Notice of Preliminary Results of Antidumping Duty Administrative Review: Ferrosilicon From Brazil

DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-820]

Notice of Preliminary Results of Antidumping Duty Administrative

Review: Ferrosilicon From Brazil

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 8, 1997.

FOR FURTHER INFORMATION CONTACT: Jennifer Katt or Sal Tauhidi, AD/CVD

Enforcement Group II, Office Four, Import Administration, International

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

Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)

482-0498 or (202) 482-4851, respectively.

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 to the Act by the

Uruguay Round Agreements Act (URAA).

Preliminary Results

We preliminarily determine that sales of ferrosilicon from Brazil

have been made below normal value (NV). If these preliminary results

are adopted in our final results of administrative review, we will

instruct U.S. Customs to assess antidumping duties on all appropriate

entries.

Case History

On March 4, 1996 (61 FR 8238), the Department of Commerce (the

Department) published in the Federal Register a notice of ``Opportunity

to Request an Administrative Review'' of the antidumping duty order on

Ferrosilicon from Brazil covering the period March 1, 1995, through

February 29, 1996. In accordance with 19 CFR 353.22(a)(2), in March

1996, Companhia Brasileira Carbureto De Calcio (CBCC) and Companhia

Ferroligas Minas Gerais (Minasligas) (collectively the respondents)

requested that the Department conduct an administrative review of their

shipments of ferrosilicon to the United States during this period. On

April 25, 1996, the Department published a notice of initiation of

administrative review (61 FR 18379). The Department is now conducting

this administrative review in accordance with section 751 of the Act.

On May 8, 1996, the Department issued an antidumping duty

questionnaire to CBCC and Minasligas. This questionnaire instructed the

respondents to respond to sections A (corporate structure, accounting

practices, markets and merchandise), B (home market sales), C (United

States sales) and D (cost of production/constructed value) of the

questionnaire. CBCC and Minasligas submitted questionnaire responses in

July 1996. The Department issued supplemental questionnaires to CBCC

and Minasligas in September 1996, December 1996, and January 1997.

Responses to the supplemental questionnaires were received in October

1996, and January 1997.

Under section 751(a)(3)(A) of the Act, the Department may extend

the deadline for completion of a preliminary determination if it

determines that it is not practicable to complete the review within the

statutory time limit. On November 26, 1996, the Department extended the

time limit for the preliminary results in this case. See Extension of

Time Limits of Antidumping Duty Administrative Review, (61 FR 64322)

(December 4, 1996).

In accordance with section 782(i) of the Act, we verified the sales

and cost questionnaire responses of CBCC and Minasligas during February

1997. The results of these verifications are outlined in the public

versions of the verification reports dated March 19, 1997, on file in

room B-099 of the main Commerce building.

Scope of Review

The merchandise subject to this review is ferrosilicon, a

ferroalloy generally containing, by weight, not less than four percent

iron, more than eight percent but not more than 96 percent silicon, not

more than 10 percent chromium, not more than 30 percent manganese, not

more than three percent phosphorous, less than 2.75 percent magnesium,

and not more than 10 percent calcium or any other element. Ferrosilicon

is a ferroalloy produced by combining silicon and iron through smelting

in a submerged-arc furnace. Ferrosilicon is used primarily as an

alloying agent in the production of steel and cast iron. It is also

used in the steel industry as a deoxidizer and a reducing agent, and by

cast iron producers as an inoculant.

Ferrosilicon is differentiated by size and by grade. The sizes

express the maximum and minimum dimensions of the lumps of ferrosilicon

found in a given shipment. Ferrosilicon grades are defined by the

percentages by weight of contained silicon and other minor elements.

