[Federal Register Volume 62, Number 240 (Monday, December 15, 1997)]
[Notices]
[Pages 65656-65665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32631]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-821-807]
Ferrovanadium and Nitrided Vanadium From the Russian Federation:
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.
-----------------------------------------------------------------------
SUMMARY: On August 7, 1997, the Department of Commerce published in the
Federal Register the preliminary results of its administrative review
of the antidumping duty order on ferrovanadium and nitrided vanadium
from the Russian Federation (62 FR 42492). This review covers the
period January 4, 1995, through June 30, 1996. Based on our analysis of
the comments received from interested parties, we have made certain
changes to our preliminary results, including corrections of errors.
Therefore, the final results differ from the preliminary results. The
final weighted-average dumping margin is listed below in the section
entitled ``Final Results of Review.''
We have determined that sales have been made below normal value
during the period of review. Accordingly, we will instruct the U.S.
Customs Service to assess antidumping duties based on the difference
between export price and normal value.
EFFECTIVE DATE: December 15, 1997.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Mary Jenkins,
AD/CVD Enforcement Group II, Office 5, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone
(202) 482-4136 or (202) 482-1756, respectively.
[[Page 65657]]
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 Rounds Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to the regulations as codified at 19 CFR Part 353 (April 1, 1997).
Background
The Department of Commerce (the Department) published an
antidumping duty order on ferrovanadium and nitrided vanadium from the
Russian Federation (Russia) on July 10, 1995 (60 FR 35550).
The Department published a notice of ``Opportunity To Request an
Administrative Review'' of the antidumping duty order for this review
period on July 8, 1996 (61 FR 35712). We received a timely request for
review and on August 15, 1996, we published a notice of initiation of
the review (61 FR 42416).
This review covers one exporter of the subject merchandise, Galt
Alloys, Inc. (Galt).
On August 7, 1997, the Department published in the Federal Register
the preliminary results of its administrative review of the antidumping
duty order on ferrovanadium and nitrided vanadium from Russia, as well
as a recission of the review for a second exporter, Odermet Ltd., which
had no shipments during the period of review (POR) (62 FR 42492). Galt
and the petitioner, Shieldalloy Metallurgical Co., Inc., submitted case
and rebuttal briefs in September 1997. In response to the Department's
October 15, 1997, letter, the petitioner submitted additional surrogate
value data on October 27, 1997, and Galt submitted comments related to
this submission on November 3, 1997. As the Department placed
additional surrogate value information on the record on November 6,
1997, we allowed comments on this information from the petitioner,
submitted on November 14 and 18, 1997, and rebuttal comments from Galt
submitted on November 20, 1997, in accordance with section 782(g) of
the Act.
The Department has now completed this review in accordance with
section 751(a) of the Act.
Scope of the Review
The products covered by this administrative review are
ferrovanadium and nitrided vanadium, regardless of grade, chemistry,
form or size, unless expressly excluded from the scope of this order.
Ferrovanadium includes alloys containing ferrovanadium as the
predominant element by weight (i.e., more weight than any other
element, except iron in some instances) and at least 4 percent by
weight of iron. Nitrided vanadium includes compounds containing
vanadium as the predominant element, by weight, and at least 5 percent,
by weight, of nitrogen. Excluded from the scope of this order are
vanadium additives other than ferrovanadium and nitrided vanadium, such
as vanadium-aluminum master alloys, vanadium chemicals, vanadium waste
and scrap, vanadium-bearing raw materials, such as slag, boiler
residues, fly ash, and vanadium oxides.
The products subject to this order are currently classifiable under
subheadings 2850.00.20, 7202.92.00, 7202.99.5040, 8112.40.3000, and
8112.40.6000 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope is
dispositive.
Period of Review
The period of review (POR) is January 4, 1995, through June 30,
1996. The review covers one exporter, Galt.
Facts Available
In accordance with section 776(a) of the Act, we have determined
that the use of adverse facts available (FA) is appropriate for sales
of merchandise produced by Chusovoy, as discussed in the Preliminary
Results of Antidumping Duty Administrative Review of Ferrovanadium and
Nitrided Vanadium from the Russian Federation (62 FR 42494, August 7,
1997) and below at Comment 1.
Analysis of Comments Received
Comment 1: Application of Facts Available to Chusovoy-produced
Merchandise.
Galt contends that the use of an adverse facts available rate of
88.63 percent for Galt's sales of merchandise produced by Chusovoy, a
non-cooperative party to the proceeding, is contrary to the statutory
requirements and Department precedent, and punishes the wrong party for
non-cooperation. Galt cites section 776(b) of the Act which provides
that adverse FA may be applied when an interested party has failed to
cooperate by not acting to the best of its ability to comply with a
request for information. Accordingly, while Chusovoy may be
uncooperative, Galt notes that it has cooperated to the best of its
ability, and thus adverse FA cannot be applied in calculating its
margin. In a recent case with a similar fact pattern, Final Results of
Antidumping Duty Administrative Review: Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, from the People's Republic of
China, 62 FR 6173 (February 11, 1997) (PRC TRBs), Galt states that the
Department did not apply adverse FA from the less than fair value
(LTFV) investigation petition for the merchandise from the
uncooperating producers sold by the cooperating exporter, as was
applied in these preliminary results, but rather used the facts
available from other producers in that proceeding to calculate normal
value (NV) for those sales. Galt thus argues that the margin for these
sales should be calculated using Galt's actual sales prices for export
price (EP) and the information obtained from the other producer in this
proceeding, Tulachermet, or, alternatively, Chusovoy's data from the
LTFV investigation, to calculate NV.
The petitioner argues that the Department properly considered
Chusovoy an uncooperative respondent in the preliminary results and
correctly applied adverse FA to sales of Chusovoy's merchandise. Given
the absence of the required data from Chusovoy, the petitioner contends
that the petition rate properly constitutes the ``facts otherwise
available'' in accordance with section 776(b) of the Act. This
approach, the petitioner continues, is consonant with the Department's
established, and judicially approved, pre-URAA two-tiered ``best
information available'' (BIA) methodology, and the Department's
practice regarding facts available under the URAA. With regard to
Galt's proposed alternatives to the LTFV petition rate, the petitioner
claims that Chusovoy's data from the LTFV segment of the proceeding
cannot be considered in this segment because Galt improperly submitted
the information on this record without Chusovoy's consent or knowledge.
The petitioner also notes that the facts in this case are different
from those in PRC TRBs, where, the petitioner contends, the amount of
usable information was much greater than in this instance.
