[Federal Register Volume 62, Number 201 (Friday, October 17, 1997)]
[Notices]
[Pages 54087-54094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27632]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-806]
Silicon Metal From Brazil; Amended Final Results of Antidumping
Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Amended final results of antidumping duty administrative
review.
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SUMMARY: The Department of Commerce (the Department) is amending its
final results of review, published on January 14, 1997, of the
antidumping duty order on silicon metal from Brazil, to reflect the
correction of ministerial errors in those final results. The period
covered by these amended final results is the period July 1, 1994
through June 30, 1995.
EFFECTIVE DATE: October 17, 1997.
FOR FURTHER INFORMATION CONTACT: Fred Baker, Alain Letort, or John
Kugelman, AD/CVD Enforcement Group III--Office 8, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230, telephone 202/482-2924 (Baker), 202/482-4243
(Letort), or 202/482-0649 (Kugelman), fax 202/482-1388.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to 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 (URAA).
Background
The Department published the final results of the fourth
administrative review, covering the period July 1, 1994 through June
30, 1995, of the antidumping duty order on silicon metal from Brazil on
January 14, 1997 (62 FR 1970) (Fourth Review Final Results). The
respondents are Companhia Brasileira Carbureto de Calcio (CBCC),
Companhia Ferroligas Minas Gerais-Minasligas (Minasligas),
[[Page 54088]]
Eletrosilex Belo Horizonte (Eletrosilex), Rima Industrial S.A. (RIMA),
and Camargo Correa Metais (CCM). The petitioners are American Alloys,
Inc., Elken Metals, Co., Globe Metallurgical, Inc., SMI Group, and SKW
Metals & Alloys.
On January 31, 1997, Minasligas and RIMA filed clerical error
allegations. On February 4, 1997, the petitioners filed clerical error
allegations with respect to Eletrosilex, Minasligas, RIMA, and CBCC. On
February 6, 1997, Eletrosilex filed clerical error allegations. On
February 7, 1997, petitioners filed a response to the clerical error
allegations submitted by Minasligas and RIMA. Also on February 7, 1997,
RIMA submitted a response to the petitioners' clerical error
allegations. On February 11, 1997, CBCC submitted a response to
petitioners' clerical error allegations. On February 13, 1997,
petitioners submitted a response to Eletrosilex's clerical error
allegations. Pursuant to the CIT's order, we are now addressing the
ministerial allegations and amending our final results of the fourth
review. See American Silicon Technologies et al., v. United States,
Slip Op. 97-113, August 18, 1997.
Scope of Review
The merchandise covered by this review is silicon metal from Brazil
containing at least 96.00 percent but less than 99.99 percent silicon
by weight. Also covered by this review is silicon metal from Brazil
containing between 89.00 and 96.00 percent silicon by weight but which
contains a higher aluminum content than the silicon metal containing at
least 96.00 percent but less than 99.99 percent silicon by weight.
Silicon metal is currently provided for under subheadings 2804.69.10
and 2804.50 of the Harmonized Tariff Schedule (HTS) as a chemical
product, but is commonly referred to as a metal. Semiconductor grade
silicon (silicon metal containing by weight not less than 99.99 percent
silicon and provided for in subheading 2804.61.00 of the HTS) is not
subject to the order. HTS item numbers are provided for convenience and
for U.S. Customs purposes. The written description remains dispositive
as to the scope of product coverage.
Clerical Error Allegations
Comment 1
Minasligas argues that the Department erred in its calculation of
its cost of production/constructed value (COP/CV) by failing to offset
Minasligas' financial expenses with its financial income. That
Minasligas had short-term financial income, Minasligas argues, is
evident from its 1994 financial statement. Minasligas argues that there
are three categories of financial income which the Department
erroneously determined not to allow as an interest income offset. The
first is ``income from short term applications,'' which Minasligas
alleges the Department disallowed as an offset because it mistook it to
be compensation for inflation. In fact, Minasligas argues, the record
shows that the effects of inflation are reflected on the financial
statements through the recording of monetary correction of fixed
assets, shareholders equity, and other accounts subject to such
correction. Thus, Minasligas argues, the Department cannot interpret
Minasligas' submissions or its financial statements to indicate that
inflation is included in ``income from short term applications.''
The second category of income which the Department erroneously
failed to include as an offset to Minasligas' financial expenses,
Minasligas argues, is the category ``exchange gains.'' Minasligas
argues that the Department should include exchange gains as an offset
to financial expenses because it included exchange losses as a
financial expense.
The third category of income which the Department erroneously
failed to include as an offset to financial expenses, Minasligas
argues, is the category ``gains on monetary correction.'' Minasligas
argues that the Department should include this category of income as an
offset to financial expenses because it included an amount for monetary
correction of loans (i.e., the inflation adjustment on monetary
liabilities) in financial expenses.
