[Federal Register Volume 70, Number 174 (Friday, September 9, 2005)]
[Notices]
[Pages 53628-53631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4939]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-824]


Silicomanganese From Brazil: Preliminary Results of Antidumping 
Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on silicomanganese from Brazil

[[Page 53629]]

manufactured and exported by Rio Doce Mangan[ecirc]s S.A. (RDM), 
Companhia Paulista de Ferro-Ligas (CPFL), and Urucum 
Minera[ccedil][atilde]o S.A. (Urucum) (collectively RDM/CPFL) in 
response to a request from Eramet Marietta Inc., a domestic 
manufacturer of silicomanganese. This review covers the period December 
1, 2003, through November 30, 2004.
    We have preliminarily determined that RDM/CPFL did not make sales 
of the subject merchandise to the United States at prices below normal 
value during the period of review. We invite interested parties to 
comment on these preliminary results.

EFFECTIVE DATE: September 9, 2005.

FOR FURTHER INFORMATION CONTACT: Yang Jin Chun at (202) 482-5760 or 
Richard Rimlinger at (202) 482-4477, AD/CVD Operations, Office 5, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On December 22, 1994, the Department of Commerce (the Department) 
published in the Federal Register the antidumping duty order on 
silicomanganese from Brazil. See Notice of Antidumping Duty Order: 
Silicomanganese from Brazil, 59 FR 66003 (December 22, 1994). On 
December 1, 2004, we published in the Federal Register a notice of 
opportunity to request an administrative review of this order covering 
the period December 1, 2003, through November 30, 2004. See Antidumping 
or Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 69 FR 69889 (December 1, 
2004). On December 30, 2004, Eramet Marietta Inc. requested that the 
Department conduct an administrative review of RDM/CPFL's sales. On 
January 31, 2005, the Department published in the Federal Register a 
notice of initiation of this administrative review. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Request 
for Revocation in Part, 70 FR 4818 (January 31, 2005). The Department 
is conducting this review in accordance with section 751 of the Tariff 
Act of 1930, as amended (the Act).

Scope of Order

    The merchandise covered by this order is silicomanganese. 
Silicomanganese, which is sometimes called ferrosilicon manganese, is a 
ferroalloy composed principally of manganese, silicon and iron, and 
normally contains much smaller proportions of minor elements, such as 
carbon, phosphorus, and sulfur. Silicomanganese generally contains by 
weight not less than 4 percent iron, more than 30 percent manganese, 
more than 8 percent silicon, and not more than 3 percent phosphorous. 
All compositions, forms, and sizes of silicomanganese are included 
within the scope of the order, including silicomanganese slag, fines, 
and briquettes. Silicomanganese is used primarily in steel production 
as a source of both silicon and manganese.
    Silicomanganese is currently classifiable under subheading 
7202.30.0000 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Some silicomanganese may also currently be classifiable under 
HTSUS subheading 7202.99.5040. This order covers all silicomanganese, 
regardless of its tariff classification. Although the HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the order remains dispositive.

Collapsing

    The Department's regulations outline the criteria for collapsing 
(i.e., treating as a single entity) affiliated producers for purposes 
of calculating a dumping margin. The regulations state that we will 
treat two or more affiliated producers as a single entity where those 
producers have production facilities for identical or similar products 
that would not require substantial retooling of either facility in 
order to restructure manufacturing priorities and we conclude that 
there is a significant potential for manipulation of price or 
production. In identifying a significant potential for the manipulation 
of price or production, the Department may consider the following 
factors: (i) the level of common ownership; (ii) the extent to which 
managerial employees or board members of one firm sit on the board of 
directors of an affiliated firm; and (iii) whether operations are 
intertwined, such as through the sharing of sales information, 
involvement in production and pricing decisions, the sharing of 
facilities or employees, or significant transactions between the 
affiliated producers. See 19 CFR 351.401(f).
    Because RDM and Urucum are entities wholly owned by Companhia Vale 
de Rio Doce (CVRD) and CPFL is a subsidiary of RDM, CVRD is affiliated 
with RDM and Urucum, and RDM is affiliated with CPFL. Furthermore, 
based on CVRD's investment interest in both companies, we find that 
CVRD is in the position legally and/or operationally to exercise 
direction or restraint over RDM, CPFL, and Urucum and, thus, has direct 
or indirect control within the meaning of section 771(33)(F) of the 
Act. As such, we determine that RDM, CPFL, and Urucum are affiliated 
pursuant to section 771(33)(F) of the Act.
    With respect to the first criterion of 19 CFR 351.401(f), the 
information currently on the record indicates that RDM, CPFL, and 
Urucum use similar production facilities, in terms of production 
capacities and type of machinery, and employ virtually identical 
production processes to produce identical or similar silicomanganese 
products. See RDM/CPFL's April 11, 2005, questionnaire response at 
pages D-3 through D-5. Based on this information, we find that the 
companies could shift the production requirements from one facility to 
the other without requiring substantial retooling in order to 
restructure manufacturing priorities.
    We also find that a significant potential for manipulation of 
prices, production costs, and production priorities exists pursuant to 
19 CFR 351.401(f)(2). Specifically, the information on the record 
indicates the following: CVRD has a direct involvement in RDM's, 
CPFL's, and Urucum's activities associated with the production and 
sales, as well as the transportation of raw materials; all three 
companies share the expertise of an executive officer; all three 
companies have heavily intertwined operations with respect to their 
purchases of manganese ore from each other's mines. Therefore, for the 
purposes of this administrative review, we find that RDM, CPFL, and 
Urucum are affiliated and have collapsed them into one entity pursuant 
to section 771(33) of the Act and 19 CFR 351.401(f). For a more 
complete discussion of this issue, see the September 2, 2005, 
Memorandum from Yang Jin Chun to Laurie Parkhill, ``Administrative 
Review of the Antidumping Duty Order on Silicomanganese from Brazil: 
Collapsing of Affiliated Producers Rio Doce Mangan[ecirc]s S.A., 
Companhia Paulista de Ferro-Ligas, and Urucum Minera[ccedil][atilde] 
S.A. for Purposes of Calculating a Dumping Margin,'' which is on file 
in the Central Records Unit (CRU) at the main Department building.

