Ferrovanadium and Nitrided Vanadium From the Russian Federation: Notice of Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-807]

Ferrovanadium and Nitrided Vanadium 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 August 7, 1997, the Department of Commerce published in the

Federal Register the preliminary results of its administrative review

of the antidumping duty order on ferrovanadium and nitrided vanadium

from the Russian Federation (62 FR 42492). This review covers the

period January 4, 1995, through June 30, 1996. Based on our analysis of

the comments received from interested parties, we have made certain

changes to our preliminary results, including corrections of errors.

Therefore, the final results differ from the preliminary results. The

final weighted-average dumping margin is listed below in the section

entitled ``Final Results of Review.''

We have determined that sales have been made below normal value

during the period of review. Accordingly, we will instruct the U.S.

Customs Service to assess antidumping duties based on the difference

between export price and normal value.

EFFECTIVE DATE: December 15, 1997.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Mary Jenkins,

AD/CVD Enforcement Group II, Office 5, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

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

(202) 482-4136 or (202) 482-1756, respectively.

[[Page 65657]]

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended, (the Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Rounds 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 (April 1, 1997).

Background

The Department of Commerce (the Department) published an

antidumping duty order on ferrovanadium and nitrided vanadium from the

Russian Federation (Russia) on July 10, 1995 (60 FR 35550).

The Department published a notice of ``Opportunity To Request an

Administrative Review'' of the antidumping duty order for this review

period on July 8, 1996 (61 FR 35712). We received a timely request for

review and on August 15, 1996, we published a notice of initiation of

the review (61 FR 42416).

This review covers one exporter of the subject merchandise, Galt

Alloys, Inc. (Galt).

On August 7, 1997, the Department published in the Federal Register

the preliminary results of its administrative review of the antidumping

duty order on ferrovanadium and nitrided vanadium from Russia, as well

as a recission of the review for a second exporter, Odermet Ltd., which

had no shipments during the period of review (POR) (62 FR 42492). Galt

and the petitioner, Shieldalloy Metallurgical Co., Inc., submitted case

and rebuttal briefs in September 1997. In response to the Department's

October 15, 1997, letter, the petitioner submitted additional surrogate

value data on October 27, 1997, and Galt submitted comments related to

this submission on November 3, 1997. As the Department placed

additional surrogate value information on the record on November 6,

1997, we allowed comments on this information from the petitioner,

submitted on November 14 and 18, 1997, and rebuttal comments from Galt

submitted on November 20, 1997, in accordance with section 782(g) of

the Act.

The Department has now completed this review in accordance with

section 751(a) of the Act.

Scope of the Review

The products covered by this administrative review are

ferrovanadium and nitrided vanadium, regardless of grade, chemistry,

form or size, unless expressly excluded from the scope of this order.

Ferrovanadium includes alloys containing ferrovanadium as the

predominant element by weight (i.e., more weight than any other

element, except iron in some instances) and at least 4 percent by

weight of iron. Nitrided vanadium includes compounds containing

vanadium as the predominant element, by weight, and at least 5 percent,

by weight, of nitrogen. Excluded from the scope of this order are

vanadium additives other than ferrovanadium and nitrided vanadium, such

as vanadium-aluminum master alloys, vanadium chemicals, vanadium waste

and scrap, vanadium-bearing raw materials, such as slag, boiler

residues, fly ash, and vanadium oxides.

The products subject to this order are currently classifiable under

subheadings 2850.00.20, 7202.92.00, 7202.99.5040, 8112.40.3000, and

8112.40.6000 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, our written description of the scope is

dispositive.

Period of Review

The period of review (POR) is January 4, 1995, through June 30,

1996. The review covers one exporter, Galt.

Facts Available

In accordance with section 776(a) of the Act, we have determined

that the use of adverse facts available (FA) is appropriate for sales

of merchandise produced by Chusovoy, as discussed in the Preliminary

Results of Antidumping Duty Administrative Review of Ferrovanadium and

Nitrided Vanadium from the Russian Federation (62 FR 42494, August 7,

1997) and below at Comment 1.

Analysis of Comments Received

Comment 1: Application of Facts Available to Chusovoy-produced

Merchandise.

Galt contends that the use of an adverse facts available rate of

88.63 percent for Galt's sales of merchandise produced by Chusovoy, a

non-cooperative party to the proceeding, is contrary to the statutory

requirements and Department precedent, and punishes the wrong party for

non-cooperation. Galt cites section 776(b) of the Act which provides

that adverse FA may be applied when an interested party has failed to

cooperate by not acting to the best of its ability to comply with a

request for information. Accordingly, while Chusovoy may be

uncooperative, Galt notes that it has cooperated to the best of its

ability, and thus adverse FA cannot be applied in calculating its

margin. In a recent case with a similar fact pattern, Final Results of

Antidumping Duty Administrative Review: Tapered Roller Bearings and

Parts Thereof, Finished and Unfinished, from the People's Republic of

China, 62 FR 6173 (February 11, 1997) (PRC TRBs), Galt states that the

Department did not apply adverse FA from the less than fair value

(LTFV) investigation petition for the merchandise from the

uncooperating producers sold by the cooperating exporter, as was

applied in these preliminary results, but rather used the facts

available from other producers in that proceeding to calculate normal

value (NV) for those sales. Galt thus argues that the margin for these

sales should be calculated using Galt's actual sales prices for export

price (EP) and the information obtained from the other producer in this

proceeding, Tulachermet, or, alternatively, Chusovoy's data from the

LTFV investigation, to calculate NV.

The petitioner argues that the Department properly considered

Chusovoy an uncooperative respondent in the preliminary results and

correctly applied adverse FA to sales of Chusovoy's merchandise. Given

the absence of the required data from Chusovoy, the petitioner contends

that the petition rate properly constitutes the ``facts otherwise

available'' in accordance with section 776(b) of the Act. This

approach, the petitioner continues, is consonant with the Department's

established, and judicially approved, pre-URAA two-tiered ``best

information available'' (BIA) methodology, and the Department's

practice regarding facts available under the URAA. With regard to

Galt's proposed alternatives to the LTFV petition rate, the petitioner

claims that Chusovoy's data from the LTFV segment of the proceeding

cannot be considered in this segment because Galt improperly submitted

the information on this record without Chusovoy's consent or knowledge.

The petitioner also notes that the facts in this case are different

from those in PRC TRBs, where, the petitioner contends, the amount of

usable information was much greater than in this instance.

