Notice of Final Determination of Sales at Less Than Fair Value: Silicomanganese From Brazil

DEPARTMENT OF COMMERCE

[A-351-824]

Notice of Final Determination of Sales at Less Than Fair Value:

Silicomanganese From Brazil

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: November 7, 1994.

FOR FURTHER INFORMATION CONTACT:

Paul Kullman or John Brinkmann, Office of Antidumping Investigations,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW.;

Washington, DC 20230; telephone: (202) 482-1279 or (202) 482-5288,

respectively.

FINAL DETERMINATION: We determine that imports of silicomanganese from

Brazil are being, or are likely to be, sold in the United States at

less than fair value, as provided in section 735 of the Tariff Act of

1930, as amended (the Act). The estimated margins are shown in the

``Continuation of Suspension of Liquidation'' section of this notice.

Case History

Since the preliminary determination and postponement of the final

determination of this investigation on June 10, 1994, (59 FR 14852,

June 17, 1994), the following events have occurred:

On June 16, 1994, the U.S. Department of Commerce (the Department)

received the response of Companhia Paulista de Ferro-Ligas and Sibra

Eletro-Siderurgica Brasileira S/A (collectively ``Paulista'') to the

Department's cost of production (COP) and constructed value (CV)

questionnaire. The Department sent a COP/CV deficiency questionnaire to

Paulista on July 8, 1994, which the company answered on July 29, 1994.

On August 3, 1994, the Department sent a letter requesting additional

clarification, which the company responded to on August 23, 1994.

The Department conducted verification in Brazil of Paulista's COP/

CV response in August 1994.

On September 2, 1994, Paulista informed the Department that it

would no longer be participating in the investigation. Paulista cited a

lack of personnel and the fact that the company was operating under the

Brazilian equivalent of U.S. Chapter 11 bankruptcy protection as

reasons why it was withdrawing from the investigation. Paulista

requested that all of its proprietary information be removed from the

record.

The petitioners (Elkem Metals Company and the Oil, Chemical &

Atomic Workers, Local 3-639) submitted a case brief on September 23,

1994. Paulista submitted a rebuttal brief on September 28, 1994. At

petitioners' request, a public hearing was held on September 30, 1994.

Scope of the Investigation

The merchandise covered by this investigation is silicomanganese.

Silicomanganese, which is sometimes called ferrosilicon manganese, is a

ferroalloy composed principally of manganese, silicon, and iron, and

normally containing much smaller proportions of minor elements, such as

carbon, phosphorous and sulfur. Silicomanganese generally contains by

weight not less than four percent iron, more than 30 percent manganese,

more than eight percent silicon and not more than three percent

phosphorous. All compositions, forms and sizes of silicomanganese are

included within the scope of this investigation, including

silicomanganese slag, fines and briquettes. Silicomanganese is used

primarily in steel production as a source of both silicon and

manganese. This investigation covers all silicomanganese, regardless of

its tariff classification. Most 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. Although

the HTSUS subheadings are provided for convenience and customs

purposes, our written description of the scope is dispositive.

Period of Investigation

The period of investigation is June 1, 1993, through November 30,

1993.

Such or Similar Comparisons

We have determined that the merchandise subject to this

investigation constitutes two such or similar categories, lumps and

fines.

Best Information Available (BIA)

As noted in the ``Case History'' section of this notice, Paulista

withdrew from the investigation after completion of the COP/CV

verification and requested that all of its proprietary data be removed

from the record. Section 776(c) of the Act provides that whenever a

party refuses or is unable to produce information requested in a timely

manner and in the form required, or otherwise significantly impedes an

investigation, the Department shall use BIA as a basis for its

determination. Consequently, we have based this determination on BIA.

In determining what rate to use as BIA, the Department follows a

two-tiered methodology, whereby the Department normally assigns lower

margins to those respondents who cooperated in an investigation and

margins based on more adverse assumptions to those respondents found to

be uncooperative in an investigation. The Department's two-tiered

methodology for assigning BIA has been upheld by the U.S. Court of

Appeals for the Federal Circuit. (See Allied Signal v. United States,

996 F.2d 1185 (Fed. Cir. 1993) (June 22, 1993)).

When a company refuses to cooperate or otherwise significantly

impedes an investigation, the Department normally uses as BIA the

highest of: (1) the highest margin in the petition; (2) the highest

margin calculated for any other respondent within the same country for

the same class or kind of merchandise; or (3) the estimated margin

found for the affected firm in the preliminary determination. (See

Final Determination of Sales at Less Than Fair Value: Antifriction

Bearings (other than Tapered Roller Bearings) and Parts Thereof from

the Federal Republic of Germany, 54 FR 18992, 19033 (1989)).

