[Federal Register Volume 67, Number 183 (Friday, September 20, 2002)]
[Notices]
[Pages 59253-59263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24004]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-817]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Silicon Metal From the 
Russian Federation

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

ACTION: Notice of preliminary determination of the less-than-fair-value 
investigation of silicon metal from the Russian Federation and 
postponement of the final determination.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce (``the Department'') has 
preliminarily determined that imports of silicon metal from the Russian 
Federation (''Russia'') are being, or are likely to be, sold in the 
United States at less than fair value (``LTFV'').

EFFECTIVE DATE: September 20, 2002.

FOR FURTHER INFORMATION CONTACT: Carrie Blozy or Cheryl Werner, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230;

[[Page 59254]]

telephone: (202) 482-0409 and (202) 482-2667, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    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. In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations codified at 19 CFR Part 351 (2002).

Background

    On March 27, 2002, the Department initiated 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 LTFV. See 
Notice of Initiation of Antidumping Duty Investigation: Silicon Metal 
from the Russian Federation, 67 FR 15791 (April 3, 2002) (``Notice of 
Initiation''). The Department set aside a period for all interested 
parties to raise issues regarding product coverage. See Notice of 
Initiation. The Department received no comments on product coverage 
from interested parties.
    On April 16, 2002, the Department requested information from the 
U.S. Embassy in Russia to identify producers/exporters of the subject 
merchandise.
    On April 18, 2002, the United States International Trade Commission 
(''ITC'') issued its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured by reason of imports of the subject merchandise from 
the Russian Federation. See Silicon Metal from Russia, 67 FR 20993 
(April 29, 2002) (''ITC Preliminary Determination'').
    On April 23, 2002, the Department issued its antidumping 
questionnaire to the Trade Representative of the Russian Federation to 
the USA with a letter requesting that it forward the questionnaire to 
all manufacturers and exporters in Russia of silicon metal, and stated 
that complete questionnaire responses were required from producers/
exporters who had sales, shipments, or entries of the subject 
merchandise into the United States during the period of investigation 
(``POI''). We also sent courtesy copies of the antidumping 
questionnaire to the following possible producers/exporters of subject 
merchandise: SUAL Holding, ZAO Kremny, SUAL-Kremny-Ural Ltd (``SKU''), 
and Pultwen Limited (``Pultwen Ltd.'') as well as Bratsk Aluminum 
Smelter (``BAS''). We received Section A responses from ZAO Kremny/SKU 
and Pultwen Ltd. as well as BAS and Rual Trade Limited (``RTL'') on May 
29, 2002. On June 11, 2002, we received comments from petitioners \1\ 
on BAS and RTL's Section A response. On June 12, 2002, we received 
comments from petitioners on ZAO Kremny/SKU and Pultwen Ltd's Section A 
response. On June 17, 2002, we received Sections C and D responses from 
ZAO Kremny/SKU and Pultwen Ltd. and from BAS and RTL.
---------------------------------------------------------------------------

    \1\ 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 ``petitioners.''
---------------------------------------------------------------------------

    On June 18, 2002, we issued supplemental Section A questionnaires 
to ZAO Kremny/ SKU and Pultwen Ltd. and to BAS and RTL. On June 21, 
2002, and June 27, 2002, we received comments from petitioners on BAS 
and RTL's Sections C and D responses and ZAO Kremny/SKU and Pultwen 
Ltd's Sections C and D responses, respectively. On June 28, 2002, we 
issued supplemental Sections C and D questionnaires to ZAO Kremny/SKU 
and Pultwen Ltd. and to BAS and RTL. On July 3, 2002, we received 
supplemental Section A responses from ZAO Kremny/SKU and Pultwen Ltd. 
and from BAS and RTL. On July 3, 2002, we issued a second supplemental 
Sections A and C questionnaire to ZAO Kremny/SKU and Pultwen Ltd., 
including a request that they report their sales through a U.S. trading 
company. On July 15, 2002, we received comments from petitioners on BAS 
and RTL's supplemental Section A response. On July 16, 2002, we issued 
a second supplemental Section A questionnaire to BAS and RTL. On July 
19, 2002, we received supplemental Sections C and D responses from BAS 
and RTL and from ZAO Kremny/SKU and Pultwen Ltd. Also, on July 19, 
2002, we received second supplemental Sections A and C responses from 
ZAO Kremny/SKU and Pultwen Ltd. On July 26, 2002, we received a section 
A questionnaire response from a U.S. trading company that purchased 
Russian silicon metal from Pultwen Ltd. during the POI.
    On July 26, 2002, we received comments from petitioners on ZAO 
Kremny/SKU and Pultwen Ltd's responses for Sections C and D and 
supplemental Sections A and C. On July 29, 2002, ZAO Kremny/SKU and 
Pultwen Ltd. submitted a revised U.S. sales listing. On July 29, 2002, 
we received comments from petitioners on BAS and RTL's joint 
supplemental Sections C and D responses. On July 30, 2002, we issued a 
fourth supplemental questionnaire to ZAO Kremny/SKU and Pultwen Ltd, 
again requesting that they report sales through the U.S. trading 
company. On July 31, 2002, we received the second supplemental Section 
A response from BAS and RTL. On August 13, 2002, we received ZAO 
Kremny/SKU and Pultwen Ltd's second supplemental Sections C and D 
response and on August 20, 2002, we received the second supplemental 
Sections C and D responses from BAS and RTL. On August 20, 2002, we 
issued a fifth supplemental questionnaire to ZAO Kremny/SKU and Pultwen 
Ltd., again requesting the U.S. trading company's sales information, 
and received their response on August 27, 2002. On August 22, 2002, 
petitioners submitted comments concerning the relationship between ZAO 
Kremny/SKU, Pultwen Ltd. and a U.S. trading company. On August 27, 
2002, the Department determined that Pultwen Ltd. and a U.S. trading 
company were affiliated through a principal/agent relationship. See 
Memorandum For Joseph A. Spetrini, Deputy Assistant Secretary for 
Import Administration, Group III: Antidumping Investigation of Silicon 
Metal from Russia; Affiliation Memorandum of Pultwen Limited and U.S. 
Trading Company, dated August 27, 2002 (``Affiliation Memo for Pultwen 
and U.S. Trading Company''). On August 28, 2002, we again requested 
that ZAO Kremny/SKU and Pultwen Ltd. provide their affiliated U.S. 
trading company's sales and received their response on September 4, 
2002. Also, on August 28, 2002, we issued a third supplemental 
questionnaire to BAS and RTL and received their response on September 
4, 2002. On August 29, 2002, petitioners submitted comments concerning 
the application of adverse facts available for ZAO Kremny/SKU, Pultwen, 
and the affiliated U.S. trading company.
    On August 2, 2002, the Department determined the investigation was 
extraordinarily complicated and postponed the preliminary determination 
by 30 days, until September 13, 2002. See Notice of Postponement of 
Preliminary Determination of Antidumping Duty Investigation: Silicon 
Metal from the Russian Federation, 67 FR 51834 (August 9, 2002).