DOC Position: We find no basis to change our finding in the

preliminary results that the use of adverse FA is warranted for

Chusovoy's factors of production. As we stated in the preliminary

results, we find that, pursuant to section 782(e) of the Act, the

limited information that Chusovoy

[[Page 65658]]

submitted is so incomplete that it cannot serve as a reliable basis for

reaching a determination in this review. Further, by failing to

respond, Chusovoy is an interested party which has not cooperated to

the best of its ability under section 776(b) of the Act. Therefore, we

have continued to use an adverse inference in selecting from the facts

available to determine the margins for Galt's sales of Chusovoy-

produced merchandise and applied the 88.63 percent margin used in the

preliminary results for these sales.

With regard to Galt's reference to a different approach applied in

PRC TRBs, we note that the facts in PRC TRBs are distinguishable from

the instant situation in a number of ways. Premier purchased the

subject merchandise from eight suppliers, two of which did not

cooperate; here, Galt purchased only from two suppliers, of which one

did not cooperate. Premier's six cooperating suppliers reported little

variation in factor-utilization rates; thus, using their data to

calculate the unreported factor data for the same model may have been

appropriate for that case. Here, we only have one cooperating

producer's fully reported factors of production to consider and thus an

insufficient basis to conduct a similar evaluation of variation in

consumption rates. Under these circumstances, it is inappropriate to

allow Chusovoy (or any producer) to benefit for not cooperating in a

proceeding.

With regard to petitioner's comment concerning Galt's submission of

Chusovoy data from the LTFV investigation, we do not agree that the

information was improperly submitted. The information in question was

originally obtained by Galt and submitted to the Department by counsel

common to Galt and Chusovoy. Galt did not obtain the information

through a violation of the administrative protective order, but rather

had direct access to the information and thus was in a position to

submit it for this record.

Comment 2: Valuation of Chusovoy's Vanadium Slag for Facts

Available Rate.

The petitioner contends that the Department cannot use

Tulachermet's purchase price of South African vanadium slag to value

Chusovoy's consumption of vanadium slag. According to the petitioner,

Department precedent and policy establish the Department's intent to

apply the price paid by an NME producer for a market economy input only

to that producer's own consumption of the input. The petitioner also

claims that, in applying the facts available rate as NV for Galt's

sales of Chusovoy merchandise, the Department improperly concluded that

Chusovoy procured all of its slag requirements from Russian suppliers

and thus improperly applied a quality adjustment in valuing vanadium

slag. As facts otherwise available, the petitioner holds that the

Department should adversely assume that this uncooperative respondent

did not purchase any of its vanadium slag requirements from Russian

suppliers of low grade vanadium slag, but rather consumed high grade

vanadium slag such as South African slag, containing 23 percent

vanadium pentoxide, and thus apply, without adjustment, the LTFV margin

of 108 percent to all of Galt's sales of subject merchandise produced

by Chusovoy.

Galt objects to the use of the unadjusted petition value for

vanadium slag (i.e., the price paid by Shieldalloy for South African

slag exported to the United States) because it relates to sales to a

different market and is thus less accurate than a price to the Russian

market. According to Galt, the price paid by Tulachermet for South

African vanadium slag imported into Russia is the best available

information to value Chusovoy's slag.

DOC Position: We have not valued Chusovoy's consumption of vanadium

slag based on Tulachermet's South African purchase, but rather we

applied the LTFV investigation margin rate, adjusted to reflect the

quality of Russian-sourced vanadium slag as we did for the preliminary

results of this administrative review, for all of Galt's sales of

Chusovoy-produced merchandise. We disagree with the petitioner that the

Department must make an adverse assumption of the facts available that

Chusovoy obtained higher quality South African slag for all of its

vanadium slag consumption. The facts available in this segment include

all of the relevant information obtained and verified during the LTFV

segment of the proceeding, and placed specifically on the record prior

to the preliminary results, as well as information in the public

record. In the LTFV investigation, Chusovoy reported, and the

Department verified, that none of its slag was obtained from market

economy sources. The LTFV investigation established that Chusovoy

obtained slag from two sources: as a by-product of its production of

other goods, and from a steel manufacturer in Nizhni-Tagil in Russia.

There is no basis to assume, adversely or otherwise, that Chusovoy has

completely changed its supply pattern and relies exclusively on

foreign-sourced vanadium inputs.

Comment 3: Application of Facts Available to Galt and Tulachermet

Data.

The petitioner claims that Galt's and Tulachermet's data as well as

Chusovoy's should be disregarded for the final results because of

numerous deficiencies and failure to provide requested data. Moreover,

the petitioner argues that these parties are also uncooperative and

adverse FA must be applied for the final results. The petitioner cites

the following areas as the basis for its claim:

(a) Failure to meet certification requirements--The petitioner

contends that the respondents failed to comply with the Department's

certification requirements of 19 CFR 353.31(i) by omitting

certifications from Chusovoy or its counsel, or by submitting

certifications that were merely copies of faxes used in previous

submissions and have never replaced them with original signed

certifications.

(b) Galt failed to report all of its POR sales--The petitioner

contends that Galt failed to report all of its sales during the POR

because it did not report data for merchandise sold from a shipment

that allegedly entered the United States prior to suspension of

liquidation. The petitioner claims that in order to exclude these

sales, Galt must meet the stringent requirements outlined in Final

Results of Antidumping Duty Administrative Review: Certain Stainless

Steel Wire Rod from France, 62 FR 7206 (February 18, 1997) (SSWR),

namely that such sales may be excluded only if the Department

determines that these sales (1) entered the United States prior to

suspension of liquidation, and (2) that there is sufficient linkage

between the entry and the POR sales. The petitioner argues that Galt

had provided insufficient documentation to establish the date of entry

as being prior to the suspension of liquidation, and that Galt has not

adequately demonstrated linkage between this entry and corresponding

sales.

(c) Galt failed to provide all required audited financial

statements--The petitioner states that Galt never provided the audited

financial statement for Galt International for the fiscal year ending

September 30, 1996, as requested by the Department. The internal

financial documents Galt submitted, the petitioner contends, were

untimely and inadequate.

(d) Tulachermet failed to provide critical information--The

petitioner contends that Tulachermet did not adequately respond to the

Department's questionnaire because it did not provide full translations

of production worksheets, revealed late in this proceeding that it

produced an intermediate product, limestone, in making the subject

merchandise, failed

[[Page 65659]]

to provide complete packing materials and labor factor data for the

POR, and omitted other information specifically requested by the

Department.

Galt counters that it has fully cooperated with the Department.

Galt's responses to the petitioner's comments are as follows:

(a) Failure to meet certification requirements--Galt contends that

all submissions included the necessary certifications for factual

information and that no submission has been rejected by the Department

because of the absence of a proper certification. Galt adds that the

petitioner is incorrect in its understanding of the certification

regulation in that it does not specify the particular form of

certification that the petitioner is demanding. Accordingly, there is

no reason to reject Galt's and Tulachermet's submission on this basis.

