[Federal Register Volume 65, Number 31 (Tuesday, February 15, 2000)]
[Notices]
[Pages 7497-7507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3557]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-806]


Final Results of Antidumping Duty Administrative Review: Silicon 
Metal From Brazil

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

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

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SUMMARY: On August 9, 1999, the Department of Commerce (``the 
Department'') published the preliminary results of administrative 
review of the antidumping duty order on silicon metal from Brazil. This 
review covers four manufacturers/exporters of silicon metal from Brazil 
during the period July 1, 1997 through June 30, 1998.
    Based on our analysis of the comments received and the correction 
of certain ministerial errors, we have changed our results from those 
presented in our preliminary results as described below in the 
``Changes From the Preliminary Results'' section of this notice. The 
final results are listed below in the section ``Final Results of 
Review.''

EFFECTIVE DATE: February 15, 2000.

FOR FURTHER INFORMATION CONTACT: Zev Primor or Tom Futtner, AD/CVD 
Enforcement, Office Four, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4114 and (202) 482-3814, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions as of January 1, 1995, the effective date 
of the amendments made to the Tariff Act of 1930 (``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 (1999).

Background

    On August 9, 1999, the Department published its preliminary results 
of review of the antidumping duty order on silicon metal from Brazil. 
See, Silicon Metal from Brazil: Preliminary Results of Antidumping Duty 
Administrative Review, 64 FR 43161 (``Preliminary Results''), 56 FR 
36135, (July 31, 1991).
    In October 1999, the Department conducted a sales and cost 
verification of Companhia Brasileira Carbureto De Calcio (``CBCC''), a 
respondent in the instant review. At verification, CBCC submitted minor 
corrections to the data used in the preliminary results of this review. 
A list of the corrections can be found in the public version of the 
Department's verification report, which is on file in the Central 
Records Unit (``CRU''), Room B-099 of the Main Commerce Building, under 
the appropriate case number. See, Memorandum from Thomas Futtner and 
Maisha Cryor to The File dated November, 24, 1999 regarding the sales 
and cost verification of CBCC.
    We gave interested parties an opportunity to comment on the 
verification report for CBCC and the preliminary review results. We 
received comments from CBCC and Eletrosilex Belo Horizonte 
(``Eletrosilex''). We also received comments from American Silicon 
Technologies, Elkem Metals Company, Globe Metallurgical, Inc. and SKW 
Metals & Alloys, Inc., (collectively, ``the petitioners'') on December 
10, 1999.
    On December 22, 1999, CBCC, Eletrosilex, Ligas de Aluminio, S.A. 
(``LIASA''), and petitioners submitted rebuttal comments. Rima 
Industrial S/A did not submit a case or rebuttal brief. We held a 
public hearing on January 13, 2000, to give interested parties the 
opportunity to express their views directly to the Department. Based on 
our analysis of the comments received and the correction of certain 
ministerial and computer programming errors, we have made changes from 
the preliminary results, as described below in the ``Changes From the 
Preliminary Results'' section of this notice. The final results are 
listed below in the section ``Final Results of Review.'' The Department 
has now completed this administrative review in accordance with section 
751(a) of the Act.

Scope of the Review

    The merchandise covered by this administrative review is silicon 
metal from Brazil containing at least 96.00 percent but less than 99.99 
percent silicon by weight. Also covered by this administrative review 
is silicon metal from Brazil containing between 89.00 and 96.00 percent 
silicon by weight but which contains more aluminum than the silicon 
metal containing at least 96.00 percent but less than 99.99 percent 
silicon by weight. Silicon metal is currently provided for under 
subheadings 2804.69.10 and 2804.69.50 of the Harmonized Tariff Schedule 
(HTS) as a chemical product, but is commonly referred to as metal. 
Semiconductor grade silicon (silicon metal containing by weight not 
less than 99.99 percent silicon and provided for in subheading 
2804.61.00 of the HTS) is not subject to the order. Although the HTS 
item numbers are provided for convenience and for U.S. Customs 
purposes, the written description remains dispositive.

Changes From the Preliminary Results

Determination Not To Revoke the Order With Regard To CBCC

    On August 9, 1999, the Department stated its intent to partially 
revoke the antidumping duty order on silicon metal from Brazil with 
respect to CBCC. See, Preliminary Results. The Department ``may revoke, 
in whole or in part'' an antidumping duty order upon completion of a 
review under section 751 of the Act. While Congress has not specified 
the procedures that the Department must follow in revoking an order, 
the Department has developed a procedure for revocation that is 
described in 19 CFR 351.222. This regulation requires, inter alia, that 
a company requesting revocation must submit the following: (1) A 
certification

[[Page 7498]]

that the company has sold the subject merchandise at not less than 
normal value (``NV'') in the current review period and that the company 
will not sell at less than NV in the future; and (2) a certification 
that the company sold the subject merchandise in commercial quantities 
in each of the three years forming the basis of the revocation request. 
See, 19 CFR 351.222(e)(1). Upon receipt of such a request, the 
Department may revoke an order, in part, if it concludes, inter alia, 
that the exporter and producer covered at the time of revocation: (1) 
Sold subject merchandise at not less than NV for a period of at least 
three consecutive years; and (2) is not likely in the future to sell 
the subject merchandise at less than NV. See, 19 CFR 351.222(b)(2); 
Final Results of Antidumping Duty Administrative Review and 
Determination Not To Revoke Order in Part: Pure Magnesium from Canada 
(``Pure Magnesium from Canada''), 64 FR 12977, 12982 (March 16, 1999).
    In accordance with the regulation described above, we must 
determine whether the company requesting revocation sold the subject 
merchandise in commercial quantities in each of the three years forming 
the basis of the revocation request. See, 19 CFR 351.222(d)(1). In 
other words, the Department must determine whether the quantities sold 
during these time periods are reflective of the company's normal 
commercial activity. See, Final Results of Antidumping Duty 
Administrative Reviews and Determination To Revoke in Part Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate From Canada, 64 FR 2175 (January 13, 1999) 
(``Certain Corrosion-Resistant Carbon Steel Flat Products from 
Canada''). Sales during a period of review (``POR'') which, in the 
aggregate, are of an abnormally small quantity, either in absolute 
terms or in comparison to an appropriate benchmark period, do not 
generally provide a reasonable basis for determining that the 
discipline of the order is no longer necessary to offset dumping. Id. 
See also, Pure Magnesium From Canada, 64 FR 12977 (March 16, 1999). 
However, the determination as to whether or not sales volumes are made 
in commercial quantities is made on a case-by-case basis, based on the 
unique facts of each proceeding. See, section 751(d) of the Act; 19 CFR 
351.222. See also Notice of Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke the Antidumping 
Duty Order: Brass Sheet and Strip from the Netherlands, 65 FR 750, 
(January 6, 2000) (``Brass from Netherlands'').
    In the Preliminary Results, we determined that CBCC sold subject 
merchandise at or above NV during four consecutive review periods, 
stating with respect to sales volumes that ``[a]lthough in one of the 
four years the sales were not as extensive as in the other three years, 
we note that sales in the remaining three years were made in commercial 
quantities.'' See, Preliminary Results at 43163. Since the publication 
of our preliminary results, the Court of International Trade (``CIT'') 
remanded to the Department the results of the 1994-1995 review, the 
first of four periods considered by the Department in evaluating the 
commercial quantity requirement of CBCC's revocation request. As a 
result of that remand, CBCC's dumping margin for the 1994-1995 review 
segment increased from zero to 67.93 percent. See, Silicon Metal from 
Brazil, Final Results of Redetermination Pursuant to Court Remand, 
American Silicon Technologies v. United States, Court No. 97-02-00267, 
Slip. Op. 99-34 (``1994-1995 Remand Results''). Consequently, for the 
these final review results, the Department has relied upon CBCC's sales 
activity during the 1995-1996, 1996-1997 and 1997-1998 review periods 
in making its decision regarding CBCC's revocation request.
    CBCC claims that its 1995-1996 transaction quantities were not 
``abnormally small'' because the quantity in individual U.S. 
transactions was greater than the quantity CBCC typically sells to home 
market customers. Although some of the individual U.S. transactions may 
have been larger in quantity than the average home market transaction, 
CBCC has not demonstrated that the transactions at issue represent the 
normal commercial quantity for its individual transactions to the 
United States. Moreover, we note that the number of sales transactions 
to the United States during the 1995-1996 review segment were 
significantly smaller than the number of sales transactions during the 
POR. In addition, the overall aggregate quantity of silicon metal sold 
in the United States during the 1995-1996 review period is very small 
when compared to the period of investigation (``POI'') in this case or 
other review segments. During the twelve months of the 1995-1996 review 
period, CBCC's sales to the United States amounted to approximately 
four percent of the shipments made during the six-month POI. When the 
POI sales are annualized, the 1995-1996 sales amount to about to two 
percent of the POI sales volume. See, Memorandum to File, Silicon Metal 
from Brazil: Commercial Quantities for CBCC in the 1995-1996 Period of 
Review, February 7, 2000. While the issue of normal commercial 
quantities is decided on a case-by-case basis, in Brass from 
Netherlands, the Department denied revocation by stating that the 
volume of merchandise sold to the United States was approximately two 
percent of the volume of merchandise sold in the benchmark 
investigative period. See, 65 FR at 752. CBCC argues that its decline 
in sales volume during the 1995-1996 review period was due to a 
depressed market and the fact that it was selling only a metallurgical 
grade of silicon metal. However, CBCC does not explain why its sales 
were limited to the metallurgical grade of silicon metal. Moreover, 
while CBCC's sales declined from the 1994-1995 review period to the 
1995-1996 review segment by over 80 percent, publicly available import 
statistics indicate that overall U.S. imports of silicon metal from 
Brazil increased over 50 percent during that same time period. Thus, 
the record does not support CBCC's contention that a depressed U.S. 
market was the reason for its low volume of imports during the 1995-
1996 review period. In light of the above, we find that CBCC's sales to 
the United States were not made in commercial quantities during the 
1995-1996 review period.
    After review of the criteria outlined at Secs. 351.222(b) and 
351.222(d) of the Department's regulations, the comments of the 
parties, and the evidence on the record, we have determined that the 
requirements for revocation have not been met. Based on the final 
results of this review and the final results of the two preceding 
reviews, CBCC has demonstrated three consecutive years of sales at not 
less than NV. However, CBCC did not sell in commercial quantities in 
one of the periods that formed the basis of CBCC's revocation request. 
The abnormally low level of sales activity during that review period 
does not provide a reasonable basis for determining that the discipline 
of the antidumping duty order is no longer necessary to offset dumping. 
Therefore, because CBCC has not sold subject merchandise in commercial 
quantities during each of the three years of the revocation period, we 
find that CBCC does not qualify for revocation from the order on 
silicon metal from Brazil under 19 CFR 351.222.

