[Federal Register Volume 66, Number 151 (Monday, August 6, 2001)]
[Notices]
[Pages 40980-40986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19621]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-806]


Silicon Metal From Brazil: Preliminary Results of Antidumping 
Duty Administrative Review and Notice of Intent Not To Revoke Order in 
Part

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review and notice of intent not to revoke order in part.

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SUMMARY: In response to requests by American Silicon Technologies and 
Elkem Metals Company (collectively petitioners), and requests by 
Companhia Brasileira Carbureto De Calcio (CBCC), Ligas de Aluminio S.A. 
(LIASA), and RIMA Industrial S.A. (RIMA) (collectively respondents), 
the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on silicon metal 
from Brazil. The period of review (POR) is July 1, 1999 through June 
30, 2000.
    We preliminarily determine that no respondent sold subject 
merchandise at less than normal value (NV) during the POR. If these 
preliminary results are adopted in the final results of this 
administrative review, we will instruct Customs to assess antidumping 
duties on all appropriate entries. We invite interested parties to 
comment on the preliminary results. Parties who submit comments in this 
proceeding should also submit with the argument: (1) A statement of the 
issue(s), and (2) a brief summary of the argument (not to exceed five 
pages). Further, we would appreciate it if parties submitting written 
comments would provide the Department with an additional copy of the 
public version of any such comments on diskette.

EFFECTIVE DATE: August 6, 2001.

FOR FURTHER INFORMATION CONTACT: Maisha Cryor at (202) 482-5831 or Ron 
Trentham at (202) 482-6320, AD/CVD Enforcement, Office IV, Group II, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:   

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations at 19 CFR part 351 (2000).

Background

    On July 31, 1991, the Department published in the Federal Register 
the antidumping duty order on silicon metal from Brazil. See 
Antidumping Duty Order: Silicon Metal from Brazil 56 FR 36135 (July 31, 
1991). On July 20, 2000, the Department published in the Federal 
Register a notice of opportunity to request an administrative review of 
the antidumping duty order on silicon metal from Brazil for the period 
July 1, 1999 through June 30, 2000. See Antidumping or Countervailing 
Duty Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 65 FR 45035 (July 20, 2000). On July 24, 2000, 
in accordance with 19 CFR 351.213(b)(1), LIASA requested that the 
Department conduct an administrative review of its sales and partially 
revoke the order with respect to LIASA pursuant to 19 CFR 351.222(e). 
On July 26, 2000, in accordance with 19 CFR 351.213(b)(1), CBCC 
requested that the Department conduct an administrative review of its 
sales and partially revoke the order with respect to CBCC pursuant to 
19 CFR 351.222(e). On July 31, 2000, RIMA requested that the Department 
conduct an administrative review of its sales and partially revoke the 
order with respect to RIMA pursuant to 19 CFR 351.222(e).
    On July 31, 2000, petitioners requested that the Department conduct 
an administrative review of sales made by CBCC, Eletrosilex, LIASA, 
Companhia Ferroligas Minas Gerais-Minasligas (Minasligas) and RIMA. On 
August 8, 2000, the Department issued questionnaires to CBCC, 
Eletrosilex, LIASA, Minasligas and RIMA. On August 18, 2000, 
petitioners withdrew their request that the Department conduct an 
administrative review of sales made by Eletrosilex. On August 31, 2000, 
the Department informed Eletrosilex that it should not reply to the 
Department's August 8, 2000, questionnaire because an administrative 
review of its sales would not be conducted. On September 6, 2000, in 
accordance with 19 CFR 351.221(b)(1), the Department published in the 
Federal Register a notice of initiation of this antidumping duty 
administrative review. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocation in Part, 65 FR 
53980 (September 6, 2000).
    On September 22, 2000, the Department received responses to 
sections A through D of the questionnaire from Minasligas. On October 
6, 2000, the Department received responses to sections A through D of 
the questionnaire from CBCC and LIASA. On October 10, 2000, the 
Department received responses to sections A through D of the 
questionnaire from RIMA. The Department issued a supplemental 
questionnaire to Minasligas on November 17, 2000 and received a 
response on December 1, 2000. The Department issued a supplemental 
questionnaire to LIASA on November 21, 2000 and received a response on 
December 19, 2000. The Department issued supplemental questionnaires to 
CBCC on December 4, 2000, February 16, February 23 and May 25 of 2001, 
and received responses on January 2, March 9, March 16 and June 22 of 
2001, respectively. The Department issued supplemental questionnaires 
to RIMA on December 8, 2000 and February 1, 2001 and received responses 
on January 3, 2001 and March 1, 2001, respectively.
    On March 15, 2001, in accordance with section 751(a)(3)(A) of the 
Act, the Department published in the Federal Register its notice 
extending the deadline for the preliminary results until July 30, 2001. 
See Silicon Metal from Brazil: Extension of Time Limit for Preliminary 
Results of Antidumping Duty Administrative Review, 66 FR 15078 (March 
15, 2001). The Department is conducting this review in accordance with 
section 751 of the Act.