Affiliation of Parties

    Pursuant to sections 771(33)(E) and (F) of the Act, the Department 
has preliminarily determined that certain customers to which RDM/CPFL 
sold silicomanganese during the period of

[[Page 53630]]

review and whom RDM/CPFL identified as unaffiliated parties are, in 
fact, affiliated with RDM/CPFL. Specifically, the Department has 
determined that RDM/CPFL and some of its home-market customers are 
under the common control of CVRD, RDM/CPFL's parent company. According 
to section 771(33)(F) of the Act, two or more persons under common 
control with any other person shall be considered affiliated. Thus, we 
have preliminarily found these companies to be affiliated with RDM/
CPFL. For a complete discussion of this issue, see the September 2, 
2005, Memorandum to the File, ``Analysis Memorandum for the Preliminary 
Results of the Administrative Review of the Antidumping Duty Order on 
Silicomanganese from Brazil: Rio Doce Mangan[ecirc]s S.A. (RDM), 
Companhia Paulista de Ferro-Ligas (CPFL), and Urucum 
Minera[ccedil][atilde] S.A. (Urucum) (collectively, RDM/CPFL),'' which 
is on file in the CRU.

Comparisons to Normal Value

    To determine whether sales of silicomanganese from Brazil were made 
in the United States at less than normal value, we compared the export 
price to the normal value. When making comparisons in accordance with 
section 771(16) of the Act, we considered all comparable products sold 
in the home market that were in the ordinary course of trade for 
purposes of determining appropriate product comparisons to U.S. sales.

Export Price

    For the price to the United States, we used export price, as 
defined in section 772(a) of the Act, because the subject merchandise 
was sold directly to the first unaffiliated purchaser in the United 
States prior to the date of importation. We based export price on the 
Free-on-Board price to the first unaffiliated purchaser in the United 
States. We made deductions, where appropriate, consistent with section 
772(c)(2)(A) of the Act for movement expenses.

Normal Value

A. Home-Market Viability

    Based on a comparison of the aggregate quantity of home-market and 
U.S. sales, we determined that the quantity of foreign like product 
sold by RDM/CPFL in the exporting country was sufficient to permit a 
proper comparison with the sales of the subject merchandise to the 
United States, pursuant to section 773(a) of the Act. RDM/CPFL's 
quantity of sales in its home market was greater than five percent of 
its sales to the U.S. market. Therefore, in accordance with section 
773(a)(1)(B)(i) of the Act, we based normal value on the prices at 
which the foreign like product was first sold for consumption in the 
exporting country in the usual commercial quantities and in the 
ordinary course of trade.

B. Arm's-Length Sales

    RDM/CPFL made sales in the home market to affiliated and 
unaffiliated customers. The Department may calculate normal value based 
on a sale to an affiliated party only if it is satisfied that the price 
to the affiliated party is comparable to the price at which sales are 
made to parties not affiliated with the exporter or producer, i.e., 
sales at arm's-length prices. See 19 CFR 351.403(c). We excluded sales 
to affiliated customers for consumption in the home market that we 
determined were not at arm's-length prices from our analysis. To test 
whether these sales were made at arm's-length prices, we compared the 
prices of sales of comparable merchandise to affiliated and 
unaffiliated customers, net of movement charges, direct selling 
expenses, and packing. Pursuant to 19 CFR 351.403(c) and in accordance 
with the Department's practice, when the prices charged to an 
affiliated party are, on average, between 98 and 102 percent of the 
prices charged to unaffiliated parties for merchandise comparable to 
that sold to the affiliated party, we determine that the sales to the 
affiliated party are at arm's-length prices and include these sales in 
our calculation of normal value. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, 
69187 (November 15, 2002). In this review, however, we determined that 
no sales to affiliated parties were at arm's-length prices. As such, we 
did not include these sales in our calculation of normal value.

