Silicon Metal From Argentina: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-804]

Silicon Metal From Argentina: Preliminary Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review.

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SUMMARY: In response to a request from the respondent, the Department

of Commerce (the Department) is conducting an administrative review of

the antidumping duty order on silicon metal from Argentina. The review

covers one manufacturer/exporter of the subject merchandise to the

United States and the period September 1, 1997 through August 31, 1998.

We have preliminarily determined that respondent has not made sales

below normal value during the period of review. If these preliminary

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

the U.S. Customs Service not to assess antidumping duties on entries

subject to this review.

EFFECTIVE DATE: October 12, 1999.

FOR FURTHER INFORMATION CONTACT: Helen M. Kramer or Linda Ludwig,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-0405 or 482-3833,

respectively.

APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all

citations to the Trade and 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 Round Agreements

Act of 1994 (URAA). In addition, unless otherwise indicated, all

references to the Department's regulations are to 19 CFR Part 351

(1998).

SUPPLEMENTARY INFORMATION:

Background

On September 26, 1991, the Department published an antidumping duty

order on silicon metal from Argentina (56 FR 48779), which was amended

on July 10, 1995, pursuant to court remand (60 FR 35551). The

Department published a notice of ``Opportunity To Request

Administrative Review'' of the antidumping duty order for the 1997/1998

review period on September 11, 1998 (63 FR 49543). On September 30,

1998, the respondent, Electrometalurgica Andina S.A.I.C. (``Andina'')

filed a request for review. We published a notice of initiation of this

review on October 29, 1998 (63 FR 58009).

Due to the complexity of issues involved in this case, the

Department extended the time limit for completion of the preliminary

results until September 30, 1999, in accordance with section

751(a)(3)(A) of the Act. See 64 FR 23056 (April 29, 1999). The deadline

for the final results of this review will continue to be 120 days after

the date of publication of this notice. The Department is conducting

this review in accordance with section 751 of the Act.

Scope of the Review

The product covered by this review is silicon metal. During the

less-than-fair-value (LTFV) investigation, silicon metal was described

as containing at least 96.00 percent, but less than 99.99 percent,

silicon by weight. In response to a request by the petitioners for

clarification of the scope of the antidumping duty order on silicon

metal from the People's Republic of China, the Department determined

that material with a higher aluminum content containing between 89 and

96 percent silicon by weight is the same class or kind of merchandise

as silicon metal described in the LTFV investigation. See Final Scope

Rulings--Antidumping Duty Orders on Silicon Metal From the People's

Republic of China, Brazil and Argentina (February 3, 1993). Therefore,

such material is within the scope of the orders on silicon metal from

the PRC, Brazil and Argentina. Silicon metal is currently provided for

under subheadings 2804.69.10 and 2804.69.50 of the Harmonized Tariff

Schedule (HTS) and is commonly referred to as a metal. Semiconductor-

grade silicon (silicon metal containing by weight not less than 99.99

percent of silicon and provided for in subheading 2804.61.00 of the

HTS) is not subject to this review. These HTS subheadings are provided

for convenience and U.S. Customs purposes. Our written description of

the scope of the proceeding is dispositive.

Verification

As provided in section 782(i)(3) of the Act, we verified sales and

cost information provided by Andina at its headquarters in Buenos Aires

and at its plant in San Juan, Argentina from May 17 through 28, 1999,

using standard verification procedures, including inspection of the

manufacturing facilities, examination of relevant sales and financial

records, and selection of original documentation containing relevant

information. As a result of our findings at verification, we adjusted

the costs of wood chips and electricity. See ``Verification of Cost at

Electrometalurgica Andina S.A.I.C., San Juan and Buenos Aires,

Argentina, May 17-21, 1999,'' dated August 6, 1999, ``Verification of

Sales at Electrometalurgica Andina S.A.I.C., San Juan and Buenos Aires,

Argentina, May 24-28, 1999,'' dated August 6, 1999, and ``Analysis of

Electrometalurgica Andina S.A.I.C. for the Preliminary Results of the

Administrative Review of Silicon Metal from Argentina for the Period

September 1, 1997 through August 31, 1998,'' dated September 10, 1999.

Cost of Production Analysis

Because all of Andina's sales in the home market during the last

completed segment of the proceeding failed the cost test and, as such,

were disregarded, we initiated a cost of production (``COP'') analysis

in accordance with section 773(b) of the Act. We conducted the COP

analysis as described below.

A. Calculation of COP

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

weighted-average COP based on the sum of the cost of materials,

processing, depreciation, interest expenses, general and administrative

expenses, and packing costs. We used the period January through

September 1998, as there was no production of silicon metal during the

POR until January, and in the normal course of business Andina accounts

for costs on a quarterly basis ending in September. We revised the

reported cost of the first stage of production by increasing the cost

of wood chips purchased from an affiliated supplier to reflect more

closely the affiliate's actual costs. We increased the cost of energy

purchased during the months of August and September to include a price

increase not reflected in respondent's accounts until the preparation

of the audited financial statements. We corrected the reported

financial expenses by deducting interest revenue received from

customers. Pursuant to section 773(f)(1)(C)(ii) of the

[[Page 55250]]

Act and section 351.407(d) of the Department's regulations, we denied a

claimed adjustment for startup costs, as we determined Andina's

investment in the rebuilding of the furnace used for production of

silicon metal did not meet the Department's criteria for a ``new

production facility.'' Andina stated that the retooling of Furnace IV

``involved the replacement of the furnace lining, and the acquisition

and installation of a new production technology.'' See supplemental

response of March 2, 1999, page 7. Section 351.407(d)(1)(i) of the

Department's regulations provides that ``new production facilities''

includes the substantially complete retooling of an existing plant.