CBCC

    As a result of the verification, we have corrected the following: 
(1) Inland freight for home and U.S. market sales; (2) U.S. brokerage 
and handling

[[Page 7499]]

expenses; (3) U.S. warehousing expenses; (4) U.S. direct selling 
expenses; and (5) U.S. international freight expenses.

Eletrosilex

    We have revised Eletrosilex's cost of production (``COP'') and 
recalculated its constructed value (``CV'') profit rate and CV profit 
amount. See, Comments 3, 4 and 5 below. We also corrected Eletrosilex's 
general and administrative (``G&A'') expense ratio for these final 
results. See, Comment 6 below.

ICMS Taxes (Valued-Added Taxes)

    On December 21, 1999, the Court of Appeals for the Federal Circuit 
(``CAFC'') upheld the Department's position during the investigative 
phase of silicon metal from Brazil that Brazil's ICMS taxes are 
properly included in the calculation of CV. See, Camargo Correa Metais, 
S.A. v. United States, Nos. 99-1191, 99-1192 (Fed. Cir. Dec. 21, 1999) 
(``Camargo'').
    In this review, the Department used CV only in the case of 
Eletrosilex. We included ICMS taxes in the CV for Eletrosilex using the 
methodology outlined in Silicon Metal from Brazil: Preliminary Results 
of Antidumping Duty Administrative Review, 63 FR 42001, 42004 (August 
6, 1998) (`` 1996-1997 Preliminary Results ''); Silicon Metal from 
Brazil: Notice of Final Results of Antidumping Duty Administrative 
Review, 64 FR 6305, 6308, (Feb. 9, 1999) (``1996-1997 Final Review 
Results''). That methodology is based upon the fact that Brazilian 
companies pay ICMS taxes on the inputs they purchase, and collect ICMS 
taxes on their domestic sales. If a company pays more tax on its inputs 
in a fiscal year than it collects from domestic customers, then the 
balance is reported as a credit to be carried over to the next fiscal 
year. If a company pays less in ICMS taxes on its inputs than it 
collects from its domestic customers, then it pays the balance to the 
Government. With respect to CV, the Department includes only that 
amount of ICMS tax paid by the company on inputs that exceed the amount 
of ICMS tax collected by the company (on its domestic sales) during the 
POR. For additional details of this calculation with respect to 
Eletrosilex, refer to the Memorandum to File Regarding Eletrosilex: 
Calculations for the Final Results of the 1997-1998 Administrative 
Review of Silicon Metal from Brazil, February 7, 2000 (``Final 
Calculation Memorandum for Eletrosilex'') on file in the CRU.

Interested Party Comments

Eletrosilex

Comment 1: Audited Financial Statements
    The petitioners, citing Stainless Steel Bar from India; Final 
Results of Antidumping Duty Administrative Review and New Shipper 
Review, 64 FR 13771, 13776 (March 22, 1999), argue that, for the final 
results, the Department should follow its standard practice and 
calculate Eletrosilex's financial expenses based solely on audited 
financial statements. The petitioners argue that, in the preliminary 
results, the Department erroneously calculated Eletrosilex's financial 
expenses based on data obtained from Eletrosilex's audited financial 
statements and the unaudited balance sheets and income statements of 
its parent, Silex Trading, and affiliate, Silex International. 
Petitioners argue that the information contained in unaudited 
statements is unreliable. Therefore, for these final results, the 
petitioners contend that the Department should calculate Eletrosilex's 
financial expenses using only audited financial statements.
    Eletrosilex argues that petitioners are mistaken in their assertion 
that the Department's standard practice is to rely only upon audited 
financial statements when calculating financial expenses. Eletrosilex, 
citing Chrome-Plated Lug Nuts From Taiwan; Final Results of Antidumping 
Duty Administrative Review, 64 FR 17314, 17316 (April 9, 1999) 
(``Chrome-Plated Lug Nuts''), contends that where, as with 
Eletrosilex's affiliates, audited statements are not available, the 
Department accepts unaudited statements. Additionally, Eletrosilex, 
citing the Final Determination of Sales at Less Than Fair Value: Canned 
Pineapple Fruit from Thailand, 60 FR 29553 (June 5, 1995) (``Canned 
Pineapple Fruit''), and Certain Cut-To-Length Carbon Steel Plate from 
Finland: Final Results of Antidumping Duty Administrative Review and 
New Shipper Review, 61 FR 2792 (January 29, 1996), argues that the 
Department typically only rejects unaudited statements when there is a 
choice between an audited statement and an unaudited statement. 
Accordingly, for these final results, Eletrosilex argues that the 
Department should use its affiliates' unaudited financial statements in 
calculating financial expenses, as its affiliates do not prepare 
audited financial statements.
    DOC Position: We agree with Eletrosilex. Under certain 
circumstances we accept unaudited financial statements when respondents 
do not prepare audited statements in the normal course of business. 
See, Fresh Cut Flowers From Mexico; Final Results of Antidumping Duty 
Administrative Review, 60 FR 49569,49570 (September 26, 1995).
    Eletrosilex reported that Silex Trading and Silex International do 
not have audited financial statements, nor does the parent corporation 
prepare consolidated financial statements. At the Department's 
direction, Eletrosilex prepared a consolidated statement of income for 
Silex Trading and its subsidiaries, including Eletrosilex. The data for 
Eletrosilex was taken directly from Eletrosilex's audited financial 
statements as reported in its questionnaire response. Further, the data 
for Silex Trading and its other subsidiaries were reconciled to Silex 
Trading's balance sheet and statement of income as provided in 
Eletrosilex's July 6, 1999, Response to the Department's Supplemental 
Questionnaire. Therefore, we are satisfied as to the veracity of the 
financial information submitted by the respondent and have used this 
information in the calculation of Eletrosilex's financial expenses for 
purposes of these final results of review.
Comment 2: Consolidated Financial Expenses
    The petitioners argue that when calculating financial expenses, the 
Department should not consolidate Eletrosilex's audited financial 
information with the unaudited financial information of its affiliates. 
Citing AIMCOR v. United States, 69 F. Supp. 2d 1345 (CIT 1999) 
(``AIMCOR''), and 19 U.S.C. sections 1677b(b)(3)(B), 1677b(e)(2)(A) and 
1677b(f)(1)(A), the petitioners contend that the Department should 
calculate Eletrosilex's 1997 audited financial expenses based solely on 
Eletrosilex's financial statements, as they most accurately reflect the 
costs associated with the production and sale of silicon metal. The 
petitioners assert that AIMCOR involved similar facts, yet the court 
rejected the Department's calculation of financial expenses based on 
the consolidated financial statements of the parent company. 
Additionally, the petitioners argue that, as in AIMCOR, Eletrosilex's 
financial statements show a higher financial expense ratio than that 
obtained from the consolidated financial information. See, Eletrosilex 
Calculation Memorandum, August 2, 1999, at Attachment 2. Further, the 
petitioners argue that, as in AIMCOR, Eletrosilex's parent, Silex 
Trading, does not determine Eletrosilex's borrowing costs,