Petitioners argue that the Department's calculation of Minasligas'
financial expenses was correct. It cites the final results notice in
which the Department stated:
[A]lmost all of Minasligas' reported ``interest income''
consists of items that are totally unrelated to interest income. The
financial statements for Minasligas and its parent, Delp Engenharia
Mecanica S.A. (Delp), demonstrate that over 95 percent of both
companies' reported ``interest income'' consists of ``monetary
variation,'' ``monetary correction,'' and ``income from short-term
applications.'' The Department's verification report for Minasligas
in the immediately preceding review clarifies that ``financial
applications'' (which would include ``income from short-term
applications'') refers to compensation for inflation. At no point
has Minasligas demonstrated for the record that the amounts reported
for these categories of income constitute interest income derived
from short-term investments of working capital. Nor has Minasligas
demonstrated that the claimed interest income was derived from
short-term investments of working capital merely by stating in its
rebuttal brief that its net interest income exceeded its net
interest expense.
Similarly, the financial statements submitted by Minasligas show
that the category ``interest received'' included inter alia, (1)
charges paid by customers for Delp's granting of delayed payment
terms, which are really sales revenue; (2) discounts obtained from
suppliers; (3) dividends received; and (4) exchange gains or losses.
See Minasligas' April 30, 1996 SQR at 37 and exhibit 19. These items
clearly do not represent interest income from short-term
investments.
For the above reasons, we have reduced Minasligas' interest
income by the total amount of the items incorrectly included therein
by Minasligas (see Final Analysis Memorandum from Fred Baker to the
File).
See Fourth Review Final Results, at 1974. Based on the analysis in
the final results, petitioners argue that the Department's calculation
of Minasligas' interest expense was neither a ministerial nor a non-
ministerial error.
Department's Position: As petitioners have noted, we addressed this
issue in the final results of the fourth review. Our treatment of
Minasligas' financial income was intentional, and not a ministerial
error. The disagreement Minasligas has expressed is in regard to our
analysis, and is thus not a proper subject for review under the
ministerial errors correction process.
Comment 2
Minasligas argues that the Department made a ministerial error in
its revaluation of Minasligas' beginning inventory. The Department,
based on Minasligas' October 15, 1996 submission, revalued Minasligas'
beginning inventory in order to account for hyperinflation that
occurred prior to the start of the period of review (POR). The raw
material costs Minasligas reported in its October 15, 1996 submission,
it argues, were its inventory of both ferrosilicon and silicon metal.
Minasligas states that the Department did not request that Minasligas
report silicon metal inventory separately, nor could Minasligas have
done so because it does not maintain separate inventory records.
Minasligas argues that the Department mistakenly overstated the
adjustment to the reported silicon metal costs by calculating an
inflation adjustment on raw materials for the entire company, and
applying the additional costs entirely to silicon metal, rather than
proportionately to subject and non-subject merchandise.
Petitioners argue that there is no evidence on the record, and
Minasligas has cited to none, to support Minasligas' claim. For this
reason, petitioners argue,
[[Page 54089]]
the Department should reject Minasligas' argument. Furthermore,
petitioners point out that in its April 30, 1996 supplemental
questionnaire response, Minasligas stated that it maintains separate
inventories for charcoal. Thus, petitioners argue, Minasligas' argument
that it does not maintain separate inventory records for its raw
materials is contradicted by other information on the record, at least
with respect to charcoal.
Department's Position: We agree with both parties in part. We agree
with Minasligas that the revalued costs should be allocated to silicon
metal so that ferrosilicon costs are not attributed to silicon metal,
and that it would be an error not to perform an allocation where one is
warranted. However, we agree with petitioners that Minasligas has cited
to no evidence on the record that the inventory volumes and values
Minasligas reported in its October 15, 1996 submission were its entire
inventory of raw materials used in the production of both ferrosilicon
and silicon metal. Our review of the record indicates that the figures
for charcoal Minasligas' reported in its October 15, 1996 submission
reflects its entire inventory for charcoal, but the figures it reported
in its October 15, 1996 submission for woodchips, quartz, and carbon
electrodes reflects only the inventory used in the production of
silicon metal. We made this determination based on the value of
material inputs Minasligas reported in tab 8 of its April 30, 1996
submission (where Minasligas reported the value of its inputs for
silicon metal), as compared to the material input values Minasligas
reported in its October 15, 1996 submission, which Minasligas now
alleges reflects its entire inventory of the four inputs. These two
exhibits demonstrate that the cost figures Minasligas reported for
woodchips, quartz, and carbon electrodes in the production of silicon
metal in tab 8 of its April 30, 1996 submission are identical to those
it reported in its October 15, 1996 submission. However, such is not
the case for charcoal. Furthermore, other evidence on the record
indicates that the consumption volume figures Minasligas reported for
charcoal were used in the production of silicon metal and ferrosilicon
(see tab 18 (exhibit 36c) of its April 30, 1996 submission). Therefore
in these amended final results, we have performed an allocation of the
revalued costs only for charcoal. We performed the allocation based on
the volume of charcoal consumed in the production of silicon metal
relative to the volume of charcoal consumed in the production of
ferrosilicon. See the amended final results analysis memorandum for our
calculations.
