Titanium Sponge From the Russian Federation; Notice of Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-803]

Titanium Sponge From the Russian Federation; Notice of Final

Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review.

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SUMMARY: On May 12, 1997, the Department of Commerce (the Department)

published the preliminary results of the administrative review of the

antidumping finding on titanium sponge from the Russian Federation

(Russia). This notice of final results covers the review period of

August 1, 1995 through July 31, 1996. This review covers one

manufacturer, AVISMA Titanium-Magnesium Works (AVISMA), and three

trading companies, Interlink Metals & Chemicals, S.A. (Interlink), TMC

Trading International, Ltd. (TMC), and Cometals, Inc. (Cometals). We

gave interested parties an opportunity to comment on the preliminary

results. We received comments from AVISMA, Interlink, TMC, and Titanium

Metals Corporation (TIMET), a petitioner. A hearing was held on June

30, 1997 with both public and closed sessions. Based on our analysis of

these comments, we have not changed the final results from those

presented in the preliminary results of review.

EFFECTIVE DATE: September 16, 1997.

FOR FURTHER INFORMATION CONTACT: James Terpstra or Mark Manning, Office

of AD/CVD Enforcement, Office 4, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230; telephone:

[[Page 48602]]

(202) 482-3965 and 482-3936 respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations are to the

regulations as codified at 19 CFR part 353 (1997).

Background

On May 12, 1997, the Department published in the Federal Register

(62 FR 25920) the preliminary results of the 1995-1996 administrative

review of the antidumping finding on titanium sponge from Russia (33 FR

12138, August 28, 1968). This notice of final results covers the review

period for August 1, 1995 through July 31, 1996, covering one

manufacturer, AVISMA, and three trading companies, Interlink, TMC, and

Cometals. The Department has conducted this review in accordance with

section 751 of the Act.

Scope of the Review

The product covered by this administrative review is titanium

sponge from Russia. Titanium sponge is chiefly used for aerospace

vehicles, specifically, in construction of compressor blades and

wheels, stator blades, rotors, and other parts in aircraft gas turbine

engines. Imports of titanium sponge are currently classifiable under

the harmonized tariff schedule (HTS) subheading 8108.10.50.10. The HTS

item number is provided for convenience and Customs' purposes. The

written description remains dispositive as to the scope of the product

coverage.

The review period (POR) is August 1, 1995 through July 31, 1996,

covering one manufacturer, AVISMA, and three trading companies,

Interlink, TMC, and Cometals.

Analysis of Comments Received

Comment 1: Application of Facts Available Against TMC

Petitioner argues that TMC has not acted to the best of its ability

to comply with the Department's requests for information. Petitioner

states, ``from the inception of the administrative review, TMC has

orchestrated a prolonged deception in each of its responses, concerning

its activities and the existence of affiliated parties.'' In addition,

petitioner claims that TMC's submissions are ``only a partial

accounting of its history and affiliations.'' Therefore, petitioner

argues that the application of adverse facts available to TMC is

warranted.

Petitioner argues that TMC is a false front. Petitioner claims that

TMC is trying to have the Department believe that AVISMA would abandon

experienced trading companies for TMC, which, petitioner claims, does

not have experience in or knowledge of the worldwide titanium market.

In addition, petitioner argues that TMC is not operated similar to any

other company in the titanium sponge industry. For example, petitioner

claims that TMC's reported sales and profit are not representative of a

normal, arm's-length trading company being supplied by an unaffiliated

producer. Petitioner points to the information on the record which

demonstrates that TMC's profit is higher than the average commission

income received by trading companies in the titanium sponge industry.

To support its argument that TMC is misrepresenting itself,

petitioner points out that TMC only began providing more information on

its activities, ownership, and affiliation after the deadline for

submitting new information had expired. Petitioner asserts that the

deadline for the submission for new information was March 16, 1997, in

accordance with 19 CFR 353.31(a)(ii). Petitioner argues that the

Department should reject TMC's April 3, 1997 submission, which

petitioner argues provides new information that was not verified by the

Department because it was provided on the last day of verification.

