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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-803]

Titanium Sponge From the Russian Federation: 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 September 8, 1998, the Department of Commerce (``the

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Department'') published the preliminary results of its administrative

review of the antidumping finding on titanium sponge from the Russian

Federation (``Russia''). The review covers the period August 1, 1996,

through July 31, 1997.

We gave interested parties an opportunity to comment on our

preliminary results. We received comments from Titanium Metals

Corporation (``the petitioner'') and rebuttal comments from AVISMA

Magnesium-Titanium Works (``AVISMA'') and Interlink Metals & Chemicals

S.A. and Interlink Metals, Inc. (collectively ``Interlink''). We did

not receive any comments from TMC Trading International, Ltd., the

other respondent in this review. After considering these comments, we

have not changed the final results from those presented in the

preliminary results of review.

EFFECTIVE DATE: January 11, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Wendy Frankel, Office

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

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

Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-3936

and (202) 482-5849, respectively.

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 Round Agreements Act. In addition, unless

otherwise indicated, all citations to the Department of Commerce's

regulations refer to the regulations codified at 19 CFR part 351

(1998).

Background

On September 8, 1998, the Department published in the Federal

Register (63 FR 47474) the preliminary results of its administrative

review of the antidumping finding on titanium sponge from Russia. The

Department has now completed the review in accordance with section 751

of the Act.

Scope of the Review

The product covered by this administrative review is titanium

sponge from Russia. Titanium sponge is chiefly used for aerospace

vehicles, specifically, in construction of compressor blades and

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

engines. Imports of titanium sponge are currently classifiable under

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

HTS subheading is provided for convenience and U.S. Customs purposes.

Our written description of the scope of this proceeding is dispositive.

Interested Party Comments

We gave interested parties an opportunity to comment on our

preliminary results. We received comments from the petitioner on

October 8, 1998, and rebuttal comments from AVISMA and Interlink on

October 13, 1998. We did not receive comments from any other party.

Comment 1: The petitioner argues that the Department erred when it

valued electricity with the electricity rate for industrial users from

the Guayana region of Venezuela, as reported by the Venezuelan Chamber

of Electric Industry, rather than with an industrial user rate for all

of Venezuela. According to the petitioner, selecting this regional rate

broke with the Department's past practice of valuing electricity with a

country-wide rate. Specifically, the petitioner notes that the

Department used a Brazilian-wide rate in the preliminary results for

the 1994-1995 and 1995-1996 administrative reviews. See the

petitioner's July 16, 1998, submission at 3, citing to Preliminary

Results of Antidumping Duty Administrative Review: Titanium Sponge from

the Russian Federation, 61 FR 39437, (July 29, 1996); and Preliminary

Results of Antidumping Duty Administrative Review: Titanium Sponge from

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

The petitioner also claims that there is no provision in the

applicable statute that allows, or even mentions, subdividing a

selected surrogate country for valuation purposes. In fact, the

petitioner argues, the statute mandates the use of country-wide rates

because it directs the Department to utilize a ``country'' to value the

factors of production. Id. at 3. The petitioner contends that it is the

Department's established practice to determine the economic

comparability of a potential surrogate market economy country by

examining the country-wide characteristics, such as the level of per

capita Gross National Product, national distribution of labor and

national growth rates. Id. at 3, emphasis in original. For this reason,

the petitioner argues that the Department should be consistent and use

country-wide prices for valuing the factors of production. The

petitioner notes that both itself and Interlink submitted general-

industry electricity rates for all of Venezuela and recommends that the

Department, for the final results of review, use either of these two

country-wide rates.

According to Interlink and AVISMA (collectively ``the

respondents''), the Department was correct to value electricity with

the industrial user rate from the Guayana region of Venezuela. The

respondents state that this region contains the country's largest

industrial companies, including Venezuela's three aluminum producers.

Furthermore, the respondents argue that EDELCA, the company that

provides electricity to this region, is Venezuela's largest utility

company and accounts for approximately 70 percent of Venezuela's total

electricity production. In addition, the 177 industrial users EDELCA

serviced in 1997 accounted for 25 percent of Venezuela's electricity

consumption. See respondent's submission dated March 3, 1998 at 2.