[[Page 7500]]

and is not involved in the production or sale of silicon metal. 
Therefore, for the final results, the petitioners argue that the 
Department should use the information that most accurately reflects the 
true cost to the producer of producing silicon metal and calculate 
Eletrosilex's financial expenses based solely upon Eletrosilex's 1997 
audited financial statement.
    In addition, the petitioners note that in response to the 
Department's request that Eletrosilex recalculate its financial 
expenses exclusive of inter-company transactions, Eletrosilex provided 
the Department with a worksheet containing both the financial 
information for Eletrosilex and the combined financial information of 
Eletrosilex and Silex Trading. The petitioners argue that there is no 
evidence demonstrating that Eletrosilex excluded inter-company 
transfers from the financial information provided in the worksheet.
    Eletrosilex argues that the Department's standard practice has been 
to consolidate the financial expenses of affiliated parties. 
Eletrosilex notes that the Department's questionnaire instructs 
affiliated companies to report consolidated financial expenses. 
Eletrosilex argues that it provided consolidated financial information 
in the manner requested, pursuant to the Department's instructions that 
Eletrosilex ``recalculate your financial expenses based on {the cost 
of} goods sold (``COGS'') of Silex Trading and its subsidiaries, after 
eliminating inter-company transactions.'' See, Department's June 24, 
1999, Supplemental Questionnaire, at question 4. Further, Eletrosilex 
argues that Silex Trading's role in arranging financing and letters of 
credit for all of Eletrosilex's third-country and U.S. sales merits the 
consolidation of the financial expense information.
    Eletrosilex argues that AIMCOR is distinguishable on its facts from 
the present case. Eletrosilex contends that in AIMCOR, the CIT stated 
that the Department is ``justified in utilizing consolidated financial 
statements when corporate control, whether direct or indirect, 
exists,'' but that Commerce must use the financial expense ratio 
``which will more accurately reflect actual costs incurred--especially 
in this case, where there is no evidence of inter-company borrowing or 
other indicia that {the parent company} determined {the respondent's} 
cost of money.'' Accordingly, Eletrosilex argues that during the POR, 
Silex Trading was the majority owner of Eletrosilex and influenced 
Eletrosilex's cost of money through its financing role. Additionally, 
Eletrosilex argues that the decision in AIMCOR is not a binding 
precedent because the original antidumping duty order was revoked 
during the pendency of the AIMCOR litigation. Therefore, for these 
final results, Eletrosilex argues that the Department should 
consolidate the financial expenses of Eletrosilex and its affiliates.
    DOC Position: We agree with Eletrosilex. Our established policy is 
to calculate financial expenses for COP and CV purposes based on the 
borrowing costs incurred at the consolidated group level, regardless of 
whether the respondent's financial expense is greater than the 
consolidated financial expense. This practice recognizes two facts: (1) 
The fungible nature of money within a consolidated group of companies; 
and (2) that the controlling entity within a consolidated group has the 
power to determine the capital structure (i.e., the debt and equity) of 
each member company within its group. See, e.g., Final Results of 
Antidumping Duty Administrative Review; Silicon Metal From Brazil, 63 
FR 6899 (February 11, 1998); Notice of Final Determination of Sales at 
Less Than Fair Value: Steel Wire Rod from Canada, 63 FR 182 (February 
24, 1998). The record indicates that although Silex Trading is a 
consolidated entity, it does not in the normal course of business 
prepare a consolidated statement of income.
    Contrary to the petitioner's arguments, the situation in this case 
differs from that in AIMCOR. In AIMCOR, the CIT stated that ``Commerce 
is justified in utilizing consolidated financial statements when 
corporate control, whether direct or indirect, exists. . . '' See, 
AIMCOR, 69 F. Supp. 2d at 1354. However, in that case the CIT found 
that on the facts of AIMCOR ``there was no evidence of inter-company 
borrowing or other indicia'' that the respondent's parent company 
determined the respondent's cost of money. Id. Based on that fact, the 
CIT instructed the Department to recalculate the respondent's financial 
expenses using the financial statements of the respondent. Id.
    In the instant proceeding, Silex Trading was the majority owner of 
Eletrosilex during the POR. Silex Trading handled the financing 
arrangements for all of Eletrosilex's sales in third-country markets 
and arranged for letters of credit on all sales to the United States 
during the POR. See, Eletrosilex's June 8, 1999 Supplemental 
Questionnaire Response at 7-9. Silex Trading collected funds on these 
sales for Eletrosilex, and remitted these funds to Eletrosilex with 
interest for the time the funds were held by Silex Trading. Id. at 48-
49. Thus, in the instant review, contrary to the circumstances in the 
AIMCOR case, there is record evidence of corporate control by Silex 
Trading and parent company influence on Eletrosilex's cost of money.
Comment 3: COP
    The petitioners argue that the Department erred in calculating 
Eletrosilex's COP, by using Eletrosilex's reported cost of 
manufacturing (``COM''). The petitioners state that Eletrosilex 
incorrectly offset its COM by subtracting an amount for total revenue 
(inclusive of ICMS taxes received) from the sale of by-products. The 
petitioners, citing Silicon Metal from Brazil; Final Results of 
Antidumping Duty Administrative Review and Determination Not to Revoke 
in Part, 62 FR 1970 (January 14, 1997) (``1994-1995 Review Final 
Results''), state that the inclusion of ICMS taxes as an offset to COM 
contradicts the Department's policy of only allowing offsets for net 
revenue. Therefore, the petitioners assert that the Department should 
revise Eletrosilex's by-product offset amount to exclude ICMS taxes.
    Eletrosilex argues that because it pays more ICMS taxes than it 
collects, its collection of ICMS taxes is real revenue which it 
retains. Therefore, Eletrosilex argues that the full amount of revenue 
received should offset its COM.
    DOC Position: We agree with the petitioners. Our practice is to 
allow an offset only for actual revenue earned. See, 1994-1995 Review 
Final Results, 62 FR at 1987. To offset costs with taxes collected on 
home market sales of by-products would result in an inaccurate 
calculation of cost because those taxes are collected on behalf of the 
Brazilian government and do not constitute revenue for Eletrosilex. 
See, Silicon Metal From Brazil; Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke in Part, 62 FR 
1954, 1964 (January 14, 1997) (``1993-1994 Final Review Results''). In 
these final results, we have offset COM with all revenue that 
Eletrosilex reported from its sales of by-products exclusive of ICMS 
taxes collected on the sales of those by-products.
Comment 4: CV Profit Rate
    The petitioners, citing Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof from France, Germany, Italy, Japan, 
Romania, Singapore, Sweden, and the United Kingdom; Final Results of 
the Antidumping Duty Administrative

[[Page 7501]]

