[Federal Register Volume 67, Number 153 (Thursday, August 8, 2002)]
[Notices]
[Pages 51539-51545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20077]


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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 To Revoke Order in 
Part.

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests by Elkem Metals Company and Globe 
Metallurgical (collectively petitioners), and requests by Companhia 
Brasileira Carbureto de Calcio (CBCC), Rima Industrial S.A. (Rima) and 
Companhia Ferroligas Minas Gerais - Minasligas (Minasligas) 
(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, 2000 
through June 30, 2001.
    We preliminarily determine that one respondent sold subject 
merchandise at less than normal value (NV) during the POR. We also 
intend, preliminarily, to revoke the order, in part, with respect to 
Rima, because we find that Rima has met all of the requirements for 
revocation, as set forth in section 351.222(b) of the Department's 
regulations. If these preliminary results are adopted in our final 
results of this administrative review, we will instruct the U.S. 
Customs Service (Customs Service) to assess antidumping duties based on 
the difference between the export price (EP) or constructed export 
price (CEP) and NV. 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 8, 2002.

FOR FURTHER INFORMATION CONTACT: Maisha Cryor at (202) 482-5831 or 
Thomas Futtner at (202) 482-3814, AD/CVD Enforcement, Office IV, Group 
II, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 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 (2001).

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 2, 2001, 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, 2000, through June 30, 2001. See Antidumping or Countervailing 
Duty Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 66 FR 34910 (July 2, 2001). On July 13, 2001, 
CBCC requested that the Department conduct an administrative review of 
its sales. On July 13, 2001, Minasligas requested that the Department 
conduct an administrative review of its sales and partially revoke the 
order with respect to Minasligas pursuant to 19 CFR 351.222. On July 
31, 2001, 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.
    On July 31, 2001, petitioners requested that the Department conduct 
an administrative review of sales made by CBCC, Minasligas and Rima. On 
August 20, 2001, in accordance with 19 CFR 351.221(c)(1)(i), 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, 66 FR 43570 (August 20, 2001). On September 5, 
2001, the Department issued questionnaires to CBCC, Minasligas and 
Rima.\1\
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy (NME) cases). Section C requests a complete 
listing of U.S. sales. Section D requests information on the cost of 
production (COP) of the foreign like product and the constructed 
value (CV) of the merchandise under investigation. Section E 
requests information on further manufacturing.
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    On October 19, 2001, the Department received responses to sections 
A through D of the questionnaire from Minasligas. On October 22, 2001, 
the Department received responses to sections A through C of the 
questionnaire from Rima. On November 5, 2001, the Department received 
responses to sections A through D of the questionnaire from CBCC. On 
February 22, 2002, the Department initiated a cost investigation with 
respect to Rima. On March 5, 2002, the Department informed Rima that it 
was required to respond to section D of the Department's questionnaire. 
On March 22, 2002, the Department received a response to section D of 
the questionnaire from Rima.
    The Department issued supplemental questionnaires to Minasligas on 
March 29, 2002, April 12, 2002, and June 7, 2002, and received 
responses on April 24, 2002, and June 21, 2002. The Department issued 
supplemental questionnaires to CBCC on March 29, 2002, and May 24, 
2002, and received responses on April 19, 2002 and June 12, 2002. The 
Department issued supplemental questionnaires to Rima on April 12, 
2002, May 15, 2002 and May 17, 2002 and received responses on May 3, 
2002, and May 31, 2002.
    On March 15, 2002, in accordance with section 751(a)(3)(A) of the 
Act, the

[[Page 51540]]

Department published in the Federal Register its notice extending the 
deadline for the preliminary results until July 31, 2002. See Silicon 
Metal from Brazil: Extension of Time Limit for Preliminary Results of 
Antidumping Duty Administrative Review, 67 FR 11674 (March 15, 2002). 
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 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 Customs purposes, the 
written description remains dispositive.

Fair Value Comparisons

    During the POR, Brazilian respondents made both EP and CEP sales to 
the United States. To determine whether EP sales of silicon metal by 
the Brazilian respondents to the United States were made at less than 
NV, we compared EP to the NV, as described in the Export Price and 
Normal Value sections of this notice. To determine whether CEP sales of 
silicon metal by the Brazilian respondents to the United States were 
made at less than NV, we compared CEP to the NV, as described in the 
Constructed Export Price and Normal Value sections of this notice. 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.

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). 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 CV of 
the product sold in the U.S. market during the comparison period, 
consistent with section 351.405 of the Department's regulations.

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).