[[Page 59255]]

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on September 6, 2002, ZAO
    Kremny/SKU and Pultwen Ltd. requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until not later than 135 
days after the date of the publication of the preliminary determination 
in the Federal Register and extend the provisional measures to not more 
than six months. On September 10, 2002, BAS and RTL also requested that 
the Department fully postpone its final determination, in accordance 
with section 735(a)(2) of the Act, and agreed to the extension of 
provisional measures to not more than six months. In accordance with 19 
CFR 351.210(b)(2)(ii) and (e), because (1) our preliminary 
determination is affirmative, (2) ZAO Kremny/SKU and Pultwen Ltd. and 
BAS and RTL account for a significant proportion of exports of the 
subject merchandise, and (3) no compelling reasons for denial exist, we 
are granting the respondents' request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly.

Period of Investigation

    The POI is July 1, 2001, through December 1, 2001. This period 
corresponds to the two most recent fiscal quarters prior to the month 
of the filing of the petition (March 7, 2001). See 19 CFR 
351.204(b)(1).

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.

Critical Circumstances

    According to section 733(e)(1) of the Act, if critical 
circumstances are alleged under section 733(e) of the Act, the 
Department must examine whether there is a reasonable basis to believe 
or suspect that: (A)(i) There is a history of dumping and material 
injury by reason of dumped imports in the United States or elsewhere of 
the subject merchandise, or (ii) the person by whom, or for whose 
account, the merchandise was imported knew or should have known that 
the exporter was selling the subject merchandise at less than its fair 
value and there was likely to be material injury by reason of such 
sales, and (B) there have been massive imports of the subject 
merchandise over a relatively short period. Section 351.206(h)(1) of 
the Department's regulations provides that, in determining whether 
imports of the subject merchandise have been ``massive,'' the 
Department normally will examine: (i) The volume and value of the 
imports; (ii) seasonal trends; and (iii) the share of domestic 
consumption accounted for by the imports. In addition, section 
351.206(h)(2) of the Department's regulations provides that an increase 
in imports during the ``relatively short period'' described in section 
351.206(i) of over 15 percent may be considered ``massive.'' Section 
351.206(i) of the Department's regulations defines ``relatively short 
period'' normally as the period beginning on the date the proceeding 
begins (i.e., the date the petition is filed) and ending at least three 
months later.
    On July 31, 2002, petitioners submitted an allegation of critical 
circumstances with respect to imports of silicon metal from Russia. On 
August 2, 2002, the Department requested shipment information from ZAO 
Kremny/SKU, and Pultwen Ltd.\2\ and BAS and RTL.\3\ On August 12, 2002, 
ZAO Kremny/SKU and Pultwen Ltd. and BAS and RTL each submitted shipment 
information and commented on the allegation that critical circumstances 
exist with respect to imports of silicon metal from Russia. On August 
29, 2002, petitioners submitted additional comments on the critical 
circumstances determination. On September 10, 2002, BAS and RTL 
submitted additional shipment information for August 2002, and 
commented on petitioners' August 29, 2002, comments. However, because 
of the lateness of the September 10, 2002, submission, we are not able 
to analyze the data for the preliminary determination and will consider 
it for the final.
---------------------------------------------------------------------------

    \2\ The Department has determined that ZAO Kremny and SKU, which 
are parts of SUAL-Holding Group, are affiliated with Pultwen Ltd. 
See Memorandum to Joseph A. Spetrini, Deputy Assistant Secretary for 
Import Administration: Antidumping Investigation of Silicon Metal 
from Russia; Affiliation Memorandum of Pultwen Limited and ZAO 
Kremny and SUAL-Kremny-Ural (``Affiliation Memo''), dated September 
11, 2002.
    \3\ RTL is the exporter of BAS's subject merchandise.
---------------------------------------------------------------------------

    In their August 12, 2002, submission, BAS and RTL make several 
arguments as to why the criteria for a finding that critical 
circumstances exist are not satisfied in this case. First, BAS and RTL 
argue that the margin alleged in the petition cannot be considered a 
reliable source of information from which to impute knowledge of 
dumping to importers of silicon metal from Russia. BAS and RTL note 
that it is the Department's normal practice to rely on its own 
estimated dumping margins in determining whether to impute knowledge of 
dumping in the absence of a history of dumping and material injury with 
respect to silicon metal from Russia in the United States and other 
countries. BAS and RTL assert that the petition was filed over five 
months ago (on March 7, 2002), and that the initiation margin is based 
on aberrational surrogate values from Egypt, including the value for 
quartzite. BAS and RTL submit that respondents have provided 
information demonstrating that Egypt is not an appropriate surrogate 
country for Russia.
    BAS and RTL also argue in their August 12, 2002, submission that 
since the filing of the petition imports of silicon metal from Russia 
have not been massive considering high market volatility and 
seasonality. Citing the Antidumping Manual, Chapter 10, page 4, and 
Sulfanilic Acid from the People's Republic of China, 57 FR 29705, 29708 
(July 6, 1992), BAS and RTL claim that the Department's practice 
indicates that a six-month period from March 2002 to August 2002 should 
be examined in comparison to the prior six month period, rather than 
the three-month period proposed by petitioners. BAS and RTL provide a 
graph showing the average change in the level of silicon metal imports 
from month to month for the period 1998 to 2001, which they assert 
shows that the average percent change in the level of silicon metal 
imports from month to month was plus or minus forty-one percent. BAS 
and RTL conclude that based on these ``dramatic'' changes in silicon 
metal import levels, an unrepresentative comparison may result if the 
base period and comparison period chosen are too short. They claim that 
to avoid these distortions, the Department should examine the full 
period from the petition to the preliminary determination in comparison 
to an equal period prior to the petition.

[[Page 59256]]