Ferrosilicon is most

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commonly sold to the iron and steel industries in standard grades of 75

percent and 50 percent ferrosilicon. Calcium silicon, ferrocalcium

silicon, and magnesium ferrosilicon are specifically excluded from the

scope of this review. Calcium silicon is an alloy containing, by

weight, not more than five percent iron, 60 to 65 percent silicon, and

28 to 32 percent calcium. Ferrocalcium silicon is a ferroalloy

containing, by weight, not less than four percent iron, 60 to 65

percent silicon, and more than 10 percent calcium. Magnesium

ferrosilicon is a ferroalloy containing, by weight, not less than four

percent iron, not more than 55 percent silicon, and not less than 2.75

percent magnesium. Ferrosilicon is currently classifiable under the

following subheadings of the Harmonized Tariff Schedule of the United

States (HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000,

7202.29.0010, and 7202.29.0050. Although the HTSUS subheadings are

provided for convenience and customs purposes, our written description

of the scope of this review is dispositive.

Ferrosilicon in the form of slag is included within the scope of

this order if it meets, in general, the chemical content definition

stated above and is capable of being used as ferrosilicon. Parties that

believe their importations of ferrosilicon slag do not meet these

definitions should contact the Department and request a scope

determination.

Period of Review

The period of review (POR) is March 1, 1995, through February 29,

1996.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all

products produced by CBCC and Minasligas, covered by the description in

the ``Scope of the Review'' section, above, and sold in the home market

during the POR, to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. Where there were no

sales of identical merchandise in the home market to compare to U.S.

sales, we compared U.S. sales to the next most similar foreign like

product based on the following criteria: (1) The grade of ferrosilicon

(i.e., standard, high purity and low aluminum); (2) the percentage

range, by weight, of silicon content; and (3) the sieve size.

Although we have used the sieve size category as a matching

criterion in past reviews, we are reconsidering the matching criteria

for CBCC and Minasligas in light of additional data on the record in

this review. Although cost differences among sieve size categories do

not exist, we considered whether the merchandise was a ``lump'' or a

``fine'' in making our product comparisons because sales of

ferrosilicon fines command significantly lower market prices than sales

of ferrosilicon lumps. In addition, it appears that the two products

have different end-uses. For purposes of these preliminary results, we

considered ferrosilicon pieces with a minimum dimension equal to or

greater than one millimeter to be lumps and ferrosilicon pieces with a

maximum dimension less than one millimeter to be fines. We did not

consider any difference in sieve size ranges within the lump or fine

categories in determining the most appropriate product comparison

because significant price differences within the lump or fine sieve

size category did not exist. Interested parties are requested to

comment on these matching criteria in the case briefs submitted in this

review.

For those sales where CBCC did not report the actual silicon weight

content because the chemical analysis certification documentation had

been destroyed, we assumed that the silicon content was 75 percent

because it was confirmed at verification that this merchandise was

marketed and sold to the U.S. customer as ``75 percent ferrosilicon.''

CBCC and Minasligas reported only one cost of manufacturing (COM)

for all three grades of ferrosilicon produced and sold during the POR.

Both companies stated that in the normal course of business, their

books and records do not capture any cost differences for producing

different grades of ferrosilicon. However, at verification, Minasligas

was able to identify some cost differences associated with the

production of high purity and low aluminum ferrosilicon. Where

Minasligas' U.S. sales of high purity or low aluminum ferrosilicon were

matched to home market sales of standard grade ferrosilicon, we

calculated a difference in merchandise (DIFMER) adjustment between the

products as follows: (1) We isolated the additional material, labor and

variable overhead costs used in the production of high purity and low

aluminum ferrosilicon; (2) we removed these costs from the variable

cost of manufacturing (VCOM) reported for standard grade ferrosilicon;

and (3) we added these costs to the VCOM reported for high purity and

low aluminum ferrosilicon. The DIFMER was then calculated, where

appropriate, to be the difference in the variable cost of manufacturing

between the product sold to the U.S. and the product sold in the home

market. (For a further discussion of the calculation of the DIFMER, see

the ``Concurrence Memorandum'' dated April 1, 1997, on file in room B-

099 of the main Commerce building.)

Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act and in the

Statement of Administrative Action (SAA) accompanying the URAA, H.R.