(b) Galt failed to report all of its POR sales--Galt replies that

it has adequately demonstrated that the sales in question were properly

excluded from its reporting because the merchandise entered the United

States prior to suspension of liquidation. Galt states that, although

the petitioner insists that Galt has supplied insufficient

documentation, the petitioner fails to identify what piece of

documentation, other than the actual entry documents, Galt should have

submitted. Galt asserts that the entry summary provided to U.S. Customs

sufficiently establishes the date of entry for this merchandise.

Further, Galt argues that it has already established during the LTFV

investigation verification that it keeps records in the ordinary course

of business that enables it to link entered merchandise and sales.

(c) Galt failed to provide all required audited financial

statements--Galt responds that there is no audited financial statement

for its affiliate Galt International for the fiscal year ending

September 30, 1996; thus, Galt cannot be said to be uncooperative in

this regard.

(d) Tulachermet failed to provide critical information--Galt states

that Tulachermet reported all inputs to the Department. The production

summary worksheet translations are adequate, Galt states, because each

monthly summary has year-to-date cumulative calculations, so that by

providing translations for December 1995 and June 1996, Tulachermet has

provided translations for the entire POR. With regard to Tulachermet's

own production of lime from limestone, Galt states that the necessary

information was immediately submitted to the Department after the

Department raised the issue, and that the labor and energy consumed in

the production of lime already had been included in the reporting of

vanadium pentoxide production. Galt states that Tulachermet's packing

input reporting is complete in that a comparison of the response for

the POR to the verified response in the LTFV investigation shows that

the petitioner's claim that all of its packing materials were not

reported is baseless, and that the petitioner has failed to identify

even one material that is missing.

DOC Position: We continue to hold, as we stated in our preliminary

results, that Galt and Tulachermet have fully cooperated with the

Department and that the information submitted by Galt and Tulachermet

meets the requirements of section 782(e) of the Act in that:

(1) the information is timely;

(2) the information is verifiable;

(3) the information is not so incomplete that it cannot serve as a

reliable basis for our determination;

(4) these parties have acted to the best of their abilities in

providing the requested information; and

(5) the information can be used without undue difficulties.

Accordingly, we have relied upon the information submitted by Galt

and Tulachermet for the final results. We address the specific areas

raised by the petitioner as follows:

(a) In our review of Galt's submissions, we found that all

submissions that required certifications were accompanied by a

certification that meets the regulatory requirement. Most of these

certifications were of the faxed, copied type. While this type may not

be ideal, there is no regulatory or statutory basis for rejecting such

certification.

(b) The Department is satisfied that the ``unreported sales''

claimed by the petitioner are for pre-antidumping duty order entries.

We disagree with the petitioner that Galt failed to meet the two-prong

test as articulated in SSWR from France. The first prong of the test is

established by showing that the merchandise entered the United States

before the suspension of liquidation. Galt met this part of the test by

submitting entry documents for the sales in question which established

that the merchandise entered the United States prior to suspension of

liquidation. In addition, the second part of the test was met because a

comparison of the lot number for the entry to the lot numbers supplied

in the sales listing confirms that Galt has been able to link specific

sales to entries. We verified in the LTFV investigation that Galt is

able to link specific sales to specific entries of the subject

merchandise and we have no reason to believe that circumstances have

changed with regard to Galt's ability to link these entries and sales.

(c) We find no basis to conclude that Galt has withheld any

financial statements. Galt has stated that there is no financial

statement for its affiliate and we have no reason to dispute this

assertion.

(d) With respect to Tulachermet's provision of information, the

information provided is timely, verifiable, complete to the extent that

it serves as a reliable basis for our determination, and can be used

without undue difficulty. Galt provided Tulachermet's production

worksheets in full compliance with the Department's instructions, and

provided adequate translations for them. The information on lime

production, which constitutes only a small portion of NV, by value, was

provided in a timely manner for this segment of the proceeding. The

information provided for the relatively minor packing factors is

sufficient to serve as a reliable basis for our final results.

Comment 4: ``Combination Rates'' for Galt.

Galt contends that, if the Department applies adverse FA to sales

of Chusovoy merchandise, it should do so in a way that punishes

Chusovoy for its non-cooperation, but not Galt. Accordingly, Galt

advocates establishing separate deposit rates for each producer/

exporter combination (``combination rates'')--i.e., a deposit rate for

Chusovoy (producer) and Galt (exporter) based on adverse FA, and a

deposit rate for Tulachermet (producer) and Galt (exporter) based on

the Department's margin calculations using the submitted data. Galt

also advocates a different basis for assessment purposes using the

actual sales information from Galt.

The petitioner argues that the issuance of a single dumping margin

for Galt is proper and consistent with the Department's practice.

Indeed, it would be inappropriate and improper for the Department to

issue separate combination rates, according to the petitioner. The

petitioner cites a number of past determinations where the Department

has refused to establish producer/exporter combination rates, except

where a producer/exporter margin is found to be zero or de minimis and

thus excluded from an antidumping duty order. The petitioner further

contends that the issuance of a single dumping margin for Galt

facilitates administration of the antidumping duty order. Finally, the

petitioner notes that establishing assessment and deposit rates on

[[Page 65660]]

different bases would have the effect of rewarding Chusovoy for its

failure to cooperate since, under Galt's proposal, little or no

antidumping duties would be assessed on the sales already made, while

there would be no impact for future sales since Chusovoy has shown no

further interest in exports to the United States.

DOC Position: We have followed our long-established practice and

calculated a single rate applicable to the exporter, Galt, consistent

with our approach in similar cases (see, e.g., Final Determination of

Sales at Less Than Fair Value: Pure Magnesium From Ukraine, 60 FR

16433, March 30, 1995). As the rate calculated merely reflects the

margins determined on all of Galt's U.S. sales, we are not persuaded

that there is a compelling reason to deviate from our normal practice.

Comment 5: Whether Verification Should Have Been Conducted in this

Proceeding.

The petitioner claims that it established a compelling and apparent

need for verification of the sales and factors of production responses

in this proceeding, based on, inter alia, the changes in Galt's

distribution system since the LTFV investigation, alleged deficiencies

in Galt's and Tulachermet's responses, and Tulachermet's failed

verification in the LTFV investigation. The petitioner further contends

that the respondents have ``ducked'' verification by claiming that

verification would be a needless expense and that all required

information could be provided without verification. Instead, the

petitioner argues, the respondents have provided an incomplete and

contradictory record; they should not benefit from their objection to

verification.

The respondents counter that they have not ``ducked'' verification,

but rather contend that it would be an unnecessary expense for the

Department and for the respondents to conduct on-site verifications

again in this review when the Department could achieve the same ends

through written submissions. The respondents also contend that the

petitioner failed to meet the deadline for requesting verification in

this review and therefore has no standing to object to the Department's

decision not to conduct a verification in this instance.

