[Federal Register Volume 64, Number 215 (Monday, November 8, 1999)]
[Notices]
[Pages 60784-60787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29203]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-828]
Silicomanganese From the People's Republic of China: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting
the first administrative review of the antidumping duty order on
silicomanganese from the People's Republic of China (``PRC'') in
response to requests by the respondents, Guangxi Bayi Ferroalloy Works
(``Bayi''), and Sichuan Emei Ferroalloy Import and Export Co., Ltd
(``Emei''). The period of review (``POR'') is December 1, 1997 through
November 30, 1998.
We have preliminarily determined that U.S. sales of subject
merchandise by Bayi and Emei have been made below normal value
(``NV''). Since both Bayi and Emei submitted full responses to the
antidumping questionnaires and it has been established that they are
sufficiently independent, they are entitled to separate rates. If these
preliminary results are adopted in our final results of administrative
review, we will instruct the U.S. Customs Service to assess antidumping
duties on entries from Bayi and Emei.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: November 8, 1999.
FOR FURTHER INFORMATION CONTACT: Timothy Finn or Paige Rivas, AD/CVD
Enforcement Group II, Office IV, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-0065 or (202) 482-0651 respectively.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all
citations to the Tariff Act of 1930, as amended (``the Act''), are
references to the provisions as of 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's regulations are to the regulations at 19 CFR part 351
(1998).
SUPPLEMENTARY INFORMATION:
Background
The Department received a request for administrative review from
Bayi and Emei on December 17, 1998. We published a notice of initiation
of this review on January 25, 1999 (64 FR 3682).
On January 29, 1999, we issued antidumping questionnaires to Bayi
and Emei. The Department received responses from both Bayi and Emei to
Section A on March 5, 1999 and Sections C and D on March 22, 1999.
We issued supplemental questionnaires to Bayi and Emei on April 12,
1999. The responses to these supplemental questionnaires were received
on May 5, 1999. On July 12, 1999, the Department issued additional
supplemental questionnaires to Bayi and Emei. The responses to the
second supplemental questionnaires were received on August 2, 1999.
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for issuing a preliminary determination in an
administrative review if it determines that it is not practicable to
complete the preliminary review within the statutory time limit of 245
days. On August 25, 1999, the Department published a notice of
extension of the time limit for the preliminary results in this case to
November 1, 1999 (64 FR 46350).
On October 12, 1999, Bayi and Emei and petitioner, Eramet Marietta
Inc. (``Eramet''), submitted publicly available information and
comments for consideration in valuing the factors of production used in
our NV calculations.
Scope of Review
The merchandise covered by this order is silicomanganese.
Silicomanganese, which is sometimes called ferrosilicon manganese, is a
ferroalloy composed principally of manganese, silicon, and iron, and
normally containing much smaller proportions of minor elements, such as
carbon, phosphorous and sulfur. Silicomanganese generally contains by
weight not less than 4 percent iron, more than 30 percent manganese,
more than 8 percent silicon and not more than 3 percent phosphorous.
All compositions, forms and sizes of silicomanganese are included
within the scope of this investigation, including silicomanganese slag,
fines and briquettes. Silicomanganese is used primarily in steel
production as a source of both silicon and manganese. This
investigation covers all silicomanganese, regardless of its tariff
classification. Most silicomanganese is currently classifiable under
subheading 7202.30.0000 of the Harmonized Tariff Schedule of the United
States (``HTS''). Some silicomanganese may also currently be
classifiable under HTS subheading 7202.99.5040. Although the
[[Page 60785]]
HTS subheadings are provided for convenience and customs purposes, our
written description of the scope is dispositive.
Separate Rates
It is the Department's policy to assign all exporters of the
merchandise subject to review in non-market economy (``NME'') countries
a single rate, unless an exporter can demonstrate an absence of
government control, both in law and in fact, with respect to exports.
To establish whether an exporter is sufficiently independent of
government control to be entitled to a separate rate, the Department
analyzes the exporter in light of the criteria 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 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) (Silicon Carbide). 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 an 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. Evidence relevant to a de facto absence of government
control with respect to exports is based on four factors concerning
whether the respondent: (1) Sets its own export prices independent from
the government and other exporters; (2) can retain the proceeds from
its export sales; (3) has the authority to negotiate and sign
contracts; and (4) has autonomy from the government regarding the
selection of management. See Silicon Carbide, 59 FR at 22587; see also
Sparklers, 56 FR at 20589.