Scope of 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

[[Page 40981]]

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 a 
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.

Verification

    As provided in section 782(i) of the Act, we conducted 
verifications of the information provided by RIMA and CBCC. We used 
standard verification procedures including examination of relevant 
sales and financial records, and selection of relevant source 
documentation as exhibits. Our verification findings are detailed and 
on file in the Central Records Unit, Room B099 of the Main Commerce 
building (CRU--Public File). Following the publication of these 
preliminary results, we plan to verify, as provided in section 782(i) 
of the Act, information provided by CBCC's U.S. affiliate. At that 
verification, we will use standard verification procedures, including 
on-site inspection of the manufacture's facilities, the examination of 
relevant sales and financial records, and the selection of original 
source documentation containing relevant information. We plan to 
prepare a verification report outlining our verification results and 
place this report on file in the CRU.

Intent Not To Revoke

    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 that the company has 
sold the subject merchandise at not less than NV in the current review 
period and that the company will not sell at less than NV in the 
future; (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; and (3) an agreement to 
reinstatement in the order or suspended investigation, as long as any 
exporter or producer is subject to the order (or suspended 
investigation), if the Secretary concludes that the exporter or 
producer, subsequent to the revocation, sold the subject merchandise at 
less than NV. 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: (1) Sold subject merchandise at 
not less than NV for a period of at least three consecutive years; and 
(2) are not likely in the future to sell the subject merchandise at 
less than NV. See 19 CFR 351.222(b)(2) (2000); Final Results of 
Antidumping Duty Administrative Review and Determination Not To Revoke 
Order In Part: Pure Magnesium from Canada, 64 FR 12977, 12982 (March 
16, 1999) (Pure Magnesium from Canada).

I. CBCC

    On July 26, 2000, CBCC submitted a request, in accordance with 19 
CFR 351.222(e), that the Department partially revoke the order covering 
silicon metal from Brazil with respect to its sales of subject 
merchandise. In accordance with 19 CFR 351.222(e)(1), the request was 
accompanied by certifications from CBCC that for a consecutive three-
year period, including this review period, it sold the subject 
merchandise in commercial quantities at not less than NV, and would 
continue to do so in the future. CBCC also agreed to its immediate 
reinstatement in this antidumping order, as long as any firm is subject 
to the order, if the Department concludes that, subsequent to 
revocation, CBCC sold the subject merchandise at less than NV.
    We received comments from CBCC and petitioners on March 16, 2001 
concerning CBCC's revocation request. We received rebuttal comments 
from petitioners on March 26, 2001.
    After a review of the record, the Department preliminarily 
determines that because CBCC did not have a zero or de minimis dumping 
margin during the preceding review period, the 1998-1999 POR, it has 
failed to make sales of subject merchandise ``at not less than NV for a 
period of at least three consecutive years'' as required by the 
Department's regulations. During the 1998-1999 review period, CBCC's 
weight-averaged dumping margin was determined to be 0.63 percent, a 
non-de minimis rate. See Final Results of Antidumping Duty 
Administrative Review: Silicon Metal From Brazil, 66 FR 11256 (February 
23, 2001) (1998-1999 Silicon Metal Final). Therefore, we do not intend 
to revoke the antidumping duty order with respect to CBCC. 
Additionally, because one of the requirements to qualify for revocation 
has not been met, the Department has not addressed the issues of 
commercial quantities and whether the continued application of the 
antidumping duty order is necessary to offset dumping with respect to 
CBCC.