Revocation

    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 (2001). 
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 will consider the following in determining whether to 
revoke the order in part: (1) whether the producer or exporter 
requesting revocation has sold subject merchandise at not less than NV 
for a period of at least three consecutive years; (2) whether the 
continued application of the antidumping duty order is otherwise 
necessary to offset dumping; and (3) whether the producer or exporter 
requesting revocation in part has agreed in writing to the immediate 
reinstatement of the order, as long as any exporter or producer is 
subject to the order, if the Department concludes that the exporter or 
producer, subsequent to revocation, sold the subject merchandise at 
less than NV. See 19 CFR 351.222(b)(2); see also Notice of Preliminary 
Results and Partial Rescission of Antidumping Duty Administrative 
Review and Intent to Revoke Antidumping Duty Order in Part: Certain 
Pasta From Italy, 66 FR 34414, 34420 (June 28, 2001).
I. Rima
    On July 31, 2001, Rima submitted a request, in accordance with 19 
CFR 351.222, 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, Rima sold the subject merchandise at less than NV. We 
received no comments from petitioners on Rima's request for revocation.
    Based on the preliminary results in this review and the final 
results of the two preceding reviews, Rima has preliminarily 
demonstrated three consecutive years of sales at not less than NV. 
Further, in determining whether three years of no dumping establish a 
sufficient basis to make a revocation determination, the Department 
must be able to determine that the company continued to participate 
meaningfully in the U.S. market during each of the three years at 
issue. See Certain Corrosion-Resistant Carbon Steel Flat Products and 
Certain Cut-to-Length Carbon Steel Plate From Canada; Final Results of 
Antidumping

[[Page 51541]]

Duty Administrative Reviews and Determination To Revoke in Part, 64 FR 
2173, 2175 (January 13, 1999); see also Pure Magnesium From Canada; 
Final Results of Antidumping Duty Administrative Review and 
Determination Not to Revoke Order in Part, 64 FR 12977, 12979 (March 
16, 1999); and Notice of Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke the Antidumping 
Order: Brass Sheet and Strip from the Netherlands, 65 FR 742 (January 
6, 2000). This practice has been codified in Sec. 351.222(d)(1) of the 
Department's regulations, which states that, ``before revoking an order 
or terminating a suspended investigation, the Secretary must be 
satisfied that, during each of the three (or five) years, there were 
exports to the United States in commercial quantities of the subject 
merchandise to which a revocation or termination will apply.'' 19 CFR 
351.222(d)(1) (emphasis added); see also 19 CFR 351.222(e)(1)(ii). For 
purposes of revocation, the Department must be able to determine that 
past margins are reflective of a company's normal commercial activity. 
Sales during the POR which, in the aggregate, are of an abnormally 
small quantity do not provide a reasonable basis for determining that 
the discipline of the order is no longer necessary to offset dumping.
    With respect to the threshold matter of whether Rima made sales of 
subject merchandise to the United States in commercial quantities, we 
find that Rima's aggregate sales to the United States were made in 
commercial quantities during the past three consecutive years. The 
quantity of Rima's shipments of subject merchandise to the United 
States has remained at a sufficiently high level to be considered as 
having been made in commercial quantities. Therefore, we can reasonably 
conclude that the zero and de minimis margins calculated for Rima in 
each of the last three administrative reviews are reflective of the 
company's normal commercial experience. See Memorandum from Maisha 
Cryor to File, ``Shipments of Silicon Metal to the United States by 
Rima,'' dated July 31, 2002.
    Rima also agreed in writing that it will not sell subject 
merchandise at less than NV in the future and to the immediate 
reinstatement of the antidumping order, as long as any exporter or 
producer is subject to the order, if the Department concludes that, 
subsequent to the partial revocation, Rima has sold the subject 
merchandise at less than NV. Thus, in light of the above and pursuant 
to 19 CFR 351.222, we preliminarily find, for Rima, that the subject 
merchandise was sold at not less than NV for a period of at least three 
consecutive years and that dumping is not likely to resume in the 
future. Consequently, the continuing imposition of an antidumping duty 
is not necessary to offset dumping.
    Therefore, if these preliminary results are affirmed in our final 
results, we intend to revoke the order in part with respect to 
merchandise produced and exported by Rima. In accordance with 19 CFR 
351.222(f)(3), we will terminate the suspension of liquidation for any 
such merchandise entered, or withdrawn from warehouse, for consumption 
on or after the first day after the period under review, and will 
instruct the Customs Service to refund any cash deposits.
II. Minasligas
    On July 13, 2001, Minasligas submitted a request, in accordance 
with 19 CFR 351.222, 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 Minasligas 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. Minasligas 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, Minasligas sold the subject merchandise at less than NV.
    After a review of the record, the Department preliminarily 
determines that because Minasligas did not have a zero or de minimis 
dumping margin during the 1999-2000 POR, the preceding review period, 
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 1999-2000 review period, 
Minasligas' weighted-average dumping margin was determined to be 1.23 
percent, i.e., not a de minimis rate. See Silicon Metal from Brazil; 
Final Results of Antidumping Duty Administrative Review, 67 FR 6488 
(February 12, 2002) (1999-2000 Silicon Metal). Therefore, we do not 
intend to revoke the antidumping duty order with respect to Minasligas. 
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 otherwise necessary to offset dumping with 
respect to Minasligas.