Reviews, 63 FR 33,320 (June 18, 1998), state that in calculating the CV 
profit rate for Eletrosilex, the Department's standard practice is to 
divide the total profit from home market sales by the total COP for 
home market sales. The petitioners argue that the Department erred when 
calculating a weighted-average CV profit rate (based on the other three 
respondents' data) by dividing the total home market profit of these 
three entities by the total home market sales revenue generated by 
these three companies. The petitioners assert that the Department 
should have used the three respondents' total COP as the denominator in 
this calculation.
    In addition, the petitioners state that the Department used an 
understated amount for total home market sales revenue for CBCC when 
calculating a weighted-average profit rate to apply to Eletrosilex. 
Therefore, for the final results, the petitioners assert that the 
Department should correct the understatement of CBCC's profit.
    Eletrosilex did not comment on this issue.
    DOC Position: For these final review results, we are unable to 
derive actual profit based on home market sales for Eletrosilex because 
all of its home market sales were below cost. Therefore, as in the 
Preliminary Review Results, 64 FR 43165, in accordance with section 
773(e)(2)(B)(ii) of the Act, we calculated profit for Eletrosilex by 
using the weighted-average profit rate realized by the other 
respondents in this review. However, we agree with the petitioners that 
we erred in our preliminary calculations. Therefore, we have 
recalculated the CV profit rate for Eletrosilex by dividing total 
profit from home market sales of the three remaining respondents by 
total COP of home market sales for those respondents and applying that 
rate to Eletrosilex's total COP. In addition, we have corrected our 
preliminary error with respect to CBCC's sales revenue in the 
calculation of the three respondents total home market revenues. See, 
Final Calculation Memorandum for Eletrosilex.
Comment 5: Proper Profit Amount
    The petitioners, citing Certain Cold-Rolled and Corrosion-Resistant 
Carbon Steel Flat Products from Korea Final Results of Antidumping Duty 
Administrative Reviews, 62 FR 18404 (April 15, 1997), argue that the 
Department erred in its calculation of CV profit by multiplying the 
weighted-average CV profit rate times a COP that fails to include the 
same cost components used to calculate the CV profit rate.
    Eletrosilex did not comment on this issue.
    DOC Position: We agree with the petitioners. We have recalculated 
CV profit for these final results by multiplying the CV profit rate by 
a COP which includes the same cost components used to calculate the CV 
profit rate. See, Final Calculation Memorandum for Eletrosilex.
Comment 6: General and Administrative Expenses
    Eletrosilex argues that the Department erred in rounding 
Eletrosilex's G&A ratio when calculating COP and CV. For the final 
results, Eletrosilex argues that the Department should use the G&A 
ratio, as rounded to two digits past the decimal points.
    The petitioners did not comment on this issue.
    DOC Position: We agree with the Eletrosilex and for the final 
results calculations have used a G&A ratio rounded to two decimal 
places. See, Final Calculation Memorandum for Eletrosilex.
Comment 7: Offsets to Financial Expense
    Eletrosilex argues that the Department should not have denied 
``loans to shareholders'' as a financial revenue offset to financial 
expenses. Eletrosilex states that its ``loans to shareholders'' account 
contains short-term interest payments from Silex Trading. Eletrosilex 
states that because Silex Trading arranges letters of credit for 
Eletrosilex's third-country sales, the payment goes directly to Silex 
Trading. Eletrosilex explains that Silex Trading then sends the payment 
to Eletrosilex and the delay in payment is viewed as a short-term loan 
on which Silex Trading pays Eletrosilex interest. Eletrosilex argues 
that the short-term nature of this loan is evidenced in a Mutual Loan 
Agreement (``Agreement'') entered into by Eletrosilex and Silex 
Trading. The Agreement provides that the interest charges be calculated 
monthly, the current account balance be adjusted and reviewed quarterly 
and that the debt balance be fully paid at the expiration of the one 
year agreement. Therefore, for these final results, Eletrosilex argues 
that the ``loans to shareholders'' item should have been granted as an 
offset to its financial expenses.
    The petitioners argue that the Department correctly denied the 
offset to Eletrosilex's financial expenses because the investment 
income derived from ``loans to shareholders'' was not short-term. The 
petitioners, citing the Notice of Final Results of the 1992/93 
Antidumping Duty Administrative Review: Silicon Metal from Argentina, 
62 FR 5613 (February 6, 1997) (``Silicon Metal from Argentina''), argue 
that the Department's established practice is to consider loans of one 
year or less to be short-term. The petitioners argue that the loan 
agreement between Eletrosilex and Silex Trading was for more than one 
year; therefore the investment was not short-term. Further, citing the 
1994-1995 Final Review Results, the petitioners argue that the income 
derived from ``loans to shareholders'' is similar to charges applied to 
late payments by customers and should be viewed as sales revenue, not 
as an offset to financial expenses. Additionally, the petitioners argue 
that the Department's established practice is to offset financial 
expense with income derived from short-term investments of working 
capital. See, 1996-1997 Final Review Results, 64 FR 6305. The 
petitioners argue that the loan agreement between Eletrosilex and Silex 
Trading is not a short-term investment of working capital because 
Eletrosilex allows Silex Trading to retain funds collected on 
Eletrosilex's receivables. The petitioners argue that because the 
collected funds were not received by Eletrosilex, they never became a 
part of Eletrosilex's working capital.
    DOC Position: The Department's practice is to compute net interest 
expense on a consolidated basis. Respondent has explained that it does 
not prepare audited consolidated financial statements in the ordinary 
course of business. However, in response to a request by the 
Department, it prepared a worksheet consolidating Eletrosilex's 
financial data with that of its parent, Silex Trading. See, Comment 2 
above. In preparing these consolidated results, the Department 
instructed Eletrosilex to eliminate transactions between consolidating 
entities. Eletrosilex prepared its consolidated worksheet in accordance 
with the Department's instructions. Because the interest income item at 
issue results from transactions between Eletrosilex and its parent and 
these transactions were eliminated in Eletrosilex's consolidation 
worksheets, the issue of whether to include this interest income as an 
offset to the interest expense calculation is moot.
Comment 8: Offsets to COM
    Eletrosilex states that its ``interest on trade bills'' account 
contains interest on late payments by customers who purchased by-
products from Eletrosilex. Eletrosilex argues that because the 
Department denied the offset to financial expenses for ``interest on 
trade

[[Page 7502]]

bills'' in the preliminary results, the COM should be adjusted by this 
amount because the payments reflect late fees collected on the sale of 
by-products.
    The petitioners argue that the first time Eletrosilex made a claim 
for this adjustment was in its case brief. The petitioners argue that, 
according to the Department, it does not make adjustments when the 
request for the adjustment is not made until the case brief. 
Additionally, the petitioners argue that Eletrosilex reported an amount 
for ``interest on trade bills'' for periods outside of the POR, while 
it reported cost information for the POR. Therefore, the petitioners 
claim that Eletrosilex did not provide the Department with the 
information needed to adjust COM. Additionally, the petitioners contend 
that Eletrosilex has the burden of establishing its right to reduce 
financial expenses by such interest income. However, the petitioners 
claim that Eletrosilex did not explain or provide documentation 
demonstrating how income from ``interest on trade bills'' was 
generated. Moreover, petitioners maintain that in the 1994-1995 
administrative review, the Department denied CBCC's request for an 
adjustment to COP for revenue received from the sale of by-products, 
because CBCC first made the request in its case brief and because CBCC 
did not substantiate its claimed offsets. Therefore, for these final 
results, petitioners argue that the Department should not reduce 
Eletrosilex's COM for any ``interest on trade bills'' accounts.
    DOC Position: We disagree with respondent's assertion that if we 
deny this short-term interest category as an offset to financial 
expenses, we should recognize this amount as an adjustment to COM. The 
respondent made this claim for an adjustment to COM for the first time 
in this review in its case brief. It is the respondent's responsibility 
to make a timely claim for any requested adjustment. In accordance with 
19 CFR 351.301(b)(2), and consistent with 1994-1995 Final Review 
Results, 62 FR at 1988, we did not make an adjustment for it in these 
final results because the respondent submitted this claim after the 
applicable time limit, and has not adequately demonstrated its claim. 
Finally we note that, the Department has determined that late payment 
charges paid by customers, by definition, do not constitute interest 
income and are more appropriately considered sales revenue. See, 1994-
1995 Final Review Results 62 FR at 1974.
Comment 9: Offset for ``Obtained Discounts''
    Eletrosilex states that its ``obtained discounts `` contains 
discounts paid to Eletrosilex by its suppliers of materials and 
equipment. Eletrosilex, citing the 1994-1995 Remand Results, argues 
that, because the Department denied this item as an offset to financial 
expenses, it should adjust COM for this amount because the payment 
reflects a reduction in material costs.
    The petitioners claim that in the 1994-1995 Remand Results, the 
Department disallowed discounts obtained from suppliers as a short-term 
interest-income offset for CBCC. Further, the petitioners claim that in 
the 1994-1995 Final Review Results, the Department did not make an 
adjustment to CBCC's COM for discounts obtained from suppliers because 
CBCC had not made a request for this adjustment prior to submission of 
its case brief and because the information on the record was 
insufficient to substantiate an adjustment to COM. In light of that 
precedent, the petitioners argue that Eletrosilex's claim for an 
adjustment to COM should be denied because in the instant review the 
adjustment was not requested by Eletrosilex until it filed its case 
brief. Therefore, the petitioners argue that, for the final results, 
the Department should not adjust Eletrosilex's COM for obtained 
discounts.
    DOC Position: We agree with the petitioners that, in our 
preliminary determination, we properly disallowed Eletrosilex's 
``obtained discounts'' because the Department has determined that 
discounts from suppliers do not represent income from short-term 
investments. See, 1994-1995 Final Review Results, 62 FR 1974.
    In addition, we disagree with the respondent's assertion that if we 
deny this item as an offset to financial expenses, we should recognize 
this amount as an adjustment to COM. The respondent made this claim for 
adjustment to COM for the first time in its case brief in this review 
even though the Department expressly instructed Eletrosilex in a 
supplemental questionnaire that ``purchase discounts should be 
classified as a reduction to the reported direct material costs if they 
relate to materials used to manufacture silicon metal.'' See, 
Department's May 13, 1999, Supplemental Questionnaire at 15. In 
addition we note that the respondent reported an amount for ``obtained 
discounts'' for the period January 1997 through December 1997. By 
comparison, the respondent reported cost information for the POR (July 
1997 through June 1998). Therefore, the Department does not have the 
information necessary to make the COM adjustment requested by the 
respondent. As a consequence, because the respondent did not claim this 
offset until it submitted its case brief, and because it is a 
respondent's responsibility to substantiate its claims for offsets, 
which the respondent has not done in this case, we have not treated 
this item as a cost offset in our calculation of Eletrosilex's COM. 
See, 1994-1995 Final Review Results, 62 FR 1988.