II. LIASA

    On July 24, 2000, LIASA submitted a request, in accordance with 19 
CFR 351.222(e), that the Department partially revoke the order covering 
silicon metal from Brazil with respect to its sales of subject 
merchandise. In accordance with 19 CFR 351.222(e)(1), the request was 
accompanied by certifications from LIASA that for a consecutive three-
year period, including this review period, it sold the subject 
merchandise in commercial quantities at not less than NV, and would 
continue do so in the future. LIASA also agreed to its immediate 
reinstatement in this antidumping order, as long as any firm is subject 
to the order, if the Department concludes that, subsequent to 
revocation, LIASA sold the subject merchandise at less than NV.
    We received comments from LIASA on March 16, 2001 concerning 
LIASA's revocation request. We received rebuttal comments from 
petitioners on March 26, 2001.
    After a review of the record, the Department preliminarily 
determines that because LIASA did not sell subject merchandise in 
commercial quantities during the most recently completed segment of 
this proceeding, the 1998-1999 POR, it has failed to demonstrate three 
consecutive years of sales in commercial quantities, as required by the 
Department's regulations. See 1998-1999 Silicon Metal Final and 
accompanying Decision Memo. A comparison of LIASA's aggregated U.S. 
sales during the 1998-1999 POR to its sales during the six month period 
of investigation (POI) revealed that LIASA's POR sales represented 
approximately 1.6 percent of its sales during the POI. Id. In addition, 
when LIASA's POI sales were annualized, its 1998-1999 POR sales 
declined even further, to approximately 0.8 percent, when compared to 
its POI sales volume. Id. On this basis, we concluded in the preceding 
administrative review that LIASA did not sell subject merchandise in 
commercial quantities during the 1998-1999 POR. Therefore, because 
LIASA did not sell subject merchandise in commercial quantities during 
the most recent three consecutive PORs, we do not intend to revoke the 
antidumping duty order with respect to LIASA. Additionally, because one 
of the

[[Page 40982]]

requirements to qualify for revocation has not been met, the Department 
has not addressed the issue of whether the continued application of the 
antidumping duty order is necessary to offset dumping with respect to 
LIASA.

III. RIMA

    On July 31, 2000, RIMA submitted a request, in accordance with 19 
CFR 351.222(e), that the Department partially revoke the order covering 
silicon metal from Brazil with respect to its sales of subject 
merchandise. In accordance with 19 CFR 351.222(e)(1), the request was 
accompanied by certifications from RIMA that for a consecutive three-
year period, including this review period, it sold the subject 
merchandise in commercial quantities at not less than NV, and would 
continue to do so in the future. RIMA also agreed to its immediate 
reinstatement in this antidumping order, as long as any firm is subject 
to the order, if the Department concludes that, subsequent to 
revocation, it sold the subject merchandise at less than NV.
    We received comments from RIMA and petitioners on March 16, 2001, 
concerning RIMA's revocation request. We received rebuttal comments 
from RIMA and petitioners on March 26, 2001.
    For these preliminary results, the Department has relied upon 
RIMA's sales activity during the 1997-1998, 1998-1999 and 1999-2000 
PORs in making its decision regarding RIMA's revocation request.
    In accordance with the regulations described above, the Department 
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 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 on the record of each proceeding. See 
section 751(d) of the Act; 19 CFR 351.222(e); 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 742, 750 (January 6, 2000) (Brass from Netherlands).
    In the present case, the Department compared RIMA's aggregate U.S. 
sales during each of the aforementioned PORs to the six-month POI. The 
POI is an appropriate benchmark because it reflects sales activity 
without the discipline of an antidumping order in place. The comparison 
indicates that RIMA's sales to the U.S. market during the three above-
mentioned PORs represent 0.039 percent (1997-1998), 63 percent (1998-
1999), and 296 percent (1999-2000) of the U.S. sales during the POI. 
See Memorandum Regarding ``Ninth Administrative Review: RIMA and 
Commercial Quantities,'' dated July 31, 2001 (Commercial Quantities 
Memo). When the POI sales are annualized, the sales for each of the 
three consecutive PORs decline to approximately 0.02 percent, 32 
percent, and 148 percent, respectively, when compared to the POI sales 
volume. Id. In Brass from Netherlands, the Department denied revocation 
by stating that the volume of merchandise sold to the United States 
during one of the relevant PORs was not sold in commercial quantities 
because it represented approximately two percent of the volume of 
merchandise sold in the benchmark investigative period. Id. at 65 FR 
752. Similarly, in the most recently completed segment of this 
proceeding, the Department denied revocation for LIASA because it 
failed to meet the commercial quantities threshold. In that particular 
administrative review, the Department determined that LIASA's aggregate 
sales during the review period, represented less than one percent of 
the sales volume sold during the POI. Based on that finding, the 
Department denied LIASA's revocation request. See 1998-1999 Silicon 
Metal Final. In the instant review, we find that during the 1997-1998 
POR, RIMA's sales to the United States were significantly lower, as a 
percentage of its POI sales, than in cases mentioned above.
    After a review of the criteria outlined at sections 351.222(b) and 
351.222(d) of the Department's regulations, the Department's practice, 
the comments of the parties, and the evidence on the record, we have 
preliminarily determined that the requirements for revocation have not 
been met. Based on the preliminary results of this review and the final 
results of the two preceding reviews, RIMA has not demonstrated three 
consecutive years of sales in commercial quantities. Therefore, because 
RIMA has not sold subject merchandise in commercial quantities during 
each of the three consecutive review periods, we do not intend to 
revoke the antidumping duty order with respect to RIMA. See Commercial 
Quantities Memo.
    Additionally, because one of the requirements to qualify for 
revocation has not been met, the Department has not addressed the issue 
of whether the continued application of the antidumping duty order is 
necessary to offset dumping with regard to RIMA. However, should the 
decision regarding Rima's revocation be revised for the final results 
of review, it will be necessary to address this factor at that time. As 
a consequence, interested parties are invited to comment on this factor 
in their case briefs.