Comment 3
Minasligas argues that the Department made a ministerial error by
double-counting packing costs in COP/CV. It argues that the Department
added packing costs to a COP which already included packing costs. It
argues that the Department failed to deduct home-market packing costs
from the cost of manufacture (COM) before adding U.S. packing costs in
calculating CV.
Petitioners argue that information on the record indicates that the
Department double-counted only the labor and machine costs for packing,
and not the cost of packing materials. Department's Position: We agree
with petitioners that we double-counted only the labor and machine
costs for packing, and not the material costs. In these amended final
results of review we have revised our calculations of COP and CV so as
not to double-count labor and machine costs. See the amended final
results analysis memorandum for our calculations.
Comment 4
Minasligas argues the Department made three errors in calculating
profit for CV. The first alleged error was that the Department based
profit on Minasligas' financial statement data, rather than on the
actual profit calculated on above-cost sales of subject merchandise.
Minasligas argues that this was an error because the statute directs
the Department to add to CV the ``actual amounts incurred and realized
by the specific exporter or producer being examined in the
investigation or review for selling, general, and administrative
expenses, and for profits, in connection with the production and sale
of a foreign like product, in the ordinary course of trade for
consumption in the foreign country* * *'' 19 U.S. 1677b(e)(2)(A). Based
on this statutory language, Minasligas argues that the Department is
required to calculate profit based on above-cost sales wherever
possible.
Furthermore, Minasligas argues that in calculating profit based on
above-cost sales, the Department erred by limiting the calculation to
only the sales of regular grade silicon metal. Rather, Minasligas
argues, the Department should have included sales of both regular and
high-purity grade silicon metal even if all the U.S. sales to be
compared to CV are regular-grade silicon metal. Minasligas contends
that the Department has in the past based profits on the entire foreign
like product, and not on a subset of the subject merchandise. In
support of this contention, it cites Antifriction Bearings (Other than
Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy,
Japan, Singapore, and the United Kingdom; Final Results of Antidumping
Duty Administrative Reviews, 62 F.R. 2081, 2112-2114 (January 15,
1997), where the Department rejected a respondent's argument that where
there are no appropriate identical or family matches (and hence the
Department uses CV), there are no sales of ``a foreign like product''
to calculate a profit margin. In further support of this contention,
Minasligas cites Professional Electric Cutting Tools from Japan; Final
Results of Antidumping Duty Administrative Review, 62 F.R. 386, 389-390
(January 3, 1997), in which the Department stated, ``For purposes of
calculating CV and CEP profit, we interpret the term `foreign like
product' to be inclusive of all merchandise sold in the home market
which is in the same general class or kind of merchandise as that under
consideration,'' and Notice of Final Determination of Sales at Less
than Fair Value: Large Newspaper Printing Presses and Components
Thereof, Whether Assembled or Unassembled, from Japan, 61 F.R. 38139,
38145-38147 (July 23, 1996), in which the Department stated,
``[Respondent] is incorrect to suppose that because we did not find
home-market sales which provided practicable price-to-price matches, no
foreign like product existed. The foreign like product . . . did exist,
as revealed by our examination of . . . equipment sold in the home
market for purposes of the Department's home-market viability test.''
The second alleged error the Department made was using an allegedly
incorrect total profit figure to calculate Minasligas' profit ratio. In
calculating the total profit figure, the Department included the line
item for interest income found on Minasligas' 1994 financial statement.
Minasligas argues that it was an error for the Department to reject the
line item for interest income as an offset to financial expenses
(presumably because it was unrelated to production of the foreign like
product ) but to include it in the calculation of profit. It argues
that if the interest income is unrelated to production then it cannot
be used for the purpose of calculating CV.
The third alleged error that the Department made was its failure to
apply the profit cap required by the statute. Minasligas argues that
the
[[Page 54090]]
statute allows profit to be calculated in one of three ways:
(i) the actual amounts incurred and realized by the specific
producer for profits, in connection with the production and sale for
consumption in the foreign country, of merchandise that is in the same
general category of products as the subject merchandise;
(ii) the weighted average of the actual amounts incurred and
realized by producers that are subject to the review for profits in
connection with the production and sale of a foreign like product, in
the ordinary course of trade, for consumption in the foreign country;
or
(iii) the amounts incurred for profits based on any other
reasonable method, except that the amount allowed for profit may not
exceed the amount normally realized by exporters or producers in
connection with the sale, for consumption in the foreign country, of
merchandise that is in the same general category of products as the
subject merchandise.