DOC Position: We find no basis to change our finding in the
preliminary results that the use of adverse FA is warranted for
Chusovoy's factors of production. As we stated in the preliminary
results, we find that, pursuant to section 782(e) of the Act, the
limited information that Chusovoy
[[Page 65658]]
submitted is so incomplete that it cannot serve as a reliable basis for
reaching a determination in this review. Further, by failing to
respond, Chusovoy is an interested party which has not cooperated to
the best of its ability under section 776(b) of the Act. Therefore, we
have continued to use an adverse inference in selecting from the facts
available to determine the margins for Galt's sales of Chusovoy-
produced merchandise and applied the 88.63 percent margin used in the
preliminary results for these sales.
With regard to Galt's reference to a different approach applied in
PRC TRBs, we note that the facts in PRC TRBs are distinguishable from
the instant situation in a number of ways. Premier purchased the
subject merchandise from eight suppliers, two of which did not
cooperate; here, Galt purchased only from two suppliers, of which one
did not cooperate. Premier's six cooperating suppliers reported little
variation in factor-utilization rates; thus, using their data to
calculate the unreported factor data for the same model may have been
appropriate for that case. Here, we only have one cooperating
producer's fully reported factors of production to consider and thus an
insufficient basis to conduct a similar evaluation of variation in
consumption rates. Under these circumstances, it is inappropriate to
allow Chusovoy (or any producer) to benefit for not cooperating in a
proceeding.
With regard to petitioner's comment concerning Galt's submission of
Chusovoy data from the LTFV investigation, we do not agree that the
information was improperly submitted. The information in question was
originally obtained by Galt and submitted to the Department by counsel
common to Galt and Chusovoy. Galt did not obtain the information
through a violation of the administrative protective order, but rather
had direct access to the information and thus was in a position to
submit it for this record.
Comment 2: Valuation of Chusovoy's Vanadium Slag for Facts
Available Rate.
The petitioner contends that the Department cannot use
Tulachermet's purchase price of South African vanadium slag to value
Chusovoy's consumption of vanadium slag. According to the petitioner,
Department precedent and policy establish the Department's intent to
apply the price paid by an NME producer for a market economy input only
to that producer's own consumption of the input. The petitioner also
claims that, in applying the facts available rate as NV for Galt's
sales of Chusovoy merchandise, the Department improperly concluded that
Chusovoy procured all of its slag requirements from Russian suppliers
and thus improperly applied a quality adjustment in valuing vanadium
slag. As facts otherwise available, the petitioner holds that the
Department should adversely assume that this uncooperative respondent
did not purchase any of its vanadium slag requirements from Russian
suppliers of low grade vanadium slag, but rather consumed high grade
vanadium slag such as South African slag, containing 23 percent
vanadium pentoxide, and thus apply, without adjustment, the LTFV margin
of 108 percent to all of Galt's sales of subject merchandise produced
by Chusovoy.
Galt objects to the use of the unadjusted petition value for
vanadium slag (i.e., the price paid by Shieldalloy for South African
slag exported to the United States) because it relates to sales to a
different market and is thus less accurate than a price to the Russian
market. According to Galt, the price paid by Tulachermet for South
African vanadium slag imported into Russia is the best available
information to value Chusovoy's slag.
DOC Position: We have not valued Chusovoy's consumption of vanadium
slag based on Tulachermet's South African purchase, but rather we
applied the LTFV investigation margin rate, adjusted to reflect the
quality of Russian-sourced vanadium slag as we did for the preliminary
results of this administrative review, for all of Galt's sales of
Chusovoy-produced merchandise. We disagree with the petitioner that the
Department must make an adverse assumption of the facts available that
Chusovoy obtained higher quality South African slag for all of its
vanadium slag consumption. The facts available in this segment include
all of the relevant information obtained and verified during the LTFV
segment of the proceeding, and placed specifically on the record prior
to the preliminary results, as well as information in the public
record. In the LTFV investigation, Chusovoy reported, and the
Department verified, that none of its slag was obtained from market
economy sources. The LTFV investigation established that Chusovoy
obtained slag from two sources: as a by-product of its production of
other goods, and from a steel manufacturer in Nizhni-Tagil in Russia.
There is no basis to assume, adversely or otherwise, that Chusovoy has
completely changed its supply pattern and relies exclusively on
foreign-sourced vanadium inputs.
Comment 3: Application of Facts Available to Galt and Tulachermet
Data.
The petitioner claims that Galt's and Tulachermet's data as well as
Chusovoy's should be disregarded for the final results because of
numerous deficiencies and failure to provide requested data. Moreover,
the petitioner argues that these parties are also uncooperative and
adverse FA must be applied for the final results. The petitioner cites
the following areas as the basis for its claim:
(a) Failure to meet certification requirements--The petitioner
contends that the respondents failed to comply with the Department's
certification requirements of 19 CFR 353.31(i) by omitting
certifications from Chusovoy or its counsel, or by submitting
certifications that were merely copies of faxes used in previous
submissions and have never replaced them with original signed
certifications.
(b) Galt failed to report all of its POR sales--The petitioner
contends that Galt failed to report all of its sales during the POR
because it did not report data for merchandise sold from a shipment
that allegedly entered the United States prior to suspension of
liquidation. The petitioner claims that in order to exclude these
sales, Galt must meet the stringent requirements outlined in Final
Results of Antidumping Duty Administrative Review: Certain Stainless
Steel Wire Rod from France, 62 FR 7206 (February 18, 1997) (SSWR),
namely that such sales may be excluded only if the Department
determines that these sales (1) entered the United States prior to
suspension of liquidation, and (2) that there is sufficient linkage
between the entry and the POR sales. The petitioner argues that Galt
had provided insufficient documentation to establish the date of entry
as being prior to the suspension of liquidation, and that Galt has not
adequately demonstrated linkage between this entry and corresponding
sales.
(c) Galt failed to provide all required audited financial
statements--The petitioner states that Galt never provided the audited
financial statement for Galt International for the fiscal year ending
September 30, 1996, as requested by the Department. The internal
financial documents Galt submitted, the petitioner contends, were
untimely and inadequate.
(d) Tulachermet failed to provide critical information--The
petitioner contends that Tulachermet did not adequately respond to the
Department's questionnaire because it did not provide full translations
of production worksheets, revealed late in this proceeding that it
produced an intermediate product, limestone, in making the subject
merchandise, failed
[[Page 65659]]
to provide complete packing materials and labor factor data for the
POR, and omitted other information specifically requested by the
Department.
Galt counters that it has fully cooperated with the Department.
Galt's responses to the petitioner's comments are as follows:
(a) Failure to meet certification requirements--Galt contends that
all submissions included the necessary certifications for factual
information and that no submission has been rejected by the Department
because of the absence of a proper certification. Galt adds that the
petitioner is incorrect in its understanding of the certification
regulation in that it does not specify the particular form of
certification that the petitioner is demanding. Accordingly, there is
no reason to reject Galt's and Tulachermet's submission on this basis.