Doc. No. 316, 103d Cong., 2d Sess at 870. (1994) (SAA), at 829-831, to

the extent practicable, the Department will calculate NV based on sales

at the same level of trade as the U.S. sale. When the Department is

unable to find sale(s) in the comparison market at the same level of

trade as the U.S. sale, the Department may compare sales in the U.S. to

foreign market sales at a different level of trade. See Final

Determination of Sales at Less than Fair Value; Certain Pasta from

Italy, 61 FR 30326 (June 14, 1996).

In order to determine whether there is a difference in level of

trade, the Department must find that two sales have been made at

different stages of marketing, or the equivalent. Different stages of

marketing necessarily involve differences in selling functions, but

differences in selling functions (even substantial ones) are not alone

sufficient to establish a difference in the level of trade. Similarly,

seller and customer descriptions (such as ``distributor'' and

``wholesaler'') are useful in identifying different levels of trade,

but are insufficient to establish that there is a difference in the

level of trade. See Porcelain-on-Steel Cookware from Mexico:

Preliminary Results of Antidumping Duty Administrative Review (61 FR

36551 (January 31, 1997)).

In implementing these principles in this review, we examined

information regarding the selling activities of the producers/exporters

associated with each stage of marketing, or the equivalent. In

reviewing the selling functions reported by the respondents, we

considered all types of selling activities, both claimed and unclaimed,

that had been performed. In analyzing whether separate LOTs existed, we

found that no single selling activity was sufficient to warrant a

separate LOT (see Notice of Proposed Rulemaking and Request for Public

Comments, 61 FR 7307, 7348 (February 27, 1996)). Pursuant to section

773(a)(7)(B)(i) of the Act and the SAA at 827, in identifying levels of

trade for EP and home market sales, we considered the selling functions

reflected in the starting price of these transactions before any

adjustments.

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In addition, we examined any claimed LOTs reported by each

respondent in response to our initial and supplemental questionnaires.

When examining claimed LOTs, we analyzed the selling activities

associated with the classes of customers and marketing stages the

respondents reported. In applying this analysis, we expect that, if

claimed LOTs are the same, the functions and activities of the seller

should be similar. Conversely, if a party claims that LOTs are

different for different groups of sales, the functions and activities

of the seller should be dissimilar. The Department not only examines

the types of selling activities, but weighs the overall function

performed for each claimed level of trade.

In accordance with section 773(a)(7)(A) of the Act, in comparing

U.S. sales to NV sales, the Department will adjust the NV to account

for any difference in level of trade if two conditions are met. First,

the sales must in fact be made at different levels of trade, which can

exist only if there are differences between the actual selling

functions performed by the seller at the level of trade of the U.S.

sale and the level of trade of the NV sale. Second, there must be a

difference in price comparability, as evidenced by a pattern of

consistent price differences between sales at the different levels of

trade in the market in which NV is determined.

Based on our analysis of the selling functions performed by each

respondent, we found that a single level of trade exists in each

market. We then compared selling functions in the U.S. market and in

the home market and found them to be similar. We find, therefore, that

sales in the home market and in the U.S. market are at the same level

of trade.

Fair Value Comparisons

To determine whether sales of ferrosilicon by CBCC and Minasligas

to the United States were made at less than fair value, we compared the

export price (EP) to the normal value (NV), as described in the

``Export Price'' and ``Normal Value'' sections of this notice. In

accordance with section 777A(d)(2) of the Act, we compared the EP of

individual transactions to the weighted-average NV of contemporaneous

sales of the foreign like product.

Export Price

For CBCC and Minasligas, we calculated EP, in accordance with

subsections 772 (a) and (c) of the Act because the subject merchandise

was sold directly to the first unaffiliated purchaser in the United

States prior to importation and constructed export price was not

otherwise warranted based on the facts of record.