NV Comparisons

    During the POR, U.S. sales by Brazilian respondents were both 
export price (EP) and constructed export price (CEP) sales. To 
determine whether EP sales of silicon metal by the Brazilian 
respondents to the United States were made at less than normal value, 
we compared EP to the NV, as described in the ``EP'' and ``NV'' 
sections of this notice, below. To determine whether CEP sales of 
silicon metal by the Brazilian respondents to the United States were 
made at less than normal value, we compared CEP to the NV, as described 
in the ``CEP'' and ``NV'' sections of this notice below. In accordance 
with section 777A(d)(2) of the Act, we calculated monthly weighted-
average prices for NV and compared these to individual EP or CEP 
transactions, as appropriate.

Sales Reviewed

    We have continued to employ the approach, adopted in the final 
results of the second review of this order, covering the 1992-1993 POR, 
in determining which U.S. sales to review for all companies. If a 
respondent sold subject merchandise, and the importer of that 
merchandise had at least one entry during the POR, we reviewed all 
sales to that importer during the POR. See Silicon Metal from Brazil, 
Final Results of Antidumping Duty

[[Page 40983]]

Administrative Review, 61 FR 46763 (September 5, 1996).

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents, covered by the description in the 
``Scope of Review'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Further, as in the preceding segment of this proceeding, we have 
continued to treat all silicon metal meeting the description of the 
merchandise under the ``Scope of Review'' section, above (with the 
exception of slag and contaminated products) as identical products for 
purposes of model-matching. See Silicon Metal From Brazil: Preliminary 
Results, Intent To Revoke in Part, Partial Rescission of Antidumping 
Duty Administrative Review, and Extension of Time Limits, 64 FR 43161 
(August 9, 1999) (1997-1998 Silicon Metal Preliminary). Therefore, 
where there were no contemporaneous sales of identical merchandise in 
the home market made in the ordinary course of trade to compare to U.S. 
sales, we compared U.S. sales to the constructed value (CV) of the 
product sold in the U.S. market during the comparison period.

Level of Trade (LOT)

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same LOT as the EP or CEP transaction, as appropriate. The NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on CV, that of the sales from which we derive selling, 
general and administrative (SG&A) expenses and profit. For EP sales, 
the U.S. LOT is also the level of the starting-price sale, which is 
usually from the exporter to the importer. For CEP sales, the U.S. LOT 
is the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated or affiliated customer. If the comparison-market sales are 
at a different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and the comparison market sales at the LOT 
of the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV level is more remote 
from the factory than the CEP level and there is no basis for 
determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773 (a)(7)(B) 
of the Act (the CEP offset provision). See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In determining whether separate LOTs actually existed in the home 
and U.S. markets for each respondent, we examined whether the 
respondent's sales involved different marketing stages (or their 
equivalent) based on the channel of distribution, customer categories, 
and selling functions (or services offered) to each customer or 
customer category, in both markets.

I. CBCC

    CBCC reported home market sales through one channel of distribution 
to three unaffiliated customer categories (i.e., direct sales to 
traders, end-users and silicon metal producers). CBCC reported both EP 
and CEP sales in the U.S. market. For EP sales, CBCC reported one 
customer category and one channel of distribution (i.e., direct sales 
to an unaffiliated trading company). CBCC claimed in its response that 
EP sales were made at the same LOT as home market sales to unaffiliated 
customers. For this reason, CBCC has not asked for a LOT adjustment to 
NV for comparison to its EP sales. For CEP sales, CBCC reported one 
customer category and one channel of distribution (i.e., direct sales 
to an affiliated party). CBCC claimed in its response that CEP sales 
were made at the same LOT as home market sales to unaffiliated 
customers. For this reason, CBCC has not asked for a LOT adjustment to 
NV for comparison to its CEP sales.
    In analyzing CBCC's selling activities for the home and U.S. 
markets, we determined that essentially the same selling functions were 
provided for both markets. The selling functions in both markets were 
minimal in nature and limited to arranging for freight and delivery. 
Therefore, based upon this information, we have preliminarily 
determined that for CBCC, the LOT for all EP and CEP sales is the same 
as that in the home market. Accordingly, because we find the U.S. sales 
and home market sales to be at the same LOT, no LOT adjustment or CEP 
offset under section 773(a)(7) of the Act is warranted for CBCC.