(b) Galt failed to report all of its POR sales--Galt replies that
it has adequately demonstrated that the sales in question were properly
excluded from its reporting because the merchandise entered the United
States prior to suspension of liquidation. Galt states that, although
the petitioner insists that Galt has supplied insufficient
documentation, the petitioner fails to identify what piece of
documentation, other than the actual entry documents, Galt should have
submitted. Galt asserts that the entry summary provided to U.S. Customs
sufficiently establishes the date of entry for this merchandise.
Further, Galt argues that it has already established during the LTFV
investigation verification that it keeps records in the ordinary course
of business that enables it to link entered merchandise and sales.
(c) Galt failed to provide all required audited financial
statements--Galt responds that there is no audited financial statement
for its affiliate Galt International for the fiscal year ending
September 30, 1996; thus, Galt cannot be said to be uncooperative in
this regard.
(d) Tulachermet failed to provide critical information--Galt states
that Tulachermet reported all inputs to the Department. The production
summary worksheet translations are adequate, Galt states, because each
monthly summary has year-to-date cumulative calculations, so that by
providing translations for December 1995 and June 1996, Tulachermet has
provided translations for the entire POR. With regard to Tulachermet's
own production of lime from limestone, Galt states that the necessary
information was immediately submitted to the Department after the
Department raised the issue, and that the labor and energy consumed in
the production of lime already had been included in the reporting of
vanadium pentoxide production. Galt states that Tulachermet's packing
input reporting is complete in that a comparison of the response for
the POR to the verified response in the LTFV investigation shows that
the petitioner's claim that all of its packing materials were not
reported is baseless, and that the petitioner has failed to identify
even one material that is missing.
DOC Position: We continue to hold, as we stated in our preliminary
results, that Galt and Tulachermet have fully cooperated with the
Department and that the information submitted by Galt and Tulachermet
meets the requirements of section 782(e) of the Act in that:
(1) the information is timely;
(2) the information is verifiable;
(3) the information is not so incomplete that it cannot serve as a
reliable basis for our determination;
(4) these parties have acted to the best of their abilities in
providing the requested information; and
(5) the information can be used without undue difficulties.
Accordingly, we have relied upon the information submitted by Galt
and Tulachermet for the final results. We address the specific areas
raised by the petitioner as follows:
(a) In our review of Galt's submissions, we found that all
submissions that required certifications were accompanied by a
certification that meets the regulatory requirement. Most of these
certifications were of the faxed, copied type. While this type may not
be ideal, there is no regulatory or statutory basis for rejecting such
certification.
(b) The Department is satisfied that the ``unreported sales''
claimed by the petitioner are for pre-antidumping duty order entries.
We disagree with the petitioner that Galt failed to meet the two-prong
test as articulated in SSWR from France. The first prong of the test is
established by showing that the merchandise entered the United States
before the suspension of liquidation. Galt met this part of the test by
submitting entry documents for the sales in question which established
that the merchandise entered the United States prior to suspension of
liquidation. In addition, the second part of the test was met because a
comparison of the lot number for the entry to the lot numbers supplied
in the sales listing confirms that Galt has been able to link specific
sales to entries. We verified in the LTFV investigation that Galt is
able to link specific sales to specific entries of the subject
merchandise and we have no reason to believe that circumstances have
changed with regard to Galt's ability to link these entries and sales.
(c) We find no basis to conclude that Galt has withheld any
financial statements. Galt has stated that there is no financial
statement for its affiliate and we have no reason to dispute this
assertion.
(d) With respect to Tulachermet's provision of information, the
information provided is timely, verifiable, complete to the extent that
it serves as a reliable basis for our determination, and can be used
without undue difficulty. Galt provided Tulachermet's production
worksheets in full compliance with the Department's instructions, and
provided adequate translations for them. The information on lime
production, which constitutes only a small portion of NV, by value, was
provided in a timely manner for this segment of the proceeding. The
information provided for the relatively minor packing factors is
sufficient to serve as a reliable basis for our final results.
Comment 4: ``Combination Rates'' for Galt.
Galt contends that, if the Department applies adverse FA to sales
of Chusovoy merchandise, it should do so in a way that punishes
Chusovoy for its non-cooperation, but not Galt. Accordingly, Galt
advocates establishing separate deposit rates for each producer/
exporter combination (``combination rates'')--i.e., a deposit rate for
Chusovoy (producer) and Galt (exporter) based on adverse FA, and a
deposit rate for Tulachermet (producer) and Galt (exporter) based on
the Department's margin calculations using the submitted data. Galt
also advocates a different basis for assessment purposes using the
actual sales information from Galt.
The petitioner argues that the issuance of a single dumping margin
for Galt is proper and consistent with the Department's practice.
Indeed, it would be inappropriate and improper for the Department to
issue separate combination rates, according to the petitioner. The
petitioner cites a number of past determinations where the Department
has refused to establish producer/exporter combination rates, except
where a producer/exporter margin is found to be zero or de minimis and
thus excluded from an antidumping duty order. The petitioner further
contends that the issuance of a single dumping margin for Galt
facilitates administration of the antidumping duty order. Finally, the
petitioner notes that establishing assessment and deposit rates on
[[Page 65660]]
different bases would have the effect of rewarding Chusovoy for its
failure to cooperate since, under Galt's proposal, little or no
antidumping duties would be assessed on the sales already made, while
there would be no impact for future sales since Chusovoy has shown no
further interest in exports to the United States.
DOC Position: We have followed our long-established practice and
calculated a single rate applicable to the exporter, Galt, consistent
with our approach in similar cases (see, e.g., Final Determination of
Sales at Less Than Fair Value: Pure Magnesium From Ukraine, 60 FR
16433, March 30, 1995). As the rate calculated merely reflects the
margins determined on all of Galt's U.S. sales, we are not persuaded
that there is a compelling reason to deviate from our normal practice.
Comment 5: Whether Verification Should Have Been Conducted in this
Proceeding.
The petitioner claims that it established a compelling and apparent
need for verification of the sales and factors of production responses
in this proceeding, based on, inter alia, the changes in Galt's
distribution system since the LTFV investigation, alleged deficiencies
in Galt's and Tulachermet's responses, and Tulachermet's failed
verification in the LTFV investigation. The petitioner further contends
that the respondents have ``ducked'' verification by claiming that
verification would be a needless expense and that all required
information could be provided without verification. Instead, the
petitioner argues, the respondents have provided an incomplete and
contradictory record; they should not benefit from their objection to
verification.
The respondents counter that they have not ``ducked'' verification,
but rather contend that it would be an unnecessary expense for the
Department and for the respondents to conduct on-site verifications
again in this review when the Department could achieve the same ends
through written submissions. The respondents also contend that the
petitioner failed to meet the deadline for requesting verification in
this review and therefore has no standing to object to the Department's
decision not to conduct a verification in this instance.