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

Level of Trade

    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 level of trade (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

[[Page 51542]]

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, original equipment manufacturers 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 unaffiliated trading companies). For CEP sales, 
CBCC reported one customer category and one channel of distribution 
(i.e., direct sales to original equipment manufacturers). In its 
response, CBCC stated that it performs the same type of services for 
home market customers as it does for its foreign market customers. For 
this reason, CBCC has not requested a LOT adjustment to NV for 
comparison to its EP and CEP sales.
    Because of the similarity of the selling functions involved in the 
EP and CEP sales, we found there is only one LOT in the U.S. market. 
Moreover, in analyzing CBCC's selling activities in both 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 that for CBCC, the LOT for all U.S. sales is the same as 
that in the home market. Consequently, because we find the U.S. and 
home market sales to be at the same LOT, no LOT adjustment under 
section 773(a)(7) of the Act is warranted for CBCC.
II. Rima
    Rima reported home market sales through one channel of distribution 
to one unaffiliated customer category (i.e., direct sales to original 
equipment manufacturers). In the U.S. market, Rima reported EP sales 
through one channel of distribution to one unaffiliated customer 
category (i.e., direct sales to original equipment manufacturers). 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. 
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 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.
III. Minasligas
    Minasligas reported home market sales through one channel of 
distribution to two unaffiliated customer categories (i.e., direct 
sales to domestic retailers and original equipment manufacturers). 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 that for 
Minasligas, 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.

Export Price

    For Rima, Minasligas and CBCC (where appropriate) we used the 
Department's EP methodology, in accordance with section 772(a) of the 
Act, because the respondents sold the subject merchandise to 
unaffiliated purchasers in the United States prior to importation and 
because the Department's CEP methodology was not otherwise warranted. 
CBCC reported sales to unaffiliated trading companies as EP sales in 
its November 25, 2001, response. However, in a subsequent May 2, 2002, 
submission, CBCC stated that all of its sales to unaffiliated trading 
companies were ultimately purchased by Dow Corning Corporation, an 
affiliate of CBCC. Nevertheless, we have determined that the record 
evidence in this POR does not establish that at the time of the sales 
by CBCC to the unaffiliated trading companies, CBCC had or should have 
had knowledge that this merchandise would ultimately be purchased by 
Dow. Therefore, for the purposes of these preliminary results, we have 
continued to treat CBCC's sales to unaffiliated trading companies as EP 
sales.
    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, brokerage and handling, 
international freight, insurance, U.S. duties and U.S. warehousing. For 
Minasligas, in accordance with section 772(c)(1)(B) of the Act, we 
increased EP by duty drawback. We made company-specific adjustments to 
reported expenses as follows:
I. Minasligas
    We recalculated Minasligas' imputed U.S. credit expense using the 
date of payment by the U.S. customer to the bank as the date of 
payment. This adjustment is consistent with our past practice 
concerning the calculation of imputed U.S. credit expense in this 
proceeding. See 1999-2000 Silicon Metal, 67 FR 6488 (February 12, 2002) 
and accompanying Decision Memorandum at Comment 2. We revised 
Minasligas' reported duty drawback adjustment. See Minasligas' 
Preliminary Results Calculation Memorandum, dated July 31, 2002.
II. Rima
    We recalculated Rima's U.S. credit expense using the date of 
shipment from the factory to the port as the date of shipment. See 
Rima's Preliminary Results Calculation Memorandum, dated July 31, 2002.

Constructed Export Price

    In its November 5, 2001, response, CBCC reported sales to its U.S. 
affiliate, Dow as constructed export price (CEP) sales. 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

[[Page 51543]]

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 constructed 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 (SAA) 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 has relied upon an alternative methodology 
to calculate CBCC's margin for these sales. However, we found that 
there is not a sufficient quantity of sales to unaffiliated parties to 
use such sales as an alternative method of establishing export price. 
Therefore, as the alternative methodology, the Department used the 
price paid to CBCC by Dow. 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 (Special Rule 
Memo), dated July 31, 2002.