    BAS and RTL also contend in their August 12, 2002, submission that 
the Department should consider that imports of silicon metal from 
Russia have maintained a stable proportion of total silicon metal 
imports. Moreover, citing shipment data provided by BAS and RTL, they 
contend that frozen conditions at the port of St. Petersburg may cause 
a drop in import levels from Russia during January, February, and 
March, and then cause apparent surges in Russian imports in the early 
spring.
    Respondents ZAO Kremny/SKU and Pultwen Ltd. maintain that based on 
a five-month comparison period, the monthly shipment data they provided 
shows that there has been no post-petition surge in the quantity of 
silicon metal shipped to the United States after the filing of the 
petition.
    In their August 29, 2002, submission, petitioners allege that BAS 
and RTL and ZAO Kremny/SKU and Pultwen improperly reported their 
shipment data, and suggest that the Department should rely on the 
official import data in examining critical circumstances. Citing Notice 
of Preliminary Determination of Critical Circumstances: Silicomanganese 
From India, 66 FR 53207, 53208 (``October 19, 2001'') 
(``Silicomanganese from India''); Notice of Preliminary Affirmative 
Countervailing Duty Determination, Preliminary Affirmative Critical 
Circumstances Determination and Alignment of Final Countervailing Duty 
Determination with Final Antidumping Duty Determination Certain 
Softwood Lumber Products from Canada, 66 FR 43186, 43190 (August 17, 
2001); and Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Steel Concrete 
Reinforcing Bars from Latvia, 66 FR 8323, 8325 (January 30, 2001) 
(''Rebars from Latvia''), petitioners maintain that the Department has 
used a three-month pre-filing and post-filing period in numerous 
instances, and there is no reason to deviate from this practice in this 
investigation. They argue that BAS and RTL have not provided evidence 
to demonstrate that their seasonality argument is valid.
    In determining whether the statutory criteria have been satisfied, 
we examined: (1) The evidence presented in petitioners' July 31, 2002, 
allegation of critical circumstances; (2) new evidence obtained since 
the initiation of the LTFV investigation (i.e., additional import 
statistics released by the Census Bureau and company-specific shipment 
information); and (3) the ITC preliminary injury determination.
    Because we are not aware of and there is no record evidence of any 
antidumping order in any country on silicon metal from Russia, we find 
that there is no reasonable basis to believe or suspect that there is a 
history of dumping and material injury by reason of dumped imports in 
the United States or elsewhere of the subject merchandise. Therefore, 
we must look to whether there was importer knowledge under section 
733(e)(1)(A)(ii). In determining whether there is a reasonable basis to 
believe or suspect that an importer knew or should have known that the 
exporter was selling silicon metal at less than fair value, the 
Department normally considers margins of 25 percent or more for export 
price (``EP'') sales and 15 percent or more for constructed export 
price (``CEP'') sales sufficient to impute knowledge of dumping. See 
Certain Cut-to-Length Carbon Steel Plate From the People's Republic of 
China, 62 FR 31972, 31978 (June 11, 1997). As noted by BAS and RTL, the 
Department generally bases its decision, with respect to knowledge, on 
the margins calculated in the preliminary determination. As indicated 
above, all sales by BAS and RTL are properly classified as EP sales. 
All sales from ZAO Kremny, SKU, and Pultwen Ltd. through the U.S. 
trading company are properly classified as CEP sales, all other sales 
from ZAO Kremny, SKU, and Pultwen Ltd. are properly classified as EP 
sales. The margins for BAS and RTL and ZAO Kremny, SKU, and Pultwen are 
in excess of 25 percent. Therefore, we impute knowledge of dumping in 
regard to exports by these companies.
    Moreover, in determining whether there is a reasonable basis to 
believe or suspect that an importer knew or should have known that 
there was likely to be material injury by reason of dumped imports, the 
Department may look to the preliminary injury determination of the ITC. 
If the ITC finds a reasonable indication of present material injury to 
the relevant U.S. industry, the Department normally determines that a 
reasonable basis exists to impute importer knowledge that there was 
likely to be material injury by reason of dumped imports. Id. The ITC 
has found that a reasonable indication of present material injury 
exists in regard to Russia. See ITC Preliminary Determination. As a 
result, the Department has determined that there is a reasonable basis 
to believe or suspect that importers knew or should have known that 
there was likely to be material injury by reason of dumped imports in 
this case.
    In determining whether there are ``massive imports'' over a 
``relatively short period,'' the Department ordinarily bases its 
analysis on import data for at least the three months preceding (the 
base period) and following (the comparison period) the filing of the 
petition. See 19 CFR 351.206(i). Imports normally will be considered 
massive when imports during the comparison period have increased by 15 
percent or more compared to imports during the base period. See 19 CFR 
351.206(h). We agree with respondents that it is our normal practice to 
include in our analysis data concerning the respondents' imports of 
subject merchandise up to the date of the preliminary determination, 
where such data are available. See, e.g., Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Softwood Lumber Products from 
Canada, 67 FR 15539, 15540 (April 2, 2002) (``Lumber from Canada''); 
Aramid Fiber of Poly-Phenylene Terephthalamide From the Netherlands, 59 
FR 23684, 23687 (May 6, 1994) and Final Determination of Sales at Less 
Than Fair Value; Stainless Steel Sheet and Strip in Coils From Germany, 
64 FR 30710, 30729 (June 8, 1999). Of the cases cited by petitioners, 
we note that in Silicomananese from India, we used all the company-
specific shipment information available at the time of the preliminary 
determination, which resulted in a five-month comparison period, and in 
Rebars from Latvia, it is unclear what time period was used by the 
Department, although in the other rebar investigations we used an 
eight-month comparison period, which incorporated all of the 
information available at the time of the preliminary determination (see 
Preliminary Determinations of Critical Circumstances: Steel Concrete 
Reinforcing Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 
2000)). Although we used a three-month comparison period in the 
preliminary determination in the countervailing duty investigation of 
lumber from Canada, in the final determination the Department did not 
address whether it should use additional data because the first prong 
of the test was not met. In the antidumping investigation of lumber 
from Canada, we used a six-month period. See Lumber from Canada. 
Because we agree with BAS and RTL that a longer period is appropriate, 
we have not considered the other arguments presented by BAS and RTL 
against a finding of ``massive imports'' (e.g., volatility in silicon 
metal imports and seasonality) and petitioners' counter-arguments.

[[Page 59257]]

    In this instance, both respondents have submitted shipment data 
through July 2002. BAS and RTL reported its shipments data based on the 
``bill of lading'' month, and ZAO Kremny/SKU and Pultwen Ltd. reported 
shipments data using two different methodologies: The first data based 
on the date of invoice to the U.S. customer for all sales and the 
second based on different shipment methodologies for the two plants. In 
their original Section C Response, BAS and RTL explained that the date 
of shipment reported in the U.S. sales listing was the date on which 
the merchandise was loaded onto the ocean vessel at the port. See June 
17, 2002, submission at 5. In describing its sales process, BAS and RTL 
noted that after production BAS informs RTL of the amount of silicon 
metal produced and available for sale and then loads the silicon metal 
onto railcars for shipment to a bonded warehouse in St. Petersburg, 
where it is stored for a certain length of time until shipment. See May 
29, 2002, submission at 15 and 18. Because BAS and RTL invoice their 
sales of silicon metal to the United States while the material is 
stored at a bonded warehouse, we disagree with petitioners that the 
date of shipment from BAS's plant would be the appropriate date on 
which to base shipment data for purposes of our critical circumstances 
analysis. Moreover, based on an analysis of BAS and RTL's questionnaire 
responses, we find that the bill of lading date is an appropriate proxy 
for the date of shipment of the silicon metal from the bonded 
warehouse. See June 17, 2002, submission at 9. Therefore, for BAS and 
RTL we determine that it is appropriate to rely on the shipment date 
provided. With respect to ZAO Kremny/SKU and Pultwen Ltd., petitioners 
specifically challenge the methodology used to report SKU's shipments. 
ZAO Kremny/SKU and Pultwen defined date of shipment for ZAO Kremny as 
the date of shipment from the plant, and defined date of shipment for 
SKU as the date of shipment from the port. See July 2, 2002, submission 
at 18. ZAO Kremny/SKU,and Pultwen Ltd. explained that the date of 
shipment was defined differently because of differences in the sales 
process. See August 13, 2002, submission at 2. Based on the information 
provided by ZAO Kremny/SKU and Pultwen, we determine that given the 
different sales processes for sales produced by the ZAO Kremny plant 
and the SKU plant, ZAO Kremny/SKU and Pultwen Ltd. have properly 
defined date of shipment for both SKU and ZAO Kremny. See July 2, 2002, 
submission at Exhibit A-9. Consequently, for purposes of our critical 
circumstances analysis, we have relied on the shipment data prepared by 
ZAO Kremny/SKU and Pultwen Ltd. based on their defined date of shipment 
for each plant.
    Accordingly, for both respondents we have based our analysis on 
shipment data for the five months preceding (the base period) and 
following (the comparison period) the filing of the petition. Pursuant 
to 19 CFR 351.206(h), we analyzed respondents' shipment data and found 
that imports were not massive as imports in the comparison period did 
not increase by at least 15 percent over imports in the base period. We 
therefore preliminarily find that critical circumstances do not exist 
with respect to BAS and RTL and ZAO Kremny/SKU and Pultwen Ltd.
    With respect to exporters subject to the ``Russia-wide'' rate, the 
Department has considered the traditional critical circumstances 
criteria to determine whether critical circumstances exist. First, the 
dumping margin for the Russia-wide entity, 123.62 percent, exceeds the 
25 percent threshold necessary to impute knowledge of dumping. Second, 
based on the ITC's preliminary material injury determination, we also 
find that importers knew or should have known that there would be 
material injury from sales of the dumped merchandise by respondents 
other than BAS and RTL and ZAO Kremny/SKU and Pultwen. With respect to 
massive imports for the Russia-wide entity, U.S. Customs data do not 
permit the Department to analyze imports from the Russia-wide entity of 
the product at issue, because it is not possible to link (and therefore 
subtract out) individual exporter's reported shipment data with U.S. 
Customs import data (e.g., due to time differentials between export 
from Russia and import into the United States, the involvement of 
resellers, and split shipments). Because the U.S. Customs data include 
imports from companies who have cooperated in this investigation, we 
are therefore unable to analyze whether there have been massive imports 
from the single Russia-wide entity using information specific to the 
Russia-wide entity. In addition, we found no other independent sources 
of information covering all exports from the Russia-wide entity. 
Because we have no independent means by which to determine import 
levels for the Russia-wide entity, we have determined, as adverse facts 
available, that because this entity did not provide an adequate 
response to our questionnaire, there were massive imports of subject 
merchandise. This is consistent with past Department practice. See 
e.g., Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Automotive Replacement Glass Windshields From the 
People's Republic of China, 67 FR 48233, 48239 (September 19, 2001); 
and Notice of Final Determination of Sales at Less Than Fair Value; 
Certain Preserved Mushrooms from the People's Republic of China, 63 FR 
72255, 72263 (December 31, 1998). We further note that in the instant 
case, aggregate imports of silicon metal from Russia during the 
comparison period increased by 19 percent. Therefore, because all of 
the necessary criteria have been met, in accordance with section 
733(e)(1) of the Act, the Department preliminarily finds that critical 
circumstances do exist with respect to the Russia-wide entity.