DOC Position: As stated in section 782(i)(3) of the Act, the
Department shall verify information relied on for the final results of
an administrative review if (A) there is a timely request for
verification, and (B) no verification was made during the two
immediately preceding reviews and investigations, unless good cause for
verification is shown. Under the applicable regulation, 19 CFR
353.36(a)(v)(A), the petitioner's request was not timely, as it was
made more than 120 days after the initiation of this administrative
review. However, 19 CFR 353.36(a)(iv) also provides for verification if
the Department determines that good cause for verification exists. In
response to the petitioner's assertions, we do not find that good cause
exists for verification in the instant segment of the proceeding.
Both Galt and Tulachermet were verified in the LTFV investigation,
which immediately preceded this review. While Tulachermet failed
verification of its sales response in the LTFV investigation, its
reported factors of production were successfully verified and used to
calculate foreign market value for an unaffiliated exporter. Although
Galt has made changes in its distribution system since our last
verification, it has fully responded to our requests for information
and provided sufficient data in this review for the Department's
analysis and reliance upon for the final results. We do not consider a
change in a respondent's distribution system, in and by itself,
sufficient cause to require a verification. In sum, we are satisfied
that the data provided by Galt and Tulachermet is sufficiently reliable
under section 782(e) of the Act so as to form the basis of our final
results without conducting verification.
Comment 6: Surrogate Value for Vanadium Slag.
In the preliminary results, the Department valued Tulachermet's
Russian-sourced vanadium slag based on the price Tulachermet paid for a
purchase of South African slag immediately prior to the POR, adjusted
for the quality difference between the South African and Russian
material using the methodology applied in the LTFV final determination.
The petitioner contends that the use of a single, pre-POR purchase of
vanadium slag, which is of an insignificant quantity in comparison to
Tulachermet's consumption of Russian slag, is an inadequate basis for
the surrogate value. The petitioner claims that the Department rejected
its valuation proposal--the weighted-average of the petitioner's own
South African vanadium slag purchases during the POR--because of the
Department's faulty mathematical analysis of the petitioner's
purchases. Because its South African vanadium slag purchases are of the
material to be valued, and cover the entire POR, the petitioner argues
that these prices are the appropriate basis for the surrogate value.
With regard to vanadium price data obtained from the South African
Minerals Bureau subsequent to the preliminary results (see fax dated
November 6, 1997), which includes the domestic average price for
vanadium slag, the petitioner objects to this source because the
petitioner believes that the South African values stated are likely to
be distorted by intracompany transfers not conducted at arm's length,
and thus do not represent market value.
Galt claims that the use of Tulachermet's purchase price as the
basis for the vanadium slag surrogate value is consistent with the
Department's policy and practice, as embodied in section 351.408(c)(1)
of the Department's new regulations, which states that the Department
will base surrogate value on a market economy purchase when an input is
sourced from both market economy and NME suppliers. Galt asserts that
Tulachermet made bonafide, substantial purchases for Tulachermet's
production, and not a de minimis purchase meant to distort a dumping
margin; thus, this purchase is a reasonable basis for valuing Russian
sourced slag in accordance with the Department's policy. The use of the
petitioner's prices for vanadium slag, Galt further contends, would be
unfair and unpredictable because this business proprietary information
is unavailable when the respondents make sales. Thus, argues Galt, how
could Tulachermet know if Shieldalloy purchased slag at the beginning,
at the end, or anytime at all during the POR, and in what quantities?
And, how could Galt even attempt to price fairly if it must guess at
the value of an important input rather than use a figure that is
readily accessible? Galt also notes that relying on the petitioner's
purchase prices would involve the use of prices to the United States
rather than to an appropriate surrogate country, contrary to section
773(c)(4) of the Act. Finally, with regard to petitioner's contentions
regarding the use of the vanadium slag price data from the South
African Minerals Bureau, Galt claims that its analysis shows that any
price distortion that exists in this value would be to respondents'
detriment and the value should be adjusted accordingly if it were to be
used.
DOC Position: Vanadium slag is the single most important input for
production of ferrovanadium. Tulachermet obtained nearly all of its
vanadium slag consumed during the POR from a Russian source, which
provided the material at a grade of approximately 15-16 percent
contained vanadium pentoxide. Tulachermet purchased a relatively small
amount of vanadium slag from South Africa immediately prior to the POR
for POR
[[Page 65661]]
consumption. This market economy purchase was of 22-24 percent
contained vanadium pentoxide. As in the preliminary results, we valued
the quantity purchased from South Africa at the purchase price for this
material. Because this material is different from the Russian-sourced
material, on the basis of the vanadium pentoxide content, we did not
apply this price to the remainder of the vanadium slag consumed by
Tulachermet, nor did we assign this price as the basis for the vanadium
slag surrogate value (prior to adjustment), as we did in the
preliminary results. As explained further below and in the Final
Results Valuation Memorandum dated December 4, 1997 (FRVM), we have
applied a different surrogate value and adjustment methodology (see
Comment 7) for the final results.
The Department's stated practice in determining which surrogate
value to use for valuing each factor of production is to select, where
possible, publicly available information which is: (1) an average non-
export value; (2) representative of a range of prices within the POR if
submitted by an interested party, or most contemporaneous with the POR;
(3) product-specific; and (4) tax-exclusive (see, e.g., Final Results
of Antidumping Duty Administrative Review: Sebacic Acid From the
People's Republic of China, 62 FR 10530, 10534, March 7, 1997 (Sebacic
Acid), and Preliminary Results of Antidumping Administrative Review:
Manganese Metal From the People's Republic of China, 62 FR 60226,
60227, November 7, 1997). The Department has also articulated a
preference for a surrogate country's domestic prices over import values
(see, e.g., Final Determinations of Sales at Less Than Fair Value:
Brake Drums and Brake Rotors From the People's Republic of China, 62 FR
9160, 9163, February 28, 1997).
As we have noted throughout this proceeding (see, e.g., Preliminary
Results Valuation Memorandum (PRVM) at page 3), we have not been able
to identify a market economy surrogate value for vanadium slag with 16
percent contained vanadium pentoxide from any source. Indeed, our
research indicates that vanadium slag of this quality is not produced
outside of Russia and, perhaps, the People's Republic of China.
Accordingly, the Department must identify the most comparable surrogate
match.