Petitioner argues that all changes to submissions should be presented

at the beginning of verification, which should have included the

information in TMC's April 3, 1997 submission. Petitioner asserts that

the information provided in this submission is ``new information and

worthless for the purpose of determining affiliation'' and ``not

susceptible to verification.'' Petitioner claims that none of these

submissions were in response to a Departmental query, but new

information submitted on its own. At a minimum, petitioner argues that

the Department should return and disregard all of TMC's submissions

dated after March 16, 1997. Also included in these untimely

submissions, are TMC's audited financial statements, which were

submitted on March 28, 1997.

Petitioner states that it believes that AVISMA controls and is

affiliated with TMC and that TMC tried to manipulate the review process

to prevent the Department from learning of this affiliation in order

for AVISMA to indirectly obtain a zero dumping margin. Petitioner

claims that the original questionnaire requested that TMC list all

affiliated companies and TMC failed to disclose several affiliated

parties. Given another opportunity through its supplemental

questionnaires, petitioner claims that TMC still failed to fully

disclose its affiliated companies, and TMC falsely certified that its

responses were complete and accurate. Petitioner characterizes TMC as

reluctantly deciding to disclose the true owner(s) of TMC once it

realized that the Department would be questioning the distribution of

TMC's profits on the last day of verification. Petitioner alleges that

TMC's late disclosure of this owner indicates that TMC must believe

that this disclosure is detrimental to its position.

Petitioner states that the Department has two choices for adverse

facts available. We could either use the ``All Others'' rate of 83.96

percent or calculate a new rate by classifying TMC's dividend/royalty

as a direct expense and allocate it only to the merchandise sold to the

U.S. during the period of review. Finally, petitioner argues that TMC

did not accurately and completely answer the questionnaire in a timely

manner to the best of its ability.

Petitioner claims that the Department is unable to make a decision

on affiliation due to the incomplete information on the record.

Petitioner asserts that, ``the Department cannot simply assume benign

neglect on TMC's part or that the omissions led to harmless error.

Given the still incomplete record in this case, it is impossible to

discern the extent to which TMC has prejudiced the final results. These

problems render all of TMC's responses unreliable.'' Petitioner argues

that if the Department chooses to use TMC responses, it would set a

precedent for future respondents that if they fail to provide timely,

complete, and accurate responses, there should be ``no fear of

sanction.'' Therefore, petitioner argues that the evidence supports

applying adverse facts available because TMC failed to cooperate with

the Department and did not act to the best of its ability to comply

with the Department's requests for information.

TMC argues that the application of facts available is unwarranted

because of TMC's cooperation and timeliness in responding to the

Department's requests for information and at verification.

With regard to timeliness, TMC claims that it responded to the

[[Page 48603]]

Department's initial and six supplemental questionnaires within the

deadlines established by the Department and submitted additional

factual information within the 180-day regulatory deadline. In

addition, TMC claims that it submitted its audited financial statements

as soon as the company's first audit was completed, in advance of

verification. TMC points out that the Department's verification report

reveals ``no material inaccuracies in the information submitted by TMC,

nor does it indicate that there were any items that could not be

verified.''

TMC cites CAFC court rulings which rule that facts available may be

warranted when a large portion of the questionnaire response is

submitted past the Department's deadline or when the respondent did not

comply with a Department's request for information. See Ansaldo

Componenti S.p.A. v. U.S., 628 F.Supp. 198, 205 (CIT 1986); Olympic

Adhesives, Inc. v. U.S., 708 F.Supp. 344 (CIT 1989), rev'd, 899 F.2d

1565 (Fed. Cir. 1990); Daewoo Elec. Co. v. U.S., 712 F.Supp. 931, 944

(CIT 1989). TMC states that its actions are consistent with the CAFC

court rulings in that facts available are not justified in this case.

TMC also argues that TIMET had several opportunities to comment on

any inadequacies found in TMC's supplemental questionnaire responses

and in the verification report, but chose not to comment.

TMC asserts that TIMET's argument that the Department should reject

TMC's March 5, 1997 and April 3, 1997 submissions because they are

untimely is misplaced. First, TMC claims that it submitted the April 3,

1997 by the Department's established deadline and during, not after,

verification, stating that verification took place April 3-4, 1997

(noting a typographical error in the verification report). In addition,

TMC's March 5, 1997 submission was submitted well within the 180-day

deadline established by the Department for supplemental submissions.

TMC also argues that information presented in its April 3, 1997

submission was verified. TMC argues that, at verification, the

Department requested information regarding TMC's affiliations, which

included the information contained in TMC's April 3, 1997 submission.