See 19 U.S.C. 1677b(e)(2)(B). Minasligas argues that the Department's
method of calculating profit does not comport with either items (i) or
(ii), and therefore must have been (iii). Thus, Minasligas argues, the
statutory profit cap applies, but the amount the Department calculated
for profit exceeded this cap because it exceeded the amount normally
realized by other exporters or producers.
Petitioners retort that the Department did not make an error in the
calculation of Minasligas' profit. First, they contend that the statute
requires not that sales of subject merchandise be used in the
calculation of profit (as Minasligas claims), but that actual amounts
for profits ``in connection with the production and sale of a foreign
like product'' be used. See 19 U.S.C. 1677(16). Second, petitioners
argue that the Department's regulations define the term ``ministerial
error'' as ``an error in addition, subtraction, or other arithmetic
function, clerical error resulting from inaccurate copying, duplication
or the like, and any other type of unintentional error which the
Secretary considers ministerial.'' Based on this definition,
petitioners argue that the Department's calculation of profit was not a
ministerial error. Indeed, petitioners argue, the Department's analysis
memorandum demonstrates that it acted intentionally when it calculated
profit as it did. Third, petitioners argue that the Department does not
have on the record of the review the information necessary to calculate
a profit cap in accordance with the statute. Thus, petitioners argue,
the Department properly calculated Minasligas' profit on a facts-
available basis because the Statement of Administrative Action states
that the Department may do so under such circumstances.
Department's Position: We agree with petitioners that our
calculation of profit did not constitute a clerical error. Our
calculation of profit used in the programming is identical to that
described in the final results analysis memorandum for Minasligas. See
the January 24, 1997 analysis memorandum, pp. 4 and 5.
Comment 5
Minasligas argues that the Department erred in its calculation of
CV by calculating general and administrative expenses (G&A), profit,
and financial expense ratios as a percentage of cost of goods sold
(which does not include value-added taxes) and applying these ratios to
a COM which includes value-added taxes. It argues that since the value-
added taxes are not reflected anywhere as a cost on Minasligas' audited
financial statements, it would be inappropriate to calculate a G&A,
profit, or financial expense ratio from its financial statements and
then apply the ratio to a COM which includes value-added taxes.
Similarly, RIMA and Eletrosilex argue that the Department erred in its
calculation of CV by calculating G&A and financial expense ratios as a
percentage of cost of goods sold (COGS) from their 1994 financial
statements (which do not include value-added taxes and depreciation
expenses) and applying them to a COM which does include value-added
taxes and depreciation expenses. RIMA also argues that the Department
erred in its calculation of financial expenses by calculating a ratio
which includes late payment fees, and applying it to a COM which also
includes late payment fees. By so doing, RIMA argues, the Department
double-counted late payment fees.
Furthermore, Minasligas argues that the Department's calculation of
CV was inconsistent with the statute because the G&A and interest
expense values used in CV are different from those used in COP.
Minasligas argues that because 19 U.S.C. Sec. 1677b(e)(2)(A) requires
the Department to base selling, general, and administrative expenses on
the actual amounts incurred and realized in production of the foreign
like product, and because the actual amount of G&A and interest does
not differ for the product between CV and COP, the Department's method
was a violation of the statute.
Petitioners argue, with respect to Eletrosilex, that the Department
made no error in its calculations. It argues that the Department did
not, contrary to Eletrosilex's claims, calculate its G&A ratio from
Eletrosilex's financial statements. Instead, petitioners state, the
Department used the monthly G&A expenses that Eletrosilex reported in
exhibit 36 of its October 20, 1995 questionnaire response. With respect
to Eletrosilex's financial expenses, petitioners argue that the COM
does not include the depreciation that the Department calculated, nor
does it include the ICMS tax (a value-added tax).
Department's Position: We agree with respondents that where the
COGS recorded on the financial statements do not include value-added
taxes or depreciation, the COM values used to calculate profit, G&A,
and interest for CV should be net of value-added taxes or depreciation
in order to avoid overstating these expenses. Therefore, in these
amended final results of review, we have calculated CV using G&A,
profit, and interest expense figures for Minasligas and RIMA based on a
COM that is net of value-added taxes and (for RIMA) net of
depreciation. We also agree with RIMA that because late payment fees
were included in the financial expenses reported on its financial
statement, we would double count late payment fees by including them in
the COM used to calculate interest expenses. Therefore, in these
amended final results, we have removed the late payment fees from the
financial expenses in calculating RIMA's financial expense ratio.
