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

DEPARTMENT OF COMMERCE

International Trade Commission

[A-351-820]

Ferrosilicon From Brazil: 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 January 16, 1998, the Department of Commerce published the

preliminary results of the administrative review of the antidumping

duty order on Ferrosilicon from Brazil. This review covers exports of

this merchandise to the United States by one manufacturer/exporter,

Companhia de Ferro Ligas da Bahia, during the period March 1, 1996,

through February 28, 1997.

We gave interested parties an opportunity to comment on the

preliminary results. Based on our analysis of the comments received, we

have not changed the final results from those presented in the

preliminary results.

EFFECTIVE DATE: May 22, 1998.

FOR FURTHER INFORMATION CONTACT: Wendy Frankel 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, NW, Washington, DC 20230; telephone: (202) 482-

5849 or (202) 482-4851, respectively.

[[Page 28356]]

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

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). In addition, unless otherwise

indicated, all references to the Department of Commerce's (the

Department's) regulations refer to the regulations as codified at 19

CFR part 353 (April 1, 1997).

Background

The Department published the antidumping duty order on ferrosilicon

from Brazil on March 14, 1994 (59 FR 11769). On January 16, 1998, the

Department published the preliminary results of the 1996-1997

administrative review of that antidumping duty order (63 FR 2661). On

March 4, 1998, and March 16, 1998, we received case and rebuttal briefs

from Companhia de Ferro Ligas da Bahia (Ferbasa), and Aimcor and SKW

Metals & Alloys, Inc. (the petitioners). Based on our analysis of the

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

presented in the preliminary results.

Scope of Review

The merchandise subject to this review is ferrosilicon, a ferro

alloy 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 ferro alloy 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 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 ferro alloy containing, by weight, not less than four percent

iron, 60 to 65 percent silicon, and more than 10 percent calcium.

Magnesium ferrosilicon is a ferro alloy 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. 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.

Analysis of Comments Received

Comment 1

Ferbasa maintains that the Department's recalculation of cost of

manufacturing (COM) for ferrosilicon based on the six-month period,

September 1, 1996 through February 28, 1997, instead of the twelve-

month fiscal year, January 1, 1996 through December 31, 1996, is

inconsistent with the instructions set forth in the Department's

questionnaire. Ferbasa notes the fact that, in a letter from the

Department dated June 19, 1997, the Department allowed the company to

report home market sales data for the six-month period. (See, the

Department's letter from Holly Kuga to Gilvan Durao, Executive Director

of Ferbasa.) At the same time, however, Ferbasa observes that it

followed the Department's questionnaire instructions which allow

respondents to report production costs on a fiscal-year basis in

certain circumstances.

Ferbasa adds that the Department verified its submitted fiscal year

costs and notes that the recalculation of COM based on a six-month

period is inconsistent with the full-year selling, general and

administrative expenses (SG&A) and interest ratio calculations used by

the Department to compute cost of production (COP) in the preliminary

results of this case. For these reasons, Ferbasa contends that the

Department must use the company's full fiscal-year cost data to compute

COP for the final results of this administrative review.

The petitioners argue that the Department correctly calculated

Ferbasa's COM based on the six-month period rather than the submitted

fiscal year data. The petitioners note that the Department reasonably

recalculated COM based on the period of time which coincides with

Ferbasa's reported home market sales data. Moreover, the petitioners

maintain that the fact Ferbasa reported its cost data on a fiscal-year

basis does not obligate the Department to use that information in its

sales-below-cost analysis.

The petitioners further note that both the fiscal year and the six-

month data were tested at verification and, therefore, the Department

is not compelled to use only the submitted fiscal-year data. Finally,

the petitioners conclude that the Department's normal calculation of

SG&A and interest expense ratios based on the fiscal year data is

appropriate.

Department's Position

We agree with petitioners that it was appropriate in this case for

us to revise Ferbasa's submitted COM figures to reflect the six-month

period. Based on a timely request from Ferbasa, we permitted the

company to limit its reporting of home market sales to only those

months that were contemporaneous to its one U.S. sale. We further note

that the Department's questionnaire reflects our general practice of

allowing a respondent to report costs for its normal fiscal year if

this fiscal period corresponds closely with the period under

investigation or review.

In the instant proceeding, although Ferbasa's fiscal year

corresponds closely with the entire period under review it was not

sufficiently correlated to the sales reporting period. We advised

Ferbasa of our intent to examine at verification the extent to which

the submitted fiscal year costs were representative of costs incurred

during the six-month sales reporting period. (See, Cost Verification

Agenda, October 27, 1997, Section IV. C., at 5.)