C. Cost-of-Production Analysis

    Because the Department disregarded RDM/CPFL's home-market sales 
that it determined were sold at below-cost prices in the most recently 
completed administrative review, we had reasonable grounds to believe 
or suspect that sales of the foreign like product under consideration 
for the determination of normal value in this review may have been made 
at prices below the cost of production (COP) as provided by section 
773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 773(b)(1) 
of the Act, we initiated a COP investigation of sales by RDM/CPFL in 
the home market.
    Based on the respondent's request, we allowed the cost-reporting 
period to correspond with RDM/CPFL's 2004 fiscal year. Before making 
any price comparisons, we conducted the COP analysis. We calculated 
COP, in accordance with section 773(b)(3) of the Act, based on the sum 
of the costs of materials and fabrication employed in producing the 
foreign like product plus amounts for home-market selling, general, and 
administrative expenses, financial expenses, and packing expenses. For 
the preliminary results of review, we relied on the COP information 
submitted by RDM/CPFL in its questionnaire responses.
    In accordance with section 773(b)(1) of the Act, we tested whether 
home-market sales of the foreign like product were made at prices below 
the COP within an extended period of time in substantial quantities and 
whether any such prices permitted the recovery of all costs within a 
reasonable period of time. We compared model-specific COPs to the 
reported home-market prices less any applicable movement charges.
    Pursuant to section 773(b)(2)(C) of the Act, when less than 20 
percent of the respondent's sales of the foreign like product were at 
prices less than the COP, we did not disregard any below-cost sales of 
that product because the below-cost sales were not made in substantial 
quantities within an extended period of time. When 20 percent or more 
of the respondent's sales of the foreign like product during the period 
of review were at prices less than the COP, we disregarded the below-
cost sales because they were made in substantial quantities within an 
extended period of time in accordance with sections 773(b)(2)(B) and 
(C) of the Act and, based on comparisons of prices to weighted-average 
COPs for the period of review, we determined that these sales were at 
prices which would not permit recovery of all costs within a reasonable 
period of time in accordance with section 773(b)(2)(D) of the Act. 
Based on this test, we disregarded below-cost sales for RDM/CPFL.

D. Calculation of Normal Value

    Because we were able to find contemporaneous home-market sales made 
in the ordinary course of trade for a comparison to all export-price 
sales, in accordance with section 773(a)(1)(B) of the Act we based 
normal value on the prices at which the foreign like product was sold 
for consumption in the home market. Home-market prices were based on 
ex-factory or delivered prices to unaffiliated purchasers. When 
applicable, we made adjustments for

[[Page 53631]]

differences in packing and for movement expenses in accordance with 
sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for 
differences in circumstances of sale in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.401. Specifically, we made 
circumstance-of-sale adjustments by deducting home-market direct 
selling expenses from and adding U.S. direct selling expenses to normal 
value.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that a margin 
of 0.00 percent exists for RDM/CPFL for the period December 1, 2003, 
through November 30, 2004.
    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties calculations performed in connection with these preliminary 
results within five days of the date of publication of this notice. Any 
interested party may request a hearing within 30 days of publication of 
this notice. A hearing, if requested, will be held at the main 
Department building. We will notify parties of the exact date, time, 
and place for any such hearing.
    Issues raised in hearings will be limited to those raised in the 
respective case and rebuttal briefs. Case briefs from interested 
parties may be filed no later than 30 days after publication of this 
notice. Rebuttal briefs, limited to the issues raised in case briefs, 
may be submitted no later than five days after the deadline for filing 
case briefs. Parties who submit case or rebuttal briefs in this 
proceeding are requested to submit with each argument a statement of 
the issue and a brief summary of the argument with an electronic 
version included.
    The Department will publish a notice of final results of this 
administrative review, which will include the results of its analysis 
of issues raised in the case briefs, within 120 days from the date of 
publication of these preliminary results.

Assessment

    The Department shall determine, and U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. Upon completion of this review, the Department will issue 
appraisement instructions directly to the CBP.
    Further, the following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of silicomanganese entered, or withdrawn from warehouse, 
for consumption on or after the date of publication, as provided by 
section 751(a)(1) of the Act: (1) the cash-deposit rate for RDM/CPFL 
will be the rate established in the final results of review; (2) for 
previously reviewed or investigated companies not mentioned 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 less-than-fair-value 
(LTFV) investigation, but the manufacturer is, then the cash-deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; and (4) if neither the exporter nor 
the producer is a firm covered in this review, a prior review, or the 
LTFV investigation, the cash-deposit rate shall be 17.60 percent, the 
all-others rate established in the LTFV investigation. See Notice of 
Final Determination of Sales at Less Than Fair Value: Silicomanganese 
from Brazil, 59 FR 55432 (November 7, 1994). These deposit 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a primary reminder to importers of their 
responsibility under 19 CFR 351.402(f) 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.
    We are publishing this notice in accordance with sections 751(a)(1) 
and 777(i)(1) of the Act.

    Dated: September 2, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4939 Filed 9-8-05; 8:45 am]
BILLING CODE 3510-DS-S