Non-Market Economy Country Status

    On June 6, 2002, the Department revoked Russia's status as a non-
market economy (``NME''), effective April 1, 2002. See Memorandum from 
Albert Hsu, Barbara Mayer, and Christopher Smith through Jeffrey May, 
Director, Office of Policy, to Faryar Shirzad, Assistant Secretary, 
Import Administration: Inquiry into the Status of the Russian 
Federation as a Non-Market Economy Country under the U.S. Antidumping 
Law, dated June 6, 2002. On June 20, 2002, BAS and RTL requested the 
Department analyze the transactions of these companies for this 
investigation in accordance with the antidumping rules applicable to 
market economies. BAS and RTL stated that the Department's analysis of 
Russia's economy ``was based on a review of historic data that applies 
to the investigation period in this case, July 1 through December 31.'' 
See Letter from BAS and RTL, dated June 20, 2002. Because the period of 
investigation pre-dates the effective date of the Department's 
determination, we are continuing to utilize our methodology in this 
investigation. Should an antidumping order be issued in this case, the 
NME antidumping duty rates will remain in effect until they are changed 
as a result of a review, pursuant to section 751 of the Act, of a 
sufficient period of time after April 1, 2002.

Separate Rates

    It is the Department's policy to assign all exporters of subject 
merchandise in an NME country a single rate, unless an exporter can 
demonstrate that it is sufficiently independent so as to be entitled to 
a separate rate. BAS and RTL (the exporter of BAS's subject

[[Page 59258]]

merchandise) and ZAO Kremny/SKU have submitted separate rates 
information in their section A responses, have stated that there is no 
element of government control, and have requested a separate, company-
specific rate.
    The Department's separate rates test is unconcerned, in general, 
with macroeconomic/ border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 
61279 (November 17, 1997); and Honey from the People's Republic of 
China: Preliminary Determination of Sales at Less than Fair Value, 60 
FR 14725, 14726 (March 20, 1995). To establish whether a firm is 
sufficiently independent from government control to be entitled to a 
separate rate, the Department analyzes each exporting entity under a 
test arising out of the Final Determination of Sales at Less Than Fair 
Value: Sparklers From the People's Republic of China, 56 FR 20588 (May 
6, 1991) (``Sparklers''), as modified by Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide From the People's Republic of 
China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide''). Under the 
separate rates criteria, the Department assigns separate rates in NME 
cases only if the NME respondents can demonstrate the absence of both 
de jure and de facto governmental control over export activities. See 
Silicon Carbide and Final Determination of Sales at Less Than Fair 
Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 
22545 (May 8, 1998).

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies. 
See Sparklers, 56 FR at 20508. Respondents have placed on the record a 
number of documents to demonstrate absence of de jure control, 
including: (1) The Federal Law on Joint Stock Companies (November 24, 
1995); (2) the Russian Federation Federal Act on State Regulation of 
Foreign Trade Activity (July 7, 1995) (amended as Federal Law No. 32-FZ 
(February 10, 1999)); (3) the President of the Russian Federation's 
Decree No. 721 (July 1, 1992); and (4) the Russian Federation Civil 
Code (October 21, 1994) at Articles 49 and 50. In prior cases, the 
Department has analyzed these laws and found that they establish an 
absence of de jure control. See, e.g., Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Cold-Rolled Flat-Rolled 
Carbon-Quality Steel Products From the Russian Federation, 64 FR 61261, 
61268 (November 10, 1999); see also Notice of Preliminary Determination 
of Sales at Less Than Fair Value: Solid Fertilizer Grade Ammonium 
Nitrate From the Russian Federation, 65 FR 1139, 1142 (January 7, 
2000).\4\ We have no new information in this proceeding which would 
cause us to reconsider this determination. According to BAS and RTL and 
ZAO Kremny/SKU, silicon metal exports are not affected by export 
licensing provisions or export quotas. Based on the assertions of BAS 
and RTL and ZAO Kremny/SKU, we preliminarily determine that there is an 
absence of de jure government control over the pricing and marketing 
decisions of BAS and RTL and ZAO Kremny/SKU with respect to these 
companies' silicon metal export sales.
---------------------------------------------------------------------------

    \4\ The Department's findings in the preliminary determinations 
of these proceedings were unchanged in the final determinations. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From 
the Russian Federation, 65 FR 5510, 5518 (February 4, 2000) 
(``Russian Cold-Rolled Final Determination'') and Notice of Final 
Determination of Sales at Less Than Fair Value; Solid Fertilizer 
Grade Ammonium Nitrate From the Russian Federation, 65 FR 42669, 
42671 (July 11, 2000).
---------------------------------------------------------------------------

2. Absence of De Facto Control

    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by, or 
subject to, the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts, and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of its management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. BAS and RTL and ZAO Kremny/SKU have each asserted 
the following: Each company
    (1) establishes its own export prices; (2) negotiates contracts 
without guidance from any governmental entities or organizations; (3) 
makes its own personnel decisions; and (4) retains the proceeds of its 
export sales and uses profits according to its business needs although 
in accordance with the Law on Hard Currency Regulation and Control, 
they are obligated to sell 50 percent of all foreign currency earned. 
Additionally, respondents' questionnaire responses indicate that 
company-specific pricing during the POI does not suggest coordination 
among exporters. This information supports a preliminary finding that 
there is an absence of de facto governmental control of the export 
functions of these companies. Consequently, we preliminarily determine 
that BAS and RTL and ZAO Kremny and SKU have met the criteria for the 
application of separate rates.