TMC asserts that the Department is not required to verify every piece

of information, as stated in 19 CFR 353.36(c).

TMC argues that petitioner inaccurately characterizes TMC's

experience in the titanium sponge industry and AVISMA's rationale for

hiring TMC as its distributor for marketing titanium sponge. In

addition, TMC argues that petitioner's suggestion that the Department

could classify TMC's dividend/royalty as a direct expense as adverse

facts available is not consistent with Departmental practice. TMC

asserts that, in these instances, the Department's practice is ``to

assume related party payments are not at arm's length and,

consequently, not adjust for them in its antidumping calculations.''

See Outokumpu Copper Rolled Products AB v. U.S., 850 F.Supp. 16, 22

(CIT 1994).

TMC argues that TIMET's arguments about TMC's profits are

inappropriate and ``should not be viewed as signifying anything other

than a well-run company.'' TMC characterizes TIMET's comparison of

TMC's profits to those of a commission agent, who takes no risk, as

unrealistic and inappropriate.

Finally, TMC argues that if the Department determines that TMC and

AVISMA are affiliated, the final results would not change, citing the

Department's discussion of affiliation in the preliminary results. TMC

points out that TIMET has not challenged this aspect of the preliminary

results.

Department's Position

While we are concerned that TMC did not fully disclose the nature

of its relationship to AVISMA in its initial questionnaire responses,

we have determined that this deficiency did not materially impair our

review in this case. Therefore, we have not used adverse facts

available against TMC.

In its response to our first questionnaire, TMC stated that it is a

wholly owned subsidiary of TMC (Holdings), Limited, whose share capital

is owned by Valmet S.A. The ultimate parent of Valmet S.A. is Valmet

Group Limited. Bank Menatep of Russia is a minority shareholder of

Valmet Group Limited. We note and are concerned by TMC's failure to

initially disclose, in response to our questionnaire, the fact that

Bank Menatep has a major presence on AVISMA's board of directors. Such

facts clearly are material to our consideration of the nature of any

relationship between TMC and AVISMA. Although we did not specifically

ask TMC whether any of its parent companies were affiliated with

AVISMA, either directly or indirectly through another affiliated

company, we did ask questions aimed at obtaining a complete picture of

the relationship between TMC and AVISMA. To the extent TMC was aware

that Bank Menatep was affiliated with AVISMA and failed to report it,

we would view that as impeding this review. On the other hand, the

record of this case is not clear on this point. The questions asked did

not specifically seek this information; rather, the questions focused

on the structure and operations of Valmet Group Ltd., Valmet S.A., and

TMC. Moreover, the record of this case indicates that Bank Menatep is a

minority non-controlling shareholder of Valmet Group Limited. As such,

it is not clear how much TMC knew or should have known about Bank

Menatep's various operations. Indeed, Bank Menatep's financial

statement, later submitted by TMC, shows it to be a large commercial

bank with extensive holdings in numerous entities. Additionally, as

discussed below, TMC's substantial cooperation and compliance with our

numerous questionnaires indicate that rejecting TMC's response in toto

is not warranted. Therefore, on balance, we do not believe it

reasonable to reject TMC's entire response. We also note that, as

stated in the preliminary results, we do not believe it is necessary to

address this issue of possible affiliation between TMC and AVISMA for

purposes of this review because the determination will not affect our

analysis. We must rely on TMC's sales to the United States regardless

of a determination on affiliation.

With regard to the timeliness of TMC's questionnaire responses and

submissions, we believe that TMC has provided its submissions in a

timely manner because its submissions were provided earlier than the

180-day regulatory deadline for the submission of new information, in

accordance with 19 CFR 353.31(a)(ii) (i.e., March 17, 1997), and its

questionnaire responses were submitted within deadlines established by

the Department. The Department's regulations at 19 CFR 353.31(b) state

that the Department ``may request any person to submit factual

information at any time during a proceeding'' (emphasis added). TMC's

April 3, 1997 submission was provided on the first day of verification

in response to the Department's April 1, 1997 supplemental

questionnaire. Therefore, at verification, we accepted the new

information provided in TMC's April 3, 1997 submission because it was

requested by the Department at a previous date.

In addition, TMC cooperated with the Department's requests for

information and at verification. As noted by TMC, the Department's

April 16, 1997 verification report does not refer to any lack of

cooperation on the part of TMC when questioned on its affiliations.