With respect to Eletrosilex, we agree with petitioners that, in the
final results, we did not include all value-added taxes in the COM used
to calculate Eletrosilex's interest expenses for CV. (We included only
the IPI, and not the ICMS.) Therefore, in these amended final results
of review, we have removed the IPI from the COM used to calculate
interest. Furthermore, we also agree with petitioners that we did not
calculate Eletrosilex's G&A from its financial statement, but instead
used the monthly G&A figures it submitted in exhibit 36 of its October
20, 1995 questionnaire response. However, we disagree with petitioners
that the COM we used to calculate Eletrosilex's interest was net of
depreciation. Therefore in these amended final results, we have
calculated Eletrosilex's interest using a COM that is net of
depreciation.
[[Page 54091]]
Comment 6
Minasligas and RIMA argue that the Department made a clerical error
in the calculation of CV by increasing normal value (NV) by the amount
of U.S. imputed credit expenses, but not reducing NV by the amount of
imputed home-market credit expenses. They argue that the Department
should subtract imputed home-market credit from NV.
Petitioners argue that the Department was correct in not
subtracting home-market credit from NV. They argue that the
Department's practice is to include only actual, not imputed, expenses
in CV. Therefore, petitioners say, because the Department did not
include home-market imputed credit expenses in CV, it would have been
wrong to subtract home-market imputed credit expenses from CV when
making the circumstance-of-sale adjustment for imputed credit.
Department's Position: We agree with respondents that our failure
to subtract imputed credit from the calculation of CV constituted a
ministerial error. It is our practice to make a circumstance-of-sale
adjustment for differences in credit costs between the home and U.S.
markets even in a CV margin calculation. Hence, we have done so in
these amended final results.
Comment 7
Minasligas argues that the Department erred in its computation of
net home-market price and home-market credit by including in the
computation the addition of a variable representing the PIS/COFINS
taxes. The Department included this variable in the preliminary results
of review, but its final results analysis memorandum indicates that the
Department intended to delete it for the final results. Minasligas
argues that the Department did not do so.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 8
Minasligas, RIMA, and Eletrosilex argue that the Department erred
by failing to deduct from CV the difference between the ICMS tax due on
home-market sales and on U.S. sales. To support their argument,
Minasligas, RIMA, and Eletrosilex cite the Department as stating in the
final results: ``In order to achieve tax neutrality with respect to the
ICMS tax we should deduct from NV only the amount of the difference
between ICMS tax due on home-market sales and ICMS tax due on U.S.
sales.'' See Fourth Review Final Results at 1983. Furthermore,
Minasligas, RIMA, and Eletrosilex argue that the Department has in the
past stated that its practice is to make circumstance-of-sale
adjustments in price-to-CV as well as price-to-price margin
calculations. See Tapered Roller Bearings and Parts Thereof Finished or
Unfinished from Japan, 52 FR 30700 (August 17, 1987).
Petitioners argue that the language cited by Minasligas, RIMA, and
Eletrosilex applies only to price-to-price comparisons, and not price-
to-CV comparisons. Petitioners argue that the correct interpretation of
the Department's statement cited by Minasligas is governed by another
statement the Department made in the same context: ``This approach is
in accordance with 19 U.S.C. Sec. 1677b(a)(6)(B)(iii).'' This section
of the statute, petitioners argue, refers to price, and not CV. It
states that ``the price described in paragraph (1)(B) shall be * *
*reduced by* * * the amount of any taxes imposed directly upon the
foreign like product or components thereof which have been rebated, or
which have not been collected, on the subject merchandise, but only to
the extent that such taxes are added to or included in the price of the
foreign-like product.''
Department's Position: We disagree with respondents that our
treatment of ICMS taxes in a CV situation constitutes a ministerial
error. We intended to treat ICMS taxes in a CV situation exactly as we
did in the final results. Therefore, this issue is a methodological
issue, and not a proper subject for review under the ministerial errors
correction process.
Comment 9
Minasligas, RIMA, and Eletrosilex argue that the Department made a
clerical error in calculating U.S. imputed credit by dividing the
annual interest rate by 30 rather than 365.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 10
RIMA argues that the Department incorrectly calculated
depreciation. In the final results, the Department stated that it based
its calculation of RIMA's depreciation on facts available, and
explained:
As facts available the Department has chosen to use one-half of
the audited total RIMA depreciation expenses for the fiscal year as
RIMA's total POR depreciation expenses, and to allocate to silicon
metal production a share of that total based on the highest monthly
percentage of cost of goods sold accounted for by silicon metal, as
appearing in verification exhibit OH1. We allocated one-twelfth of
this total, in turn, to each month of the POR.
See Fourth Review Final Results, at 1984. RIMA argues that the
Department failed to divide the total depreciation by two as is
necessary if the calculated amount is to be ``one-half of the audited
total RIMA depreciation expenses for the fiscal year,'' as described
above.
Petitioners argue that the Department's calculations, as laid out
in the January 24, 1997 final results analysis memorandum, indicate
that the Department did in fact divide total depreciation by two.
