's questionnaire. The evidence
submitted in this review by UKTMP and SMC, which is consistent with the
Department's findings in the previous review, is sufficient to
demonstrate independence from the government entity. We therefore
preliminarily determine that UKTMP and SMC continue to be entitled to a
separate rate.
Export Price
In accordance with section 772(a) of the Act, the Department
calculated an export price (EP) on sales to the United States, because
use of constructed export price was not warranted. 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. United States, 901 F. Supp 362 (CIT 1995).
We calculated export price based on the price to unaffiliated
purchasers in the United States. We made deductions, where appropriate,
for foreign inland freight, insurance, ocean freight, and brokerage and
handling. SMC did not claim any other adjustments to EP, nor were any
other adjustments allowed.
Surrogate Country Selection
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine normal value (NV)
using a factors of production methodology if (1) the subject
merchandise is exported from an NME country, and (2) available
information does not permit the calculation of NV using home-market
prices, third-country prices, or constructed value, in accordance with
Section 773(a) of the Act. Section 351.408 of the Department's
regulations sets forth the Department's methodology for calculating the
NV of merchandise from NME countries.
The Department has treated Kazakhstan as an NME country in every
past case involving this country. Since none of the parties to these
proceedings contested such treatment in this review, we calculated NV
for the instant review in accordance with section 773(c) of the Act and
section 351.408 of the Department's regulations.
In accordance with section 773(c)(3) of the Act, the factors of
production (FOP) utilized in producing titanium sponge include, but are
not limited to--(A) hours of labor required, (B) quantities of raw
materials employed, (C) amounts of energy and other utilities consumed,
and (D) representative capital cost, including depreciation. In
accordance with section 773(c)(4) of the Act, the Department valued the
FOP, to the extent possible, using the cost of the FOP in a market
economy that is--(A) at a level of economic development comparable to
Kazakhstan, and (B) a significant producer of comparable merchandise.
We determined that Egypt is comparable to Kazakhstan in terms of per
capita gross national product, the growth rate in per capita income,
and the national distribution of labor. Furthermore, Egypt is a
significant producer of aluminum, a product comparable to titanium
sponge. For a further discussion of the Department's selection of Egypt
as the surrogate country, see Memorandum to the File, ``1997-1998
Administrative Review of the Antidumping Finding on Titanium Sponge
from Kazakhstan; Selection of a Surrogate Country,'' dated June 24,
1999, which is on file in the Central Records Unit, Room B099 of the
Main Commerce building (CRU--Public File).
Normal Value
In accordance with section 773(c)(1) of the Act, for purposes of
calculating normal value (NV), we valued Kazakhstan's FOP based on data
for the POR. Surrogate values that were in effect during periods other
than the POR were inflated or deflated, as appropriate, to account for
price changes between the effective period and the POR. We calculated
the inflation or deflation adjustments for all factor values, except
labor, using the wholesale price indices for Egypt and Indonesia, where
appropriate, that were reported in the IMF's publication, International
Financial Statistics. We valued Kazakhstan's FOP as follows (for
further discussion of our preliminary analysis, see Analysis Memorandum
for the Preliminary Results of Administrative Review, dated August 31,
1999, which is on file in the CRU--Public File.):
Except as noted below, we valued raw materials using
Egyptian import data from the Commodity Trade Statistics Section,
United Nations Statistics Division, (UN import statistics) for the
calendar year 1997. We
[[Page 48795]]
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 using the market
economy price, regardless of the supplier. The most recent Egyptian
import statistics that we were able to find for pitch coke and chlorine
were Egypt's 1994 and 1996 UN import statistics, respectively. Since
the UN statistics are reported in U.S. dollars, we did not adjust these
values for the effects of inflation. We were unable to find information
from Egypt in order to value carnallite and spent electrolyte. For
carnallite, we used the 1995 Egyptian UN import statistics for
dolomite, a commodity similar to carnallite, as the surrogate value. In
order to value spent electrolyte, we used the surrogate value for
potassium chloride because spent electrolyte is 75 percent potassium
chloride. The surrogate value for potassium chloride was obtained from
Egypt's 1997 UN import statistics.
Pursuant to section 351.408(c)(3) of the Department's
regulations, we valued labor by using the regression-based wage rate
for Kazakhstan as posted on the Import Administration Internet web
site.
Although the respondents placed on the record an Egyptian
electricity rate for large industrial consumers, they did not provide
any source documentation to substantiate this rate. Therefore, we
valued electricity in the instant review with the Indonesian surrogate
value for electricity used in the 1996-1997 administrative review of
this finding. In that review, 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
POR. Since this rate is from 1994, and is expressed in Indonesian
rupiahs, we adjusted this rate in order to account for the effects of
inflation.
We were unable to obtain a surrogate value from Egypt for
steam. Since steam was not valued as a factor of production in the
1996-1997 administrative review of this finding, we have used the
surrogate for electricity, as discussed above, to value this energy
input.
UKTMP states that it incurred handling and reloading
charges for merchandise transited through the port in St. Petersburg,
Russia. We were unable to find a surrogate value from Egypt for
handling and reloading charges. Since these expenses were incurred in
Russia, we valued them, consistent with the 1996-1997 review of
titanium sponge from Kazakhstan, with the surrogate value used in the
1996-1997 administrative review of the antidumping finding on titanium
sponge from the Russian Federation (titanium sponge from Russia). In
that review, we determined that Venezuela was an appropriate surrogate
country for Russia. However, since we were unable to locate a
Venezuelan surrogate value for handling charges, we valued these
charges with the surrogate value from the 1995-1996 administrative
review of titanium sponge from Russia. In the 1995-1996 review, we
valued these charges using the brokerage and handling charges reported
in the public record of the antidumping administrative review of
silicon metal from Brazil. Therefore, in the instant review, we valued
the handling and reloading charges incurred by UKTMP in Russia with the
weighted-average brokerage and handling expenses reported in the public
record of the 1997-1998 administrative review of the antidumping duty
order on silicon metal from Brazil.