Russia-Wide Rate

    In NME cases, it is the Department's policy to assume that all 
exporters located in the NME comprise a single exporter under common 
control, the ``NME entity.'' This presumption can be rebutted. The 
Department assigns a single NME rate to the NME entity unless an 
exporter can demonstrate eligibility for a separate rate. All exporters 
were given the opportunity to respond to the Department's 
questionnaire. As explained above, we received timely Section A 
responses from ZAO Kremny/SKU and Pultwen Ltd., and BAS and RTL. Our 
review of U.S. import statistics, however, reveals that these companies 
did not account for all imports of subject merchandise into the United 
States from Russia. We received no responses from other exporters. 
Accordingly, we are applying a single antidumping rate--the Russia-wide 
rate--to all exporters in Russia based on our presumption that those 
respondents who failed to respond to the initial questionnaire 
constitute a single enterprise under common control by the Russian 
government. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Bicycles from the People's Republic of China, 61 FR 19026 (April 
30, 1996) (``Bicycles''). The Russia-wide rate applies to all entries 
of subject merchandise except for entries from ZAO Kremny/SKU and BAS.

[[Page 59259]]

Use of Facts Otherwise Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information which cannot be verified, the 
Department shall use, subject to sections 782(d) and (e) of the Act, 
facts otherwise available in reaching the applicable determination. 
Thus, pursuant to section 776(a) of the Act, the Department is required 
to apply, subject to section 782(d), facts otherwise available. 
Pursuant to section 782(e), the Department shall not decline to 
consider such information if all of the following requirements are met: 
(1) The information is submitted by the established deadline; (2) the 
information can be verified; (3) the information is not so incomplete 
that it cannot serve as a reliable basis for reaching the applicable 
determination; (4) the interested party has demonstrated that it acted 
to the best of its ability; and (5) the information can be used without 
undue difficulties.

Facts Available

Russia-Wide Entity
    Section 776(a)(2)(A) of the Act requires the Department to use 
facts available when a party withholds information which has been 
requested by the Department. As explained above, certain exporters of 
the subject merchandise failed to respond to the Department's request 
for information. Pursuant to section 776(a) of the Act, in reaching our 
preliminary determination, we have used total facts available for the 
Russia-wide rate because these entities did not respond.
ZAO Kremny/SKU
    Section 776(a)(2)(A) of the Act requires the Department to use 
facts available when a party withholds information which has been 
requested by the Department. As indicated in the ``Background'' section 
above, on August 27, 2002, the Department determined that Pultwen Ltd. 
is affiliated with a U.S. trading company through a principal/agent 
relationship. See Affiliation Memo for Pultwen and U.S. Trading 
Company. Consequently, for purposes of our margin analysis for ZAO 
Kremny/SKU and Pultwen Ltd., it is necessary for the Department to 
examine the affiliated U.S. trading company's sales of Russian silicon 
metal rather than Pultwen's sales to the affiliated U.S. trading 
company. On July 3, July 30, August 20, and August 28, 2002, the 
Department requested that ZAO Kremny/SKU and Pultwen Ltd. report the 
U.S. trading company's resales of silicon metal purchased from Pultwen 
to unaffiliated parties during the POI and that they provide a complete 
Section C questionnaire response for the U.S. trading company. In the 
Department's July 3, 2002, questionnaire, the Department also requested 
that ZAO Kremny/SKU and Pultwen Ltd. provide a Section A questionnaire 
response for the U.S. trading company, which was submitted on July 26, 
2002. However, ZAO Kremny/SKU and Pultwen Ltd. did not provide the U.S. 
trading company's U.S. sales of silicon metal. In their August 27, 
2002, submission, ZAO Kremny/SKU and Pultwen Ltd. explained that 
``despite repeated requests, {the U.S. trading company[ballot] has 
declined to provide this information'' and thus ``it is regrettably 
impossible to comply with the Department's request.'' See August 27, 
2002, submission at 4-5; and see also August 13, 2002, submission at 4-
5. ZAO Kremny/SKU and Pultwen Ltd. provided copies of correspondence 
with the U.S. trading company. As the correspondence is proprietary, 
the summary of this correspondence can be found in the business 
proprietary version of the ZAO Kremny/SKU Analysis Memorandum for the 
Preliminary Determination, dated September 13, 2002. In their July 26, 
August 13, and August 27, 2002, submissions, ZAO Kremny/SKU and Pultwen 
Ltd. argue that this data is not necessary for the Department's 
analysis as there can be no finding of an agency relationship based on 
the facts in this case and the Department's practice in other cases. In 
their August 29, 2002, submission, petitioners argue that the 
Department should apply total facts available to ZAO Kremny/SKU and 
Pultwen Ltd., and the affiliated trading company. Moreover, they claim 
that the Department should apply an adverse inference.
    The Department has determined that the U.S. trading company is 
affiliated with Pultwen. See Affiliation Memo. Interested parties will 
have a chance to comment on this determination according to the 
briefing schedule outlined below. However, for purposes of the 
preliminary determination, the Department is required to base its 
analysis on the affiliated U.S. trading company's U.S. sales of silicon 
metal. Because these sales were not reported, we must use the facts 
available. Silicon metal sales by ZAO Kremny/SKU and Pultwen Ltd. to 
the affiliated U.S. trading company constitute a significant proportion 
of their total sales of silicon metal to the United States during the 
POI. We cannot determine the volume of U.S. sales made by the 
affiliated U.S. trading company because of the failure of respondents 
to submit the requested sales data. Therefore, based on the significant 
proportion of sales to the affiliated U.S. trading company, we must 
presume that sales of the subject merchandise by the affiliated trading 
company are also significant. However, we do not find that the 
application of total facts available is appropriate in this case. 
Therefore, we are only applying facts available to that quantity of 
U.S. sales sold to the affiliated U.S. trading company during the POI. 
We disagree with ZAO Kremny/SKU and Pultwen Ltd.'s argument that the 
Department could use the sales information on the record from the 
affiliated U.S. trading company. The Department does not have the 
starting price or quantity for the CEP sales from the affiliated U.S. 
trading company during the POI, and there is not complete and 
verifiable information for the affiliated U.S. trading company's 
expenses. Therefore, pursuant to section 776(a) of the Act, in reaching 
our preliminary determination, we have used partial facts available for 
ZAO Kremny/SKU.

