[Federal Register Volume 67, Number 64 (Wednesday, April 3, 2002)]
[Notices]
[Pages 15791-15793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8069]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-817]


Initiation of Antidumping Duty Investigation: Silicon Metal From 
the Russian Federation

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

EFFECTIVE DATE: April 3, 2002.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva or Aishe Allen, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-6412, (202) 482-0172, respectively.

INITIATION OF INVESTIGATION

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``Act'') by the 
Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's 
(``Department'') regulations are to 19 CFR Part 351 (2002).

The Petition

    On March 7, 2002, the Department received a petition on imports of 
silicon metal from the Russian Federation (``Russia'') filed in proper 
form by Globe Metallurgical Inc., Simcala Inc., the International Union 
of Electronic, Electrical, Salaried, Machine and Furniture Workers, 
I.U.E.-C.W.A., AFL-CIO, C.L.C., Local 693, The Paper, Allied-
Industrial, Chemical and Energy Workers International Union, Local 5-
89, and the United Steel Workers of America, AFL-CIO, Local 9436, 
hereinafter referred to as ``the petitioners.'' On March 13, 2002, the 
Department requested clarification of certain areas of the petition and 
received a response on March 18, 2002.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of silicon metal from Russian are being, or are 
likely to be, sold in the United States at less than fair value within 
the meaning of section 731 of the Act, and that such imports are 
materially injuring and threaten to injure an industry in the United 
States.
    The petitioners are domestic producers of silicon metal and account 
for over 25 percent of domestic production of silicon metal, as defined 
in the petition. Therefore, the Department finds that the petitioners 
have standing to file the petition because they are interested parties 
as defined under section 771(9)(C) of the Act, with respect to the 
subject merchandise. The petitioners have demonstrated sufficient 
industry support with respect to the antidumping duty investigation 
they are requesting the Department to initiate (see ``Determination of 
Industry Support for the Petition'' below).

Scope of Investigation

    For purposes of this investigation, the product covered is silicon 
metal, which generally contains at least 96.00 percent but less than 
99.99 percent silicon by weight. The merchandise covered by this 
investigation also includes silicon metal from Russia containing 
between 89.00 and 96.00 percent silicon by weight, but containing more 
aluminum than the silicon metal which contains at least 96.00 percent 
but less than 99.99 percent silicon by weight. Silicon metal currently 
is classifiable under subheadings 2804.69.10 and 2804.69.50 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). This 
investigation covers all silicon metal meeting the above specification, 
regardless of tariff classification.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations, we are setting aside a period 
for interested parties to raise issues regarding product coverage. See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27295, 
27323 (1997). The Department encourages all interested parties to 
submit such comments within 20 calender days of publication of this 
notice. Comments should be addressed to Import Administration's Central 
Records Unit at Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230. The period of scope 
consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with interested 
parties prior to the issuance of the preliminary determination.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the

[[Page 15792]]

petition account for: (1) at least 25 percent of the total production 
of the domestic like product, and (2) more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether the petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (``ITC''), 
which is responsible for determining whether ``the domestic industry'' 
has been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While the Department and the 
ITC must apply the same statutory definition regarding the domestic 
like product (see section 771(10) of the Act), they do so for different 
purposes and pursuant to separate and distinct authority. In addition, 
the Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
domestic like product, such differences do not render the decision of 
either agency contrary to law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    In this case, the domestic like product referred to in the petition 
is the single domestic like product defined in the ``Scope of 
Investigation'' section, above. At this time, the Department has no 
basis on the record to find the petition's definition of the domestic 
like product to be inaccurate. The Department, therefore, has adopted 
the domestic like product definition set forth in the petition.
    Moreover, the Department has determined that the petition contains 
adequate evidence of industry support; therefore, polling was 
unnecessary (see Initiation Checklist Re: Industry Support, March 27, 
2002) (``Initiation Checklist''). To the best of the Department's 
knowledge, producers supporting the petition represent over 50 percent 
of total production of the domestic like product. Additionally, no 
person who would qualify as an interested party pursuant to section 
771(9) (A), (C), (D), (E), or (F) of the Act has expressed opposition 
to the petition.
    Accordingly, the Department determines that this petition is filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act.

Export Price

    The following is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and factors of production are also 
discussed in the Initiation Checklist. Should the need arise to use any 
of this information as facts available under section 776 of the Act in 
our preliminary or final determination, we may reexamine the 
information and revise the margin calculations, if appropriate.
    The petitioners identified the following Russian companies as major 
producers of silicon metal in Russia: Bratsk Aluminum Plant 
(``Bratsk''), JSC Russian Aluminum, Uralsky Aluminum Plant 
(``Uralsky''), and Irkutsk Aluminum Plant (``Irkutsk'').
    The petitioners based export price (``EP'') on import values 
declared to the U.S. Customs Service (``Customs''). In calculating 
import values declared to Customs, the petitioners used the HTSUS 
category under which subject merchandise is currently classified (i.e., 
2804.69.10 and 2804.69.50). The petitioners calculated EP based on the 
average unit values (``AUVs'') for entries of subject merchandise 
during July through December 2001. For purposes of initiation, we re-
calculated the average U.S. price based on HTSUS by using a quantity 
based weighted-average of each HSTUS subheading. See Initiation 
Checklist. In order to obtain ex-factory prices, the petitioners 
deducted foreign inland freight from the Customs value. For purposes of 
calculating foreign inland freight, the petitioners used the surrogate 
value for rail because of the large distances involved and the lower 
expense of shipping by rail, as compared to shipments by truck.
    To determine export price, we relied on the data in the petition 
except that we adjusted the petitioners' estimate for foreign inland 
freight. See Initiation Checklist. To value foreign inland freight, the 
petitioners first calculated an average distance of three known 
producers of silicon metal in Russia to each producer's nearest port. 
See Initiation Checklist. The petitioners reported that the average 
distance for the three known producers of silicon metal in Russia to 
the nearest port was 4,149 kilometers. The petitioners multiplied this 
distance by an Egyptian surrogate value for rail freight that was based 
on an average of rates for distances ranging from 98 to 884 kilometers. 
For purposes of initiation, we revalued freight by multiplying the 
average distance to the port by the Egyptian surrogate value for rail 
freight for 884 kilometers only, as this is the closest distance to 
4,149 kilometers.