Department's Position: We agree with petitioners. The attachment
labeled ``Calculation of RIMA's Depreciation--4th Review''
in the final results analysis memorandum for RIMA indicates that the
Department did divide the depreciation expenses in half. Thus, we did
not make a clerical error.
Comment 11
Petitioners argue that the Department made a clerical error in its
calculations for Eletrosilex by failing to add U.S. imputed credit
expenses to CV.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 12
Petitioners argue the Department made a clerical error in its
calculations for Eletrosilex by adding U.S. post-sale warehousing
expenses expressed in Brazilian currency to a CV expressed in U.S.
dollars.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 13
Petitioners argue that the Department made a clerical error in its
calculations for CBCC by adding, rather than subtracting, international
freight from United States Price (USP).
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 14
Petitioners argue that the Department made a clerical error in its
calculations for CBCC by treating the bank charges incurred to finance
some of CBCC's U.S. sales as expressed in U.S. dollars, rather than in
Brazilian currency.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 15
Petitioners argue that the Department made a clerical error in its
calculations
[[Page 54092]]
of USP for some of CBCC's U.S. sales by including in the computer field
``BANKCHRG'' only the cost of interest, and not the cost of bank
charges.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 16
Petitioners argue that the Department made a clerical error in its
calculations for CBCC by failing to include the depreciation expenses
for all of CBCC's idle furnaces for all months of the POR. This was an
error, petitioners state, because the final results notice says that
the Department included depreciation expenses for idle assets in the
total depreciation expenses. See Fourth Review Final Results, at 1980.
CBCC argues that the Department's calculation was proper because
during part of the POR the furnaces in question were producing a
product other than silicon metal. For the same reason CBCC argues
further that if the Department decides to attribute depreciation for
the furnaces at issue to silicon metal, it should attribute only part
of it to silicon metal, and not all of it, as petitioners argue.
Department's Position: We agree with petitioners that for some
months of the POR we failed to include depreciation for idle assets in
total depreciation, which was a clerical error. We have corrected this
error in these amended final results. We have allocated to the furnaces
at issue a proportion of depreciation expenses equal to the volume of
silicon metal produced by those furnaces relative to the volume of
other products produced by those furnaces during the POR. See the
amended final results analysis memorandum for our calculations.
Comment 17
Petitioners argue that the Department made a clerical error
calculating Minasligas' variable overhead expenses. The Department, in
order to allocate overhead costs to silicon metal, applied a ratio to
Minasligas' total variable overhead amounts as given in exhibit 4 of
Minasligas' October 15, 1996 supplemental questionnaire response.
Petitioners argue that this was an error because the total variable
overhead reported in exhibit 4 had already been allocated to silicon
metal by Minasligas.
Department's Position: We agree, and have corrected this error in
these amended final results.
Comment 18
Petitioners argue that the Department made a clerical error by not
basing RIMA's charcoal costs on the price RIMA paid to its unaffiliated
suppliers, and instead using the material costs RIMA reported in
verification exhibit 7. In the final results the Department stated that
it would base RIMA's charcoal costs on the prices it pays to its
unaffiliated suppliers. See Fourth Review Final Results, at 1985.
RIMA argues that the costs reported in verification exhibit 7 are
from unaffiliated suppliers, and that the Department therefore did not
make a clerical error.
Department's Position: We agree with RIMA. The verification report
says, ``By reviewing the documents pertaining to purchased charcoal,
e.g., the general ledger, supplier's invoices, and payment records, we
confirmed that Rima's per-unit costs were based on the purchase price
from third-party suppliers.'' See October 3, 1996 verification report,
p. 12. Thus, our use of the charcoal costs contained in verification
exhibit 7 does not constitute a clerical error.
Comment 19
Petitioners argue that the Department made a clerical error in its
calculation of RIMA's imputed U.S. credit expenses. RIMA shipped each
of its U.S. sales from its plant to the port of export in lots over a
period of days, and reported to the Department the date of shipment for
each lot. The Department stated in its final results analysis
memorandum for RIMA that it used as the credit period the average
number of days between the shipment date for each lot and the payment
date. However, petitioners argue that the Department did not use the
average credit period.
RIMA argues that the Department used an annual rate, and not a
monthly rate, in its calculation of U.S. imputed credit expenses. Thus,
RIMA argues, the Department should divide the rate used in the
determination of imputed credit by 365 days, not 30 days.
Department's Position: We agree with petitioners that we did not
use the average credit periods in the calculation of U.S. credit,
although the final results analysis memorandum states the contrary. See
July 24, 1997 RIMA final results analysis memorandum, p. 3. We have
corrected this error in these amended final results. For our response
to RIMA's argument that we should calculate credit using a denominator
of 365, see our response to comment 9, above.