Normal Value

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 Analysis
    In the review segment of this proceeding that was most recently 
completed prior to initiating this review, we disregarded home market 
sales found to be below the cost of production (COP) for CBCC. See 
Silicon Metal from Brazil; Preliminary Results of Antidumping Duty 
Administrative Review and Notice of Intent Not to Revoke Order in Part, 
65 FR 47960, 47966 (August 4, 2000) aff'd Silicon Metal from Brazil; 
Final Results of Antidumping Duty Administrative Review and 
Determination Not To Revoke in Part, 66 FR 11256 (February 23, 2001) 
(1998-1999 Silicon Metal). 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 review may have been 
made by CBCC at prices below the COP.
    On November 13, 2001, petitioners in this proceeding filed a timely 
sales-below-cost allegation with respect to Rima. In the case of Rima, 
petitioners' allegation was based on Rima's antidumping duty 
questionnaire responses. Upon review of the allegation, 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 Rima. Accordingly, pursuant to section 
773(b)(1) of the Act, we initiated an investigation to determine 
whether Rima's sales of silicon metal were made at prices below the COP 
during the POR. See Memorandum Regarding the Analysis of Petitioners' 
Allegation of Sales Below the COP for Rima, dated February 22, 2002.
    We did not initiate a cost investigation with respect to Minasligas 
because its home market sales were not disregarded during the most 
recently completed segment of this proceeding prior to the initiation 
of this review (which was the 1998-1999 POR at the time this instant 
review was initiated) and petitioners did not file a sales-below-cost 
allegation. See 1998-1999 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 the respondent's 
cost of materials and fabrication for the foreign like product, plus 
amounts for home market SG&A expenses, including interest expenses, and 
packing costs.
    We relied on the COP information submitted by each respondent in 
its questionnaire responses, except for the following adjustments. For 
Rima and CBCC, we compared home market prices and COP exclusive of 
value added taxes (VAT); we did not allow Rima and CBCC to reduce its 
COP for the amount paid with VAT credits. See Final Results of 
Antidumping Duty Administrative Review: Silicon Metal from Brazil, 65 
FR 7497, 7499 (February 15, 2000); see also Silicon Metal from Brazil: 
Preliminary Results of Antidumping Duty Administrative Review and 
Notice of Intent Not To Revoke Order in Part, 65 FR 47960, 47966 
(August 4, 2000). In addition, for Rima, we corrected the calculation 
of its COP. In its section D questionnaire response, Rima mistakenly 
doubled the value of its total cost of manufacturing (TOTCOM) prior to 
including TOTCOM in the calculation of its COP. See Rima's Preliminary 
Results Calculation Memorandum, dated July 31, 2002.
B. Test of Home Market Sales Prices for CBCC and Rima
    For CBCC and Rima, we compared the per-unit adjusted weighted-
average 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

[[Page 51544]]

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 and Rima
    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 no respondent made comparison-market sales at prices 
below the COP within an extended period of time in substantial 
quantities. Therefore, we did not exclude any sales from our analysis 
in accordance with section 773(b)(1) of the Act.