II. LIASA

    LIASA reported home market sales through one channel of 
distribution to one unaffiliated customer category (i.e., direct sales 
to end-users). In the U.S. market, LIASA reported EP sales through one 
channel of distribution to one customer category (i.e., direct sales to 
unaffiliated end-users). In its response, LIASA stated that it performs 
the same type of services for home market customers as it does for its 
foreign market customers. For this reason, LIASA has not requested a 
LOT adjustment.
    In analyzing LIASA's selling activities for its EP sales, we 
determined that essentially the same services were provided for both 
markets. The selling functions in both markets were minimal in nature 
and usually limited to arranging for freight and delivery. Therefore, 
based upon this information, we have preliminarily determined for LIASA 
that the LOT for all EP sales is the same as that in the home market. 
Accordingly, because we find the U.S. sales and home market sales to be 
at the same LOT, no LOT adjustment under section 773(a)(7)(A) of the 
Act is warranted for LIASA.

III. RIMA

    RIMA reported home market sales through one channel of distribution 
to one customer category (i.e., direct sales to unaffiliated end-
users). In the U.S. market, RIMA reported EP sales through one channel 
of distribution to one customer category (i.e., direct sales to 
unaffiliated end-users). In its response, RIMA stated that it performs 
the same type of services for home market customers as it does for its 
foreign market customers. For this reason, RIMA has not requested a LOT 
adjustment.
    In analyzing RIMA's selling activities for the home and U.S. 
market, we determined that essentially the same selling functions were 
provided for both markets. The selling functions in both markets were 
minimal in nature and limited to arranging for freight and delivery. 
Therefore, based upon this information, we have preliminarily 
determined that for RIMA, the LOT for all EP sales is the same as that 
in the home market. Accordingly, because we find the U.S. sales and 
home market sales to be at the same LOT, no LOT adjustment under 
section 773(a)(7)(A) of the Act is warranted for RIMA.

IV. Minasligas

    Minasligas reported home market sales through one channel of 
distribution to two unaffiliated

[[Page 40984]]

customer categories (i.e., direct sales to domestic retailers and end-
users). In the U.S. market, Minasligas reported EP sales through one 
channel of distribution to one unaffiliated customer category (i.e., 
direct sales to trading companies). In its response, Minasligas stated 
that it performs the same type of services for home market customers as 
it does for its foreign market customers. For this reason, Minasligas 
has not requested a LOT adjustment.
    In analyzing Minasligas' selling activities for the home and U.S. 
markets, we determined that essentially the same services were provided 
for both markets. The selling functions in both markets were minimal in 
nature and limited to arranging for freight and delivery. Therefore, 
based upon this information, we have preliminarily determined for 
Minasligas that the LOT for all EP sales is the same as that in the 
home market. Accordingly, because we find the U.S. sales and home 
market sales to be at the same LOT, no LOT adjustment under section 
773(a)(7)(A) of the Act is warranted for Minasligas.

EP

    For LIASA, RIMA, Minasligas, and a portion of CBCC's sales, we used 
the Department's EP methodology, in accordance with section 772(a) of 
the Act, because the subject merchandise was sold by each producer 
outside the United States directly to the first unaffiliated purchaser 
in the United States prior to importation (or to unaffiliated trading 
companies for export to the United States). We made deductions from the 
starting price for movement expenses in accordance with section 772(c) 
of the Act. Movement expenses included, where appropriate, foreign 
inland freight (where foreign inland freight was reported inclusive of 
the value-added tax (VAT), we deducted the VAT from the gross freight 
cost), brokerage and handling, and international freight. For 
Minasligas, we added duty drawback to the starting price. We made 
company-specific adjustments to EP as follows:

I. CBCC

    We recalculated CBCC's home market inland freight, home market 
credit expense and international freight pursuant to corrections 
presented at verification. For a discussion of these changes, see 
Calculation Memorandum for CBCC dated , and Report on the Verification 
of the Sales and Cost Responses for CBCC, dated July 30, 2001, for 
further information regarding the sales verification.