As detailed in the DOC position in Comment 1 below, we consider

Paulista to have been uncooperative. Under our standard practice, we

would have selected as the most adverse BIA for this investigation the

estimated margin found for Paulista in the preliminary determination.

However, because Paulista withdrew all of its proprietary data from the

record, we cannot rely on the preliminary determination. Smith Corona

Corp. v. United States, 796 F.Supp. 1532 (CIT 1992) (Smith Corona). It

would be inappropriate to allow Paulista to thwart proper

administration of the law and reward its uncooperative behavior by

selecting as BIA the highest rate in the amended petition, which is

less adverse than the preliminary rate. Therefore, we assigned to

Paulista a BIA margin by comparing United States price (USP) to CV,

based on information in the record. (For a discussion of this BIA

calculation see the ``Fair Value Comparisons'' section of this notice

and Comment 2 below).

In calculating the ``All Others'' rate, the Department normally

weight averages all positive margins found in the investigation,

including BIA rates. As discussed above, as an uncooperative

respondent, Paulista will receive an adverse BIA margin. Because

Paulista's margin is the only margin found in the investigation, under

our normal practice, its margin would become the ``All Others'' rate.

The Department notes, however, that in Smith Corona, the Court of

International Trade (CIT) held that the Department may assign a rate

lower than the highest available rate to nonparticipants in an

investigation, when those parties (1) had no control over the sole

respondent's withdrawal of documentation, (2) had no reason to believe

that an adverse rate would be selected for the respondent as a result

of the withdrawal of information, and (3) had no opportunity to offer

their own data.

In the present case, as in Smith Corona, producers/exporters who

were not respondents had no control over Paulista's withdrawal of its

information, had no reason to believe that Paulista would receive an

adverse rate as a result of withdrawing information, and by virtue of

the point at which Paulista withdrew its information from the record,

had no opportunity to submit their own data for analysis and

verification. We have concluded that, under these circumstances,

assigning an adverse BIA rate to all other producers/exporters would be

inappropriately punitive. Therefore, the Department has based the ``All

Others'' rate in this investigation on the dumping margin which formed

the basis for the initiation of this investigation.

Fair Value Comparisons

As BIA, we have calculated a margin for Paulista based on a

comparison of USP and foreign market value (FMV). USP was based on

information contained in the petition, as fully described in the notice

of initiation of this investigation (58 FR 64553, December 8, 1993).

FMV was based on CV, using data submitted by petitioners and relied

upon by the Department in its initiation of the COP investigation (See,

Memorandum from Richard W. Moreland to Barbara R. Stafford, May 13,

1994, on file in Room B-099 of the Main Commerce Building), adjusted

for interest expense and profit. In accordance with section

773(e)(1)(B)(ii), we added the statutory minimum of eight percent for

profit and recalculated interest expense based on the consolidated

results of the operations of Paulista for the year ending December 31,

1993, as reflected in its public financial statements. Since FMV is

based on a CV, which is exclusive of any value added taxes (VAT), we

have adjusted USP to exclude the VAT adjustment that was made for

purposes of this initiation.

Interested Party Comments

Comment 1: Petitioners argue that the Department should find

Paulista uncooperative because it withdrew its participation from the

investigation and removed all of its proprietary information from the

record.

Paulista states that the company devoted significant time and

resources to provide the information requested by the Department during

the course of the investigation, allowed verification of its cost

response and provided additional information to the Department after

the cost verification.

DOC Position: We agree with petitioners. By withdrawing from the

investigation, Paulista significantly impeded the completion of the

Department's investigation. Moreover, in light of Paulista's removal of

all of its proprietary information from the record, the Department has

no choice but to treat Paulista as an uncooperative respondent. This

action has the consequence of expunging from the administrative record

the basis for showing, either now or on appeal, that Paulista had been

cooperative during this investigation. (See, e.g., Final Determination

of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat

Products and Certain Cut-to-Length Carbon Steel Plate from Italy, 58 FR

37153 (July 9, 1993); Final Determination of Sales at Less Than Fair

Value: Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from

France, 58 FR 6205 (January 27, 1993)).