Substantially complete retooling involves the replacement of nearly all

production machinery or the equivalent rebuilding of existing

machinery. As verified by the Department during a plant visit, Andina

relined an existing furnace in an existing production facility and

installed new equipment to lower electrodes into the furnace. We regard

this investment as essentially maintenance of an existing facility.

B. Test of Home Market Prices

We compared the revised weighted-average COP to home market sales

of the foreign like product as required under section 773(b) of the

Act. We regarded all sales of silicon metal as identical products. See

section 771(16)(A) of the Act. In determining whether to disregard

home-market sales made at prices below the COP, we examined whether (1)

within an extended period of time, such sales were made in substantial

quantities, and (2) such sales were made at prices which permitted the

recovery of all costs within a reasonable period of time. See sections

773(b)(2)(B)-(D) of the Act. We compared the COP to the home market

prices, less any applicable movement charges and warehousing expenses.

We found all home market sales were made at prices above the COP.

Fair Value Comparisons

To determine whether sales of the subject merchandise sold by

Andina and exported to the United States were made at less than normal

value (``NV''), we compared export price (``EP'') to the NV, as

described in the ``Export Price'' and ``Normal Value'' sections of this

notice. Pursuant to section 777A(d)(2) of the Act, we compared the EPs

of individual U.S. transactions to monthly weighted-average NVs of the

foreign like product. We considered the merchandise sold in the U.S.

and home markets to be identical products.

Export Price

We based United States price on EP, as defined in section 772(a) of

the Act, because Andina sold the merchandise to an unaffiliated company

prior to importation and constructed export price was not otherwise

indicated by the facts of record.

We calculated EP based on the packed, delivered, duty-unpaid price

to an unaffiliated trading company in the United States. We made

deductions pursuant to section 772(c)(2) of the Act for foreign inland

freight, ocean freight, brokerage and handling, and increased the

United States price by the amount of duty drawback in accordance with

section 772(c)(1)(A) of the Act.

Normal Value (NV)

In order to determine whether sales of the foreign like product in

the home market are a viable basis for calculating NV, we compared the

volume of home market sales of the foreign like product to the volume

of subject merchandise sold in the United States, in accordance with

section 773(a)(1)(C) of the Act. Andina's aggregate volume of home

market sales of the foreign like product was greater than five percent

of its respective aggregate volume of U.S. sales of the subject

merchandise. Therefore, we have based NV on home market sales.

Andina made sales exclusively to unaffiliated customers in the home

market during the period of review. Therefore we did not perform the

arm's length test. All of the home market sales were made at prices

above the cost of production. Home market prices were based on the

packed, ex-factory or delivered prices to customers. We made deductions

to NV according to section 773(a)(6)(B) of the Act, where appropriate,

for inland freight, warehousing expense, credit expenses, and packing.

We also made a deduction from NV for the gross revenue tax imposed on

home market sales revenue, but not on export sales pursuant to section

773(a)(6)(B)(iii) of the Act.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (``LOT'') as the EP or CEP transaction. In this

case, the record shows that sales in both markets were made at the same

LOT. Andina made sales directly to its customers in the United States

and Argentina. There were no differences in the selling functions

performed for distributors, end-users or trading companies in either

market. Andina provided only packing and shipping services. No

technical services or warranties were provided.

Preliminary Results of Review

We preliminarily determine that no margin exists for Andina for the

period September 1, 1997 through August 31, 1998. Pursuant to section

351.224 of the Department's regulations, we will disclose the

calculations performed to the parties to this proceeding within five

days of the date of publication of this notice. An interested party may

request a hearing within 30 days of publication. Any hearing, if

requested, will be held 44 days after the date of publication, or the

first business day thereafter. Issues raised in the hearing will be

limited to those raised in the respective case briefs and rebuttal

briefs. Interested parties may submit case briefs and rebuttal briefs

not later than 30 days and 37 days, respectively, after the date of

publication of these preliminary results of review. See 19 CFR

351.309(c)(1)(ii) and (d)(1).

Parties who submit case briefs or rebuttal briefs in this

proceeding are requested to submit with each argument (1) a statement

of the issue and (2) a brief summary of the argument. Parties are also

encouraged to provide a summary of the arguments not to exceed five

pages and a table of statutes, regulations, and cases cited.

The Department will issue the final results of this administrative

review, including the results of its analysis of issues raised in any

such written briefs or at the hearing, if held, not later than 120 days

after the date of publication of this notice.

Interested parties who wish to request a hearing or to participate

if one is requested, must submit a written request to the Assistant

Secretary for Import Administration, Room B-099,within 30 days of the

date of publication of this notice. Requests should contain: (1) the

party's name, address and telephone number; (2) the number of

participants; and (3) a list of issues to be discussed. See 19 CFR

351.310(c).

Assessment Rates

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. The Department will

issue appraisement instructions directly to the Customs Service upon

the completion of this review. The final results of this review shall

be the basis for the assessment of antidumping duties on entries of

merchandise covered by this review and for future deposits of estimated

duties.

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Cash Deposit Requirements

The following cash deposit requirements will be effective upon

completion of the final results of this administrative review for all

shipments of silicon metal from Argentina 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 Andina will be the

rate established in the final results of administrative review, except

if the rate is less than 0.5 percent, and therefore, de minimis within

the meaning of 19 CFR 351.106, in which case 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, the cash deposit rate will continue to be

the rate published in the amended final determination; or (3) if the

exporter is not a firm covered in this 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) the cash deposit rate for all other

manufacturers or exporters will continue to be 17.87 percent, the ``All

Others'' rate made effective by the amended LTFV determination. These

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

the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 351.402(f) 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 administrative review and notice are in accordance with

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

Dated: September 30, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-26588 Filed 10-8-99; 8:45 am]

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