CEP

    Initially, in it's October 6, 2000, response, CBCC reported sales 
to its U.S. affiliate as EP sales. However, in response to the 
Department's December 4, 2000, supplemental questionnaire, CBCC 
reported all sales to its U.S. affiliate, Dow Corning Corporation 
(Dow), as CEP sales in its January 2, 2001, supplemental response. CBCC 
also reported that Dow further manufactured the purchased silicon metal 
into a multitude of other products, mostly chemicals, and sold these 
products in the United States. Therefore, CBCC requested that the 
Department apply section 772(e) of the Act to the further manufactured 
sales.
    Where appropriate, in accordance with section 772(d)(2) of the Act, 
the Department deducts from CEP the cost of any further manufacture or 
assembly in the United States, except where the special rule provided 
in section 772(e) of the Act is applied. Section 772(e) of the Act 
provides that, where the subject merchandise is imported by an 
affiliated person and the value added in the United States by the 
affiliated person is likely to exceed substantially the value of the 
subject merchandise, the Department has the discretion to determine the 
CEP using alternative methods.
    The alternative methods for establishing export price are: (1) The 
price of identical subject merchandise sold by the exporter or producer 
to an unaffiliated person; or (2) the price of other subject 
merchandise sold by the exporter or producer to an unaffiliated person. 
The Statement of Administrative Action notes the following with respect 
to these alternatives:

    There is no hierarchy between these alternative methods of 
establishing the export price. If there is not a sufficient quantity 
of sales under either of these alternatives to provide a reasonable 
basis for comparison, or if the Department determines that neither 
of these alternatives is appropriate, it may use any other 
reasonable method to determine CEP, provided that it supplies the 
interested parties with a description of the method chosen and an 
explanation of the basis for its selection. Such a method may be 
based upon the price paid to the exporter or producer by the 
affiliated person for the subject merchandise, if the Department 
determines that such price is appropriate.

    To determine whether the value added is likely to exceed 
substantially the value of the subject merchandise, we estimated the 
value added based on the difference between the averages of the prices 
charged to the first unaffiliated purchaser for one form of the 
merchandise sold in the United States and the averages of the prices 
paid for the subject merchandise by the affiliated person. See 19 
C.F.R. 351.402(2). Based on this analysis, and the information on the 
record, we determined that the estimated value added in the United 
States by Dow accounted for at least 65 percent of the price charged to 
the first unaffiliated customer for the merchandise as sold in the 
United States. Therefore, we determined that the value added is likely 
to exceed substantially the value of the subject merchandise. As a 
consequence, the Department relied upon an alternative methodology to 
calculate CBCC's margin for these sales. As the alternative 
methodology, the Department used all sales of subject merchandise to 
CBCC's unaffiliated customers. For further discussion, see Memorandum 
on Whether to Determine the Constructed Export Price for Certain 
Further-Manufactured Sales Sold by Companhia Brasileira Carbureto de 
Calcio in the United States During the Period of Review Under Section 
772(e) of the Act, dated July 31, 2001. NV

1. Viability

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV 
(i.e., the aggregate volume of home market sales of the foreign like 
product is greater than five percent of the aggregate volume of U.S. 
sales), we compared each respondent's volume of home market sales of 
the foreign like product to the volume of its U.S. sales of subject 
merchandise, in accordance with section 773(a)(1) of the Act. Since 
each respondent's aggregate volume of home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales for the subject merchandise, we determined that the home 
market provides a viable basis for calculating NV for each respondent. 
Therefore, pursuant to section 773(a)(1)(B) of the Act, we based NV on 
home market sales.

2. Cost of Production (COP) Analysis

    In the review segment of this proceeding most recently completed 
prior to initiating this review, we disregarded home market sales found 
to be below the COP for LIASA. See 1997-1998 Silicon Metal Preliminary, 
aff'd Final Results of Antidumping Duty Administrative Review: Silicon 
Metal From Brazil, 65 FR 7497 (February 15, 2000). Therefore, in 
accordance with section 773(b)(2)(A)(ii) of the Act, the Department has 
reasonable grounds to believe or suspect that sales of the foreign like 
product under consideration for the determination of NV in this