DOC Position: As stated in section 782(i)(3) of the Act, the

Department shall verify information relied on for the final results of

an administrative review if (A) there is a timely request for

verification, and (B) no verification was made during the two

immediately preceding reviews and investigations, unless good cause for

verification is shown. Under the applicable regulation, 19 CFR

353.36(a)(v)(A), the petitioner's request was not timely, as it was

made more than 120 days after the initiation of this administrative

review. However, 19 CFR 353.36(a)(iv) also provides for verification if

the Department determines that good cause for verification exists. In

response to the petitioner's assertions, we do not find that good cause

exists for verification in the instant segment of the proceeding.

Both Galt and Tulachermet were verified in the LTFV investigation,

which immediately preceded this review. While Tulachermet failed

verification of its sales response in the LTFV investigation, its

reported factors of production were successfully verified and used to

calculate foreign market value for an unaffiliated exporter. Although

Galt has made changes in its distribution system since our last

verification, it has fully responded to our requests for information

and provided sufficient data in this review for the Department's

analysis and reliance upon for the final results. We do not consider a

change in a respondent's distribution system, in and by itself,

sufficient cause to require a verification. In sum, we are satisfied

that the data provided by Galt and Tulachermet is sufficiently reliable

under section 782(e) of the Act so as to form the basis of our final

results without conducting verification.

Comment 6: Surrogate Value for Vanadium Slag.

In the preliminary results, the Department valued Tulachermet's

Russian-sourced vanadium slag based on the price Tulachermet paid for a

purchase of South African slag immediately prior to the POR, adjusted

for the quality difference between the South African and Russian

material using the methodology applied in the LTFV final determination.

The petitioner contends that the use of a single, pre-POR purchase of

vanadium slag, which is of an insignificant quantity in comparison to

Tulachermet's consumption of Russian slag, is an inadequate basis for

the surrogate value. The petitioner claims that the Department rejected

its valuation proposal--the weighted-average of the petitioner's own

South African vanadium slag purchases during the POR--because of the

Department's faulty mathematical analysis of the petitioner's

purchases. Because its South African vanadium slag purchases are of the

material to be valued, and cover the entire POR, the petitioner argues

that these prices are the appropriate basis for the surrogate value.

With regard to vanadium price data obtained from the South African

Minerals Bureau subsequent to the preliminary results (see fax dated

November 6, 1997), which includes the domestic average price for

vanadium slag, the petitioner objects to this source because the

petitioner believes that the South African values stated are likely to

be distorted by intracompany transfers not conducted at arm's length,

and thus do not represent market value.

Galt claims that the use of Tulachermet's purchase price as the

basis for the vanadium slag surrogate value is consistent with the

Department's policy and practice, as embodied in section 351.408(c)(1)

of the Department's new regulations, which states that the Department

will base surrogate value on a market economy purchase when an input is

sourced from both market economy and NME suppliers. Galt asserts that

Tulachermet made bonafide, substantial purchases for Tulachermet's

production, and not a de minimis purchase meant to distort a dumping

margin; thus, this purchase is a reasonable basis for valuing Russian

sourced slag in accordance with the Department's policy. The use of the

petitioner's prices for vanadium slag, Galt further contends, would be

unfair and unpredictable because this business proprietary information

is unavailable when the respondents make sales. Thus, argues Galt, how

could Tulachermet know if Shieldalloy purchased slag at the beginning,

at the end, or anytime at all during the POR, and in what quantities?

And, how could Galt even attempt to price fairly if it must guess at

the value of an important input rather than use a figure that is

readily accessible? Galt also notes that relying on the petitioner's

purchase prices would involve the use of prices to the United States

rather than to an appropriate surrogate country, contrary to section

773(c)(4) of the Act. Finally, with regard to petitioner's contentions

regarding the use of the vanadium slag price data from the South

African Minerals Bureau, Galt claims that its analysis shows that any

price distortion that exists in this value would be to respondents'

detriment and the value should be adjusted accordingly if it were to be

used.

DOC Position: Vanadium slag is the single most important input for

production of ferrovanadium. Tulachermet obtained nearly all of its

vanadium slag consumed during the POR from a Russian source, which

provided the material at a grade of approximately 15-16 percent

contained vanadium pentoxide. Tulachermet purchased a relatively small

amount of vanadium slag from South Africa immediately prior to the POR

for POR

[[Page 65661]]

consumption. This market economy purchase was of 22-24 percent

contained vanadium pentoxide. As in the preliminary results, we valued

the quantity purchased from South Africa at the purchase price for this

material. Because this material is different from the Russian-sourced

material, on the basis of the vanadium pentoxide content, we did not

apply this price to the remainder of the vanadium slag consumed by

Tulachermet, nor did we assign this price as the basis for the vanadium

slag surrogate value (prior to adjustment), as we did in the

preliminary results. As explained further below and in the Final

Results Valuation Memorandum dated December 4, 1997 (FRVM), we have

applied a different surrogate value and adjustment methodology (see

Comment 7) for the final results.

The Department's stated practice in determining which surrogate

value to use for valuing each factor of production is to select, where

possible, publicly available information which is: (1) an average non-

export value; (2) representative of a range of prices within the POR if

submitted by an interested party, or most contemporaneous with the POR;

(3) product-specific; and (4) tax-exclusive (see, e.g., Final Results

of Antidumping Duty Administrative Review: Sebacic Acid From the

People's Republic of China, 62 FR 10530, 10534, March 7, 1997 (Sebacic

Acid), and Preliminary Results of Antidumping Administrative Review:

Manganese Metal From the People's Republic of China, 62 FR 60226,

60227, November 7, 1997). The Department has also articulated a

preference for a surrogate country's domestic prices over import values

(see, e.g., Final Determinations of Sales at Less Than Fair Value:

Brake Drums and Brake Rotors From the People's Republic of China, 62 FR

9160, 9163, February 28, 1997).

As we have noted throughout this proceeding (see, e.g., Preliminary

Results Valuation Memorandum (PRVM) at page 3), we have not been able

to identify a market economy surrogate value for vanadium slag with 16

percent contained vanadium pentoxide from any source. Indeed, our

research indicates that vanadium slag of this quality is not produced

outside of Russia and, perhaps, the People's Republic of China.

Accordingly, the Department must identify the most comparable surrogate

match.