Adverse Facts Available

    Section 776(b) of the Act provides that, in selecting from among 
the facts available, the Department may employ adverse inferences when 
an interested party fails to cooperate by not acting to the best of its 
ability to comply with requests for information. Adverse inferences are 
appropriate ``to ensure that the party does not obtain a more favorable 
result by failing to cooperate than if it had cooperated fully.'' See 
Statement of Administrative Action (``SAA'') accompanying the URAA, 
H.R. Doc. No. 103-316, at 870 (1994). Furthermore, ``affirmative 
evidence of bad faith on the part of the respondent is not required 
before the Department may make an adverse inference.'' See Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27340 (May 19, 
1997). The statute and SAA provide that such an adverse inference may 
be based on secondary information, including information drawn from the 
petition.
Russia-Wide Rate
    The complete failure of these exporters to respond to the 
Department's requests for information constitutes a failure to 
cooperate to the best of their ability. Therefore, pursuant

[[Page 59260]]

to section 776(b) of the Act, the Department preliminarily finds that, 
in selecting from among the facts available, an adverse inference is 
appropriate.
ZAO Kremny/SKU
    ZAO Kremny/SKU and Pultwen Ltd. have explained that they repeatedly 
requested that the U.S. trading company submit its sales of silicon 
metal, but that they were unable to compel the U.S. trading company to 
provide this information. Nevertheless, it was also the responsibility 
of the affiliated U.S. trading company to provide its sales 
information. The sales of ZAO Kremny/SKU and Pultwen Ltd. through their 
affiliated U.S. trading company are CEP sales (see below). For purposes 
of the CEP transaction, in essence, ``the statute treats the exporter 
and the U.S. affiliate collectively, rather than independently, 
regardless of whether the exporter controls the affiliate.'' See Notice 
of Final Determination of Sales at Less Than Fair Value: Hot-Rolled 
Flat-Rolled Carbon-Quality Steel Products From Japan, 64 FR 24329, 
24367-68 (May 6, 1999) (``Hot-Rolled Steel from Japan''). Thus, because 
the statute requires that the Department base its margin calculations 
for the affiliated U.S. trading company's sales on record information, 
the Department required that ZAO Kremny/SKU, Pultwen Ltd., and the 
affiliated U.S. trading company, collectively, provide the necessary 
price data for ZAO Kremny/SKU and Pultwen Ltd.'s U.S. sales through the 
affiliated U.S. trading company. See id. It is undisputed that ZAO 
Kremny/SKU and Pultwen Ltd. and the affiliated U.S. trading company 
failed to provide this information as requested by the Department. 
Moreover, ZAO Kremny/SKU, Pultwen Ltd., and the affiliated U.S. trading 
company have not demonstrated to the Department's satisfaction that the 
affiliated U.S. trading company is unable to provide the necessary 
sales data. Therefore, we find that the failure to report these sales 
constitutes a failure of respondents to cooperate to the best of their 
ability. Pursuant to section 776(b) of the Act, the Department 
preliminarily finds that with respect to ZAO Kremny and SKU, in 
selecting from among the facts available, an adverse inference is 
appropriate. However, we have not used total facts available in this 
case given the circumstances at hand. ZAO Kremny/SKU and Pultwen Ltd. 
have explained that they have made ``every effort to secure the 
cooperation of {the affiliated U.S. trading company{time}  in this 
investigation * * *'' (see September 4, 2002, submission at 2), and 
have provided on the record a statement from the affiliated U.S. 
trading company that it is not in the company's best interests to 
cooperate with ZAO Kremny/SKU and Pultwen Ltd. by completing a response 
(see August 28, 2002, submission at Exhibit 2). Given these claims and 
the fact that ZAO Kremny/SKU and Pultwen have provided complete and 
verifiable U.S. sales data for their U.S. sales which were not made 
through the affiliated U.S. trading company as well as complete and 
verifiable factors of production data, we applied adverse facts 
available to the sales made through the affiliated U.S. trading 
company.
    An adverse inference may include reliance on information derived 
from the petition, the final determination in the investigation, any 
previous review, or any other information placed on the record. See 
section 776(b) of the Act. However, section 776(c) provides that, when 
the Department relies on secondary information rather than on 
information obtained in the course of an investigation or review, the 
Department shall, to the extent practicable, corroborate that 
information from independent sources that are reasonably at its 
disposal. The SAA states that the independent sources may include 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation or review. See SAA at 870. The SAA clarifies that 
``corroborate'' means that the Department will satisfy itself that the 
secondary information to be used has probative value. Id. As noted in 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside 
Diameter, and Components Thereof, from Japan; Preliminary Results of 
Antidumping Duty Administrative Reviews and Partial Termination of 
Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
used.
    For our preliminary determination, as adverse facts available for 
both the Russia-wide entity and the quantity of unreported U.S. sales 
by ZAO Kremny/SKU through the affiliated U.S. trading company, we have 
used the highest rate calculated for a respondent, i.e., the rate 
calculated for BAS. In an investigation, if the Department chooses as 
facts available a calculated dumping margin of another respondent, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would indicate that using that 
rate is appropriate. Where circumstances indicate that the selected 
margin may not be appropriate, the Department will attempt to find a 
more appropriate basis for facts available. See, e.g., Fresh Cut 
Flowers from Mexico; Final Results of Antidumping Duty Administrative 
Review, 61 FR 6812, 6814 (February 22, 1996) (the Department 
disregarded the highest margin as adverse best information available 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin). In this 
investigation, there is no indication that BAS's calculated margin is 
inappropriate to use as adverse facts available.
    Accordingly, for the preliminary determination, the Russia-wide 
rate is 123.62 percent. For the preliminary determination, the margin 
applied to the unreported sales by ZAO Kremny/SKU is 123.62 percent. 
Because this is a preliminary margin, the Department will consider all 
margins on the record at the time of the final determination for the 
purpose of determining the most appropriate final Russia-wide margin 
and the final margin to apply to the unreported U.S. sales by ZAO 
Kremny/SKU.

Surrogate Country

    When the Department is investigating imports from a NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production, valued in a 
surrogate market economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4) of 
the Act, the Department, in valuing the factors of production, shall 
utilize, to the extent possible, the prices or costs of factors of 
production in one or more market economy countries that: (1) are at a 
level of economic development comparable to that of the NME country; 
and (2) are significant producers of comparable merchandise. The 
sources of the surrogate factor values are discussed under the NV 
section below.
    The Department has determined that the Philippines, Egypt, 
Thailand, Colombia, and Tunisia are countries comparable to Russia in 
terms of economic development. See Memorandum from Jeffrey May, 
Director, to James C. Doyle, Program Manager: Antidumping Duty 
Investigation on Silicon Metal from the Russian Federation, dated April 
30, 2002 (``Policy Memo'').
    On May 2, 2002, we requested comments on surrogate country 
selection, significant production in the

[[Page 59261]]

potential counties, and surrogate values for the factors of production. 
On June 6, 2002, we received comments from petitioners and a joint 
submission from ZAO Kremny/SKU, Pultwen Ltd., BAS and RTL. On July 8, 
2002, petitioners submitted comments and data to be used to value the 
factors of production. On July 24, 2002, we received a joint submission 
from ZAO Kremny/SKU, Pultwen Ltd., BAS and RTL providing comments and 
surrogate country factor values to be used to value the factors of 
production. On August 23, 2002, petitioners submitted comments on 
respondents' joint July 24, 2002 submission of South African surrogate 
data and comments. For purposes of the preliminary determination, the 
Department has selected Egypt as the primary surrogate country for 
Russia to value the factors of production for this investigation. See 
Memorandum from Edward C. Yang, Office Director to Joseph A. Spetrini, 
Deputy Assistant Secretary: Selection of a Surrogate Country: 
Preliminary Determination: Antidumping Investigation on Silicon Metal 
from the Russian Federation (September 13, 2002).
    Therefore, we have relied, where possible, on Egyptian information 
in calculating NV by using Egyptian prices to value the factors of 
production, when available and where appropriate. We have obtained and 
relied upon public information wherever possible. For certain factors 
of production values, where we could not locate usable Egyptian prices, 
we used Thai import prices (for charcoal) or domestic South African 
prices (for quartzite and quartzite fines). See Memorandum from Cheryl 
Werner on Factors of Production Valuation for the Preliminary 
Determination: Preliminary Determination of Sales at Less Than Fair 
Value: Silicon Metal from the Russian Federation (September 13, 2002) 
(``Factor Valuation Memorandum'').
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days after the 
date of publication of the preliminary determination.