[[Page 40985]]

review may have been made by LIASA at prices below the COP as provided 
by section 773(b)(2)(A)(ii) of the Act.
    On October 10, 2000, petitioners in this proceeding filed a timely 
sales-below-cost allegation with respect to Minasligas. On October 24, 
2000, petitioners in this proceeding filed a timely sales-below-cost 
allegation with respect to CBCC. In the cases of CBCC and Minasligas, 
the petitioners' allegations were based on the respective respondents' 
antidumping duty questionnaire responses. Upon review of the 
allegations, we found that petitioners' methodology provided the 
Department with a reasonable basis to believe or suspect that sales in 
the home market had been made at prices below the COP by both CBCC and 
Minasligas. Accordingly, pursuant to section 773(b)(1) of the Act, we 
initiated an investigation to determine whether CBCC's and Minasligas' 
sales of silicon metal were made at prices below COP during the POR. 
See Analysis of Petitioners' Allegation of Sales Below the COP for 
Minasligas, dated November 13, 2000; Analysis of Petitioners' 
Allegation of Sales Below the COP for CBCC, dated November 16, 2000.
    We have not initiated a cost investigation with respect to RIMA 
because home market sales were not disregarded during the most recently 
completed segment of this proceeding (which was the 1997-1998 POR at 
the time this instant review was initiated) and petitioners did not 
file a sales-below-cost allegation. See 1997-1998 Silicon Metal.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated 
company and product-specific COPs based on the sum of each respondent's 
cost of materials and fabrication for the foreign like product, plus 
amounts for home market selling, general and administrative (SG&A) 
expenses, including interest expenses, and packing costs.
    We relied on the home market sales and COP information submitted by 
each respondent in its questionnaire responses.
B. Test of Home Market Sales Prices for CBCC, Minasligas and LIASA
    For CBCC, Minasligas and LIASA, we compared the per-unit COP 
figures for the POR to home market sale prices of the foreign like 
product, as required under section 773(b) of the Act, in order to 
determine whether these sales were made at prices below the COP. On a 
product-specific basis, we compared the COP to the home market prices, 
less any applicable movement charges, rebates, and discounts. In 
determining whether to disregard home market sales made at prices below 
the COP, we examined whether: (1) Within an extended period of time, 
such sales were made in substantial quantities; and (2) such sales were 
made at prices which permitted the recovery of all costs within a 
reasonable period of time.
C. Results of COP Test for CBCC, Minasligas and LIASA
    Pursuant to section 773(b)(2)(C), where less than 20 percent of a 
respondent's sales of a given product were at prices below the COP, we 
did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's sales of a 
given product during the POR were made at prices below the COP, we 
determined such sales to have been made in ``substantial quantities'' 
within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. In such cases, because we compared prices to 
POR-average costs, we also determined that such sales were not made at 
prices which would permit the recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    We found that only LIASA and Minasligas made comparison-market 
sales at prices below the COP within an extended period of time in 
substantial quantities. Further, we found that these sales prices did 
not permit the recovery of costs within a reasonable period of time. We 
therefore excluded these sales from our analysis in accordance with 
section 773(b)(1) of the Act.

2. CV

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on each respondents' cost of materials and fabrication in 
producing the subject merchandise, SG&A expenses, the profit incurred 
and realized in connection with the production and sale of the foreign 
like product, and U.S. packing costs. We used the cost of materials, 
fabrication, and SG&A expenses as reported in the CV portion of the 
questionnaire response, adjusted as discussed in the ``Calculation of 
COP'' section, above. In addition, we used the U.S. packing costs as 
reported in the U.S. sales portion of the questionnaire responses. For 
selling expenses, we used the average of the direct and indirect 
selling expenses reported for HM sales, weighted by the total quantity 
of those sales.

Price-to-Price Comparisons

    For those comparison products for which there were sales at prices 
above the COP, we based the respondents' NV on the prices at which the 
foreign like product was first sold to unaffiliated parties for 
consumption in Brazil, in the usual commercial quantities, in the 
ordinary course of trade in accordance with section 773(a)(1)(B)(i) of 
the Act. We based NV on sales at the same level of trade as the U.S. 
transactions. For level of trade, please see the ``Level of Trade'' 
section above. In accordance with section 773(a)(6) of the Act, we made 
adjustments to home market price, where appropriate for inland freight, 
brokerage and handling charges, and rebates. Where inland freight was 
reported inclusive of value-added taxes VAT, we deducted the VAT from 
the gross freight cost.
    To account for differences in circumstances of sale between the 
home market and the United States, where appropriate, we adjusted home 
market prices by deducting home market direct selling expenses 
(including credit) and commissions and adding an amount for late 
payment fees earned on home market sales, and by adding U.S. direct 
selling expenses (including U.S. credit expenses) and, where 
appropriate, deducting an amount for late payment fees earned on U.S. 
sales. Regarding CBCC's reported home market credit expense, the 
Department has reviewed documentation related to this expense and 
determined that the interest rate used by CBCC is substantially higher 
than the prevailing short-term interest rate in effect during the POR 
in Brazil. In the most recently completed segment of this proceeding, 
the Department denied CBCC's credit expense because ``* * * given the 
fact that there was only one short-term loan made during the course of 
the POR, a loan with an unusually high interest rate, it is the 
Department's opinion that the loan does not represent a short-term 
lending activity in the `normal course of trade.' See 1998-1999 Silicon 
Metal Final and accompanying Decision Memo. In addition, CBCC's own 
internal memorandum stated that the loan ``* * * was made at an 
`exorbitant' rate to be used only in `emergency' situation [sic].'' Id.
    Although there is no internal CBCC memorandum in the current review 
characterizing CBCC's loan activity as exorbitant, the Department finds 
that the conditions of CBCC's reported credit expense in this POR are 
similar to the conditions described in CBCC's internal memorandum from 
the 1998-1999 POR. Id. See also Calculation Memorandum