Based on the available choices, we have rejected both the values

offered by the petitioner based on its own purchases of South African

vanadium slag, and the value based on Tulachermet's December 1994 South

African purchase. These values are not product-specific (i.e., are for

vanadium slag of a different quality than that obtained by Tulachermet

from its Russian supplier), and are export prices. We are also

concerned that the use of the petitioner's proprietary purchase prices,

unavailable to Galt and its suppliers, as the surrogate value for a

major input would effectively allow the petitioner to directly

influence our calculation of NV and hinder the exporter from adjusting

its prices to eliminate dumping. As for Tulachermet's price, we agree

with the petitioner that the use of a single price quote from December

1994 does not adequately represent the price levels of vanadium

products experienced during the POR.

In this proceeding, we obtained data from the South African

Minerals Bureau on the vanadium industry and price levels for a variety

of products. Some of this information was in published form (see PRVM),

while other data was obtained directly from the Bureau (see fax dated

November 6, 1997). In addition, the South African Minerals Bureau, the

petitioner, and Galt have provided information from the industry

publication Metal Bulletin on vanadium pentoxide and ferrovanadium

prices in the world market. We have relied on these public, independent

sources as the bases for valuing vanadium slag and other vanadium

products.

For vanadium slag, we have used as the base value the POR-average

South African FOB value for 24 percent vanadium pentoxide content slag,

as reported by the South African Minerals Bureau in the November 6 fax.

This value is a domestic South African price for a material that is

most comparable to the product among the publicly available values. The

value calculated is an average of 1995 and 1996 values and is thus

representative of the range of prices during the POR. Moreover, it is

derived from the only source of public data for vanadium slag (of any

grade) we have obtained in the course of this proceeding.

In our view, the inferences, speculations, and assumptions the

petitioner and Galt applied in their respective analyses of the South

African domestic prices fail to establish that these South African slag

values are not market values. A comparison of the annual averages of

the South African slag prices to the annual averages of CIF Europe spot

prices for vanadium pentoxide shown in the November 6 fax, which are

market-based prices, shows a consistent relationship of about 20 to 25

percent (i.e., the slag price is about 20-25 percent of the European

market price for vanadium pentoxide). Given the absence of any other

public source for slag prices, based on the available information, we

have no basis to conclude that, to the extent a market exists for

vanadium slag, these prices are not the South African market prices for

vanadium slag.

Comment 7: Quality Adjustment to Vanadium Slag Surrogate Value.

The petitioner disagrees with the Department's adjustments for what

it considers alleged quality differences between the South African and

Russian inputs. The petitioner contends that the record evidence does

not support the Department's position in its preliminary results that

Russian-sourced vanadium slag, of approximately 15-16 percent vanadium

pentoxide content must be valued lower than South African slag of

approximately 22-24 percent vanadium pentoxide, on a contained-vanadium

basis 1. The petitioner objects to the use of a quality

adjustment methodology based on a ratio derived from the prices of

Russian (i.e. NME) goods. Such a use of NME prices, the petitioner

contends, is contrary to the Department's established policy and

practice. Finally, if the Department were to make a quality adjustment

to the South African input value, the petitioner states that the

adjustment must be based on POR data and proposes an adjustment factor

of .96, derived from Metal Bulletin news articles during the POR,

rather than the .7292 factor derived from 1993-94 Metal Bulletin price

comparisons. Alternatively, the petitioner suggests that, if the

Department believes it has insufficient information from market economy

countries to value the vanadium slag consumed by Tulachermet, the

Department should base NV on the sales of South African ferrovanadium

to other countries.

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

\1\ ``Contained vanadium basis'' refers to adjusting the price

or value of the material based solely on the amount of vanadium

contained, regardless of the content of other materials. Thus,

products with varying percentages of contained vanadium or vanadium

pentoxide can be compared on an equal basis.

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

Galt agrees with the Department's approach to adjusting the

surrogate value for quality differences between the South African

material and the Russian-sourced material. Galt states that, contrary

to the petitioner's assertion, the statute does not prohibit the use of

NME-based value information to adjust a market-based surrogate value.

Galt notes that this case differs from the Final Determination of Sales

at Less than Fair Value: Refined Antimony Trioxide from the People's

Republic of China, 57 FR 6801 (February 26, 1992),

[[Page 65662]]

cited by the petitioner in that (1) the non-market prices in question

are being used to determine an adjustment factor, not to determine the

base price to be used, and (2) there are no market economy prices

available. Thus, Galt contends, under these conditions the Department

has no choice but to use the available information in order to make the

adjustment to the vanadium slag surrogate value that the record

overwhelmingly shows is necessary. Galt also objects to the

petitioner's proposed alternative methodology using POR price quotes,

claiming that the information is anecdotal and does not adequately

identify the Russian merchandise to allow for proper calculation of the

quality adjustment ratio.

DOC Position: As we stated in the PRVM, the record throughout this

proceeding overwhelmingly demonstrates that vanadium slag with a

vanadium pentoxide content below 24 percent is lower quality than the

24 percent product, and its value to consumers cannot be quantified in

terms of a straight-line adjustment based on relative percentages of

vanadium pentoxide, as argued by the petitioner. Principally, the

Russian-sourced vanadium slag contains a higher level of impurities

than the 24 percent vanadium pentoxide content slag, which, in turn,

results in higher processing and waste disposal costs. We concluded in

the LTFV investigation that the South African slag value should be

adjusted in order to properly value the Russian-sourced vanadium slag

to account for the latter's lower quality. Our finding and methodology

was upheld in Shieldalloy Metallurgical Corp. v. United States, 975

F.Supp. 361 (Ct. Int'l Trade 1997) and Shieldalloy Metallurgical Corp.

v. United States, 947 F.Supp. 525 )Ct. Int'l Trade 1996). In this

review, we continue to believe that Russian-sourced slag must be valued

lower than the 24 percent vanadium pentoxide slag, on a contained

vanadium basis.

The petitioner has never convincingly refuted the fact that the

Russian-sourced slag is of an inferior quality to the South African

slag upon which surrogate values have been based. The petitioner's

claims and speculations that the inferior Russian vanadium slag should

be valued the same as the higher quality South African material, on a

contained vanadium basis, do not stand up against the weight of

information to the contrary developed throughout this proceeding. Given

that no market economy value exists to our knowledge for vanadium slag

of a comparable quality to the Russian-sourced material, a quality

adjustment must be made to the South African vanadium slag value in

order to arrive at a surrogate value that fairly represents the

material to be valued.

The petitioner has argued that the Department's quality adjustment

methodology used in the LTFV final determination and the preliminary

results of this review is flawed because it is based on NME prices, and

is based on noncontemporaneous price data. We acknowledged in the

preliminary results that, subsequent to the LTFV investigation and CIT

litigation, we learned that the 90% vanadium pentoxide prices published

in Metal Bulletin and used to calculate our adjustment ratio were based

on Russian prices. However, since we have been unable to identify any

other information suitable for making this adjustment, we must continue

to use the ratio between vanadium pentoxide prices, including the

prices of Russian vanadium pentoxide of lower quality, as a facts

available basis for the quality adjustment methodology. We emphasize

that we are not using any NME prices to arrive at the surrogate value,

but rather the relationship between prices for internationally-traded

goods in market economies, where some of these goods were produced in a

NME country, and applying the resulting ratio to a South African value.