We valued truck and rail transportation in Kazakhstan
using Egyptian truck and rail surrogate values obtained by the
respondents. With respect to truck transportation, the respondents
provided a schedule of trucking fees covering transport of cargo
between various cities throughout Egypt. We used the price per
kilometer per metric ton rate from the Ramadan City-to-Cairo fee
because the distance between these two cities most closely matches the
distance cargo traveled by truck in Kazakhstan. In regard to rail
transportation, the respondents provided a schedule of rail fees
covering transport of cargo between various cities throughout Egypt. We
used the price per kilometer per metric ton rate from the city-to-city
fees that most closely matched the distances cargo traveled by rail in
Kazakhstan.
UKTMP shipped its sales of titanium sponge to the United
States via rail through Russia. We valued this transportation with the
surrogate value for rail transportation used in the 1996-1997
administrative review of titanium sponge from Russia, which is the most
recently completed review of that finding. In that review, we valued
transportation via the Russian rail lines using the Venezuelan
Bolivares price per metric ton per kilometer quoted by the national
Venezuelan railroad system administrator. Since the correspondence
containing the price quote was issued during the instant review's POR,
we did not adjust this rate to account for the effects of price
changes.
In regard to packing materials, we used the 1997 UN import
statistics from Egypt that were provided by the respondent for
polyethylene film, argon, and sheet steel. 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.
The respondents placed on the record the financial
statements from three Egyptian aluminum companies. One of the three
companies is a primary aluminum producer while the other two are
aluminum products producers. Since primary aluminum producers use a
production process that is closer to the process used to produce
titanium sponge than producers of aluminum products, we normally prefer
to use the financial statements from primary aluminum producers in our
calculation of factory overhead, selling, general and administrative
(SG&A) expense, and profit. However, the financial statements from the
Egyptian primary aluminum producer did not contain enough detail to be
used in our calculations. Similarly, the financial statements from one
of the two aluminum products producers lacked sufficient detail to be
used in our calculations. Therefore, we calculated the ratios used in
our valuation of overhead, SG&A, and profit with the 1998 financial
statements from Arab Aluminum Co., an Egyptian producer of aluminum
products.
Currency Conversion
We made currency conversions in accordance with section 773A(a) of
the Act, based on exchange rates certified by the Federal Reserve Bank
and Dow Jones Business Information Services.
Preliminary Results of the Review
SMC owns 65 percent of UKTMP and manages the operations of UKTMP
under a long-term management contract. Due to SMC's equity ownership in
UKTMP, we considered SMC and UKTMP to be affiliated for the purpose of
the antidumping statute and regulations. During the POR, UKTMP sold
titanium sponge to SMC who then resold the merchandise to unaffiliated
purchasers in the United States. Because this was the only channel of
distribution for sales to the United States, we calculated one rate
that will apply to both SMC and UKTMP. As a result of our review, we
preliminarily determine that the following margin exists for the period
August 1, 1997 through July 31, 1998:
[[Page 48796]]
------------------------------------------------------------------------
Margin
Manufacturer/Exporter Period (percent)
------------------------------------------------------------------------
Specialty Metals Company/Ust- 8/1/97-7/31/98 00.00
Kamenogorsk Titanium and Magnesium
Plant
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Within 5 days of the date of publication of this notice, in
accordance with 19 CFR 351.224, the Department will disclose its
calculations. Any interested party may request a hearing within 30 days
of publication of this notice in accordance with 19 CFR 351.310(c). Any
hearing, if requested, will be held 37 days after the publication of
this notice, or the first workday thereafter. Interested parties may
submit written comments (case briefs) within 30 days of the date of
publication of this notice in accordance with 19 CFR 351.309(c)(2).
Rebuttal comments (rebuttal briefs), which must be limited to issues
raised in the case briefs, may be filed not later than 35 days after
the date of publication. The Department will publish a notice of the
final results of this administrative review, which will include the
results of its analysis of issues raised by the parties, within 120
days of publication of this preliminary result.
The final results of this review shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
this review.
Duty Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Pursuant to 19
CFR 351.212(b)(1), we have calculated an importer-specific ad valorem
duty assessment rate based on the ratio of the total amount of the
dumping margins calculated for the examined sales to the total entered
value of those same sales. In order to estimate the entered value, we
subtracted international movement expenses from the gross sales value.
This rate will be assessed uniformly on all entries of that specific
importer made during the POR. In accordance with 19 CFR 351.106 (c)(2),
we will instruct the Customs Service to liquidate without regard to
antidumping duties any entries for which the assessment rate is de
minimis, i.e., less than 0.5 percent. The Department will issue
appraisement instructions directly to the Customs Service.
Cash Deposit Requirements
Pursuant to the ITC's determination that revocation of the finding
covering titanium sponge imports from Kazakhstan is not likely to lead
to continuation or recurrence of material injury to an industry in the
United States, the Department revoked this finding on August 31, 1998,
with an effective date of August 13, 1998. Since the revocation is
currently in effect, current and future imports of titanium sponge from
Kazakhstan shall be entered into the United States without regard to
antidumping duties. Therefore, we will instruct Customs not to suspend
future entries and to liquidate all future entries of this product,
from Kazakhstan, without regard to antidumping duties.
Notification of Interested Parties
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 is in accordance with
sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and
1677f(i)(1) ).
Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23328 Filed 9-7-99; 8:45 am]
BILLING CODE 3510-DS-P