With regard to whether or not the information in TMC's April 3,

1997 submission was verified, we disagree

[[Page 48604]]

with the petitioner. As the verification report indicates, TMC's

responses were verified without any major discrepancies. As a normal

part of our verification procedures, and in particular because of the

question of affiliation in this case, we examined TMC's corporate

structure and the nature of any affiliation with other partners in

great detail. This exercise necessarily involves asking for and

collecting additional support documentation. Given the completeness and

success of the verification, and the fact that the collected

information did not materially affect our analysis, we chose not to

visit another location to further evaluate this matter.

Petitioner's speculations on the existence of an affiliation

between AVISMA and TMC are not relevant to this proceeding. The

Department issued several supplemental questionnaires on this issue and

analyzed each submission with regard to whether further information

should be requested. In addition, at verification, we examined

documents relevant to the affiliation issue, and noted at the time that

``we found no documentation that would lead us to believe that AVISMA

and TMC have other dealings besides what was presented in its

response.'' Id. at 4. Should this question become relevant in our

analysis in future administrative reviews, we may further examine the

issue of affiliation between TMC and AVISMA. For purposes of this

review, the information on the record indicates that an affiliation

determination is not relevant to our determination of the dumping

margins for TMC and AVISMA. As stated in our preliminary results,

because AVISMA did not export to the United States and did not have

knowledge of the ultimate destination of the merchandise sold through

TMC, ``all relevant sales to the United States are captured in our

analysis without making an affiliation determination.'' See Preliminary

Results of Antidumping Duty Administrative Review: Titanium Sponge from

the Russian Federation, 62 FR 25920, 25921 (May 12, 1997).

Comment 2: Reported Entered Values

Petitioner alleges that Interlink may have used the price that

Interlink paid to AVISMA as the entered value of the imported titanium

sponge reported to the U.S. Customs Service (Customs). Petitioner

states that the reported entered values are not equivalent to the gross

sales prices less moving expenses. Petitioner claims that Interlink

appears to have undervalued its entries and, therefore, underpaid the

dumping cash deposits and Customs duties.

If this is the case, petitioner argues that this price may not be

used because the merchandise was not clearly destined for export to the

United States (given that AVISMA did not have knowledge of the final

destination of the merchandise), as stated in Nissho Iwai decision. See

Nissho Iwai American Corp. v. U.S., 982 F.2d 505,509 (Fed.Cir. 1992).

Therefore, petitioner states that AVISMA-Interlink sales may not be

used as the basis for entered values.

AVISMA and Interlink argue that this issue was raised in the last

administrative review and concerns Interlink and Customs, not the

Department or TIMET. AVISMA and Interlink report that Interlink is

working with Customs, ``the United States government agency that is, by

law, responsible for these matters, to resolve any issues related to

the proper valuation of consumption entries.''

Department's Position

We agree with AVISMA and Interlink that any questions concerning

the proper valuation of consumption entries is a matter to be resolved

by the Customs Service. The Department has conveyed petitioner's

allegations to Customs.

Regarding the appropriate basis for export price in this review,

our concern is that we have the correct sales price (i.e., the price

between the exporter who had knowledge that the shipment was destined

to the U.S. and the first unaffiliated U.S. customer). The record of

this case indicates that AVISMA did not have prior knowledge that the

final destination of the shipment in question was the United States.

Because there is no affiliation between Interlink and the U.S.

customer, we are satisfied that the reported sales price is the

appropriate basis for the export price.

Comment 3: Interlink's U.S. Sales

Petitioner alleges that the Interlink sales used in the calculation

of its dumping margin are not bona fide sales for commercial purposes

and should be disregarded. Petitioner alleges that Interlink sales

which entered the United States under temporary importation bonds

(TIBs) are priced lower than the Interlink sales entered for

consumption which are used to calculate the dumping margin. In

addition, petitioner states that these sales are considerably higher

than U.S. and world prices of titanium sponge for the review period.

Petitioner states that the Department has disregarded sales when the

prices were significantly higher than world market prices and it

believed that the respondent had artificially set prices. See Notice of

Final Determination of Sales at Less Than Fair Value: Manganese Metal

from the People's Republic of China, 60 FR 56045, 56046 (November 6,

1995); Chang Tieh Industry Co., Ltd. v. U.S., 840 F.Supp. 141, 146 (CIT

1993). Insofar as petitioner argues that Interlink's sales used to

calculate the dumping margin were not made on commercial terms, it

asserts that Interlink's sales should be disregarded and the Department

should apply adverse facts available as Interlink's dumping margin.