LIASA

Comment 1: Bona fide Sales
    The petitioners argue that the Department should exclude all or 
certain sales made by LIASA to its U.S. customer, alleging that the 
circumstances of the sales were not in the normal course of business.
    The petitioners reason that the Department has the authority to 
exclude from its margin calculations U.S. sales that are distortive, 
atypical or unrepresentative of the seller's normal market behavior, 
(i.e., sales which do not reflect actual market transactions). 
Moreover, the petitioners contend that in an administrative review, the 
Department may disregard a sale which is the result of an orchestrated 
scheme involving artificially high prices.
    The petitioners cite Chang Tieh Industry Co. v. United States, 17 
CIT 1314, 1318, 840 F. Supp. 141, 145 (1993) (``Chang Tieh''), in which 
the CIT determined that the Department may exclude a sale where ``its 
inclusion would lead to an unrepresentative price comparison, thus 
frustrating the ``apples to apples'' comparison goal of the antidumping 
laws.'' In the underlying review at issue there, the Department had 
looked to whether the transaction had been artificially structured so 
as to be commercially unreasonable. See, Certain Cut-to-Length Carbon 
Steel Plate from Romania: Notice of Rescission of Antidumping Duty 
Administrative Review, 63 FR 47234 (September 4, 1998).
    According to the petitioners, LIASA reported a minimal amount of 
transactions during the POR, which were all sold to the same customer 
at prices that were substantially higher than prices reported by other 
respondents in the review. Citing Metals Week, the petitioner argues 
that the price charged by LIASA to its customer was far higher than the 
average U.S. dealer price charged during the week LIASA made its sales. 
Additionally, petitioners claim the prices that LIASA

[[Page 7503]]

charged its home market customers were much lower than the prices that 
it charged to its U.S. customer.
    The petitioners contend that not only did LIASA's U.S. customer buy 
its product at prices well above the market price, it could have 
purchased the same product from other U.S. producers at substantially 
lower prices. Additionally, the quantity of each individual sale was 
far below the shipment size reported by other respondents in the 
review.
    LIASA claims that there is no legal basis for the Department to 
exclude LIASA's sales from the administrative review. According to 
LIASA, the CIT has never held that the Department has authority to 
exclude U.S. sales from an administrative review, and contends that the 
petitioners ignore the distinction in necessary criteria for such an 
action in an administrative review versus the less-than-fair-value 
(``LTFV'') stage of the proceeding.
    LIASA notes that the cases that the petitioners cited, Chang Tieh 
and Ipso, Inc. v. United States, 13 CIT 402,408, 714 F. Supp. 1211, 
1217 (1989), do not provide any basis for the actions that the 
petitioners seek. The CIT has stated that different rules apply to 
investigations than to reviews. LIASA argues that in FAG U.K. Ltd. v. 
United States, 945 F. Supp. 260 (1996), the CIT explicitly stated that 
the Department is without authority to exclude sales from 
administrative reviews, unless there are exceptional circumstances of 
unrepresentative and extremely distortive sales. See, e.g., FAG, 945 F. 
Supp. at 264-265.
    As for the facts of this case, LIASA points out that the 
petitioners have failed to provide any evidence that the sales made by 
LIASA were not bona fide arm's-length transactions. If the Department 
has the authority to exclude U.S. sales from its analysis, it can do so 
only when there is evidence that the sales are not bona fide arm's-
length transactions. There is no evidence that any of the transactions 
between LIASA and its customer during the POR were not bona fide sales.
    Finally, in response to allegations by petitioners that it had 
arranged for artificial sales during the POR, LIASA argues that any 
correspondence between LIASA and its U.S. customer indicates only that 
the client and the company were aware of the antidumping order at the 
time of sale, not that LIASA and its client were circumventing the 
antidumping order.
    DOC Position: We agree with LIASA that, in Chang Tieh, the CIT 
noted that the antidumping laws do not contain specific provisions that 
allow the Department to disregard U.S. sales in administrative reviews. 
However, while there is no specific statutory or regulatory provision 
for the exclusion of U.S. sales as ``outside the ordinary course of 
trade,'' the Department's authority to prevent fraud upon its 
proceedings has been recognized by the courts. See, Chang Tieh, 840 F. 
Supp. at 146. The Department may disregard a U.S. sale if it is 
determined that the sale is not the result of a bona fide arm's-length 
transaction. See, PQ Corporation v. United States, 652 F. Supp. 729 
(CIT 1987). We are very mindful of this issue, especially in the 
context of a review where a respondent may receive a zero or de minimis 
margin, and thus, subsequently be eligible for revocation. However, as 
with the prior review (see, 1996-1997 Final Review Results), we 
conclude that there is no evidence on the record of this segment of the 
proceeding to indicate that the U.S. sales in question were not bona 
fide transactions or that the transactions were in any way fraudulent.
    We note that a small number of sales transactions in a review 
segment does not compel the conclusion that the transactions are not 
bona fide. As reflected in the Department's practice, a dumping 
analysis may be based upon a few sales even where the sales are 
designed for the express purpose of reducing the cash deposit rate. In 
the case of Fresh Chilled Atlantic Salmon from Norway; Final Results of 
New Shipper Antidumping Duty Administrative Review, 62 FR 1430 (January 
10, 1997), for example, the Department accepted and analyzed a single 
U.S. sale where there was no evidence of fraud or proof that the sale 
was not bona fide.
    The principal arguments put forth by the petitioners for excluding 
LIASA's sales to its U.S. customer rest on the premise that the price 
of the merchandise sold and the subsequent small quantities of 
merchandise delivered were not consistent with LIASA's ordinary course 
of business. Although the petitioners attempt to call into question the 
commercial validity of LIASA's sales by raising such factors as the 
price of identical merchandise in the United States during the same 
time period, they do not provide or cite to any evidence on the record 
of the instant review that supports the conclusion that these 
transactions are not bona fide sales between two unaffiliated parties 
or that permits the Department to conclude that the sales were 
fraudulent. In the absence of evidence that would contradict LIASA's 
assertions or validate the petitioner's allegations, we are including 
the sales within the respondent's U.S. sales database.