Fair Value Comparisons

BAS

    To determine whether sales of silicon metal to the United States by 
RTL were made at less than fair value, we compared EP to NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
calculated weighted-average EPs.

ZAO Kremny/SKU

    To determine whether sales of silicon metal to the United States by 
ZAO Kremny/SKU and Pultwen Ltd. were made at less than fair value, we 
compared EP to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice. In accordance with section 
777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs.

Transactions Investigated

    As stated at 19 CFR 351.401(i), the Department normally will use 
the respondent's invoice date as the date of sale unless another date 
better reflects the date upon which the exporter or producer 
establishes the essential terms of sale.

BAS

    For all U.S. sales, BAS and RTL reported the date of invoice issued 
by RTL to the final customer as date of sale. BAS and RTL stated that 
there were no changes to the unit price between the sales contract date 
and invoice date of RTL's U.S. sales of subject merchandise during the 
POI and none of the contract quantities changed in excess of the 
tolerance specified in the contract during the POI. However, BAS and 
RTL explained that a significant percentage of contract quantities of 
subject merchandise changed during the POI. Therefore, the Department 
is using RTL's invoice date as the date of sale for the preliminary 
determination.

ZAO Kremny/SKU

    For all U.S. sales, ZAO Kremny/SKU and Pultwen Ltd. reported date 
of sale as the earlier of date of shipment or the date of invoice 
issued by Pultwen Ltd. to the final customer. ZAO Kremny, SKU, and 
Pultwen Ltd. explained that in accordance with the Department's normal 
practice, date of sale cannot be later than date of shipment. All sales 
to one customer were based on long-term contracts for chemical grade 
silicon metal from ZAO Kremny. All other U.S. sales were made pursuant 
to short-term contracts.\5\ In their July 26, 2002, submission, 
petitioners argue that for the sales made pursuant to long-term 
contracts, the appropriate date of sale is the date of contract. See 
July 26, 2002, submission at 6-8.
---------------------------------------------------------------------------

    \5\ The Department has not considered the proper date of sale 
for the sales by the affiliated U.S. trading company since these 
sales were not reported.
---------------------------------------------------------------------------

    Although ``the Department prefers to use invoice date as the date 
of sale, we are mindful that this preference does not require the use 
of invoice date if the facts of a case indicate a different date better 
reflects the time at which the material terms of sale were 
established.'' See Circular Welded Non-Alloy Steel Pipe From the 
Republic of Korea; Final Results of Antidumping Duty Administrative 
Review, 63 FR 32833, 32835-36 (June 16, 1998) (``Pipe from Korea''). 
For the sales made pursuant to long-term contracts, the record evidence 
indicates that the quantity and price were set at the time Pultwen 
issued its Sales Note. See July 22, 2002, submission at 4; see also 
August 13, 2002, submission at 1. For the preliminary determination, we 
find that for the sales made pursuant to long-term contracts, the date 
of contract is the proper date of sale in accordance with the 
Department's regulations at 19 CFR 351.401(i). For the U.S. sales made 
pursuant to short-term contracts, we have used respondents' reported 
date of sale (i.e., the earlier of date of shipment or the date of 
invoice issued by Pultwen Ltd.).

Export Price and Constructed Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States. In accordance with section 772(b) of 
the Act, CEP is the price at which the subject merchandise is first 
sold (or agreed to be sold) in the United States before or after the 
date of importation by or for the account of the producer or exporter 
of such merchandise or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or exporter, 
as adjusted under subsections (c) and (d).

BAS

    In its May 29, 2002, Section A response, BAS and RTL classified the 
reported sales as EP. We are using EP as defined in section 772(a) of 
the Act because the merchandise was sold, prior to importation, outside 
the United States by RTL to an unaffiliated purchaser in the United 
States. We calculated weighted-average EPs for RTL's U.S. sales. We 
based EP on prices to unaffiliated purchasers in the United States. We 
made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, foreign

[[Page 59262]]

inland freight from the plant to the port of exportation. RTL reported 
that it used a non-market economy carrier for foreign inland freight; 
therefore, we valued foreign inland freight using an appropriate 
surrogate value for rail transportation costs. See Factor Valuation 
Memorandum.