AVISMA and Interlink disagree with petitioner's characterization of

Interlink's sales. AVISMA and Interlink argue that the sales in

question were made on different sales terms than sales that entered

under TIBs (i.e., Interlink assumed responsibility for all expenses and

was the importer of record). AVISMA and Interlink argue that the sales

entered under TIBs were sold on an ``in warehouse in Europe'' basis,

where the customer took possession in Europe and was responsible for

payment for all additional movement expenses, including the movement

expenses to the United States.

Department's Position

We disagree with petitioner that there is a basis for disregarding

the sales in question. There is no evidence that these sales involve

``artificially set prices.'' Moreover, it is apparent that the higher

prices merely reflect the fact that the sales in question were made on

different terms of sale. Interlink submitted the sales and entry

documentation for the sales in question in response to the Department's

February 4, 1997 request. See Letter from Wilmer, Cutler & Pickering to

Robert S. LaRussa, February 11, 1997. We note that the documentation

reports the price charged to Interlink's customer and the sales terms

are reported as ``delivered, duty paid.'' In addition, the Customs

entry document reports that Interlink paid the 83.96 percent

antidumping cash deposit for the sales in question. The customs duty

and antidumping cash deposit account for much of the difference between

these prices and the ``in warehouse in Europe'' price level. See

Analysis Memorandum for the Final Results of 1995/1996 Administrative

Review of the Antidumping Finding of Titanium Sponge from the Russian

Federation for further discussion of our analysis.

Comment 4: Future Entries of Subject Merchandise

Petitioner argues that the Department should establish a single

cash deposit rate for all respondents in this review. Although the

Department did not

[[Page 48605]]

establish a single rate in the 1994/1995 review, petitioner argues that

the circumstances differ in this review because AVISMA changed its

selling practices and made sales under this new sales structure, and

the record states that TMC became the sole distributor of AVISMA's

titanium sponge in November 1995. Petitioner adds that respondents

acknowledge that TMC knows the ultimate destination of merchandise it

sells through resellers, and, therefore, TMC is the true exporter.

Petitioner refers to cases where the Department has applied a

``knowledge test,'' which determines whether the non-NME reseller

qualifies as an exporter. See Final Results of Antidumping Duty

Administrative Reviews; Antifriction Bearings (Other Than Tapered

Roller Bearings) and Parts Thereof From France, 57 FR 28360, 28427

(June 24, 1992); Final Determination of Sales at Less Than Fair Value;

Ferrovanadium and Nitrided Vanadium From the Russian Federation, 60 FR

27957, 27959 (May 26, 1995).

In addition, petitioner claims that Interlink will never again be

the exporter and the Department will not be able to calculate a

separate margin for Interlink, unless Interlink purchases from another

entity which does not have knowledge of the ultimate destination.

Therefore, petitioner argues that because TMC will be the only exporter

for future entries of titanium sponge, the dumping margin found for TMC

should be the cash deposit rate for all future entries by any

respondent until the next final results of review are published.

AVISMA and Interlink argue that TIMET is incorrect regarding: (1)

The meaning of the marketing arrangement between Interlink and TMC; (2)

what TMC knew about the destination of the Interlink sales covered by

this review; and (3) the future AVISMA/TMC/Interlink marketing

arrangements for titanium sponge sales. AVISMA and Interlink argue that

TMC had only a general awareness of Interlink's sales plans and did not

know the destination of each sale made by Interlink (an arrangement

similar to TMC's sales relationship with AVISMA). In addition, AVISMA

and Interlink state that, because of the circumstances of the sale, TMC

could not and did not know who or in what country the customer was

located. Finally, AVISMA and Interlink argue that petitioner is

incorrect in asserting that Interlink will never again be an exporter

because, as stated in the last review, the relationship between AVISMA

and its resellers is continuing to evolve and sales may be based on a

different distribution approach in the future.