Based on the available choices, we have rejected both the values
offered by the petitioner based on its own purchases of South African
vanadium slag, and the value based on Tulachermet's December 1994 South
African purchase. These values are not product-specific (i.e., are for
vanadium slag of a different quality than that obtained by Tulachermet
from its Russian supplier), and are export prices. We are also
concerned that the use of the petitioner's proprietary purchase prices,
unavailable to Galt and its suppliers, as the surrogate value for a
major input would effectively allow the petitioner to directly
influence our calculation of NV and hinder the exporter from adjusting
its prices to eliminate dumping. As for Tulachermet's price, we agree
with the petitioner that the use of a single price quote from December
1994 does not adequately represent the price levels of vanadium
products experienced during the POR.
In this proceeding, we obtained data from the South African
Minerals Bureau on the vanadium industry and price levels for a variety
of products. Some of this information was in published form (see PRVM),
while other data was obtained directly from the Bureau (see fax dated
November 6, 1997). In addition, the South African Minerals Bureau, the
petitioner, and Galt have provided information from the industry
publication Metal Bulletin on vanadium pentoxide and ferrovanadium
prices in the world market. We have relied on these public, independent
sources as the bases for valuing vanadium slag and other vanadium
products.
For vanadium slag, we have used as the base value the POR-average
South African FOB value for 24 percent vanadium pentoxide content slag,
as reported by the South African Minerals Bureau in the November 6 fax.
This value is a domestic South African price for a material that is
most comparable to the product among the publicly available values. The
value calculated is an average of 1995 and 1996 values and is thus
representative of the range of prices during the POR. Moreover, it is
derived from the only source of public data for vanadium slag (of any
grade) we have obtained in the course of this proceeding.
In our view, the inferences, speculations, and assumptions the
petitioner and Galt applied in their respective analyses of the South
African domestic prices fail to establish that these South African slag
values are not market values. A comparison of the annual averages of
the South African slag prices to the annual averages of CIF Europe spot
prices for vanadium pentoxide shown in the November 6 fax, which are
market-based prices, shows a consistent relationship of about 20 to 25
percent (i.e., the slag price is about 20-25 percent of the European
market price for vanadium pentoxide). Given the absence of any other
public source for slag prices, based on the available information, we
have no basis to conclude that, to the extent a market exists for
vanadium slag, these prices are not the South African market prices for
vanadium slag.
Comment 7: Quality Adjustment to Vanadium Slag Surrogate Value.
The petitioner disagrees with the Department's adjustments for what
it considers alleged quality differences between the South African and
Russian inputs. The petitioner contends that the record evidence does
not support the Department's position in its preliminary results that
Russian-sourced vanadium slag, of approximately 15-16 percent vanadium
pentoxide content must be valued lower than South African slag of
approximately 22-24 percent vanadium pentoxide, on a contained-vanadium
basis 1. The petitioner objects to the use of a quality
adjustment methodology based on a ratio derived from the prices of
Russian (i.e. NME) goods. Such a use of NME prices, the petitioner
contends, is contrary to the Department's established policy and
practice. Finally, if the Department were to make a quality adjustment
to the South African input value, the petitioner states that the
adjustment must be based on POR data and proposes an adjustment factor
of .96, derived from Metal Bulletin news articles during the POR,
rather than the .7292 factor derived from 1993-94 Metal Bulletin price
comparisons. Alternatively, the petitioner suggests that, if the
Department believes it has insufficient information from market economy
countries to value the vanadium slag consumed by Tulachermet, the
Department should base NV on the sales of South African ferrovanadium
to other countries.
---------------------------------------------------------------------------
\1\ ``Contained vanadium basis'' refers to adjusting the price
or value of the material based solely on the amount of vanadium
contained, regardless of the content of other materials. Thus,
products with varying percentages of contained vanadium or vanadium
pentoxide can be compared on an equal basis.
---------------------------------------------------------------------------
Galt agrees with the Department's approach to adjusting the
surrogate value for quality differences between the South African
material and the Russian-sourced material. Galt states that, contrary
to the petitioner's assertion, the statute does not prohibit the use of
NME-based value information to adjust a market-based surrogate value.
Galt notes that this case differs from the Final Determination of Sales
at Less than Fair Value: Refined Antimony Trioxide from the People's
Republic of China, 57 FR 6801 (February 26, 1992),
[[Page 65662]]
cited by the petitioner in that (1) the non-market prices in question
are being used to determine an adjustment factor, not to determine the
base price to be used, and (2) there are no market economy prices
available. Thus, Galt contends, under these conditions the Department
has no choice but to use the available information in order to make the
adjustment to the vanadium slag surrogate value that the record
overwhelmingly shows is necessary. Galt also objects to the
petitioner's proposed alternative methodology using POR price quotes,
claiming that the information is anecdotal and does not adequately
identify the Russian merchandise to allow for proper calculation of the
quality adjustment ratio.
DOC Position: As we stated in the PRVM, the record throughout this
proceeding overwhelmingly demonstrates that vanadium slag with a
vanadium pentoxide content below 24 percent is lower quality than the
24 percent product, and its value to consumers cannot be quantified in
terms of a straight-line adjustment based on relative percentages of
vanadium pentoxide, as argued by the petitioner. Principally, the
Russian-sourced vanadium slag contains a higher level of impurities
than the 24 percent vanadium pentoxide content slag, which, in turn,
results in higher processing and waste disposal costs. We concluded in
the LTFV investigation that the South African slag value should be
adjusted in order to properly value the Russian-sourced vanadium slag
to account for the latter's lower quality. Our finding and methodology
was upheld in Shieldalloy Metallurgical Corp. v. United States, 975
F.Supp. 361 (Ct. Int'l Trade 1997) and Shieldalloy Metallurgical Corp.
v. United States, 947 F.Supp. 525 )Ct. Int'l Trade 1996). In this
review, we continue to believe that Russian-sourced slag must be valued
lower than the 24 percent vanadium pentoxide slag, on a contained
vanadium basis.
The petitioner has never convincingly refuted the fact that the
Russian-sourced slag is of an inferior quality to the South African
slag upon which surrogate values have been based. The petitioner's
claims and speculations that the inferior Russian vanadium slag should
be valued the same as the higher quality South African material, on a
contained vanadium basis, do not stand up against the weight of
information to the contrary developed throughout this proceeding. Given
that no market economy value exists to our knowledge for vanadium slag
of a comparable quality to the Russian-sourced material, a quality
adjustment must be made to the South African vanadium slag value in
order to arrive at a surrogate value that fairly represents the
material to be valued.
The petitioner has argued that the Department's quality adjustment
methodology used in the LTFV final determination and the preliminary
results of this review is flawed because it is based on NME prices, and
is based on noncontemporaneous price data. We acknowledged in the
preliminary results that, subsequent to the LTFV investigation and CIT
litigation, we learned that the 90% vanadium pentoxide prices published
in Metal Bulletin and used to calculate our adjustment ratio were based
on Russian prices. However, since we have been unable to identify any
other information suitable for making this adjustment, we must continue
to use the ratio between vanadium pentoxide prices, including the
prices of Russian vanadium pentoxide of lower quality, as a facts
available basis for the quality adjustment methodology. We emphasize
that we are not using any NME prices to arrive at the surrogate value,
but rather the relationship between prices for internationally-traded
goods in market economies, where some of these goods were produced in a
NME country, and applying the resulting ratio to a South African value.