For both respondents, we calculated EP based on packed prices to

the first unaffiliated customers in the United States. In accordance

with section 772(c)(2)(A) of the Act, we made deductions, where

appropriate, for freight expenses between the plant and the port,

foreign brokerage and handling, warehousing expenses, ocean freight,

and marine insurance expenses.

The questionnaire instructs respondents to report all costs,

charges or expenses incurred in bringing the subject merchandise from

the original place of shipment in the exporting country to the

unaffiliated customer's place of delivery. At verification we

discovered that Minasligas had not reported marine insurance expenses

incurred on U.S. sales made on a CIFFO basis, and that CBCC had not

reported the chemical analysis and weight inspection fees incurred on

U.S. sales. Section 776(a)(2) of the Act provides that if an interested

party withholds information that has been requested by the Department,

fails to provide such information in a timely manner or in the form or

manner requested, significantly impedes a determination under the

antidumping statute, or provides information which cannot be verified,

the Department shall use facts available in reaching the applicable

determination. Because CBCC and Minasligas failed to provide the data

requested by the Department regarding marine insurance expenses and

chemical analysis and weight inspection fees prior to verification, the

Department is compelled to use facts available with regard to these

expenses.

Section 776(b) of the Act provides that adverse inferences may be

used if the party has failed to cooperate by not acting to the best of

its ability to comply with requests for information. See also the

Statement of Administrative Action (SAA) at 870. Because CBCC and

Minasligas failed to report marine insurance expenses and chemical

analysis and weight inspection fees, despite the Department's request

for such data, and because the respondents provided no explanation for

the lack of data, each company has failed, to date, to cooperate to the

best of its ability with respect to these expenses. Thus, the

Department has determined that, in selecting among the facts otherwise

available to apply to these unreported U.S. expenses, an adverse

inference is warranted. Consequently, as facts otherwise available, we

have assigned the highest marine insurance expense incurred on a U.S.

sale during the POR to all of Minasligas' U.S. sales made on a CIFFO

basis and the highest chemical analysis and weight inspection fees

incurred on a U.S. sale to all of CBCC's U.S. sales.

We made additional company specific adjustments as follows:

Minasligas

We calculated Minasligas' EP based on FOB Brazilian port and

CIFFO prices. We added the amount of marine insurance revenue which

was collected by Minasligas with regard to one U.S. sale during the

POR. We disallowed Minasligas' claim for duty drawback for mineral

coal because it was determined at verification that import duties on

mineral coal were suspended upon importation. Therefore, Minasligas

does not receive any duty drawback when ferrosilicon is exported.

Finally, we corrected the reported date of sale for two transactions

to reflect the actual date of sale confirmed at verification.

CBCC

We calculated CBCC's EP based on FOB Brazilian port prices. We

disallowed CBCC's claim for interest revenue as an offset to the

reported credit expenses and instead used the actual bank charges

incurred on each U.S. sale as the cost of extending credit to the

U.S. customer. (For a further discussion of this issue, see the

``Normal Value'' section of this notice, below.)

Normal Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared each respondent's volume of home market sales of foreign

like product to the volume of U.S. sales of the subject merchandise in

accordance with section 773(a)(1)(C) of the Act. Since the aggregate

volume of home market sales of the foreign like product was greater

than five percent of the aggregate volume of U.S. sales of the subject

merchandise, and there was no evidence indicating that a particular

market situation in the exporting country did not permit a proper

comparison, we determined that the home market was viable for CBCC and

Minasligas. Therefore, in accordance with section 773(a)(1)(B)(i) of

the Act, we based NV on the prices at which the foreign like products

were first sold for consumption in the exporting country. We calculated

NV as noted in the ``Price to Price Comparisons'' and ``Price to

Constructed Value'' sections of this notice, below.

Cost of Production Analysis

Because we disregarded sales below the cost of production (COP) in

the last completed segment of the proceeding for CBCC and Minasligas

(i.e., the LTFV investigation) we had reasonable grounds to believe or

suspect that sales

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of the foreign product under consideration for the determination of NV

in this review may have been made at prices below the COP, as provided

by section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section

773(b)(1) of the Act, we initiated COP investigations of sales by CBCC

and Minasligas in the home market. (See the Memorandum to the File from

Laurel LaCivita, dated May 3, 1996, on file in room B-099 of the main

Commerce building.)