Department's Position

We disagree with petitioner's assertion that Interlink will never

again be an exporter of the subject merchandise and that the

application of a single dumping margin for all exporters is

appropriate. Speculation on the future relationships between AVISMA and

its resellers is not relevant to this administrative review. What is

relevant is that during this review, AVISMA was able to sell directly

to TMC, Interlink, and Cometals. Due to the proprietary nature of the

information on the record, please see the Analysis Memo for a further

discussion of the Department's position.

Comment 5: U.S. Credit Expense

Petitioner claims that the Department may have committed a

ministerial error by not including credit cost in its margin

calculations. Petitioner argues that the Department should make an

adjustment for credit based on the terms of sale.

AVISMA and Interlink argue that petitioner is referring to a

citation to the Department's regulations which would only apply to

reviews based on requests filed with the Department on or after July 1,

1997 (section 351.701; 62 FR 27296, 27416-17 (May 19, 1997)). In

addition, AVISMA and Interlink claim that the Departmental practice is

to not make circumstance of sale adjustments in cases involving non-

market economies. See Final Determinations of Sales at Less Than Fair

Value: Oscillating Fans and Ceiling Fans from the People's Republic of

China, 56 FR 55271, 55276 (October 25, 1991); Final Determination of

Sales at Less Than Fair Value: Certain Helical Spring Lock Washers from

the People's Republic of China, 58 FR 48833, 48839 (September 20, 1993)

(Lock Washers); Final Determination of Sales at Less Than Faire Value:

Saccharin from the People's Republic of China, 59 FR 58818, 58823

(November 15, 1994); Final Determination of Sales at Less Than Fair

Value: Manganese Metal from the People's Republic of China, 60 FR

56045, 50-51 (November 6, 1995).

Department's Position

We disagree with petitioner that we should make an adjustment for

credit based on the terms of sale. If this proceeding occurred in a

market-economy country, we would adjust normal value for the imputed

credit calculated on the sales to the United States, in accordance with

section 773(a)(6)(C)(iii) of the Act. However, in cases involving non-

market economies (NMEs), Departmental practice is to not adjust for

differences in the circumstances of sale (COS), such as imputed credit.

See Lock Washers, DOC Position to Comment 4 at 48839.

Section 773(a)(6)(C) of the Act states that COS adjustments to

normal value are only required upon a sufficient showing that

differences in circumstances of sale exist justifying the adjustment.

In this case, the only information we have regarding credit costs in

the Brazilian home market is the financial statements of the Brazilian

producers. These statements do not specify whether Brazilian home

market sales include any particular selling expenses. Therefore, we do

not have any basis upon which to determine whether adjustment to the

surrogate expenses is appropriate. Given the imprecise nature of the

information on selling expenses, we have no basis to conclude that such

adjustments are warranted in this case. See Final Determination of

Sales at Less Than Fair Value: Bicycles from the People's Republic of

China, DOC Position to Comment 1, 61 FR 19026, 19031 (April 30, 1996).

Comment 6: Value of Steel Sheet

AVISMA and Interlink argue that the Department's value for steel

sheet is far in excess of the cost that one would expect to pay for

this ``relatively minor input,'' and the SITC category used by the

Department is incorrect and should not be used in the calculation of

normal value. AVISMA and Interlink provided: (1) Information regarding

the types of steel covered by the SITC classification used by the

Department; (2) alternative HS classifications which AVISMA and

Interlink believe are more appropriate; and (3) Brazilian import data

for the HS classifications for steel.

AVISMA and Interlink claim that, although the Department used the

same SITC category in the prior review, there was apparently an

arithmetic error for this input which AVISMA and Interlink did not

recognize because the value appeared to be reasonable. In the current

review, although now the calculation is arithmetically correct, AVISMA

and Interlink claim that the cost for steel sheet far exceeds any

reasonable expectation of a cost for a minor input. Therefore, AVISMA

and Interlink argue that the Department must reject its value for steel

sheet because it clearly overstates the value of steel and does not

produce a reasonable result.

AVISMA and Interlink state the SITC classification used by the

Department is comprised of two HS categories: 7208.44 and 7208.45.

AVISMA and Interlink state that the difference between the two HS

categories is the thickness of the

[[Page 48606]]

sheet. AVISMA and Interlink argue that the more narrow thickness

category is more appropriate because lighter drums are preferred in the

titanium sponge industry since they are easier to handle and are less

expensive to make and transport. Further, AVISMA and Interlink argue

that the U.S. Department of Transportation's Research and Special

Programs Administration issued regulations which state that steel drums

which contain hazardous wastes must meet a minimum thickness

requirement of 0.92 mm and have a nominal thickness of 1.0 mm. AVISMA

and Interlink report that the greatest thickness of steel in the

regulations is 1.9 mm.