CBCC

Comment 1: Revocation Periods
    The petitioners claim that the Department's finding in the 
preliminary determination that CBCC has had zero or de minimis margins 
for the past four consecutive reviews is incorrect. The petitioners 
state that after the issuance of the preliminary results in the instant 
review, the Department determined pursuant to a remand that CBCC's 
dumping margin in the 1994-1995 review segment was 67.93 percent. 
Accordingly, CBCC has not had zero or de minimis dumping margins for 
four consecutive years.
    CBCC claims that at the time the Department issued its preliminary 
determination, the final remand results for the 1994-1995 
administrative review were not issued. Additionally, the CIT has not 
yet approved the Department's Remand Results. In fact, CBCC has asked 
the CIT to remand these results once again to the Department in order 
to re-calculate financial expenses. According to CBCC, these remand 
results will not be final until the CIT approves them.
    DOC Position: We agree with the petitioners that, pursuant to a 
remand from the CIT, the recalculated margin for CBCC in the 1994-1995 
review segment is above de minimis . For an explanation of the effect 
of this remand on CBCC's revocation request, refer to the section 
entitled ``Determination Not To Revoke the Order With Regard To CBCC.''
Comment 2: Market Conditions
    The petitioners challenge the accuracy of the Department's 
statement that ``CBCC maintained zero or de minimis margins despite the 
fact that the last three years were marked with depressed prices and 
global oversupply of silicon metal'' See, Petitioners' Case Brief, 
December 10, 1999. According to the petitioners, this statement is 
completely erroneous and directly contradicted by evidence on the 
record. The petitioners claim that the record shows that the 1995-1996, 
1996-1997 and 1997-1998 review periods, the three consecutive years on 
which CBCC based its revocation request, were marked by silicon metal 
prices that reached historic record highs. As support for this claim, 
the petitioners cite to a number of publications where they claim the 
data unequivocally show that during the 1995-1996, 1996-1997 and 1997-
1998 review periods, prices were higher than at any point during the

[[Page 7504]]

last decade. The petitioners further claim that the evidence 
demonstrates that during the three-year revocation period, silicon 
metal demand outpaced supply.
    CBCC states that the petitioners' current claim (that CBCC received 
zero or de minimis dumping margins during a period marked with 
abnormally high prices and global under supply of silicon metal) is at 
odds with the arguments made in the petitioners' submission of June 1, 
1999, and is not supported by petitioners' own evidence. In that 
submission, CBCC asserts the petitioners provided evidence that silicon 
metal prices had declined sharply since the third quarter of 1996, 
until the first quarter of 1999. CBCC argues that there is no support 
for the petitioners' new argument. Pointing to information included in 
Exhibit 1 of the petitioner's June submission, CBCC concludes that 
silicon metal prices dropped precipitously during two out of the three 
review segments in question while at the same time CBCC maintained a 
zero or de minimis margin. CBCC claims that the information provided by 
the petitioners fully supports the Department's preliminary conclusion 
that the 1996 through 1998 period was marked with depressed prices and 
global oversupply of silicon metal. Thus, CBCC urges the Department to 
revoke the order with respect to CBCC.
    DOC Position: These arguments by petitioners and CBCC relate to the 
likelihood that CBCC would dump in the future if the order were revoked 
with respect to CBCC. After review of the criteria outlined in 
Secs. 351.222 (b) and (d) of the Department's regulations, we have 
determined that CBCC has not met one of the threshold requirements for 
revocation (i.e., sales in commercial quantities during three 
consecutive periods). For a more detailed explanation, please refer to 
``Determination Not To Revoke the Order With Regard To CBCC'' above. 
Because CBCC has not met the commercial quantities requirements, we do 
not need to examine the issue of likelihood of resumption of dumping 
and the parties' arguments with respect to market conditions are moot.
Comment 3: Annualization of POI Imports
    The petitioners assert that the Department's finding that CBCC's 
sales in three of the four years in which CBCC maintained zero or de 
minimis margins represent, respectively, approximately 30, 45 and 70 
percent of the quantity shipped during the POI is erroneous. The 
petitioners claim that when the Department compared CBCC's aggregate 
U.S. sales volume during each of the three review periods with CBCC's 
aggregate U.S. sales volumes during the POI, the Department failed to 
adjust for the fact that the POI consisted only of six months while 
each review period consisted of twelve months. Adjusting for this 
difference, CBCC's aggregate sales volumes represent approximately 15 
percent, 22.5 percent, and 35 percent, respectively, of CBCC's total 
annualized sales volume during the POI. Accordingly, during the above-
mentioned review periods, CBCC's total annualized sales volumes were 
far below the annualized silicon metal volume CBCC shipped to the 
United States during the POI.
    CBCC rejects the petitioners' argument and claims that to its 
knowledge, the Department has never annualized POI sales for revocation 
purposes. In fact, CBCC argues that the petitioners cite no Department 
precedent to support their argument. The one case cited, Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-To-
Length Carbon Steel Plate from Canada, 64 FR 45, 228, 45,230 (Aug. 19, 
1999) (``Carbon Steel Flat Products from Canada''), CBCC believes is 
inapposite to the petitioners' claim. In that case, CBCC continues, the 
Department did not annualize POI sales, but continued to use the POI 
sales reported by the respondent as the benchmark for its revocation 
analysis. According to CBCC, the Department's practice is not to 
annualize POI sales since there is no evidence on the record that would 
allow the Department to correctly annualize sales for the POI. 
Multiplying POI sales by a factor of two, as the petitioners seem to 
suggest, is not an accurate surrogate for the actual POI sales volume. 
Thus, any attempt to estimate sales over a POI of twelve months would 
not be supported by evidence on the record.
    DOC Position: We do not agree with CBCC. CBCC has not provided any 
information to support its contention that annualizing its POI sales 
(i.e., increasing the six-month sales by a factor of two) results in an 
inappropriate benchmark for comparison to sales in the three years 
forming the basis of its revocation request. CBCC has not demonstrated 
that sales of silicon metal in the United States are cyclical, nor has 
it suggested factors the Department should consider in its approach to 
annualizing the POI data. Thus, it is reasonable to assume that CBCC's 
sales volumes during the 1995-1996 period were approximately two 
percent of CBCC's sales during an annualized benchmark period. Because 
we have found that CBCC's sales during the 1995-1996 period do not 
reflect CBCC's normal commercial activity with respect to sales of 
subject merchandise in the United States, and have denied revocation on 
this basis, we need not address the remaining factors relevant to a 
revocation determination.
Comment 4: Commercial Quantities
    The petitioners claim that under Sec. 351.222(d)(1) of the 
Department's regulations, before revoking an order, the Department must 
determine that the company requesting revocation sold the subject 
merchandise to the United States in commercial quantities during each 
of the three consecutive years forming the basis for the request for 
revocation. Consistent with Sec. 351.222(d)(1), the petitioners' claim 
that the Department has determined that a respondent does not satisfy 
this prerequisite for revocation when the respondent did not sell the 
subject merchandise in commercial quantities in the U.S. market during 
any one of the three consecutive years forming the basis for the 
respondent's request for revocation.
    According to the petitioners, a company requesting revocation must 
demonstrate that it participated meaningfully in the U.S. market during 
each of the three consecutive years at issue. In other words, the 
Department must be satisfied that the zero or de minimis dumping 
margins for the three consecutive years are reflective of the company's 
normal commercial activity. Past zero or de minimis dumping margins 
that were based on U.S. sales of less than commercial quantities do not 
provide a reasonable basis for determining that the order is 
unnecessary to offset dumping. For purposes of a revocation request, 
petitioners claim, U.S. sales during a review period that are in 
abnormally small quantities do not qualify as commercial sales.
    The petitioners further state that since the Department erroneously 
examined CBCC's sales volumes in four consecutive years, the first of 
which (the 1994-1995 review segment) did not form the basis for CBCC's 
request for revocation, the preliminary decision to revoke the order 
with respect to CBCC is contrary to both the Department's regulations 
and Department practice. In other words, in finding that CBCC had sales 
in commercial quantities during three of the past four consecutive 
reviews, the Department sidestepped finding whether CBCC had sales in 
commercial quantities during each of the three years forming the basis 
for revocation, as required by its regulations