Comment 20
Eletrosilex argues that the Department made a ministerial error in
its treatment of depreciation expenses. Eletrosilex argues that it
explained in its submission that it had taken no depreciation in 1994
in order to compensate, as necessary under Brazilian accounting
principles, for having taken accelerated depreciation in prior years,
and that it had returned to normal depreciation in 1995. In comment 36
of the final results notice, the Department stated that evidence from
Eletrosilex's financial statement indicates that its accounting of
depreciation was not in accordance with Brazilian generally accepted
accounting principles (GAAP). The Department therefore used the
depreciation estimates given by Eletrosilex's independent auditor.
Eletrosilex contends that the Department's determination that its
accounting of depreciation was not in accordance with Brazilian GAAP
constitutes a ministerial error. It argues that the financial statement
made no determination as to whether Eletrosilex's accounting for
depreciation was consistent with Brazilian GAAP in light of the earlier
accelerated depreciation; it merely reflected the current year
accounting. Eletrosilex argues that the Department mistakenly relied
upon the financial statement out of context, instead of relying upon
the actual data submitted by Eletrosilex and the explanation as to why
no depreciation expense was shown for 1994.
Furthermore, Eletrosilex argues that the Department's recalculation
of depreciation was flawed by exaggerating depreciation expense. The
Department used one half of the audited depreciation expenses for all
of 1994 and 1995. Eletrosilex argues that this method was doubly
mistaken. First, the Department used numbers from the column designated
as ``in currency with constant purchase power.'' Eletrosilex states
that this column includes monetary adjustment, and therefore inflates
the true number. Second, it double counts depreciation for 1995 because
the depreciation expense is already included in fixed overhead.
Petitioners argue that the Department correctly determined that
Eletrosilex's accounting of depreciation was not in accordance with
Brazilian GAAP. It bases this argument on a statement contained in the
report of the independent auditor which says that ``the company did not
recognize . . . amounts corresponding to the depreciation of the fixed
assets as required by the accounting principles foreseen in the
CORPORATE'S LEGISLATION and by the main accounting principles.''
Therefore, petitioners argue, the Department was correct in not using
the depreciation expenses that Eletrosilex reported to the Department.
[[Page 54093]]
Furthermore, petitioners argue that because Eletrosilex's 1994
financial statement did not contain any information about depreciation,
the Department was obliged to use Eletrosilex's 1995 financial
statement for information about Eletrosilex's depreciation for both
1994 and 1995. Thus, petitioners argue, the Department was justified in
using the column ``in currency with constant purchase power'' for 1994
because that is how the information was presented in Eletrosilex's 1995
financial statement.
Finally, petitioners argue that information on the record indicates
that the Department did not double count depreciation for all of the
months that Eletrosilex claims it did.
Department's Position: We disagree with Eletrosilex that our
calculation of depreciation is a clerical error. Rather, it is a
methodological issue, and not a proper subject for review under the
ministerial errors correction process. However, we do agree with
Eletrosilex that we double counted depreciation for 1995. Therefore, in
these amended final results of review we have corrected this error. See
our amended final results analysis memorandum for our calculations.
Comment 21
Eletrosilex argues that the Department mistakenly disallowed an
alleged short-term investment as an offset to its financial expenses
because it incorrectly believed the claimed offset to be a capital
gain. Eletrosilex argues that there is no basis for the Department so
to interpret the transaction. It states that the claimed offset at
issue was interest income accrued from bonds purchased as a short-term
investment. The treatment of this short-term investment creating
accrued interest is fully consistent, Eletrosilex argues, with the
Department's traditional treatment of short-term interest as an offset
to financial expenses, and the Department's treatment otherwise in the
final results was based on a mistaken interpretation of the claim.
Petitioners argue that the Department made no ministerial error in
its calculation of Eletrosilex's financial expenses. They argue that it
is a respondent's responsibility to provide a detailed explanation of
any claimed offset to expenses, and that Eletrosilex failed to meet
this responsibility because it failed to provide the information
necessary to distinguish interest income from capital gains.
Furthermore, petitioners argue that the Department acted intentionally
in denying this adjustment. Indeed, the Department specifically
addressed the transaction in question in comment 5 of the final results
notice. See Fourth Review Final Results, at 1974. Thus, petitioners
argue, the Department's denial of this adjustment does not fit the
regulatory definition of a clerical error, which is ``an error in
addition, subtraction, or other arithmetic function, clerical error
resulting from inaccurate copying, duplication, or the like, and any
other type of unintentional error which the Secretary considers
ministerial.'' 19 C.F.R. 353.28(d).
Department's Position: We agree with petitioners that our denial of
this requested offset is not a clerical error. As reflected in the
fourth review final results notice, we intended to deny this
adjustment. See Fourth Review Final Results at 1974.