Although this methodology may not be ideal because it involves the use

of NME price data, it is, nevertheless, the best available information.

To fail to apply a quality adjustment to the surrogate value would be,

in our view, a far greater distortion to the valuation of Russian-

sourced vanadium slag.

Its other objections aside, the petitioner proposes using POR

vanadium pentoxide price information to recalculate the quality

adjustment. We agree with the petitioner that this approach is

preferable. However, we agree with Galt's concerns about the Russian

vanadium pentoxide prices the petitioner selected from Metal Bulletin.

These quotes are anecdotal citations chosen by the petitioner that

include no information about the quality of the product allegedly sold.

In contrast, the LTFV methodology relied on market research data by an

independent source for vanadium pentoxide of a known purity (see

Attachment 9 to PRVM). While the data is not contemporaneous, it is

otherwise more reliable than the information proffered by the

petitioner.

For the final results, we have revised our methodology from the

preliminary results to incorporate more recent data from Metal

Bulletin, as submitted by Galt on December 13, 1996. This submission

includes 98 percent and 90 percent vanadium pentoxide price data for

the last quarter of 1994--the last period that Metal Bulletin published

90 percent vanadium pentoxide prices and the quarter immediately prior

to the POR. Thus, for the final results, we have applied the ratio

between 98 percent vanadium pentoxide and 90 percent vanadium pentoxide

prices reported for the fourth quarter of 1994, .9437, as the quality

adjustment for the vanadium slag value. Our calculation is shown in the

FRVM.

Comment 8: Contemporaneity of Vanadium Slag Surrogate Value.

The petitioner contends that a surrogate value based on a single

purchase of vanadium slag immediately prior to the POR is inappropriate

in this proceeding due to the price fluctuations of vanadium products

during the POR. In support of its position, the petitioner provided

information showing the rise and fall of world vanadium pentoxide and

ferrovanadium prices during the POR, and that the Tulachermet purchase

price is unrepresentative of prices during the POR. The petitioner

asserts that the Department must make appropriate adjustments to ensure

that the values of vanadium inputs accurately represent POR prices,

otherwise the dumping calculation will be distorted. Accordingly, the

petitioner claims that the surrogate value should be based on a

weighted-average of prices during the POR, such as the weighted-average

of the petitioner's vanadium slag purchases, or, if the Department

continues to rely on Tulachermet's slag purchase price, an adjustment

to that price must be made to reflect the difference between prices at

the time of the purchase and the average prices during the POR.

Galt asserts that Tulachermet's purchase of the South African slag,

although immediately prior to the POR, was for inputs consumed during

the POR and thus is an appropriate value for the POR. Galt claims that

to adjust the slag value for the vanadium price increases over the POR

without ensuring that appropriate costs, prices, and production factors

are matched will create distortions. In this case, Galt continues, the

Department does not have the data on the record to link Tulachermet's

actual production to its shipments to Galt, as such information was

never requested by the Department. Therefore, Galt states that the only

alternative is to find that there is no basis on the record to find

this type of price inflation for the sales at issue and thus no time

period adjustment need be made to Tulachermet's purchase price for

vanadium slag.

[[Page 65663]]

DOC Position: We agree with the petitioner that, in this instance,

it is inappropriate to base the surrogate value for vanadium slag on

Tulachermet's single purchase price and have not done so for these

final results (see Comment 6).

Comment 9: Sulfuric Acid Valuation.

The petitioner argues that Tulachermet's consumption of sulfuric

acid should be adjusted to correct the Department's treatment of this

input in diluted form. In fact, the petitioner contends that

Tulachermet reported that it consumed sulfuric acid at 100 percent

concentration. Thus, the petitioner states that, for the final results,

Tulachermet's consumption of sulfuric acid should be valued based on

the ratio of Tulachermet's 100 percent concentration consumption to the

``standard concentration of commerce'' of 93-98 percent, as identified

by the Department. In addition, the petitioner states that the price

used in the preliminary results was not the intended value identified

by the Department as provided by a South African vanadium producer, and

instead was a different value that was outside the POR. For the final

results, the petitioner states that this error should be corrected.

DOC Position: We agree with the petitioner that Tulachermet has

reported its consumption of sulfuric acid in undiluted form and that we

erred in adjusting the consumption factor by the amount of dilution,

which Tulachermet performs in the course of its production process. We

also agree that the Department erred in its preliminary results in

identifying the value source selected as a South African vanadium

producer, while actually using the value obtained from the South

African Chemical and Allied Industries Association. For the final

results, we have continued to use the value for 98% sulfuric acid from

the Association, which is a POR average provided to the Department in

response to our specific request to the Association (see FRVM). The

values obtained from both the Association and the vanadium producer

were equally contemporaneous domestic tax-exclusive prices for the same

material, but we selected the Association value as it is from a more

publicly available source than a price quote from a company whose name

cannot be revealed in our public documents.

Finally, we have adjusted Tulachermet's consumption factor to match

the 98% concentration of the sulfuric acid surrogate value, as

suggested by the petitioner.

Comment 10: Valuation of Small-Quantity Inputs.

In the preliminary results, the Department was unable to obtain

surrogate values for boron anhydride and ammonium sulphite, and also

did not include boron acid in its NV calculation. The petitioner claims

that these chemicals are important, individually and in the aggregate,

to the production of the subject merchandise, and thus their omission

understates Galt's dumping margin. Accordingly, the petitioner contends

that the Department should value these inputs based on U.S. price data

it submitted, or on the highest surrogate value for any input. In

addition, the petitioner asserts that the Department must also continue

to assign the farthest distance reported by Tulachermet for any

supplier to calculate the freight value cost for all inputs for which

Tulachermet failed to provide the distance from its supplier.

Galt argues that disregarding these inputs is justified under

section 777A(a)(2) of the Act, under which ``the administering

authority may decline to take into account adjustments which are

insignificant in relation to the price or value of the merchandise.''

In addition, Galt opposes the application of the U.S. values for these

inputs presented by the petitioner because these values are not from

the primary surrogate country, South Africa, or from any other

appropriate surrogate country identified by the Department.