Although this methodology may not be ideal because it involves the use
of NME price data, it is, nevertheless, the best available information.
To fail to apply a quality adjustment to the surrogate value would be,
in our view, a far greater distortion to the valuation of Russian-
sourced vanadium slag.
Its other objections aside, the petitioner proposes using POR
vanadium pentoxide price information to recalculate the quality
adjustment. We agree with the petitioner that this approach is
preferable. However, we agree with Galt's concerns about the Russian
vanadium pentoxide prices the petitioner selected from Metal Bulletin.
These quotes are anecdotal citations chosen by the petitioner that
include no information about the quality of the product allegedly sold.
In contrast, the LTFV methodology relied on market research data by an
independent source for vanadium pentoxide of a known purity (see
Attachment 9 to PRVM). While the data is not contemporaneous, it is
otherwise more reliable than the information proffered by the
petitioner.
For the final results, we have revised our methodology from the
preliminary results to incorporate more recent data from Metal
Bulletin, as submitted by Galt on December 13, 1996. This submission
includes 98 percent and 90 percent vanadium pentoxide price data for
the last quarter of 1994--the last period that Metal Bulletin published
90 percent vanadium pentoxide prices and the quarter immediately prior
to the POR. Thus, for the final results, we have applied the ratio
between 98 percent vanadium pentoxide and 90 percent vanadium pentoxide
prices reported for the fourth quarter of 1994, .9437, as the quality
adjustment for the vanadium slag value. Our calculation is shown in the
FRVM.
Comment 8: Contemporaneity of Vanadium Slag Surrogate Value.
The petitioner contends that a surrogate value based on a single
purchase of vanadium slag immediately prior to the POR is inappropriate
in this proceeding due to the price fluctuations of vanadium products
during the POR. In support of its position, the petitioner provided
information showing the rise and fall of world vanadium pentoxide and
ferrovanadium prices during the POR, and that the Tulachermet purchase
price is unrepresentative of prices during the POR. The petitioner
asserts that the Department must make appropriate adjustments to ensure
that the values of vanadium inputs accurately represent POR prices,
otherwise the dumping calculation will be distorted. Accordingly, the
petitioner claims that the surrogate value should be based on a
weighted-average of prices during the POR, such as the weighted-average
of the petitioner's vanadium slag purchases, or, if the Department
continues to rely on Tulachermet's slag purchase price, an adjustment
to that price must be made to reflect the difference between prices at
the time of the purchase and the average prices during the POR.
Galt asserts that Tulachermet's purchase of the South African slag,
although immediately prior to the POR, was for inputs consumed during
the POR and thus is an appropriate value for the POR. Galt claims that
to adjust the slag value for the vanadium price increases over the POR
without ensuring that appropriate costs, prices, and production factors
are matched will create distortions. In this case, Galt continues, the
Department does not have the data on the record to link Tulachermet's
actual production to its shipments to Galt, as such information was
never requested by the Department. Therefore, Galt states that the only
alternative is to find that there is no basis on the record to find
this type of price inflation for the sales at issue and thus no time
period adjustment need be made to Tulachermet's purchase price for
vanadium slag.
[[Page 65663]]
DOC Position: We agree with the petitioner that, in this instance,
it is inappropriate to base the surrogate value for vanadium slag on
Tulachermet's single purchase price and have not done so for these
final results (see Comment 6).
Comment 9: Sulfuric Acid Valuation.
The petitioner argues that Tulachermet's consumption of sulfuric
acid should be adjusted to correct the Department's treatment of this
input in diluted form. In fact, the petitioner contends that
Tulachermet reported that it consumed sulfuric acid at 100 percent
concentration. Thus, the petitioner states that, for the final results,
Tulachermet's consumption of sulfuric acid should be valued based on
the ratio of Tulachermet's 100 percent concentration consumption to the
``standard concentration of commerce'' of 93-98 percent, as identified
by the Department. In addition, the petitioner states that the price
used in the preliminary results was not the intended value identified
by the Department as provided by a South African vanadium producer, and
instead was a different value that was outside the POR. For the final
results, the petitioner states that this error should be corrected.
DOC Position: We agree with the petitioner that Tulachermet has
reported its consumption of sulfuric acid in undiluted form and that we
erred in adjusting the consumption factor by the amount of dilution,
which Tulachermet performs in the course of its production process. We
also agree that the Department erred in its preliminary results in
identifying the value source selected as a South African vanadium
producer, while actually using the value obtained from the South
African Chemical and Allied Industries Association. For the final
results, we have continued to use the value for 98% sulfuric acid from
the Association, which is a POR average provided to the Department in
response to our specific request to the Association (see FRVM). The
values obtained from both the Association and the vanadium producer
were equally contemporaneous domestic tax-exclusive prices for the same
material, but we selected the Association value as it is from a more
publicly available source than a price quote from a company whose name
cannot be revealed in our public documents.
Finally, we have adjusted Tulachermet's consumption factor to match
the 98% concentration of the sulfuric acid surrogate value, as
suggested by the petitioner.
Comment 10: Valuation of Small-Quantity Inputs.
In the preliminary results, the Department was unable to obtain
surrogate values for boron anhydride and ammonium sulphite, and also
did not include boron acid in its NV calculation. The petitioner claims
that these chemicals are important, individually and in the aggregate,
to the production of the subject merchandise, and thus their omission
understates Galt's dumping margin. Accordingly, the petitioner contends
that the Department should value these inputs based on U.S. price data
it submitted, or on the highest surrogate value for any input. In
addition, the petitioner asserts that the Department must also continue
to assign the farthest distance reported by Tulachermet for any
supplier to calculate the freight value cost for all inputs for which
Tulachermet failed to provide the distance from its supplier.
Galt argues that disregarding these inputs is justified under
section 777A(a)(2) of the Act, under which ``the administering
authority may decline to take into account adjustments which are
insignificant in relation to the price or value of the merchandise.''
In addition, Galt opposes the application of the U.S. values for these
inputs presented by the petitioner because these values are not from
the primary surrogate country, South Africa, or from any other
appropriate surrogate country identified by the Department.