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 LOT as the U.S. transactions. For LOT analysis, 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 
home market prices were reported exclusive of VAT we made no adjustment 
for this item. However, where home market prices were reported 
inclusive of VAT, we deducted the VAT from the gross home market price, 
consistent with past practice. See Silicon Metal from Brazil: 
Preliminary Results of Antidumping Administrative Review and Notice of 
Intent Not to Revoke Order in Part, 66 FR 40980, 40986 (August 6, 2001; 
aff'd 1999-2000 Silicon Metal from Brazil.
    Pursuant to section 773(a)(6)(B)(iii) of the Act, we deducted taxes 
imposed directly on sales of the foreign like product (VAT, PIS, and 
COFINS taxes), but not collected on the subject merchandise. We note 
that, in past cases involving Brazil, we have determined that since PIS 
and COFINS taxes are levied on total revenues, except for export 
revenues, the taxes are direct taxes (akin to taxes on profits or 
wages) and, as such, should not be deducted from NV. See Certain Cut-
To-Length Carbon Steel Plate From Brazil: Final Results of Antidumping 
Duty Administrative Review, 63 FR 12744, 12746 (March 16, 1998) (Plate 
from Brazil). In Plate from Brazil, the Department determined that 
since these taxes are not indirect taxes, there is no basis on which to 
deduct them in the calculation of NV, according to section 
773(a)(6)(B)(iii) of the Act. Id. However, in a recent countervailing 
duty preliminary determination regarding Certain Cold-Rolled Carbon 
Steel Flat Products from Brazil, the Department preliminarily concluded 
that the PIS and COFINS taxes are indirect. See Notice of Preliminary 
Affirmative Countervailing Duty Determination and Alignment with Final 
Antidumping Duty Determinations: Certain Cold-Rolled Carbon Steel Flat 
Products from Brazil, 67 FR 9652, 9659 (March 4, 2002).
    In reaching this decision, we note that in the Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Carbon and Certain Alloy Steel 
Wire Rod From Brazil (Steel Wire Rod from Brazil), the Department 
examined the legislation underlying the PIS and COFINS in order to 
determine how Brazil assesses these taxes. 67 FR 18586, 18590 (April 
16, 2002). In Steel Wire Rod from Brazil the Department found the 
following:
    Article 2 of the COFINS legislation states that ``corporate 
bodies'' will contribute two percent, ``charged against monthly 
billings, that is, gross revenue derived from the sale of goods and 
services of any nature.'' Likewise, Article ``Second'' of the PIS tax 
law (also found in the PIS and COFINS legislation) provides similar 
language stating that this tax contribution will be calculated ``on the 
basis of the invoicing.'' The PIS legislation further defines invoicing 
under Article ``Third'' to be the gross revenue ``originating from the 
sale of goods.'' Id.
    Section 351.102(b) of the Department's regulations defines an 
indirect tax as a ``sales, excise, turnover, value added, franchise, 
stamp, transfer, inventory, or equipment tax, border tax, or any other 
tax other than a direct tax or an import charge.'' As noted above in 
the discussion of the PIS and COFINS legislation, these taxes are 
derived from the ``monthly invoicing'' or ``invoicing'' originating 
from the sale of goods and services. Therefore, we preliminarily find 
that the manner in which these taxes are assessed is characteristic of 
an indirect tax, which is directly imposed on sales of the foreign like 
product and should be subtracted from NV.
    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 adding an amount for late payment fees earned on 
home market sales, where appropriate. Specifically, for Minasligas, we 
recalculated Minasligas' home market imputed credit expense using a 
surrogate interest rate and the period of time between the date of 
shipment and the date of payment. Regarding Minasligas' reported 
interest rate, Minasligas did not demonstrate that it incurred short-
term borrowings during the POR at the rate it reported in its 
questionnaire response. Therefore, as in the most recently completed 
segment of this proceeding, we have denied Minasligas reported credit 
expense and have used the Special Clearance and Custody System (SELIC), 
as the surrogate interest rate to calculate the expense. See 1999-2000 
Silicon Metal from Brazil, 67 FR 6488 (February 12, 2002) and 
accompanying Decision Memorandum at Comment 1. See also Minasligas' 
Preliminary Results Calculation Memorandum, dated July 31, 2002.
    Specifically, for CBCC, we recalculated CBCC's home market imputed 
credit expense using a surrogate interest rate. We reviewed 
documentation at verification pertaining to CBCC's short-term borrowing 
activity during the POR and found the activity to be outside the 
``normal course of trade.'' In particular, at the verification of CBCC, 
conducted June 13, 2002, through June 14, 2002, CBCC characterized its 
own short-term borrowing activity during this POR as rare. See CBCC's 
Verification Report, dated July 15, 2002. We therefore determine that 
CBCC's short-term borrowing during this POR, was not in

[[Page 51545]]

the ``normal course of trade.'' Consequently, as in the most recently 
completed segment of this proceeding, we have denied CBCC's reported 
credit expense and have used the SELIC rate to calculate the expense. 
See Silicon Metal 1999-2000, 67 FR 6488 (February 12, 2002) and 
accompanying Decision Memorandum at Comment 18.
    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.

Currency Conversions

    We made currency conversions in accordance with section 773A of the 
Act based on the exchange rates in effect on the dates of the U.S. 
sales as certified by the Federal Reserve Bank.

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, 
2000 through June 30, 2001, and we preliminarily determine not to 
revoke the order covering silicon metal from Brazil with respect to 
sales of subject merchandise by Minasligas. However, we do 
preliminarily determine to revoke the order covering silicon metal from 
Brazil with respect to sales of subject merchandise by Rima.

------------------------------------------------------------------------
                                                        Weighted-average
                Manufacturer/exporter                  Margin Percentage
------------------------------------------------------------------------
CBCC.................................................               0.00
Minasligas...........................................               4.30
Rima.................................................               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, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-20077 Filed 8-7-02; 8:45 am]
BILLING CODE 3510-DS-S