Before making any fair value comparisons, we conducted the COP

analysis described below for CBCC and Minasligas.

A. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated the

COP based on the sum of each respondent's cost of materials and

fabrication employed in producing the foreign like product, plus

amounts for selling, general and administrative expenses (SG&A) and

packing costs. We relied on the COP amounts reported by CBCC and

Minasligas except in the following specific instances where the

reported costs were determined to be improperly valued:

CBCC

1. We reallocated the reported labor and overhead expenses for

July, 1995, through February 1996, based on the actual production

capacity.

2. We recalculated the cost of charcoal for all charcoal

consumed in the production process using the purchased unit cost

obtained at verification.

3. We recalculated the reported factory overhead for January

1996, to include depreciation expenses on idle assets.

Minasligas

1. We reallocated the reported variable overhead cost based on

the actual production tonnage rather than the number of furnaces

used.

2. We recalculated the reported weighted-average cost used to

average monthly COP costs to correct an error discovered at

verification.

3. We adjusted the reported G&A expense to deduct reforestation

maintenance costs which had been reported twice in the COP/CV

response.

4. We disallowed Minasligas' claim for negative interest

expenses and instead, set the interest expense equal to zero.

B. Test of Home Market Prices

We compared the adjusted weighted-average COP for each respondent

to home market sales of the foreign like product as required under

section 773(b) of the Act, in order to determine whether these sales

had been made at prices below the COP within an extended period of time

in substantial quantities, and whether such prices were sufficient to

permit the recovery of all costs within a reasonable period of time. On

a product-specific basis, we compared the COP to the reported home

market prices less any applicable movement charges, taxes, rebates,

commissions and other direct and indirect selling expenses.

C. Results of the COP Test

Pursuant to section 773(b)(2)(C), where less than 20 percent of a

respondent's sales of a given product were at prices less than the COP,

we did not disregard any below-cost sales of that product because we

determined that the below-cost sales were not made in ``substantial

quantities.'' Where 20 percent or more of a respondent's sales of a

given product were at prices less than the COP, we disregarded the

below-cost sales because such sales were found to be made within an

extended period of time in ``substantial quantities'' in accordance

with sections 773(b)(2) (B) and (C) of the Act, and based on

comparisons of price to weighted-average COPs for the POR we determined

that the below-cost sales of the product were at prices which would not

permit recovery of all costs within a reasonable period of time, in

accordance with section 773(b)(2)(D) of the Act. Where all

contemporaneous sales of a specific product were at prices below the

COP, we calculated NV based on CV, in accordance with section 773(a)(4)

of the Act.

We found that, for certain ferrosilicon products, CBCC and

Minasligas made home market sales at below COP prices within an

extended period of time in substantial quantities. Further, we found

that these sales prices did not permit for the recovery of costs within

a reasonable period of time. We therefore excluded these sales from our

analysis in accordance with section 773(b)(1) of the Act.

D. Calculation of CV

For those ferrosilicon products for which we could not determine

the NV based on home market sales either because (1) There were no

contemporaneous sales of a comparable product or (2) all

contemporaneous sales of the comparison product failed the COP test, we

compared export prices to CV. In accordance with section 773(e)(1) of

the Act, we calculated CV based on the sum of the COM of the product

sold in the United States, plus amounts for home market selling,

general and administrative expenses (SG&A), home market profit and U.S.

packing costs. We calculated each respondent's CV based on the

methodology described in the ``Calculation of COP'' section of this

notice, above. In accordance with section 773(e)(2)(A), we used the

actual amounts incurred and realized by CBCC and Minasligas in

connection with the production and sale of the foreign like product, in

the ordinary course of trade, for consumption in the foreign country to

calculate home market SG&A and profit. In accordance with section

773(e) of the Act, we added to CV the amount of ICMS/IPI taxes incurred

on purchases of raw material inputs for CBCC. For Minasligas, we added

to CV the greater of either (1) the actual home market IPI/ICMS taxes

paid on raw material inputs or (2) the amount of ICMS tax collected by

the Brazilian government on export sales. (See Final Results of

Administrative Review: Silicon Metal from Brazil, 62 FR 1970 1976

(January 14, 1997)).