DOC Position: Although the inputs in question are consumed in small
quantities, we have accepted the petitioner's position in calculating
NV for the final results. Department practice is to attempt to value
all inputs in an NME NV for which there is available information. The
U.S. price data is the only surrogate value information on the record
for these inputs and thus may be used as facts available to value these
materials. While the values identified by the petitioner for boric acid
and ammonium sulfide acid are not the same as the boron (or boric)
anhydride and ammonium sulphite consumed by Tulachermet (see ``Telcon
with ITC Chemical Industry Analyst Re: Tulachermet Chemical Inputs,''
Memorandum to the File dated October 22, 1997), as facts available, we
have accepted the petitioner's contention in its October 27, 1997,
letter that these values are for materials similar enough for surrogate
valuation purposes, and that the values are, if anything, conservative
measures of surrogate value.
Comment 11: Valuation of Factors Unreported by Tulachermet.
The petitioner claims that Tulachermet did not accurately report
all of its inputs and omitted several of these inputs from its factors
of production response, based on the petitioner's analysis of
Tulachermet's production summary worksheets. As AFA, the petitioner
contends that the Department should apply the highest consumption
factor reported for any input, and apply the highest surrogate value
for any input. The petitioner also argues that Tulachermet did not
report its consumption of ``technological electricity''; therefore, the
Department should use adverse facts available to increase Tulachermet's
reported consumption of electricity.
Galt argues that Tulachermet has accounted for all materials
consumed and that the inputs cited by the petitioner either are already
reported and accounted for, or are recycled materials.
DOC Position: We agree with Galt that certain inputs consumed and
listed on the production worksheets--``metal skull,'' ``metal
riddlings,'' limestone, steam, compressed air, water, and ``technical
water''--are already accounted for in the factors of production
worksheet. Tulachermet reported its consumption of vanadium and metal-
based inputs on a gross, rather than net, basis. The production
worksheets show that metal and vanadium waste was generated in the
course of production and then re-used. Tulachermet's consumption of
limestone has been reported separately in accounting for its lime
production (see submission of March 7, 1997). Tulachermet's energy
reporting accounts for the energy consumed to generate steam and
compressed air. Water inputs are normally considered a factory overhead
item and the Department usually does not value water separately (see,
e.g., Final Determination of Sales at Less Than Fair Value: Saccharin
from the People's Republic of China From PRC, 59 FR 58818, November 15,
1994).
The production worksheets indicate consumption of certain other
inputs--silicovanadium, vanadium aluminum alloy,2 and
``technological electricity''--which we agree should have been included
in the factors of production worksheet. We have calculated consumption
factors for these inputs, based on the data in the production
worksheets submitted on February 7,
[[Page 65664]]
1997, and included them in the calculation of NV. We valued
silicovanadium and vanadium aluminum alloy, on a contained vanadium
basis, based on the POR average South African price for vanadium
products, as reported by the South African Minerals Bureau. Because
Tulachermet did not report the distance from the suppliers of these
items to its factory, we have applied the distance from the farthest
supplier, as facts available, to calculate the freight expense incurred
in transporting these inputs.
---------------------------------------------------------------------------
\2\ Galt claims that it has reported vanadium aluminum alloy as
``pre-alloyed material.'' However, our analysis of the questionnaire
response reveals that ``pre-alloyed material'' in the factors of
production worksheet corresponds to ``iron-vanadium'' alloy in the
production worksheets.
---------------------------------------------------------------------------
Finally, we note that Tulachermet also consumed a very small amount
of ``poliacrid'' during the POR, as indicated by the petitioner.
However, there is no surrogate value for this material on the record.
Therefore, we have not included a value for this material in our
calculation of NV, although we have included a freight amount for this
item, calculated in the same manner as discussed above.
Comment 12: Freight and Insurance costs for Surrogate Values
derived from the Customs Union of Southern Africa (SACU) Import
Statistics.
The petitioner contends that, in the preliminary results, the
Department used surrogate values derived from SACU for factors whose
input value did not include the cost of insurance and freight. The
petitioner argues that the Department has thus understated the values
for those inputs.
Galt responds that the Department already has made freight and
insurance adjustments in its input freight value that is shown in its
margin calculation. Galt states that to make additional adjustments to
freight or insurance would be double counting.
DOC Position: We agree with Galt. In Sigma Corp. v. United States,
No. 95-1509, 96-1036, 95-1510, 06-1037, 1997 U.S. App. LEXIS 16506
(Fed. Cir. July 7, 1997) (Sigma), the United States Court of Appeals
for the Federal Circuit (CAFC) held that the calculated freight costs
for PRC-made materials may not exceed the calculated freight costs of
shipping the material from respondents' importing seaports in the PRC
to their factories. The CAFC's decision in Sigma requires that we
revise our calculation of source-to-factory-surrogate freight for those
material inputs that are based in CIF import values in the surrogate
country. Accordingly, we have added to CIF surrogate values from South
Africa a surrogate freight cost using the shorter of the reported
distances from either the closest reported port to the factory (i.e.,
Ventspils, Latvia), or the domestic supplier to the factory.
Comment 13: Factory Overhead, Selling, General and Administrative
Expenses.
The petitioner argues that, in calculating the surrogate value for
factory overhead based on the 1995 Annual Report of Highveld Steel and
Vanadium Corporation Limited (Highveld), the Department erred in
excluding the figure for ``net provision for renewal and replacement of
fixed assets'' from overhead expenses. Consistent with the Department's
approach in Final Determination of Sales at Less Than Fair Value:
Sulfur Vat Dyes from the People's Republic of China, 58 FR 7557,
(February 8, 1993), the Department should include in the overhead ratio
depreciation and all other elements of overhead that are identified in
the Highveld's 1995 Annual Report. The petitioner further contends that
because the Department verified separate cost centers for Tulachermet
in the LTFV investigation, the surrogate overhead ratio should be
applied to each cost center (i.e. vanadium pentoxide and ferrovanadium
production centers). With regard to selling, general and administrative
(SG&A) expenses, the petitioner states that the Department should
include the amount spent on research and development, which was not
included in the preliminary results calculation.
Galt states that the factory overhead figure calculated from the
annual report is from the consolidated financial statement and
represents the total overhead of all Highveld operations. To apply this
percentage to each of Tulachermet's cost centers would result in
double-counting overhead, according to Galt. To insure an ``apples to
apples'' comparison, Galt contends that the Department should continue
to apply the consolidated percentage to the consolidated factor.
DOC Position: We agree with the petitioner with respect to the
omitted expenses in our factory overhead and SG&A calculations, and
have made the corrections. These corrections result in revised
surrogate percentages for factory overhead, SG&A expenses and profit
(see FRVM).
We agree with Galt with respect to the application of factory
overhead to the total of materials, labor, and energy values, rather
than at each stage of production. Because our surrogate percentage is
calculated on the basis of the total overhead of Highveld's production,
the factory overhead percentage must be applied in the same manner to
avoid double-counting (see Final Determination of Sales at Less Than
Fair Value: Polyvinyl Alcohol From PRC, 61 FR 14057,14056, March 29,
1996).