The respondents also contend that the Department is not required by

statute or practice to use country-wide rates for valuing factors of

production in nonmarket economy cases. The respondents argue that the

Department addressed this issue in the Notice of Final Determination of

Sales at Less Than Fair Value; Polyvinyl Alcohol From the People's

Republic of China, 61 FR 14057, 14062 (March 29, 1998), where the

Department stated ``Since there is not sufficient information on the

record to weigh the appropriateness of using one Indian state's

electricity rates over those in another, we have based the surrogate

value on the simple average of all Indian state rates found in the 1995

CMIE source.'' According to the respondents, the Department's decision

to use a country-wide rate from India was based not on a requirement

that it use a country-wide rate, but rather on a recognition that there

was insufficient information on the record on which to base a decision

to use a rate specific to a particular Indian state. See respondent's

July 21, 1998 submission at 2. Moreover, the respondents claim that the

Department's decision explicitly acknowledges that it would have used a

rate specific to a particular state or region within the surrogate

country if the information on the record suggested that this rate was a

better indicator of the rate that AVISMA would likely pay if located in

the surrogate country. Id. at 2. Therefore, argue the respondents,

since the statute and past practices do not prohibit the Department

from using a regional rate, and the record evidence indicates that the

industrial-user electricity rate from the Guayana region is the most

representative of the prices that AVISMA would pay if located in

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Venezuela, the Department should continue to use this rate for the

purposes of the final results of this review.

Department Position: We agree with the respondents. Section

773(c)(4) of the Act instructs the Department to select a surrogate

market economy country that is (1) at a comparable level of economic

development to that of the nonmarket economy country and (2) produces

merchandise that is comparable to the subject merchandise. The

Department's regulations, at section 351.408(b), provide further

guidance in selecting the appropriate surrogate country by stating that

the Secretary will place primary emphasis on per capita GDP as the

measure of economic comparability. As the petitioner notes, it is also

the Department's practice to examine additional criteria, such as

national growth rates and the national distribution of labor, when

selecting the appropriate surrogate country. However, all of the above

criteria and practices are used to select the surrogate country and are

not relevant in selecting factor of production values within the

surrogate country once selected. Section 773(c)(1)(B) of the Act states

that the valuation of the factors of production shall be based on the

best available information regarding the values of such factors in a

market economy country or countries considered to be appropriate by the

administering authority.

In our effort to value the factors of production in an accurate

manner, the Department uses both regional and country-wide market

economy values where the record evidence demonstrates that such values

provide the best available information by which to value the nonmarket

economy producer's factors of production. In the instant case, the

evidence on the record demonstrates that the Guayana region contains a

high concentration of Venezuela's largest industrial users and accounts

for 70 percent of Venezuela's total electricity production. Venezuela's

three producers of aluminum, a product comparable to titanium, are

located in Guayana and receive the industrial rate for this region.

Furthermore, 177 industrial users in this region accounted for 25

percent of Venezuela's total electricity consumption in 1997. Although

the respondent's data does not explicitly list what percent these 177

industrial users represent of all industrial consumption, we can infer

from the fact that they account for 25 percent of all total electrical

consumption (which includes residential, commercial, and industrial)

that it must be a very high percentage. See respondent's submission

dated March 3, 1998 at 2 and 3. For these reasons, we find that the

rate for industrial users in the Guayana region of Venezuela is the

most representative of the electricity prices AVISMA would pay if it

were located in Venezuela.

Comment 2: The petitioner contends that Interlink's request for

revocation did not properly comply with 19 CFR 351.222(e). Therefore,

the petitioner concludes that the Department could not have legally

revoked the order as per Interlink's request. According to the

petitioner, Interlink's September 21, 1998, submission withdrawing its

request for revocation prevented the Department from running afoul of

its own regulations.

Interlink argues that its request for revocation complied with

Department regulations, and the Department's September 8, 1998,

preliminary notice of intent to revoke the finding in response to

Interlink's request confirmed the correctness of Interlink's request.

Moreover, Interlink claims that its withdrawal of request for

revocation had nothing to do with the petitioner's argument that this

withdrawal prevented the Department from running afoul of its

regulations.