[[Page 7505]]

and practice. Accordingly, in the final results, to determine whether 
CBCC has met the threshold requirement for revocation, the Department 
should only look to CBCC's sales volumes during the 1995-1996, 1996-
1997 and 1997-1998 review periods.
    The petitioners also add that once the Department bases its 
analysis of commercial quantities on the three most recent consecutive 
review periods, it will find that during the 1995-1996 review period, 
the quantities sold in the U.S. market were abnormally small both when 
compared to other review periods as well as when compared to the POI 
and to home market sales. Specifically, according to the petitioners, 
since the sales during the 1995-1996 review period represent only four 
percent of the volume of sale made during the POI (or two percent when 
annualized), they do not represent commercial quantities. Therefore, 
the petitioners argue that CBCC's request for revocation should be 
denied.
    In contrast, CBCC states that the Department did not find the 1995-
1996 sales quantity to be ``an abnormally small quantity,'' as 
portrayed by the petitioners, but merely not as extensive as in the 
other years. Further, CBCC claims that the petitioners' allegation that 
the zero margin the Department calculated for the 1995-96 review was 
not based on sales in commercial quantities is without merit for two 
reasons. First, even though the quantity exported in 1995-1996 was 
smaller than that exported in each of the other reviews on which the 
revocation request is based, it is greater than the quantity reported 
in each of the four prior reviews for which the Department calculated 
dumping margins, with the exception of the 1994-1995 review period. 
Thus, the quantity reported for 1995-1996 is a reliable indicator of 
CBCC's commercial behavior in the U.S. market and of its ability to 
compete without sales at less than NV.
    Second, the situation in the 1995-1996 review is distinguishable 
from those recent instances in which the Department denied revocation 
on the basis of a lack of sales in commercial quantities. In Carbon 
Steel Flat Products from Canada, cited above, the Department found that 
sales that represented only 0.12 percent of the sales volume during the 
six months of the POI were not made in commercial quantities. In this 
case, CBCC's sales during the 1995-1996 review represented about four 
percent of the sales volume in the POI.
    Additionally, citing Pure Magnesium from Canada; Final Results of 
Antidumping Duty Administrative Review and Determination Not to Revoke 
Order in Part, 64 FR 12977 (March 16, 1999), CBCC claims that the 
Department found that sales from the concerned respondent virtually 
stopped in the two years following the imposition of the antidumping 
order and sales thereafter represented less than 0.5 percent of the 
sales volume made in the last completed fiscal year prior to the order. 
In contrast, CBCC never stopped exporting to the United States and the 
sales volume in the 1995-1996 review far exceeded this 0.5 percent 
threshold, as mentioned above.
    In a second decision regarding pure magnesium from Canada, see, 
Pure Magnesium from Canada: Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke in Part, 64 FR 
50489 (Sept. 17, 1999), CBCC argues the Department determined that one 
or two low-volume sales to the United States during a one-year period 
was not sufficient for the respondent to meet the Department's 
threshold for meaningful participation, in light of this respondent's 
selling activity in the home market. In contrast, the U.S. sales during 
the 1995-1996 review do not represent an abnormally small quantity, but 
are reflective of CBCC's normal commercial activity inasmuch as the 
quantity sold in each U.S. transaction is greater than the quantity 
CBCC usually sells to home market customers, on a transaction-by-
transaction basis.
    In addition, CBCC states that the Department based its preliminary 
determination on the fact that ``CBCC shipped progressively more in 
each of those three years . . .'' The evidence on the record shows that 
this statement is true whether the Department considers four years or 
three years. CBCC's sales to the United States increased significantly 
in each successive review, from four percent in 1995-1996 to 45 percent 
in 1996-1997, and 70 percent in 1997-1998, of the quantity shipped in 
the POI. Additionally, CBCC emphasizes that while its sales volume 
increased progressively in the last two reviews, it maintained zero or 
de minimis margins in spite of the precipitous decline of silicon metal 
prices in the United States during these periods.
    Also, CBCC notes that the review period during which it had its 
lowest sales volume to the United States is 1995-1996, which, according 
to the petitioners, corresponded to the largest increase in silicon 
metal prices since the order was issued. In contrast, CBCC shipped 
increasing volumes in the two periods during which silicon metal prices 
declined significantly, at prices that were found by the Department to 
be not less than NV. CBCC believes that this information is more 
meaningful to the Department's revocation analysis than if CBCC had 
shipped large volumes of silicon metal at not less than NV during the 
period of increasing prices and small volumes during the two periods of 
declining prices.
    Therefore, for the above reasons, CBCC believes it satisfied the 
requirement of selling subject merchandise in commercial quantities to 
the United States during each of the consecutive years for which the 
Department calculated zero or dumping margins.
    DOC Position: As discussed in the section of this notice above, 
``Determination Not To Revoke With Regard to CBCC,'' a company 
requesting revocation must demonstrate that it participated 
meaningfully in the U.S. market during each of the three consecutive 
years at issue. In these final review results, we have determined that 
CBCC's sales during the 1995-1996 review period do not reflect the 
company's normal commercial activity with respect to sales of subject 
merchandise in the United States. Because CBCC did not ship in 
commercial quantities during the revocation period, we do not have to 
address other aspects of petitioners' argument.
Comment 5: Likelihood of Dumping
    Both parties submitted comments regarding future likelihood of 
dumping.
    DOC Position: Since we did not revoke the order with respect to 
CBCC based on a determination that it had not made sales in the United 
States in commercial quantities for three consecutive years, we do not 
have to reach the issue of likelihood of resumed dumping.
Comment 6: ICMS Tax and COP
    CBCC claims that the Department should reduce CBCC's COP by the 
amount of ICMS tax credits used to pay for electricity utilized in the 
production of silicon metal. CBCC claims that in the immediately 
preceding administrative review of this order covering the period of 
1996-1997 (sixth administrative review), the Department stated that the 
Brazilian government allows companies to recover the amount of ICMS tax 
paid on purchases by retaining ICMS taxes collected on home market 
sales of finished products or by reducing payments on electricity 
costs. Further, CBCC states than even though a company does not record 
the ICMS tax credits as a cost in its records, the credits reflect 
actual expenditures (to

[[Page 7506]]

the extent they are not recovered or used to offset electricity costs). 
Thus, ICMS tax credits that are generated during the POR but that are 
not used during the POR to either offset tax collection or to pay 
electricity costs, represent un-reimbursed expenditures or costs for 
the POR.
    According to CBCC, if a respondent recovers in a subsequent POR 
some or all of the ICMS tax credits that were generated during the POR, 
this should be taken into account in calculating costs for that 
subsequent period, not the current POR. CBCC states that this is 
consistent with the Department's practice, citing Canned Pineapple 
Fruit From Thailand, 63 FR at 7392, 7399, wherein the Department stated 
that it has ``consistently required and used the per-unit weighted-
average costs incurred during the POR.'' CBCC goes on to claim that in 
the prior segment of the proceeding, the Department did not apply 
CBCC's ICMS tax credits used to pay electricity cost as an offset to CV 
because those credits were used to offset electricity costs during the 
subsequent POR (i.e., they were used to offset costs in the 1997-1998 
POR). CBCC claims that, therefore, in this review, the offset should be 
granted. CBCC notes that the Department verified that CBCC used the 
ICMS tax credits to pay electricity costs related to the production of 
silicon metal during the 1997-1998 POR and concluded that its 
``findings were consistent with the information contained in CBCC's 
submissions.''
    CBCC concludes that the Department incorrectly failed to account 
for the field ICMSOFFSET (which represents tax credits used to pay 
electricity costs) in calculating the revised COP (``RCOP'') variable 
in its preliminary determination. According to CBCC, since the 
Department verified that CBCC paid electricity with ICMS tax credits 
during the POR, the amount reported by CBCC under ICMSOFFSET should be 
deducted from CBCC's COP for the final determination.
    The petitioners argue that the Department has never expressed any 
intention to reduce COP for ICMS tax credits used to pay for 
electricity. The only support CBCC cites for its argument is language 
from the final results of the immediately preceding (1996-1997) 
administrative review regarding the treatment of ICMS taxes in 
calculating CV. However, in those final results, the Department did not 
address the treatment of ICMS taxes in calculating COP. Instead, the 
Department determined that:

where a respondent demonstrates recovery of the taxes paid on raw 
materials during the period of review, . . . such taxes are not 
incurred, and therefore do not constitute cost of materials for 
purposes of calculating CV. 62 FR at 1960.