Comment 14: Surrogate Profit Calculation.
The petitioner argues that the Department should calculate profit
based on ``net income before taxation,'' as reported in Highveld's 1995
Annual Report. The petitioner also contends that the Department erred
in using ``net sales turnover,'' rather than ``cost of production,'' as
the denominator for the surrogate profit calculation and should correct
it for the final results.
Galt argues that the Department should calculate the surrogate
profit percentage on the same basis it used to calculate the cost of
production from Highveld's 1995 Annual Report. Galt contends that
calculating the profit percentage on a different basis than the cost of
production would violate the statutory requirement by exceeding the
amount of profit normally realized by market economy exporters or
producers.
DOC Position: We agree with the petitioner with regard to our
surrogate profit calculation. We calculated profit based on the net
sales turnover in the report, less cost of production, and applied the
resulting ratio to the cost of production. Because of the changes to
factory overhead and SG&A, noted above, the resulting profit figure,
calculated as the difference between net sales and net costs per the
Highveld 1995 Annual Report, differs from that cited by the petitioner
(see FRVM).
Comment 15: Galt's SG&A and CEP Profit Calculations.
The petitioner contends that Galt has ignored the Department's
explicit instructions and followed its own method of reporting and
adjusting SG&A and profit used to calculate CEP expenses. The
petitioner argues that Galt did not disclose the methodology for its
numerous ``revisions'' or provide computations, beginning with the
financial statement. Moreover, according to the petitioner, Galt did
not provide any indication that its SG&A and profit calculations took
proper account of the required antidumping duty.
Galt states that it responded to the petitioner's arguments
regarding its SG&A expenses in its letter to the Department of May 21,
1997. Galt states that it explained how the figures are traced into the
financial statements and provided additional background information on
the figures. Galt objects to the petitioner's implication that the
Department should examine backup documentation for financial statements
that have already been certified as audited. In addition, Galt claims
that it has thoroughly explained to the
[[Page 65665]]
Department its methodology regarding management fees and the petitioner
has provided no meaningful criticism of Galt's approach.
DOC Position: We agree with Galt with respect to its presentation
of the information. Based on our analysis, we have accepted Galt's SG&A
calculations for adjustments to CEP sales, as described in Galt's May
21, 1997, submission. We have, however, made corrections to these
calculations for mathematical errors (see Memorandum to the File dated
December 3, 1997.) As in the preliminary results, we revised the SG&A
calculation to reflect a value-based, rather than unit-based, amount.
In addition, we have revised the calculation of CEP profit to meet
the requirements of section 772(d)(3) and 772(f) of the Act.
Accordingly, we calculated the profit allocable to selling and
distribution activities in the United States based on the data in
Galt's audited financial statements for the two fiscal years that
included the POR (see Memorandum to the File dated December 3, 1997).
Pursuant to section 772(f)(C)(iii) of the Act, this information is the
data on the record for calculating CEP profit that comprises the
narrowest category of merchandise sold in all countries which includes
the subject merchandise.
Comment 16: Valuation of Railway Freight and Insurance.
In lieu of the 1993 South African rail rate information from the
LTFV investigation used in the preliminary results, the petitioner
contends that the Department should apply the railway rate and
insurance data from the POR that the petitioner obtained in a fax from
a South African railway source.
Galt states the petitioner's fax is an unreliable basis for this
information as it does not contain published rail rates and is largely
a handwritten note from someone, apparently in South Africa, which
appears to be cut and pasted. Accordingly, Galt contends that the
Department should continue to use the rail rates from the LTFV
investigation in the absence of any other reliable information.
DOC Position: In this instance, we are asked to choose between the
only two available surrogate values for freight--a figure derived from
publicly available published data of rail rates for a representative
list of destinations, but non-contemporaneous to the POR; or a rail
rate quote contemporaneous with the POR obtained by an interested party
for a specific route. While the latter choice has the advantage of
being contemporaneous with the POR, the rate proffered by the
petitioner is based on transport of 144 kilometers, while the rate
calculated by the Department for the LTFV investigation is based on
transport of 468 to 1,342 kilometers (see PRVM at page 10). Most
transport to be valued covers distances of hundreds to thousands of
kilometers. Therefore, we find that the rate from the LTFV
investigation, although non-contemporaneous, is a more representative
surrogate value for Tulachermet's movement expenses and we have
continued to apply it in the final results.
Comment 17: Valuation of ``Vanadium Pre-alloyed Material''.
The petitioner agrees with the Department's selection of
ferrovanadium prices to determine the surrogate value for ``vanadium
pre-alloyed material.'' However, the petitioner argues that the
Department erred by applying the exchange rate conversion from South
African rand to U.S. dollars for this value as the value was already
expressed in U.S. dollars.
DOC Position: We agree with the petitioner that we made an error in
applying an exchange rate to this value reported in U.S. dollars.
However, for the final results, we have selected a different source for
the ferrovanadium price. We have used the 1995-96 average South African
FOB value for ferrovanadium reported by the South African Minerals
Bureau in its November 6, 1997, fax. In applying this value, we have
adjusted the consumption factor to reflect the maximum vanadium content
of the input, as reported by Tulachermet in the February 7, 1997
response.
Final Results of Review: As a result of the comments received, we
have changed the results from those presented in our preliminary
results of review. Therefore, we determined that the following margin
exists as a result of our review:
------------------------------------------------------------------------
Margin
Exporter Period (percent)
------------------------------------------------------------------------
Galt Alloys, Inc......................... 1/4/95-7/31/96 34.66
------------------------------------------------------------------------
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between EP and NV may vary from the percentages stated above. The
Department will issue appraisement instructions directly to Customs.
Further, the following deposit requirements will be effective upon
publication of these final results for all shipments of ferrovanadium
and nitrided vanadium 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 rate for Galt will be the
rate established in the final results of this administrative review;
(2), for merchandise exported by manufacturers or exporters not covered
in this review but covered in the original LTFV investigation and 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;
(3) for Russian manufacturers or exporters not covered in the LTFV
investigation, the cash deposit rate will continue to be the Russia-
wide rate of 108.00 percent; and (4) the cash deposit rate for non-
Russian exporters of subject merchandise from Russia who were not
covered in the LTFV investigation or in this administrative review,
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 serves as a final reminder to importers of their
responsibility under 19 CFR 353.26(b) 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 notice also serves as a reminder to parties subject to
administrative protective orders (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d)(1). 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)) and published in
accordance with section 777(i).
Dated: December 5, 1997.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-32631 Filed 12-12-97; 8:45 am]
BILLING CODE 3510-DS-P