Based on our testing at verification, we determined that the

reported fiscal year costs were not reasonably reflective of the costs

incurred to produce the subject merchandise sold during the six-month

sales reporting period. (See, Memorandum to the Official File re:

Verification of Cost of Production and Constructed Value Information

(Cost Verification Report), at 2, and Section IV.C., at 10 (January 12,

1998); see also,

[[Page 28357]]

Memorandum to the Official File re: Adjustments to Cost of Production

and Constructed Value (January 12, 1998).)

Accordingly, in reaching our preliminary determination we relied on

the actual costs incurred to produce the subject merchandise during the

six-month period contemporaneous to the reported sales. This approach

is consistent with the Department's obligation to ensure that the

calculations are based on costs which ``* * * reasonably reflects and

accurately captures all of the actual costs incurred in producing * * *

the product under investigation or review.'' (See, Statement of

Administrative Action accompanying the URRA, H.R. 5110, H.R. Doc. No.

103-316, vol. 1 (1994) at 834 (SAA); see also Final Results of

Antidumping Duty Administrative Reviews: Certain Cold-Rolled and

Corrosion-Resistant Carbon Steel Flat Products From Korea, 63 FR 13170,

13192 (March 18, 1998), where the Department determined that the POR

costs differed from the company's fiscal year costs, and after

reviewing the information, based the margin calculations on the POR

costs rather than on the fiscal year costs.) Accordingly, we continue

to rely on costs incurred during the six-month period in these final

results.

As to Ferbasa's comment that the Department's general practice of

calculating SG&A and interest expense based on the fiscal year requires

that COM be based on that same period, we disagree. The Department

normally calculates SG&A and interest expenses over the closest

corresponding fiscal year's audited financial statements. We then use

these ratios to determine the per-unit SG&A and interest expense

associated with each product. This calculation measures, over a full

fiscal year, the level of G&A expenses associated with the company's

sales. The basis for calculating these ratios over the full fiscal year

is not because it is the exact same period as that examined for the

cost calculation, but rather because using the annual ratio is most

reflective of these type of expenses, which are typically incurred

unevenly throughout the year. (See Final Determination of Sales at Less

Than Fair Value: Oil Country Tubular Goods from Argentina, 60 FR

33,539, 33,549 (June 28, 1995); and Final Determination of Sales at

Less Than Fair Value: Hot-Rolled Carbon Steel Flat Products, Cold-

Rolled Carbon Steel Flat Products, Corrosion-Resistant Carbon Steel

Flat Products, and Cut-to Length Carbon Steel Plate from Canada, 58 FR

37105, 37113 (July 9, 1993).)

Comment 2

Ferbasa contends that the Department should not have included

valued added taxes (IPI and ICMS) in the calculation of constructed

value (CV). According to Ferbasa, section 773(a)(6)(B) of the Act

provides for the exclusion of home market consumption taxes from normal

value (NV) in order to maintain a tax neutral comparison for purposes

of measuring whether dumping has occurred.

The petitioners contend that the Department properly included the

IPI and ICMS taxes in CV. According to the petitioners, section 773(e)

of the Act provides that any home market tax imposed on export goods

should be included in CV unless the tax is refunded or remitted upon

exportation. The petitioner argues that Ferbasa has not stated nor did

the verification conclude that these IPI and ICMS taxes have been

remitted or refunded upon exportation.

Department's Position:

Because the NV in these final results was based on Ferbasa's home

market prices and not on CV, this issue is moot. Therefore, we are not

addressing it here.

Final Results of Review

Our final results are unchanged from those presented in our

preliminary results. Therefore, the dumping margin for Ferbasa remains

at zero percent for the period March 1, 1996, through February 28,

1997.

The following deposit requirement will be effective for all

shipments of subject merchandise 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 the reviewed

company will be zero; (2) for merchandise exported by manufacturers or

exporters not covered in this review but covered in previous reviews or

the original less-than-fair-value (LTFV) investigation, the cash

deposit rate will continue to be the rate published in the most recent

final results or determination for which the manufacturer or exporter

received a company-specific rate; (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 manufacturer of the merchandise in the final

results of this review, earlier review or the LTFV investigation,

whichever is the most recent; (4) if neither the exporter nor the

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

cash deposit will be 35.95 percent, the ``All Others'' rate made

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

This notice serves as a final 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 notice also serves as a reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d) of the Department's

regulations. 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 terms of the APO

is a sanctionable violation.

This administrative review and notice are in accordance with

sections 751(a)(1) and 777(i)(1) of the Act.

Dated: May 14, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-13802 Filed 5-21-98; 8:45 am]

BILLING CODE 3510-DS-P