    By comparison, with respect to calculating COP, the petitioners 
believe that the Department's practice is to exclude ICMS taxes from 
both the COP and home market prices used in the sales-below-cost 
analysis. Consistent with this practice, CBCC reported its direct 
materials costs, including electricity costs, exclusive of ICMS taxes, 
and the Department used these tax-exclusive direct materials costs in 
calculating CBCC's COP for the sales-below-cost analysis. Thus, 
according to the petitioners, because ICMS taxes paid by CBCC on direct 
materials, including electricity, are not included in the COP used in 
the sales-below-cost analysis, it would be erroneous to reduce COP by 
any ICMS tax credits used to pay for electricity.
    Moreover, with respect to the calculation of COP, petitioners argue 
that the plain language of section 773(b)(3) of the Act provides that 
COP includes, inter alia, ``the cost of materials and of fabrication or 
other processing of any kind employed in producing the foreign like 
product,'' and thus the statute unambiguously requires that the COP 
inputs be included in the calculation of COP. See, Petitioners' Brief, 
at 3-4.
    Further, the petitioners claim that electricity is an important 
input in the production of silicon metal. Consistent with the statutory 
mandate, the Department's established practice is to include the cost 
of electricity in COP. Thus, under section 773(b)(3) of the Act, and 
Department practice, CBCC's full cost of electricity must be included 
in COP. The price CBCC paid to acquire electricity is reflected on the 
monthly invoices from CBCC's electricity supplier. The ICMS tax credits 
CBCC used to pay for electricity do not reduce CBCC's electricity cost, 
i.e., ``the price paid to acquire'' electricity. The use of ICMS tax 
credits only changes the manner in which CBCC pays for its electricity 
cost.
    Additionally, according to the petitioners, under the Brazilian tax 
law, ICMS tax credits may be used to pay for electricity, or equipment, 
or be used to reduce monthly ICMS tax liability to the Brazilian 
government for ICMS tax collected on home market sales or be carried 
forward for future use. Moreover, CBCC's financial statements list 
``Taxes Recoverable,'' which as Explanatory Note 5 demonstrates, 
include ICMS tax credits under the category ``Current Assets.'' Thus, 
ICMS tax credits were assets of CBCC and were expended for electricity, 
just as if they were another type of asset, such as cash.
    When CBCC used ICMS credits for electricity, it reduced the amount 
of credits available for it to spend on equipment or to carry forward 
for future use, as provided for in the ICMS statute. Hence, CBCC's use 
of the ICMS credits, which were assets of CBCC, was a ``dimunition in . 
. . assets,'' constituting a ``sacrifice made to secure'' the 
``benefit'' of electricity. In sum, the petitioners argue that it is 
clear that the portion of CBCC's electricity cost that was paid for by 
ICMS tax credits is part of CBCC's total cost of electricity, as 
reflected in the monthly invoices of its electricity supplier. For 
these reasons, pursuant to section 773(b)(3) of the Act, the 
petitioners assert that the full amount of CBCC's electricity cost, as 
reflected on the invoices of its electricity supplier (without any 
reduction for ICMS tax credits used to pay for the cost) must be 
included in CBCC's COP.
    Furthermore, the petitioners claim, that in this review, CBCC's NV 
is based on home market prices, not CV. Thus, the treatment of ICMS tax 
credits CBCC used to pay for electricity in calculating CBCC's CV is 
irrelevant to the Department's calculation of CBCC's dumping margin in 
this review. For this reason, the Department does not need to and 
should not address the issue of the treatment of ICMS tax credits CBCC 
used to pay for electricity in calculating CBCC's dumping margin for 
the final results.
    DOC Position: We agree with petitioners. The language in section 
773(b)(3) of the Act states, inter alia, that the COP shall include the 
cost of materials and of fabrication or other processing of any kind 
employed in producing the foreign like product during a period which 
would ordinarily permit the production of that foreign like product in 
the ordinary course of business.
    CBCC focuses solely on the Department's language in the prior 
administrative review, where we stated, inter alia:

    Thus, ICMS tax credits that are generated during the POR but 
that are not used during the POR to either offset tax collection or 
to pay electricity costs, represent un-reimbursed expenditures or 
costs for the POR. If a respondent recovers in a subsequent POR some 
or all of the ICMS tax credits that were generated during the POR, 
this should be taken into account in calculating costs for the 
subsequent period, not the current POR. See, 1996--1997 Final Review 
Results, 64 FR at 6312.

    Since CBCC used tax credits to pay for electricity in the current 
review, it

[[Page 7507]]

submits that the Department should reduce COP by the amount of said 
taxes. CBCC ignores the second part of the same paragraph where the 
Department clearly stated that ``. . . we did not use CBCC's ICMS tax 
credit used to pay electricity cost to reduce CV because those credits 
were not used during the POR.'' Id. (emphasis added). In other words, 
the Department did not address in the 1996-1997 Final Review Results 
the treatment of ICMS taxes in calculating COP. Rather, the Department 
there referred to the treatment of ICMS tax credits in calculating CV. 
In the current review, no normal values for CBCC were based on CV. 
Consequently, the issue of ICMS taxes with regard to CV is moot.
    With respect to the calculation of COP, consistent with the past 
practice, when conducting the sales-below-cost analysis, the Department 
compared both COP and the home market price on an ICMS tax-exclusive 
basis. Accordingly, the Department did not reduce COP by the amount of 
the ICMS tax credits.
Comment 7: Interest Revenue and Net U.S. Price
    CBCC claims that the Department should add interest revenue to U.S. 
price when calculating net price (NETPRIU). CBCC claims that the 
Department verified that CBCC received interest revenue on U.S. sales, 
as reported in its submissions. The petitioners did not comment on this 
issue.
    DOC Position: We agree with CBCC. In this review, CBCC received 
interest revenue on both home market and U.S. transactions. For the 
preliminary results, we included interest revenue derived from the home 
market transactions in NV. However, we failed to include similar 
revenue pertaining to the U.S. transactions in the net U.S. price. For 
these final results, we have corrected that error.
Comment 8: Double-Counting of U.S. Direct Selling Expenses
    CBCC claims that when the Department compared the net U.S. price to 
the foreign unit price in dollars (FUPDOL), we double-counted U.S. 
direct selling expenses in the SAS computer program. The petitioners 
did not comment on this issue.
    DOC Position: We agree with CBCC and have corrected that error for 
these final results.

Final Results of Review

    As a result of this review, we have determined that the following 
margins exist for the period April 1, 1997 through March 31, 1998:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              percentage
------------------------------------------------------------------------
Eletrosilex................................................        18.87
CBCC.......................................................          .05
LIASA......................................................            0
RIMA.......................................................            0
------------------------------------------------------------------------

Cash Deposit Requirements

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries.
    For duty assessment purposes, we have calculated importer-specific 
assessment rates for silicon metal from Brazil. For CEP sales, we 
calculated importer-specific assessment rates by aggregating the 
dumping margins calculated for all U.S. sales to each importer and 
dividing this amount by the estimated entered value of the same sales 
to that importer. We calculated the estimated entered value by 
subtracting international movement expenses and expenses incurred in 
the United States from the gross sales value. For assessment of EP 
sales, for each importer, we calculated a per unit importer-specific 
assessment amount by aggregating the dumping margins calculated for all 
U.S. sales to each importer and dividing this amount by the total 
quantity of the sales examined.
    The following deposit requirements shall be effective upon 
publication of this notice of final results of administrative review 
for all shipments of the subject merchandise from Brazil that are 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by 751(a)(1) of the Act: (1) The cash 
deposit rates for the reviewed companies will be the rates listed 
above, except if the rate is less than 0.5 percent and, therefore, de 
minimis, the cash deposit rate will be zero; (2) for merchandise 
exported by manufacturers or exporters not covered in this review but 
covered in a previous segment of this proceeding, the cash deposit rate 
will continue to be the company-specific rate published in the most 
recent final results in which that manufacturer or exporter 
participated; (3) if the exporter is not a firm covered in this review 
or in any previous segment of this proceeding, but the manufacturer is, 
the cash deposit rate will be that established for the manufacturer of 
the merchandise in these final results of review or in the most recent 
final results of review in which that manufacturer participated; and 
(4) if neither the exporter or the manufacturer is a firm covered in 
this review or in any previous segment of this proceeding, the cash 
deposit rate will be 91.06 percent, the ``all others'' rate established 
in the LTFV investigation. These requirements shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) 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 serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.105(a). Timely written notification 
of return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulation and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 7, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-3557 Filed 2-14-00; 8:45 am]
BILLING CODE 3510-DS-P