In prior cases, the Department has analyzed the laws which the
respondents have submitted in this record and found that they
established an absence of de jure control. See Notice of Preliminary
Determination of Sales at Less Than Fair Value and Postponement of
Final Determination; Certain Partial-Extension Steel Drawer Slides With
Rollers From the People's Republic of China, 60 FR 29572, 29573 (June
5, 1995); see also Notice of Final Determination of Sales at Less Than
Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR
22544 (May 8, 1995). We have no new information in this proceeding
which would cause us to reconsider this determination.
Evidence relevant to a de facto absence of government control with
respect to exports is based on whether the respondent: (1) Sets its own
export prices independent from the government and other exporters; (2)
can retain the proceeds from its export sales; (3) has the authority to
negotiate and sign contracts; and (4) has autonomy from the government
regarding the selection of management. See Silicon Carbide, 59 FR at
22587; see also, Sparklers, 56 FR at 20589. In the instant review, each
respondent has asserted the following: (1) It establishes its own
export prices; (2) it negotiates contracts, without guidance from any
governmental entities or organizations; (3) it makes its own personnel
decisions and, according to respondents, there is no information on the
record suggesting central government control over selection of
management; and (4) it retains the proceeds of its export sales, uses
profits according to its business needs and has the authority to sell
its assets and to obtain loans. In addition, respondents' questionnaire
responses indicate that company-specific pricing during the POR does
not suggest coordination among exporters. This information supports a
preliminary finding that there is a de facto absence of governmental
control of export functions.
Consequently, we preliminarily determine that both of the
respondents have met the criteria for the application of separate
rates.
Export Price
We calculated export price (``EP'') in accordance with section
772(a) of the Act, because the subject merchandise was sold directly to
the first unaffiliated purchaser in the United States prior to
importation and constructed export price (``CEP'') methodology was not
otherwise warranted, based on the facts of record. We calculated EP
based on packed, CIF U.S. port, or FOB PRC port, prices to unaffiliated
purchasers in the United States, as appropriate. We also deducted from
the starting price, where appropriate, an amount for foreign inland
freight and foreign brokerage and handling. As these movement services
were provided by NME suppliers, we valued them using Indian rates. See
``Normal Value'' section below for further discussion.
Normal Value
1. Non-Market Economy Status
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using a factors-of-production methodology if: (1) The
merchandise is exported from an NME country; and (2) the information
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
The Department has treated the PRC as an NME country in all
previous antidumping cases. In accordance with section 771(18)(C)(i) of
the Act, any determination that a foreign country is an NME country
shall remain in effect until revoked by the administering authority.
None of the parties to this proceeding has contested such treatment in
this review. Therefore, we treated the PRC as an NME country for
purposes of this review. Furthermore, available information does not
permit the calculation of NV using home market prices, third country
prices, or constructed value under section 773(a) of the Act. As a
result, we calculated NV by valuing the factors of production in a
comparable market economy country which is a significant producer of
comparable merchandise.
2. Surrogate Country
Section 773(c)(4) of the Act and 19 CFR 351.408 direct us to select
a surrogate country that is economically comparable to the PRC. On the
basis of per capita gross domestic product (``GDP''), the growth rate
in per capita GDP, and the national distribution of labor, we find that
India is a comparable economy to the PRC. See Memorandum from Director,
Office of Policy, to Office Director, AD/CVD Group II, Office IV, dated
June 24, 1999.
Section 773(c)(4) of the Act also requires that, to the extent
possible, the Department use a surrogate country that is a significant
producer of merchandise comparable to Silicomanganese. For purposes of
the LTFV investigation, we found that India was a significant producer
of comparable merchandise. See Preliminary Results Factors of
Production Memorandum from the Team to the File, dated October 20, 1999
(Factors Memorandum). Accordingly, absent evidence to the contrary we
continue to find India is a significant producer of silicomanganese
based on information submitted by the respondents in their October 1999
submission. Therefore, we have continued to use India as the surrogate
country and have used publicly available information relating to India,
unless otherwise noted, to value the various factors of production used
in our calculations.