Department Position: On September 8, 1998, the Department

preliminarily determined to revoke the finding on titanium sponge from

Russia as it applies to Interlink. Due to Interlink's September 21,

1998 withdrawal of its request for revocation, we do not need to

consider any arguments concerning Interlink's request for revocation.

Correction of Clerical Errors

The Department found two clerical errors in our August 31, 1998

analysis memorandum, which describes the methodology we used in

calculating normal value and U.S. price in this administrative review.

On page 3 of this memorandum, we discussed our calculation of selling,

general and administrative (``SG&A'') expenses and profit.

Specifically, we defined SG&A expenses to equal the surrogate SG&A

ratio multiplied by the cost of manufacture. Similarly, we defined

profit to equal the surrogate profit ratio multiplied by the sum of the

cost of manufacture and SG&A expenses. In both definitions, the

Department mistakenly used the term ``cost of manufacture'' when we

should have used the term ``adjusted cost of manufacture.'' Because our

actual calculations correctly used adjusted cost of manufacture, this

clerical error had no effect on our normal value calculation.

Final Results of Review

In the preliminary results, the Department stated that we would

confirm the information provided by AVISMA, Interlink, and TMC

regarding the existence of sales of subject merchandise to the United

States that were entered under temporary importation bond (``TIB'').

See preliminary results at 47476. We contacted the Customs Service and

confirmed that certain entries of subject merchandise manufactured by

AVISMA, Interlink, and TMC entered the United States under TIB during

the period of review. See Memorandum to the File, ``Customs Service

Confirmation of Temporary Importation Bond Entries'', dated December

30, 1998.

For the reasons set out in the preliminary determination, and in

the discussion of comments above, we determine that the following

dumping margins exist:

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

Margin

Manufacturer/Exporter Time period (percent)

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Interlink Metals & Chemicals, 8/1/96-7/31/97........... 00.0

S.A..

TMC Trading International, 8/1/96-7/31/97........... 00.0

Ltd..

AVISMA Magnesium-Titanium 8/1/96-7/31/97........... 00.0

Works.

Russia-wide rate............. 8/1/96-7/31/97........... 83.96

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

assess, antidumping duties on all appropriate entries. The Department

will issue appraisement instructions directly to the Customs Service.

Since there were no sales with dumping margins, we will instruct

Customs not to assess dumping duties on any shipments of subject

merchandise exported by the above-referenced entities that entered the

United States during the POR.

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Furthermore, the following deposit requirements will be effective

upon publication of this notice of final results of review for all

shipments of titanium sponge 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 rates

for subject merchandise manufactured and exported directly to the

United States by AVISMA will be 0.00 percent; (2) the cash deposit

rates for merchandise exported to the United States by Interlink Metals

& Chemicals, S.A. and TMC Trading International, Ltd. will be 0.00

percent; (3) merchandise exported by manufacturers or exporters not

covered in this review but covered in the original LTFV investigation

or a previous administrative review and which have a separate rate, the

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

the final determination or final results for which the manufacturer or

exporter received a company-specific rate; (4) for Russian

manufacturers or exporters not covered in the LTFV investigation or in

this or prior administrative reviews, the cash deposit rate will

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

non-Russian exporters of subject merchandise from Russia that were not

covered in the LTFV investigation or in this or prior administrative

reviews will be the rate applicable to the Russian supplier of that

exporter. These deposit rates, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

Notification to Interested Parties

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

responsibility under 19 CFR 351.402(f) of the Department's regulations

to file a certificate regarding the reimbursement of antidumping duties

prior to liquidation of the relevant entries during this review period.

Failure to comply with this requirement could result in the Secretary's

presumption that reimbursement of antidumping duties occurred and the

subsequent assessment of double antidumping duties.

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

administrative protective order (``APO'') in this review of their

responsibility concerning the disposition of proprietary information

disclosed under APO in accordance with 19 CFR 351.306. See 63 FR 24391,

24403 (May 4, 1998). Timely written notification of the return/

destruction of APO materials or conversion to judicial protective order

is hereby requested. Failure to comply with the regulations and the

terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with

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

Dated: January 5, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-552 Filed 1-8-99; 8:45 am]

BILLING CODE 3510-DS-U