AVISMA and Interlink further argue that the HS classification

7208.45 contains specialty steel sheet, while HS classification

7208.35, the only other HS category of hot-rolled steel sheet with a

thickness of less than 3 mm, contains the commodity type hot-rolled

steel sheet. Therefore, AVISMA and Interlink believe that the

Department should value steel sheet from HS classification 7208.35 or a

weighted-average of HS categories 7208.35 and 7208.45.

Department's Position

We disagree with AVISMA and Interlink that the SITC category used

to value steel sheet is incorrect, given the evidence on the record.

AVISMA did not provide any specifications of the steel sheet used for

producing steel drums in any of its questionnaire responses. Because of

the absence of this information, the Department determined in the

preliminary results that the SITC category for steel sheet used in the

previous administrative review would be appropriate to value steel

sheet for this instant review. Parties did not file comments on the

Department's use of the SITC category for steel sheet in the previous

review.

AVISMA's and Interlink's argument that there was an arithmetic

error in the previous review should have been raised in the previous

review. Because there is no information on the record of this case

describing the specifications of the steel sheet used by AVISMA, we are

not in the position to make a determination on the thickness of the

steel used. Therefore, we determined that the use of the basket SITC

category to value steel sheet is appropriate for this review.

Final Results of Review

As a result of the comments received, we did not revise our

preliminary results and determined that the following margins exist:

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

Margin

Manufacturer/exporter Review period (percent)

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

Russia-wide rate........................ 8/1/95-7/31/96 83.96

Cometals, Inc........................... 8/1/95-7/31/96 28.31

Interlink Metals & Chemicals............ 8/1/95-7/31/96 0.00

TMC Trading International............... 8/1/95-7/31/96 0.00

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

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. The following

deposit requirement will be effective for all shipments of titanium

sponge from Russia entered, or withdrawn from warehouse, for

consumption on or after the publication date of the final results of

this administrative review, as provided by section 751(a)(1) of the

Act: (1) The cash deposit rate for merchandise manufactured and

exported to the United States directly by AVISMA will be the Russia-

wide rate established in these final results of review; (2) the cash

deposit rates for merchandise exported to the United States by

Interlink, TMC, or Cometals will be those rates established for

Interlink, TMC, or Cometals in these final results of review; (3) for

merchandise exported by manufacturers or exporters not covered in this

review but covered in the original LTFV investigation or a previous

review and have a separate rate, the cash deposit rate will continue to

be the most recent rate published in the final determination or final

results for which the manufacturer or exporter received a company-

specific rate; (4) for Russian manufacturers or exporters not covered

in the LTFV investigation or in this or prior administrative reviews,

the cash deposit rate will continue to be the Russia-wide rate; and (5)

the cash deposit rate for non-Russian exporters of subject merchandise

from Russia that were not covered in the LTFV investigation or in this

or prior administrative reviews will be the rate applicable to the

Russian supplier of that exporter. These deposit rates, when imposed,

shall remain in effect until publication of the final results of the

next administrative review.

Further, because the rates for Interlink and TMC have been

determined to be zero, we will instruct Customs to liquidate all

exports of the subject merchandise during the POR by Interlink and TMC,

without regard to the antidumping duty. As stated in the preliminary

results, we found that AVISMA's and Cometals' exports during the POR

entered the United States under temporary importation bonds, which are

not subject to the antidumping order. The Department will issue

appraisement instructions directly to the U.S. Customs Service.

This notice also serves as a final reminder to importers of their

responsibility under 19 CFR 353.26(b) to file a certificate regarding

the reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

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

administrative protective order (APO) in this review of their

responsibility concerning the disposition of proprietary information

disclosed under APO in accordance with 19 CFR 353.34(d). Timely written

notification of the return/destruction of APO materials or conversion

to judicial protective order is hereby requested. Failure to comply

with the regulations and the terms of an APO is a sanctionable

violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

Dated: September 9, 1997.

Jeffrey P. Bialos,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-24469 Filed 9-15-97; 8:45 am]

BILLING CODE 3510-DS-P