Price to Price Comparisons

Where there were contemporaneous sales of the comparison product

that passed the COP test, we based NV on home market prices. For each

of the respondents, we made adjustments, where appropriate, for

physical differences in the merchandise in accordance with section

773(a)(6)(C)(ii) of the Act. (For a discussion of the calculation of

the DIFMER, see the ``Product Comparisons'' section of this notice,

above.) In addition, we deducted home market packing costs and added

U.S. packing costs in accordance with sections 773(a)(6) (A) and (B) of

the Act.

CBCC and Minasligas reported negative U.S. credit expenses (i.e.,

credit revenue) based on their claims that unique financing

arrangements for export sales, called advance exchange contracts

(ACCs)), allowed the respondents to receive payment for their U.S.

sales prior to the date of shipment. At verification we determined that

ACCs work as follows. A producer goes to a Brazilian bank that it has a

line of credit with, and applies for an ACC. At this time, the producer

must specify the product to be exported. The name of the export

country, customer and the value of particular sales may be specified,

but these variables are not fixed. On the date the ACC is signed by the

bank, the producer receives the value of the ACC in Brazilian Reais. At

a later date, the producer must present documentation to the bank

proving that the money obtained under the ACC was used to produce

merchandise for exportation (e.g., the commercial invoice, bill of

lading, etc.). After receiving the merchandise, the U.S. customer pays

the bank directly. Once the bank has received payment, the Brazilian

bank

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charges the producer bank fees equal to the interest charged for the

number of days the ACC was outstanding (i.e., the number of days

between the date the producer received the money under the ACC and the

date the U.S. customer paid the bank).

We have disallowed CBCC's and Minasligas' claimed credit revenue/

negative U.S. credit expenses for purposes of the preliminary results

because we do not consider the ACCs to be directly related to the U.S.

sales made during the POR. Evidence on the record indicating that the

ACC was not directly linked with the U.S. sales in question is as

follows: (1) The export country, customer, and value of the sale were

not fixed on the date the ACC was signed; (2) ACCs were obtained prior

to the U.S. date of sale for all of CBCC's U.S. sales and certain sales

made by Minasligas. Therefore, the ACC did not pertain to a particular

U.S. sale but instead pertained to future unspecified shipments; (3)

the amount borrowed under certain ACCs did not correspond exactly with

the value of the U.S. sale which was later shipped; (4) in certain

instances, more than one ACC was used to finance a single U.S.

transaction; and (5) certain ACCs were used to finance more than one

U.S. export. (For a further discussion of ACCs, see the ``Concurrence

Memorandum'' dated April 1, 1997, on file in room B-099 of the main

Commerce building.)

In accordance with section 773(a)(6)(C) of the Act, the Department

makes circumstance of sale (COS) adjustments to NV in order to account

for the difference in credit terms between U.S. and home market sales.

Because CBCC and Minasligas receive financing for their export sales

prior to the date of shipment and the U.S. customer pays the Brazilian

bank directly, the respondents do not forego payment from the U.S.

customer but instead pay bank charges on U.S. sales. These bank charges

represent the interest expense incurred between the date the respondent

received an advance under an ACC and the date the U.S. customer paid

the bank. For purposes of calculating U.S. credit expenses, we have

used the actual bank charges incurred on each U.S. sale as the cost of

extending credit to the customer. (See the CBCC and Minasligas

``Verification Reports'' dated March 19, 1997, on file in room B-099 of

the main Commerce building.)