[[Page 60786]]
3. Factors of Production
For purposes of calculating NV, we valued PRC factors of production
in accordance with section 773(c)(1) of the Act. Factors of production
include, but are not limited to: hours of labor employed; quantities of
raw materials required; amounts of energy and other utilities consumed;
and representative capital cost, including depreciation. In examining
surrogate values, we selected, where possible, publicly available
published information on imports of materials into the surrogate
country within the POR or most contemporaneous with the POR. Where
possible, we calculated the average of these import prices exclusive of
taxes for use as the surrogate value. For a more detailed explanation
of the methodology used in calculating various surrogate values, see
the Factors Memorandum. In accordance with this methodology, we valued
the raw materials and inputs as follows:
Respondents have stated that they import manganese ore and purchase
domestically produced manganese ore. Imported manganese ore was
purchased from a market economy supplier and paid for in a market
economy currency. Therefore, we used the market economy price paid to
the supplier in accordance with section 351.408(c)(1) of the
Department's regulations. For domestic manganese ore with a reported 30
percent purity and manganese rich slag, we used a price quote from an
Indian supplier from 1997 for the lowest available grade of manganese
ore because 30 percent purity and slag are regarded as low grade
manganese.
For dolomite, we relied on 1997 Indian import prices for limestone,
a comparable material contained in the September and November issues of
Indian Import Statistics.
To value coke, we relied on India import prices contained in the
September and November 1997, as well as the March 1998, issues of
Indian Import Statistics.
For certain minor miscellaneous materials (e.g., silicon ore) we
were unable to find usable factor values. For purposes of the
preliminary results we have not assigned a value for these factors of
production. We will continue to search for appropriate factor values
for use in the final results and will provide notice and opportunity to
comment on such values. See Factors Memorandum.
For those values not contemporaneous with the POR, we adjusted for
inflation using the wholesale price indices (``WPI'') published by the
International Monetary Fund (``IMF''). We made further adjustments to
account for freight costs between the suppliers and Bayi's and Emei's
manufacturing facilities.
In accordance with our practice, we added to CIF import values from
India a surrogate freight cost using the shorter of the reported
distances from either the closest PRC port to the factory, or from the
domestic supplier to the factory. See Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From the
People's Republic of China, 62 FR 61977 (November 20, 1997).
We valued labor based on a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3).
For electricity, we relied upon public information from the 1995
edition of IEA Energy Prices and Taxes to obtain an average of prices
for electricity provided to all industries in India. We adjusted the
values to reflect inflation up to the POR using the WPI published by
the IMF.
For the reported packing materials (i.e., woven plastic bags), we
relied upon Indian import data in the April 1997 through March 1998
issues of Indian Import Statistics. We adjusted the values to reflect
inflation up to the POR using the WPI published by the IMF.
Additionally, we adjusted these values to account for freight costs
incurred between the suppliers and Bayi and Emei.
For foreign inland freight, we used the August 1998 truck and rail
rates from Rahul Roadlines, an Indian inland freight supplier.
For foreign brokerage and handling, we used the average of the
rates reported in the public questionnaire response in the Antidumping
Duty Investigation. See Certain Stainless Steel Wire Rod from India;
Preliminary Results of Antidumping Duty Administrative and New Shipper
Review, 63 FR 48184 (September 9, 1998); See also Factors Memorandum.
We adjusted the values to reflect inflation up to the POR using the WPI
published by the IMF.
For factory overhead (``FOH''), selling, general, and
administrative expenses (``SG&A''), and profit, we used information
reported for 1992-1993 in the Reserve Bank of India Bulletin. From this
information, we were able to calculate factory overhead as a percentage
of direct material, labor, and energy expenses; SG&A as a percentage of
the total cost of manufacturing; and profit as a percentage of the sum
of the total cost of manufacturing and SG&A.
Interested Party Comments on Factor Valuation
In their October 16, 1999, factor value submissions, interested
parties also provided comment on how certain factor inputs should be
valued. For electricity, Bayi and Emei argued that Indian electricity
rates are aberrationally high and should be rejected in favor of
Indonesian electricity rates. Bayi and Emei argue that Indian
electricity rates are controlled by the state, which sets artificially
high rates for industrial users in order to subsidize low rates for
residential users. As evidence of the aberrational nature of Indian
industrial rates, Bayi and Emei present the ratio of residential to
industrial rates for India, China, the United States and other
countries. They argue that this ratio, 0.34 for India compared with
1.66 for Brazil and 1.69 for the United States, among others,
demonstrates the aberrationally high nature of Indian rates. Bayi and
Emei also submitted press reports showing the deleterious effect of
increases in electricity rates on Indian silicomanganese producers.