DOC Position: Although the inputs in question are consumed in small

quantities, we have accepted the petitioner's position in calculating

NV for the final results. Department practice is to attempt to value

all inputs in an NME NV for which there is available information. The

U.S. price data is the only surrogate value information on the record

for these inputs and thus may be used as facts available to value these

materials. While the values identified by the petitioner for boric acid

and ammonium sulfide acid are not the same as the boron (or boric)

anhydride and ammonium sulphite consumed by Tulachermet (see ``Telcon

with ITC Chemical Industry Analyst Re: Tulachermet Chemical Inputs,''

Memorandum to the File dated October 22, 1997), as facts available, we

have accepted the petitioner's contention in its October 27, 1997,

letter that these values are for materials similar enough for surrogate

valuation purposes, and that the values are, if anything, conservative

measures of surrogate value.

Comment 11: Valuation of Factors Unreported by Tulachermet.

The petitioner claims that Tulachermet did not accurately report

all of its inputs and omitted several of these inputs from its factors

of production response, based on the petitioner's analysis of

Tulachermet's production summary worksheets. As AFA, the petitioner

contends that the Department should apply the highest consumption

factor reported for any input, and apply the highest surrogate value

for any input. The petitioner also argues that Tulachermet did not

report its consumption of ``technological electricity''; therefore, the

Department should use adverse facts available to increase Tulachermet's

reported consumption of electricity.

Galt argues that Tulachermet has accounted for all materials

consumed and that the inputs cited by the petitioner either are already

reported and accounted for, or are recycled materials.

DOC Position: We agree with Galt that certain inputs consumed and

listed on the production worksheets--``metal skull,'' ``metal

riddlings,'' limestone, steam, compressed air, water, and ``technical

water''--are already accounted for in the factors of production

worksheet. Tulachermet reported its consumption of vanadium and metal-

based inputs on a gross, rather than net, basis. The production

worksheets show that metal and vanadium waste was generated in the

course of production and then re-used. Tulachermet's consumption of

limestone has been reported separately in accounting for its lime

production (see submission of March 7, 1997). Tulachermet's energy

reporting accounts for the energy consumed to generate steam and

compressed air. Water inputs are normally considered a factory overhead

item and the Department usually does not value water separately (see,

e.g., Final Determination of Sales at Less Than Fair Value: Saccharin

from the People's Republic of China From PRC, 59 FR 58818, November 15,

1994).

The production worksheets indicate consumption of certain other

inputs--silicovanadium, vanadium aluminum alloy,2 and

``technological electricity''--which we agree should have been included

in the factors of production worksheet. We have calculated consumption

factors for these inputs, based on the data in the production

worksheets submitted on February 7,

[[Page 65664]]

1997, and included them in the calculation of NV. We valued

silicovanadium and vanadium aluminum alloy, on a contained vanadium

basis, based on the POR average South African price for vanadium

products, as reported by the South African Minerals Bureau. Because

Tulachermet did not report the distance from the suppliers of these

items to its factory, we have applied the distance from the farthest

supplier, as facts available, to calculate the freight expense incurred

in transporting these inputs.

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

\2\ Galt claims that it has reported vanadium aluminum alloy as

``pre-alloyed material.'' However, our analysis of the questionnaire

response reveals that ``pre-alloyed material'' in the factors of

production worksheet corresponds to ``iron-vanadium'' alloy in the

production worksheets.

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

Finally, we note that Tulachermet also consumed a very small amount

of ``poliacrid'' during the POR, as indicated by the petitioner.

However, there is no surrogate value for this material on the record.

Therefore, we have not included a value for this material in our

calculation of NV, although we have included a freight amount for this

item, calculated in the same manner as discussed above.

Comment 12: Freight and Insurance costs for Surrogate Values

derived from the Customs Union of Southern Africa (SACU) Import

Statistics.

The petitioner contends that, in the preliminary results, the

Department used surrogate values derived from SACU for factors whose

input value did not include the cost of insurance and freight. The

petitioner argues that the Department has thus understated the values

for those inputs.

Galt responds that the Department already has made freight and

insurance adjustments in its input freight value that is shown in its

margin calculation. Galt states that to make additional adjustments to

freight or insurance would be double counting.

DOC Position: We agree with Galt. In Sigma Corp. v. United States,

No. 95-1509, 96-1036, 95-1510, 06-1037, 1997 U.S. App. LEXIS 16506

(Fed. Cir. July 7, 1997) (Sigma), the United States Court of Appeals

for the Federal Circuit (CAFC) held that the calculated freight costs

for PRC-made materials may not exceed the calculated freight costs of

shipping the material from respondents' importing seaports in the PRC

to their factories. The CAFC's decision in Sigma requires that we

revise our calculation of source-to-factory-surrogate freight for those

material inputs that are based in CIF import values in the surrogate

country. Accordingly, we have added to CIF surrogate values from South

Africa a surrogate freight cost using the shorter of the reported

distances from either the closest reported port to the factory (i.e.,

Ventspils, Latvia), or the domestic supplier to the factory.

Comment 13: Factory Overhead, Selling, General and Administrative

Expenses.

The petitioner argues that, in calculating the surrogate value for

factory overhead based on the 1995 Annual Report of Highveld Steel and

Vanadium Corporation Limited (Highveld), the Department erred in

excluding the figure for ``net provision for renewal and replacement of

fixed assets'' from overhead expenses. Consistent with the Department's

approach in Final Determination of Sales at Less Than Fair Value:

Sulfur Vat Dyes from the People's Republic of China, 58 FR 7557,

(February 8, 1993), the Department should include in the overhead ratio

depreciation and all other elements of overhead that are identified in

the Highveld's 1995 Annual Report. The petitioner further contends that

because the Department verified separate cost centers for Tulachermet

in the LTFV investigation, the surrogate overhead ratio should be

applied to each cost center (i.e. vanadium pentoxide and ferrovanadium

production centers). With regard to selling, general and administrative

(SG&A) expenses, the petitioner states that the Department should

include the amount spent on research and development, which was not

included in the preliminary results calculation.

Galt states that the factory overhead figure calculated from the

annual report is from the consolidated financial statement and

represents the total overhead of all Highveld operations. To apply this

percentage to each of Tulachermet's cost centers would result in

double-counting overhead, according to Galt. To insure an ``apples to

apples'' comparison, Galt contends that the Department should continue

to apply the consolidated percentage to the consolidated factor.

DOC Position: We agree with the petitioner with respect to the

omitted expenses in our factory overhead and SG&A calculations, and

have made the corrections. These corrections result in revised

surrogate percentages for factory overhead, SG&A expenses and profit

(see FRVM).

We agree with Galt with respect to the application of factory

overhead to the total of materials, labor, and energy values, rather

than at each stage of production. Because our surrogate percentage is

calculated on the basis of the total overhead of Highveld's production,

the factory overhead percentage must be applied in the same manner to

avoid double-counting (see Final Determination of Sales at Less Than

Fair Value: Polyvinyl Alcohol From PRC, 61 FR 14057,14056, March 29,

1996).