Comment 2: Petitioners argue that Paulista withdrew from the

investigation only after recognizing that the results of the

investigation would be more favorable if based on the petition or

initiation rate. Consequently, petitioners argue that the Department

must look beyond the pool of rates identified in its two-tier BIA

policy, since none of those rates was sufficiently adverse to compel

Paulista's cooperation. Petitioners contend that, as BIA, the

Department should use data in petitioners' COP allegation and

Paulista's financial statements to calculate FMV, and data provided in

Paulista's own ranged public submissions of its questionnaire response

to calculate USP. In addition, the petitioners contend that because

Paulista was uncooperative, the Department should ``de-range'' USP

information provided in the public version of Paulista's response by

reducing gross prices by 10 percent and increasing the foreign movement

charges and U.S. selling expenses by 10 percent.

Paulista agrees that BIA is warranted in this investigation.

However, Paulista contends that the company's ranged public data should

not be used to calculate USP. Paulista argues that the use of its

ranged public data as BIA would be unprecedented and contrary to the

intent of the Department's public summary requirements, which is to

provide meaningful summaries of data for the public. Additionally,

Paulista asserts that there is sufficient information on the record in

this investigation to establish a BIA dumping rate without resorting to

the use of ranged data.

DOC Position: We agree with the petitioners that Paulista should

not be rewarded for withdrawing from the investigation. In order to

assign Paulista an adverse BIA rate, the Department cannot rely on the

margin calculated in the preliminary determination because the use of

such a rate would not comport with the CIT's decision in Smith Corona.

While the Department might otherwise rely on the amended petition for

purposes of BIA, given the circumstances of this case and the intent of

the statute, we do not find that the rates contained in that petition

provide an adequate basis for BIA. Section 776(c) of the Act provides

for the use of BIA to compel participation. Further, a more adverse BIA

is required where a respondent fails to cooperate or significantly

impedes the investigation, as in this case. The preliminary margin was

substantially higher than the rate found in the amended petition for

purposes of initiation. To use the petition rate would, in effect,

reward the respondent for refusing to cooperate. Moreover, a precedent

could be set which would encourage a respondent to withdraw from a

proceeding and remove its proprietary information from the record

whenever the margin found in the preliminary determination exceeded

that which formed the basis of the initiation (e.g., Krupp Stahl A.G.

v. United States, Slip Op. 93-84, May 26, 1993).

We disagree, however, with petitioners' proposed selection of BIA.

Although the Department has used such ranged data as a basis for BIA in

the past, the use of such information is a last resort. In this

instance, we are not compelled to use the ranged data in order to

calculate an adverse final determination rate. There is sufficient data

available in petitioners' COP allegation and Paulista's public

financial statement to calculate a FMV based on CV. This methodology is

consistent with both past practice (see, e.g., Final Determinations of

Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat

Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain

Cut-to-Length Carbon Steel Plate From Belgium, 58 FR 37083 (July 9,

1993), and with the CIT's holding that respondents should not realize a

benefit from noncooperation.

Continuation of Suspension of Liquidation

In accordance with Section 735(c)(4) of the Act, we are directing

the Customs Service to continue to suspend liquidation of all entries

of silicomanganese from Brazil that are entered, or withdrawn from

warehouse, for consumption on or after June 17, 1994, the date of

publication in the Federal Register of our preliminary determination.

The Customs Service shall require a cash deposit or posting of a bond

equal to the estimated amount by which the FMV of the merchandise

subject to this investigation exceeds the U.S. price, as shown below.

This suspension of liquidation will remain in effect until further

notice. The dumping margins are as follows:

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

Antidumping

Producer/manufacturer exporter margin

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

Paulista.............................................. 64.93

All Others............................................ 17.60

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

International Trade Commission (ITC) Notification

In accordance with section 735(d) of the Act, we have notified the

ITC of our determination. The ITC will now determine whether these

imports are materially injuring, or threaten material injury to, the

U.S. industry within 45 days. If the ITC determines that material

injury, or threat of material injury, does not exist with respect to

the subject merchandise, the proceeding will be terminated and all

securities posted will be refunded or canceled. If the ITC determines

that such injury does exist, the Department will issue an antidumping

duty order directing Customs officials to assess antidumping duties on

all imports of the subject merchandise from Brazil entered, or

withdrawn from warehouse, for consumption on or after the effective

date of the suspension of liquidation.

Notification to Interested Parties

This notice also serves as the only reminder to parties subject to

administrative protective order (APO) of their responsibility, pursuant

to 19 CFR 353.34(d), concerning the return or destruction of

proprietary information disclosed under APO. Failure to comply is a

violation of the APO.

This determination is published pursuant to section 735(d) of the

Act and 19 CFR 353.20(a)(4).

Dated: October 31, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-27546 Filed 11-4-94; 8:45 am]

BILLING CODE 3510-DS-M