Pursuant to section 773(a)(6) of the Act, we made deductions, where

appropriate, from the starting price for rebates, inland freight and

IPI taxes. With respect to ICMS taxes for Minasligas, we deducted the

difference between the ICMS tax incurred on the home market sale and

the claimed ICMS tax on the U.S. sale. For CBCC, we deducted the

reported ICMS tax. We made circumstance of sale adjustments to NV for

direct expenses, where appropriate, in accordance with section

773(a)(6)(C)(iii) of the Act. In doing so, we deducted home market

credit expenses and, where appropriate, added U.S. credit expenses,

U.S. chemical analysis and weight inspection fees, and U.S. port

charges. Neither CBCC nor Minasligas had any short-term borrowings

during the POR. Therefore, we calculated credit expenses for all home

market sales using the average ``taxa referential'' rate offered on

short-term transactions during the POR by the Central Bank of Brazil.

In addition, for sales made on a consignment basis, we recalculated the

credit period to include the number of days between the date the

consignee was invoiced for the merchandise it consumed and the date the

respondent received payment from the home market customer. In addition,

we considered the date of sale for consignment sales to be the date

that the respondent invoiced the customer for the merchandise the

consignee notified the respondent it had consumed.

We made company-specific-adjustments for price-to-price comparisons

as follows:

CBCC

We calculated NV based on packed, FOB plant and CIF prices to

unaffiliated customers. We added the amount of interest revenue

actually collected on home market sales in instances where the customer

paid late. Section 773(a)(1)(B) of the Act directs that we calculate NV

on the basis of the price at which the ``foreign like product is first

sold.'' Foreign like product, in turn, is defined by section 771(16) of

the Act as merchandise that is produced in the same country and by the

same person as the merchandise which is the subject of the

investigation. Therefore, because CBCC sold only self-produced

merchandise to the United States, the statute prohibits using sales of

merchandise produced by persons other than CBCC in the calculation of

normal value. Accordingly, we excluded from the calculation of NV all

re-sales of merchandise which was not produced by CBCC.

In addition, we excluded all sales reported in the home market

database which were determined to be either cancelled or reported twice

in the sales listing. We did not deduct reported IPI taxes for four

home market customers because it was determined at verification that

the ferrosilicon these customers purchased was used to produce

merchandise for exportation. Therefore, these customers were exempt

from paying IPI taxes during the POR. Finally, we calculated a packing

cost for one sale where no packing cost was reported because the sale

was actually packed in bags.

We adjusted for commissions as follows: Where commissions were paid

on some, but not all, home market sales used to calculate NV, and no

commissions were paid on a U.S. sale used to calculate export price, we

deducted the home market commission from NV and added to NV the lesser

of either (1) The indirect selling expenses incurred on the U.S. sale

or (2) the weighted-average amount of the commissions paid on the home

market sales. We recalculated U.S. inventory carrying costs as follows:

(1) The credit period was recalculated using the number of days in

inventory at the plant confirmed at verification; and (2) because CBCC

had no short-term borrowings during the POR, we calculated U.S.

inventory carrying costs using the average ``taxa referential'' rate

offered on short-term transactions by the Central Bank of Brazil. (See

the ``Concurrence Memorandum'' dated April 1, 1997, and the

verification report dated March 19, 1997 on file in room B-099 of the

main commerce building.)

Minasligas

We calculated NV based on packed, FOB plant and CIF prices to

unaffiliated customers. For those home market shipments which

Minasligas claimed were made pursuant to long-term contracts, we based

the date of sale on the invoice date because, based on information

gathered at verification, we did not find the essential terms of sale

(i.e., price and quantity) to be fixed on the date of contract.

Specifically, we noted that the prices and quantities were frequently

modified after the date of the contract, there were no penalties

imposed by Minasligas in instances where the customer did not purchase

the quantity specified in the contract, and the shipping schedules

specified by the customer were frequently changed and/or not met. (For

a further discussion of Minasligas' long-term contracts, see the

``Concurrence Memorandum'' dated April 1, 1997, on file in room B-099

of the main Commerce building.) We corrected the reported payment date

for one transaction to reflect the actual payment date confirmed at

verification.