Comment 22
Eletrosilex argues that the Department erred by failing to grant a
duty drawback adjustment. In the final results the Department denied
this adjustment because Eletrosilex did not submit a claim for it until
it submitted its case brief, subsequent to the 180-day regulatory
deadline for submitting factual information. See 19 CFR
Sec. 353.31(a)(1)(ii). Eletrosilex argues that this decision unfairly
distorted reality for no valid reason. It argues that the Department
recognizes that mistakes occur, and has established the ``ministerial
error'' provision for the purpose of correcting its own mistakes.
Therefore, Eletrosilex argues, parties to proceedings should also be
permitted to correct their mistakes where there is no prejudice or
detriment to any of the parties. The oversight in question, Eletrosilex
states, was just such an error. The Department's failure to correct the
error, Eletrosilex argues, is an overly narrow interpretation which
serves no purpose other than to punish Eletrosilex and increase a
dumping margin for U.S. importers.
Petitioners argue that the Department made no ministerial error in
denying Eletrosilex a duty drawback adjustment. The regulatory
definition of ``ministerial error'' is ``an error in addition,
subtraction, or other arithmetic function, clerical error resulting
from inaccurate copying, duplication or the like, and any other type of
unintentional error which the Secretary considers ministerial.'' See 19
CFR Sec. 353.28(d). Furthermore, petitioners argue that the Department
specifically addressed this issue in the final results. See Fourth
Review Final Results, at 1988. Therefore, petitioners argue, the
Department's denial of this adjustment was not a ministerial error.
Department's Position: We agree with petitioners that our denial of
a duty drawback adjustment was not a ministerial error. It is a
methodological issue, and not a proper subject for review under the
ministerial errors correction process.
Comment 23
Eletrosilex argues that the Department used an incorrect amount for
U.S. packing expenses. The final results analysis memorandum states
that it used the packing expense that Eletrosilex submitted on its U.S.
sales file. Eletrosilex argues that in the computer program the
Department used a different amount.
Petitioners argue that the Department used the amount for packing
that appears on Eletrosilex's U.S. sales file, and that therefore the
Department did not make an error.
Department's Position: We disagree with Eletrosilex that we used
the incorrect packing amount. See line 3805 of the final results
program. We acknowledge, however, that our final results analysis
memorandum incorrectly states that we used the figure that Eletrosilex
submitted on its U.S. sales file. In the preliminary results, we
recalculated Eletrosilex's packing figure based on the itemized packing
costs Eletrosilex submitted because the figure it reported on its sales
tape differed from the figure it reported in the narrative section of
its questionnaire response. For our recalculations, see the September
3, 1996 Eletrosilex preliminary results analysis memorandum, p. 2.
Thus, in neither the preliminary nor final results of review did we use
the packing figure Eletrosilex submitted on its U.S. sales file, nor
did we intend to do so. (In their comments on the preliminary results
no party commented on the recalculation of packing.)
In addition to the changes made in the margin calculations in
response to the above comments, we have also made the following changes
to the programming in these amended final results:
For Minasligas and Eletrosilex, we calculated U.S. imputed
credit net of the ICMS tax assessed on the U.S. sale; and,
For Eletrosilex, we used as the unit price of the U.S.
sale the CIF value of the sale in U.S. dollars as given in exhibit 19
of Eletrosilex's October 25, 1995 submission.
Amended Final Results
As a result of our review, we have determined that the following
margins exist for the period July 1, 1994 through June 30, 1995:
[[Page 54094]]
------------------------------------------------------------------------
Weighted-
average
Producer/manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
CBCC....................................................... 0.37
CCM........................................................ 35.23
Eletrosilex................................................ 6.68
Minasligas................................................. 43.53
RIMA....................................................... 51.23
------------------------------------------------------------------------
The Department shall determine, and the U. S. Customs Service shall
assess, antidumping duties on all appropriate entries. The Department
shall issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements shall be effective
upon publication of this notice of amended final results of review for
all shipments of silicon metal from Brazil entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) the cash deposit
rates for the reviewed companies named above will be the rates
published in these amended final results; (2) for previously
investigated or reviewed companies not listed above, the cash deposit
rate will continue to be the company-specific rate published for the
most recent period; (3) if the exporter is not a firm covered in these
reviews, or the original less-than-fair-value (LTFV) investigations,
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 these reviews, the cash deposit rate will continue to
be 91.06 percent, the ``all others'' rate established in the LTFV
investigation. See Final Determination of Sales at Less Than Fair
Value: Silicon Metal from Brazil, 56 FR 26977 (June 12, 1991).
This notice serves as a final reminder to importers of their
responsibility under 19 CFR Sec. 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 section 353.34(d) of the Department's
regulations. Timely notification of 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.
These amended final results of review and notice are in accordance
with section 751(a)(1) of the Act (19 U.S.C. Sec. 1675(a)(1)) and
section 353.28(c) of the Department's regulations.
Dated: October 14, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-27632 Filed 10-16-97; 8:45 am]
BILLING CODE 3510-DS-P