Comment 14: Surrogate Profit Calculation.

The petitioner argues that the Department should calculate profit

based on ``net income before taxation,'' as reported in Highveld's 1995

Annual Report. The petitioner also contends that the Department erred

in using ``net sales turnover,'' rather than ``cost of production,'' as

the denominator for the surrogate profit calculation and should correct

it for the final results.

Galt argues that the Department should calculate the surrogate

profit percentage on the same basis it used to calculate the cost of

production from Highveld's 1995 Annual Report. Galt contends that

calculating the profit percentage on a different basis than the cost of

production would violate the statutory requirement by exceeding the

amount of profit normally realized by market economy exporters or

producers.

DOC Position: We agree with the petitioner with regard to our

surrogate profit calculation. We calculated profit based on the net

sales turnover in the report, less cost of production, and applied the

resulting ratio to the cost of production. Because of the changes to

factory overhead and SG&A, noted above, the resulting profit figure,

calculated as the difference between net sales and net costs per the

Highveld 1995 Annual Report, differs from that cited by the petitioner

(see FRVM).

Comment 15: Galt's SG&A and CEP Profit Calculations.

The petitioner contends that Galt has ignored the Department's

explicit instructions and followed its own method of reporting and

adjusting SG&A and profit used to calculate CEP expenses. The

petitioner argues that Galt did not disclose the methodology for its

numerous ``revisions'' or provide computations, beginning with the

financial statement. Moreover, according to the petitioner, Galt did

not provide any indication that its SG&A and profit calculations took

proper account of the required antidumping duty.

Galt states that it responded to the petitioner's arguments

regarding its SG&A expenses in its letter to the Department of May 21,

1997. Galt states that it explained how the figures are traced into the

financial statements and provided additional background information on

the figures. Galt objects to the petitioner's implication that the

Department should examine backup documentation for financial statements

that have already been certified as audited. In addition, Galt claims

that it has thoroughly explained to the

[[Page 65665]]

Department its methodology regarding management fees and the petitioner

has provided no meaningful criticism of Galt's approach.

DOC Position: We agree with Galt with respect to its presentation

of the information. Based on our analysis, we have accepted Galt's SG&A

calculations for adjustments to CEP sales, as described in Galt's May

21, 1997, submission. We have, however, made corrections to these

calculations for mathematical errors (see Memorandum to the File dated

December 3, 1997.) As in the preliminary results, we revised the SG&A

calculation to reflect a value-based, rather than unit-based, amount.

In addition, we have revised the calculation of CEP profit to meet

the requirements of section 772(d)(3) and 772(f) of the Act.

Accordingly, we calculated the profit allocable to selling and

distribution activities in the United States based on the data in

Galt's audited financial statements for the two fiscal years that

included the POR (see Memorandum to the File dated December 3, 1997).

Pursuant to section 772(f)(C)(iii) of the Act, this information is the

data on the record for calculating CEP profit that comprises the

narrowest category of merchandise sold in all countries which includes

the subject merchandise.

Comment 16: Valuation of Railway Freight and Insurance.

In lieu of the 1993 South African rail rate information from the

LTFV investigation used in the preliminary results, the petitioner

contends that the Department should apply the railway rate and

insurance data from the POR that the petitioner obtained in a fax from

a South African railway source.

Galt states the petitioner's fax is an unreliable basis for this

information as it does not contain published rail rates and is largely

a handwritten note from someone, apparently in South Africa, which

appears to be cut and pasted. Accordingly, Galt contends that the

Department should continue to use the rail rates from the LTFV

investigation in the absence of any other reliable information.

DOC Position: In this instance, we are asked to choose between the

only two available surrogate values for freight--a figure derived from

publicly available published data of rail rates for a representative

list of destinations, but non-contemporaneous to the POR; or a rail

rate quote contemporaneous with the POR obtained by an interested party

for a specific route. While the latter choice has the advantage of

being contemporaneous with the POR, the rate proffered by the

petitioner is based on transport of 144 kilometers, while the rate

calculated by the Department for the LTFV investigation is based on

transport of 468 to 1,342 kilometers (see PRVM at page 10). Most

transport to be valued covers distances of hundreds to thousands of

kilometers. Therefore, we find that the rate from the LTFV

investigation, although non-contemporaneous, is a more representative

surrogate value for Tulachermet's movement expenses and we have

continued to apply it in the final results.

Comment 17: Valuation of ``Vanadium Pre-alloyed Material''.

The petitioner agrees with the Department's selection of

ferrovanadium prices to determine the surrogate value for ``vanadium

pre-alloyed material.'' However, the petitioner argues that the

Department erred by applying the exchange rate conversion from South

African rand to U.S. dollars for this value as the value was already

expressed in U.S. dollars.

DOC Position: We agree with the petitioner that we made an error in

applying an exchange rate to this value reported in U.S. dollars.

However, for the final results, we have selected a different source for

the ferrovanadium price. We have used the 1995-96 average South African

FOB value for ferrovanadium reported by the South African Minerals

Bureau in its November 6, 1997, fax. In applying this value, we have

adjusted the consumption factor to reflect the maximum vanadium content

of the input, as reported by Tulachermet in the February 7, 1997

response.

Final Results of Review: As a result of the comments received, we

have changed the results from those presented in our preliminary

results of review. Therefore, we determined that the following margin

exists as a result of our review:

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

Margin

Exporter Period (percent)

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

Galt Alloys, Inc......................... 1/4/95-7/31/96 34.66

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

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between EP and NV may vary from the percentages stated above. The

Department will issue appraisement instructions directly to Customs.

Further, the following deposit requirements will be effective upon

publication of these final results for all shipments of ferrovanadium

and nitrided vanadium from Russia entered, or withdrawn from warehouse,

for consumption on or after the publication date as provided by section

751(a)(1) of the Act: (1) the cash deposit rate for Galt will be the

rate established in the final results of this administrative review;

(2), for merchandise exported by manufacturers or exporters not covered

in this review but covered in the original LTFV investigation 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;

(3) for Russian manufacturers or exporters not covered in the LTFV

investigation, the cash deposit rate will continue to be the Russia-

wide rate of 108.00 percent; and (4) the cash deposit rate for non-

Russian exporters of subject merchandise from Russia who were not

covered in the LTFV investigation or in this administrative review,

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.

Notification to Interested Parties

This notice 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 these review periods. 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 a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d)(1). 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)) and published in

accordance with section 777(i).

Dated: December 5, 1997.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-32631 Filed 12-12-97; 8:45 am]

BILLING CODE 3510-DS-P