Non-Market Economy Status

    The petitioners asserted that Russia is a non-market economy 
country (``NME'') and no determination to the contrary has yet been 
made by the Department. In previous investigations, the Department has 
determined that Russia is an NME. See Notice of Final Determination of 
Sales at Less Than Fair Value: Pure Magnesium from Russian Federation 
(``Magnesium from Russia''), 66 FR 49347 (September 27, 2001). In 
accordance with section 771(18)(C)(i) of the Act, the presumption of 
NME status remains in effect until revoked by the Department. The 
presumption of NME status for the Russian Federation has not been 
revoked by the Department and, therefore, remains in effect for 
purposes of the initiation of this investigation. Accordingly, the 
normal value of the product appropriately is based on factors of 
production valued in a surrogate market economy country in accordance 
with section 773(c) of the Act. In the course of this investigation, 
all parties will have the opportunity to provide relevant information 
related to the issues of Russia's NME status and the granting of 
separate rates to individual exporters.

Normal Value

    The petitioners provided a dumping margin calculation using the 
Department's NME methodology as required by 19 C.F.R. Sec.  
351.202(b)(7)(i)(C). For the normal value (``NV'') calculation, 
petitioners based the factors of production, as defined by section 
773(c)(3) of the Act (raw materials, labor and energy), for silicon 
metal on information from Russian producers. See Initiation Checklist.
    The petitioners selected Egypt as their surrogate country. The 
petitioners argued that pursuant to 773(c)(4) of the Act, Egypt is an 
appropriate surrogate

[[Page 15793]]

because it is a market-economy country that is at a comparable level of 
economic development to the NME and is a significant producer of 
comparable merchandise. Based on the information provided by the 
petitioners, we believe that the petitioners' use of Egypt as a 
surrogate country is appropriate for purposes of initiation of this 
investigation. See Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued factors of production, where possible, on reasonably available, 
public surrogate country data. To value certain raw materials, the 
petitioners used import statistics from Egypt, as reported in the 
United Nations Statistical Division Commodity Trade Database System 
(``UNCTS'') for 1999, excluding those values from countries previously 
determined by the Department to be NME countries. For inputs valued in 
Egyptian pounds and not contemporaneous with the period of 
investigation (``POI'') (i.e., July - December 2001), we used 
information from the wholesale price indices (``WPI'') in Egypt as 
published in the International Financial Statistics (``IFS''), December 
2001, to determine the inflation adjustment. The surrogate values 
calculated by the petitioners for raw materials were recently used in 
the antidumping duty investigation of silicomanganese from Kazakhstan, 
with the exception of electrode paste, charcoal and wood chips. See 
Notice of Preliminary Determination of Sales at Less Than Fair Value: 
Siliconmanganese from Kazakhstan, (``Silicomanganese from Kazakhstan'') 
66 FR 56639 (November 9, 2001) and Initiation Checklist.
    Labor was valued using the regression-based wage rate for Russia 
provided by the Department, which is available on the Import 
Administration's website, in accordance with 19 CFR 351.408(c)(3). 
Petitioners valued electricity using the same Egyptian surrogate value 
used in Silicomanganese from Kazakhstan.
    Factory overhead, selling, general and administrative expenses 
(SG&A), interest, and profit were derived from the 1999-2000 financial 
statements of Sinai Manganese Company (``Sinai''), an Egyptian ferro-
manganese alloys producer.
    We made adjustments to NV for electrode paste, charcoal, wood 
chips, and the surrogate ratios. For further information, see the 
Initiation Checklist.
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(c) of the Act, the estimated recalculated dumping margin 
for silicon metal from Russia is 97.17 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of silicon metal from Russia are being, or are 
likely to be, sold in the United States at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petition alleges that the U.S. industry producing the domestic 
like product is being materially injured and is threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than NV. The petitioners contend that the industry's 
injured condition is evident in (1) declines in production, (2) 
declines in shipments, and (3) declines in prices (4) capacity 
utilization, and (5) employment.
    The Department assessed the allegations and supporting evidence 
regarding material injury and causation and determined that these 
allegations are supported by accurate and adequate evidence and meet 
the statutory requirements for initiation (see Attachments to 
Initiation Checklist, Re: Material Injury).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on silicon metal imports 
from Russia, we find that the petition meets the requirements of 
section 732 of the Act. Therefore, we are initiating an antidumping 
duty investigation to determine whether imports of silicon metal from 
Russia are being, or are likely to be, sold in the United States at 
less than fair value. Unless postponed, we will make our preliminary 
determination no later than 140 days after the date of this initiation.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the government 
representatives of Russia. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition, 
as appropriate.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, no later than April 22, 2002, 
whether there is a reasonable indication that imports of silicon metal 
from Russia are causing material injury, or threatening to cause 
material injury, to a U.S. industry. A negative ITC determination will 
result in this investigation being terminated; otherwise, this 
investigation will proceed according to statutory and regulatory time 
limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: March 27, 2002
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-8069 Filed 4-2-02; 8:45 am]
BILLING CODE 3510-DS-S