[[Page 40986]]

for CBCC dated July 31, 2001. We therefore determine that CBCC's short-
term borrowing in this POR was not in the `normal course of trade.' 
Therefore, for these preliminary results, as in the most recently 
completed segment of this proceeding, we have denied CBCC's reported 
credit expense and have used the Taxa Referential (TR) rate to 
calculate the expense. See 1998-1999 Silicon Metal Final.
    Where commissions were paid on home market sales and no commissions 
were paid on U.S. sales, we increased NV by the lesser of either (1) 
the amount of commission paid on the home market sales or (2) the 
indirect selling expenses incurred on U.S. sales. See 19 CFR 
351.410(e). In order to adjust for differences in packing between the 
two markets, we deducted HM packing costs and added U.S. packing costs, 
where appropriate, in accordance with sections 773(a)(6)(A) and (B) of 
the Act. Where home market prices were reported exclusive of VAT we 
made no adjustment. However, where home market prices were reported 
inclusive of VAT, we deducted the VAT from the gross home market price, 
consistent with past practice.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following weighted-average dumping margins exist for the period July 1, 
1999 through June 30, 2000, and we preliminarily determine not to 
revoke the order covering silicon metal from Brazil with respect to 
sales of subject merchandise by CBCC, RIMA and LIASA.

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                       margin
                                                             percentage
------------------------------------------------------------------------
CBCC......................................................          0.00
LIASA.....................................................          0.00
RIMA......................................................          0.00
Minasligas................................................          0.00
------------------------------------------------------------------------

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within 5 days of the date of publication of 
this notice. Any interested party may request a hearing within 30 days 
of the date of publication of this notice. Parties who submit arguments 
in this proceeding are requested to submit with each argument: (1) A 
statement of the issue and (2) a brief summary of the argument. 
Further, we would appreciate it if parties submitting written comments 
would provide the Department with an additional copy of the public 
version of any such comments on diskette. All case briefs must be 
submitted within 30 days of the date of publication of this notice. 
Rebuttal briefs, which are limited to issues raised in the case briefs, 
may be filed not later than seven days after the case briefs are filed. 
A hearing, if requested, will be held two days after the date the 
rebuttal briefs are filed or the first business day thereafter.
    The Department will publish a notice of the final results of this 
administrative review, which will include the results of its analysis 
of the issues raised in any written comments or at the hearing, within 
120 days from the publication of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Upon completion of this 
review, the Department will issue appraisement instructions directly to 
Customs. The final results of this review shall be the basis for the 
assessment of antidumping duties on entries of merchandise covered by 
the determination and for future deposits of estimated duties. For duty 
assessment purposes, we calculated a per-unit customer or importer-
specific assessment rate by aggregating the dumping margins calculated 
for all U.S. sales to each customer/importer and dividing this amount 
by the total quantity of those sales. Where the assessment rate is 
above de minimis, we will instruct the U.S. Customs Service to assess 
duties on all entries of subject merchandise by that importer.
    Furthermore, the following deposit requirements will be effective 
for all shipments of silicon metal from Brazil entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rates for the reviewed 
companies will be those established in the final results of this review 
except if the rate is less than 0.5 percent, and therefore, de minimis, 
the cash deposit rate will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the original LTFV investigation, but the manufacturer 
is, the cash deposit rate will be the rate established for the most 
recent period for the manufacturer of the merchandise; and (4) for all 
other manufacturers and/or exporters of this merchandise, the cash 
deposit rate will continue to be 91.06 percent, the ``all others'' 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) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this review period. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    This administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 
351.221.

    Dated: July 31, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-19621 Filed 8-3-01; 8:45 am]
BILLING CODE 3510-DS-P