ZAO Kremny/SKU

    In its June 17, 2002, Section C response, ZAO Kremny/SKU and 
Pultwen Ltd. classified the reported sales as EP. However, as explained 
above, the Department has determined that during the POI, Pultwen Ltd. 
was affiliated with a U.S. based trading company. In its July 26, 2002, 
Section A questionnaire response, the affiliated U.S. trading company 
explained that it is an importer, and that it sells to its customers in 
the United States after the importation of the merchandise. See July 
26, 2002, submission at 11-12. Therefore, sales by the affiliated U.S. 
trading company would be properly classified as CEP sales; however, as 
explained above, since the U.S. sales by the affiliated U.S. trading 
company were not reported, the Department has applied adverse facts 
available.
    For the U.S. sales by ZAO Kremny/SKU and Pultwen Ltd. that did not 
go through the affiliated U.S. trading company, we are using EP as 
defined in section 772(a) of the Act because the merchandise was sold, 
prior to importation, outside the United States by Pultwen Ltd. to 
unaffiliated purchasers in the United States. We calculated weighted-
average EPs for Pultwen Ltd.'s U.S. sales. We based EP on prices to 
unaffiliated purchasers in the United States. We made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight from the 
plant to the port of exportation, brokerage and handling expenses, 
ocean freight charges, and U.S. inland freight charges. ZAO Kremny/SKU 
and Pultwen Ltd. reported that they used a non-market economy carrier 
for foreign inland freight; therefore, we valued foreign inland freight 
using an appropriate surrogate value for rail transportation costs. See 
Factor Valuation Memorandum. ZAO Kremny/SKU and Pultwen Ltd. reported 
that they used market economy carriers for U.S. inland freight charges, 
and reported that they used both market and non-market economy carriers 
for brokerage and handling expenses and ocean freight charges. In 
accordance with 19 CFR 351.408(c)(1) and consistent with the 
Department's practice (Synthetic Indigo from the People's Republic of 
China; Notice of Final Determination of Sales at Less Than Fair Value, 
65 FR 25706 (May 3, 2000) and accompanying Issues and Decision 
Memorandum (Changes from the Preliminary Determination)), we have used 
the weighted-average amount paid to market economy freight carriers as 
the basis for the adjustment for freight expenses paid to NME carriers. 
See Factor Valuation Memorandum.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from an NME country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used 
factors of production, reported by each producer for materials, energy, 
labor, by-products, and packing. We valued all the input factors using 
publicly available information as discussed in the ``Surrogate 
Country'' and ``Factor Valuations'' sections of this notice.
    In accordance with 19 CFR 351.408(c)(1), where a producer sources 
an input from a market economy and pays for it in market economy 
currency, the Department employs the actual price paid for the input to 
calculate the factors-based NV. See also Lasko Metal Products v. United 
States, 437 F. 3d 1442, 1445-1446 (Fed. Cir. 1994) (``Lasko''). In this 
case, BAS and RTL did not report any market economy purchases. ZAO 
Kremny/SKU reported market economy purchases of certain inputs. See 
``Factor Valuation'' section below.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV for 
BAS and RTL based on factors of production reported by the Russian 
producer BAS for the POI, and calculated NV for ZAO Kremny/SKU and 
Pultwen Ltd. based on factors of production reported by the Russian 
producer: ZAO Kremny/SKU for the POI. To calculate NV, the reported 
per-unit factor quantities were multiplied by publicly available 
surrogate values. In selecting the surrogate values, we considered the 
quality, specificity, and contemporaneity of the data. For a detailed 
description of all surrogate values used for each producer, see Factor 
Valuation Memorandum.
    As explained above, ZAO Kremny/SKU sourced certain raw material 
inputs from market economy suppliers and paid for them in market 
economy currencies. The evidence provided by ZAO Kremny/SKU and Pultwen 
Ltd. indicated that its market economy purchases were significant. See 
August 28, 2002, submission at Exhibits 11 and 12. Thus, the Department 
has determined to use the market economy prices as reported, in 
accordance with 19 CFR 351.408(c)(1). Where the terms of delivery were 
not to the producers' plants, we have added to the market economy 
price, a freight cost, by applying a surrogate freight value to the 
reported distance from the place of shipment to the plant. See Factor 
Valuation Memorandum.
    As appropriate, we adjusted input prices by including freight costs 
to derive delivered prices. We added to the surrogate values based on 
import statistics a surrogate freight cost using the shorter of the 
reported distance from the domestic supplier to the factory or the 
distance from the nearest seaport to the factory. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). For 
domestic values (i.e., quartzite), we calculated a surrogate freight 
cost using the distance from the Russian domestic supplier to the 
factory.
    For the raw material surrogate values, except for the surrogate 
values for quartzite, quartzite fines and wood charcoal, we used values 
for Egypt as reported in the United Nations Statistical Division 
CommodityTrade Database System (``UNCTS'') for 1998 or 1999, deducting 
those values from countries previously determined by the Department to 
be NME countries, or aberrational data. We also did not include imports 
from Indonesia, Korea, and Thailand because these countries maintain 
non-specific export subsidies. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Automotive Replacement Glass 
Windshields From the People's Republic of China, 67 FR 6482 (February 
12, 2002). As the UNCTS data are reported in U.S. dollars, we did not 
need to convert these values. Since the data from this publication were 
not contemporaneous with the POI, we adjusted material values for 
inflation by using the Producer Price Index (``PPI'') rate for the 
United States, as discussed in the ``Inflation/Deflation Factor'' 
section of the Factor Valuation Memorandum. Because Egypt had small

[[Page 59263]]

import quantities at high prices of quartzite, quartzite fines, and 
wood charcoal and therefore appeared aberrational relative to other 
information available to the Department, we used South African domestic 
prices for quartzite and quartzite fines, and an import value for 
Thailand, as reported in the UNCTS for 1998, for wood charcoal. See 
Factor Valuation Memorandum.
    To value electricity, we have accepted petitioners' submitted rate 
of $0.0177/kWh for Egypt, which was from the Department's Trade 
Information Center (``TIC'') website (http://www.trade.gov/td/tic). See 
Factor Valuation Memorandum.
    Both of the producers reported byproducts. BAS reported silicon 
fines as a byproduct and provided documentation showing it reused the 
fines in the production process or sold them during the POI. ZAO 
Kremny/SKU reported gas scrubbing slurry, cyclone separator dust, 
refining slag, and quartzite screens as byproducts at the ZAO Kremny 
plant, and provided evidence that cyclone separated dust, refining 
slag, and quartzite screens are sold. It reported silicon fines, 
silicon dust, and slag as byproducts at the SKU plant, and provided 
documentation showing it sold them during the POI. As explained in Bulk 
Aspirin, it is the Department's practice to offset production costs 
with the sales revenue of the recoveries/byproducts. See Final 
Determination of Sales at Less Than Fair Value: Bulk Aspirin from the 
People's Republic of China, 65 FR 33805 (May 25, 2000) and accompanying 
Issues and Decision Memorandum at Comment 13. It is also the 
Department's practice to grant offsets for recoveries/byproducts which 
are re-entered into the production process. See Notice of Final 
Determination of Sales at Less Than Fair Value: Antidumping Duty 
Investigation of Steel Concrete Reinforcing Bars From The People's 
Republic of China, 66 FR 33522 (June 22, 2001) and accompanying Issues 
and Decision Memorandum at Comment 5. Therefore, we have granted an 
offset only for the amount of the byproduct/recovery actually sold or 
reused during the POI. We valued all byproducts using South African 
domestic prices for quartzite fines. See Factor Valuation Memorandum.
    To determine appropriate overhead, financial expense, selling, 
general and administrative (``SG&A'') expense, and profit percentages 
to be applied to the NV calculation, we used relevant data from a 1999-
2000 financial statements of Sinai Manganese Company (``Sinai''), an 
Egyptian ferro-manganese alloys producer.
    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).

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
all company information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all imports of subject 
merchandise from ZAO Kremny/SKU and BAS entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. For the Russia-wide entity, as 
indicated above, we have made a preliminary affirmative critical 
circumstances finding. Therefore, for imports of Russian silicon metal 
from other than ZAO Kremny/SKU or BAS, we are directing the U.S. 
Customs Service to suspend liquidation of such shipments entered, or 
withdrawn from warehouse, for consumption on or after 90 days prior to 
the date on which this notice is published in the Federal Register. We 
will instruct the U.S. Customs Service to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the NV 
exceeds the EP, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

                              Silicon Metal
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                          Exporter                              margin
                                                              (percent)
------------------------------------------------------------------------
ZAO Kremny/SKU.............................................        91.06
BAS........................................................       123.62
Russia-Wide Rate...........................................       123.62
------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. If our final determination 
is affirmative, the ITC will determine before the later of 120 days 
after the date of this preliminary determination or 45 days after our 
final determination whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. See 19 
CFR 351.309(c)(1)(i); 19 CFR 351.309(d)(1). A list of authorities used 
and an executive summary of issues should accompany any briefs 
submitted to the Department. This summary should be limited to five 
pages total, including footnotes. In accordance with section 774 of the 
Act, we will hold a public hearing, if requested, to afford interested 
parties an opportunity to comment on arguments raised in case or 
rebuttal briefs. Tentatively, any hearing will be held fifty-seven days 
after publication of this notice at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW., Washington, DC 20230, at a 
time and location to be determined. Parties should confirm by telephone 
the date, time, and location of the hearing two days before the 
scheduled date. Interested parties who wish to request a hearing, or to 
participate if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the date of publication of this 
notice. See 19 CFR 351.310(c). Requests should contain: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. At the hearing, each 
party may make an affirmative presentation only on issues raised in 
that party's case brief, and may make rebuttal presentations only on 
arguments included in that party's rebuttal brief. See 19 CFR 
351.310(c).
    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: September 13, 2002.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-24004 Filed 9-19-02; 8:45 am]
BILLING CODE 3510-DS-P