Price to Constructed Value Comparisons

Where we compared export prices to CV, we deducted from CV the

weighted-average home market direct selling

[[Page 16768]]

expenses and added the product specific U.S. direct selling expenses in

accordance with sections 773(a)(8) and 773(a)(6)(iii) of the Act.

Currency Conversion

For purposes of the preliminary results, we made currency

conversions based on the official exchange rates in effect on the dates

of the U.S. sales as certified by the Federal Reserve Bank of New York.

Section 773A(a) of the Act directs the Department to use a daily

exchange rate in order to convert foreign currencies into U.S. dollars,

unless the daily rate involves a ``fluctuation.'' In accordance with

the Department's practice, we have determined that a fluctuation exists

when the daily exchange rate differs from a benchmark by 2.25 percent.

The benchmark is defined as the rolling average of rates for the past

40 business days. When we determine that a fluctuation exists, we

substitute the benchmark for the daily rate.

Preliminary Results of the Review

As a result of this review, we preliminarily determine that the

following weighted-average dumping margins exist for the period March

1, 1995 through February 29, 1996:

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

Margin

Manufacturer/exporter (percent)

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

CBCC......................................................... 2.27

Minasligas................................................... 7.98

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

Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of the date of publication. Any

hearing, if requested, will be held 44 days after the publication of

this notice, or the first workday thereafter. Interested parties are

invited to comment on the preliminary results. Parties who submit

arguments in this proceeding are requested to submit with each

argument: (1) A statement of the issue: and (2) a brief summary of the

argument. All case briefs must be submitted within 30 days of the date

of publication of this notice. Rebuttal briefs, which are limited to

issues raised in the case briefs, may be filed not later than 37 days

after the date of publication. The Department will publish a notice of

the final results of this administrative review, which will include the

results of its analysis of issues raised in any such written comments

within 120 days from the publication of these preliminary results.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between EP and NV may vary from the percentages stated

above. Upon completion of this review, the Department will issue

appraisement instructions directly to the Customs Service. The final

results of this review shall be the basis for the assessment of

antidumping duties on entries of merchandise covered by the

determination and for future deposits of estimated duties. For duty

assessment purposes, we calculated an importer-specific assessment rate

by aggregating the dumping margins calculated for all U.S. sales to

each importer and dividing this amount by the total quantity of subject

merchandise sold to each of the respective importers. This specific

rate calculated for each importer will be used for the assessment of

antidumping duties on the relevant entries of subject merchandise

during the POR.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of this administrative review for

all shipments of ferrosilicon from Brazil 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 CBCC and Minasligas

will be the rates established in the final results of administrative

review, except if the rate is less than 0.5 percent, ad valorem and,

therefore, de minimis within the meaning of 19 CFR 353.6, the cash

deposit rate will be zero; (2) for merchandise exported by

manufacturers or exporters not covered in this review but covered in

the original less than fair value (LTFV) investigation or a previous

review, the cash deposit rate will continue to be the company-specific

rate published in the most recent period; (3) if the exporter is not a

firm covered in this review, a previous review, or the LTFV

investigation, but the manufacturer is, the cash deposit rate will be

the rate established for the most recent period for the manufacturer of

the merchandise; and (4) if neither the exporter nor the manufacturer

is a firm covered in this or any previous reviews, the cash deposit

rate will be 35.95 percent, the ``All Others'' rate made effective by

the antidumping duty order (59 FR 11769, March 14, 1994). These

requirements, when imposed, shall remain in effect until publication of

the final results of the next administrative review.

This notice serves as a preliminary reminder to importers of their

responsibility under 19 CFR 353.26 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 administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: April 1, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-8956 Filed 4-7-97; 8:45 am]

BILLING CODE 3510-DS-P