We are not persuaded by Bayi and Emei's submission that Indian
rates should be rejected in favor of Indonesian rates. We have used
Indian electricity rates consistently for many PRC cases, including
products for which electricity is a major input, see e.g., Manganese
Metal. The fact that the state controls electricity rates is not a
basis to reject Indian rates as some degree of state control is common
in many countries. In addition, a comparison of the ratio of industrial
to residential rates between India and other countries is not
necessarily meaningful for purposes of selecting sources for factor
valuation. Each country has a unique mix of sources of electrical
supply (e.g., Hydroelectric, Nuclear, Industrial Self-Generated) as
well as a unique mix of users (e.g., residential, agricultural).
Moreover, electricity is not generally a traded good. Thus, cross-
country comparisons are inappropriate for purposes of factor valuation.
Furthermore, unless the record convincingly demonstrates that factor
values are unreliable, the Department generally prefers to stay within
the same country for factor valuation wherever possible because it
leads to more consistent results than picking and choosing factor
values from different countries. Accordingly, we continue to value
electricity based on Indian data.
For manganese rich slag, Eramet argued that we should consider it a
by-product rather than a co-product. Bayi and Emei both produce
ferromanganese (in addition to silicomanganese); this
[[Page 60787]]
production process generates manganese rich slag as a subsidiary
product. Eramet provided invoices from a market-economy producer and a
U.S producer showing that manganese rich slag has a significant market
value. However, relative to the market value of ferromanganese, it
should be considered a by-product and valued in accordance with GAAP.
Eramet proposes valuing manganese rich slag by adjusting the price of
manganese ore by a ratio to account for differences in manganese
content. Eramet calculates this ratio using the above referenced
invoices. Bayi and Emei argue that manganese rich slag is a waste
product with no commercial value, and as such, no factor input value
should be used for it in the NV calculations.
We preliminarily disagree with both parties on this point.
Manganese rich slag, used in conjunction with manganese ore, is clearly
a major input into the production process of silicomanganese and we
have valued it using Indian values. Moreover, the above-mentioned ratio
is not a reliable basis for adjusting Indian Import values of manganese
ore. See Factor Memorandum.
Preliminary Results of the Review
We preliminarily determine that the following margins exists for
the period December 1, 1997 through November 30, 1998:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Guangxi Bayi Ferroalloy Works........................... 57.71
Sichuan Emei Ferroalloy Import and Export Co., Ltd...... 67.97
------------------------------------------------------------------------
Interested parties may request a hearing within 30 days of
publication of this notice. See 19 CFR 351.310(c). Any hearing, if
requested, will be held 44 days after the date of the publication of
this notice or the first workday thereafter. Interested parties may
submit case briefs within 30 days of publication. Rebuttal briefs,
limited to issues raised in the case briefs, may be filed no later than
35 days after the date of publication. Parties who submit case briefs
or rebuttal briefs in this proceeding are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument. Parties are also encouraged to provide a summary of the
arguments not to exceed five pages and a table of statutes,
regulations, and cases cited.
The Department will subsequently issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or at a hearing, not later than 120
days after the date of publication of this notice.
Upon issuance of the final results, the Department will determine,
and Customs shall assess, antidumping duties on all appropriate entries
for assessment purposes. Pursuant to 19 CFR 351.212(b)(1), where we
analyze and use a company's response, we intend to calculate an
importer-specific duty assessment rate by dividing the total amount of
dumping margins calculated for sales to each importer by the total
number of units of those same sales sold to that importer. The unit
dollar amount will be assessed uniformly against each unit of
merchandise of that specific importer's entries during the POR.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this antidumping duty
administrative review for all shipments of the subject merchandise
entered, or withdrawn from warehouse, for consumption on or after the
publication date, as provided by section 751(a)(1) of the Act: (1) For
Bayi and Emei, which both have separate rates, the cash deposit rate
will be 57.71 percent and 67.97 percent, respectively; (2) for any
previously reviewed PRC and non-PRC exporter with a separate rate, the
cash deposit rate will be the company- and product-specific rate
established for the most recent period; (3) the cash deposit rate for
non-PRC exporters of subject merchandise from the PRC will be the rate
applicable to the PRC supplier of that exporter; and (4) the cash
deposit rate for all other PRC exporters will continue to be 150.00
percent, the PRC-wide rate established in the LTFV investigation. These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
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 is issued and published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: November 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-29203 Filed 11-5-99; 8:45 am]
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