03-3408. Notice of Final Determination of Sales at Less Than Fair Value: Silicon Metal From the Russian Federation

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination in the less-than-fair-value investigation of silicon metal from the Russian Federation.

SUMMARY:

We determine that silicon metal from the Russian Federation (“Russia”) is being, or is likely to be, sold in the United States at less than fair value. On September 20, 2002, the Department of Commerce published a notice of preliminary determination of sales at less than fair value in the investigation of silicon metal from Russia. See Notice of Preliminary Determination of Sales at Not Less Than Fair Value and Postponement of Final Determination: Silicon Metal from the Russian Federation, 67 FR 59253 (September 20, 2002) (“Preliminary Determination”). This investigation covers two manufacturers of the subject merchandise. The period of investigation (“POI”) is July 1, 2001, through December 31, 2001.

Based upon our verification of the data and analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination of this investigation differs from the preliminary determination. The final weighted-average dumping margin is listed below in the section titled “Continuation of Suspension of Liquidation.”

EFFECTIVE DATE:

February 11, 2003.

FOR FURTHER INFORMATION CONTACT:

James Doyle or Cheryl Werner, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] and [phone], respectively.

Background

This investigation was initiated on March 27, 2002. See Notice of Initiation of Antidumping Duty Investigation: Silicon Metal from the Russian Federation, 67 FR 15791 (April 3, 2002) (“Notice of Initiation”'). The Department set aside a period for all interested parties to raise issues regarding product coverage. See Notice of Initiation. The Department received no comments on product coverage from interested parties.

On August 27, 2002, the Department determined that Pultwen Ltd. (“Pultwen”) and a U.S. trading company were affiliated through a principal/agent relationship. See Memorandum For Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration, Group III: Antidumping Investigation of Silicon Metal from Russia; Affiliation Memorandum of Pultwen Limited and U.S. Trading Company, dated August 27, 2002 (“Affiliation Memo for Pultwen and U.S. Trading Company”). On August 28, 2002, we again requested that ZAO Kremny (“Kremny”)/Sual-Kremny-Ural Ltd. (“SKU”) and Pultwen provide their affiliated U.S. trading company's sales and received their response on September 4, 2002. On September 13, 2002, Kremny/SKU and Pultwen submitted an unsolicited additional response to the Department's August 28, 2002, request for the affiliated U.S. trading company's sales. On October 2, 2002, Kremny/SKU and Pultwen submitted an untimely response by their affiliated U.S. trading company to Section C of the Department's antidumping questionnaire and a revised U.S. sales listing which included sales of silicon metal made by the U.S. trading company to its U.S. customers. On October 18, 2002, petitioners submitted comments on the untimely U.S. sales data. On October 31, 2002, the Department rejected the October 2, 2002, response submitted by Kremny/SKU and Pultwen, because it was untimely filed factual information pursuant to 19 CFR 351.302 (d) of the Department's regulations.

On September 26, 2002, Kremny/SKU and Pultwen submitted a request for a hearing pursuant to Section 351.310(c). On September 30, 2002, Bratsk Aluminum Smelter (“BAS”) and Rual Trade Limited (“RTL”) submitted a request for a hearing and on October 18, 2002, petitioners also submitted a request for a hearing.

On September 27, 2002, the Department received a joint submission from BAS, RTL, Kremny/SKU, and Pultwen providing additional surrogate country factor values pursuant to Section 351.301(c)(3)(i). On November 27, 2002, we also received a joint submission from BAS, RTL, Kremny/SKU, and Pultwen providing surrogate country factor values. On December 9, 2002, petitioners submitted additional surrogate country factor values.

On October 9, 2002, through October 11, 2002, the Department conducted a factors of production verification of Kremny. See Memorandum from Carrie Blozy and Catherine Bertrand, Case Analysts, to the File: Verification of Factors of Production for ZAO Kremny (“Kremny”) plant in the Antidumping Duty Investigation of Silicon Metal from the Russian Federation, (December 4, 2002) (“Kremny Verification Report”). On October 31, 2002, through November 1, 2002, the Department conducted a U.S. sales verification of Pultwen See Memorandum from James C. Doyle, Program Manager, and Cheryl Werner, Case Analyst, to the File: Verification of U.S. Sales for Pultwen Ltd. (“Pultwen”) in the Antidumping Duty Investigation of Silicon Metal from the Russian Federation, (December 4, 2002) (“Pultwen Verification Report”).

On October 23, 2002, through October 25, 2002, the Department conducted a factors of production verification of BAS. See Memorandum from James C. Doyle, Program Manager, and Cheryl Werner, Case Analyst, to the File: Verification of Factors of Production for Bratsk Aluminum Smelter (“BAS”) in the Antidumping Duty Investigation of Silicon Metal from the Russian Federation, (December 5, 2002) (“BAS Verification Report”). On October 28, 2002, through October 29, 2002, the Department conducted a U.S. sales verification of RTL. See Memorandum from James C. Doyle, Program Manager, and Cheryl Werner, Case Analyst, to the File: Verification of U.S. Sales for Rual Trade Limited (“RTL”) (December 5, 2002) (“RTL Verification Report”).

We invited parties to comment on our Preliminary Determination. On December 17, 2002, petitioners, BAS and RTL, and Kremny/SKU and Pultwen submitted case briefs with respect to the sales and factors of production verifications and the Department's Preliminary Determination. Petitioners, BAS and RTL, and Kremny/SKU and Pultwen submitted their rebuttal briefs on December 24, 2002, with respect to the sales and factors of production verifications and the Department's Preliminary Determination. On January 7, 2003, the Department held a public hearing in accordance with 19 CFR 351.310(d)(1). Representatives for petitioners, BAS and RTL, and Kremny/SKU and Pultwen were present. All parties present were allowed an opportunity to make affirmative presentations only on arguments included in that party's case briefs and were also allowed to make rebuttal presentations only on arguments included in that party's rebuttal brief.

On January 28, 2003, the Department placed publicly available surrogate value data for petroleum coke on the record. The Department provided all parties an opportunity to comment on this value. On January 30, 2003, the Department received comments from BAS and RTL and petitioners.

Additionally, on February 3, 2003, the Department continued to find Pultwen and the U.S. trading company were affiliated. See Memorandum For Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration, Group III: Antidumping Investigation of Silicon Metal from Russia; Final Affiliation Memorandum of Pultwen Limited and U.S. Trading Company, dated February 3, 2003 (“Final Affiliation Memo”).

The Department has conducted and completed the investigation in accordance with section 735 of the Act.

Scope of Investigation

For purposes of this investigation, the product covered is silicon metal, which generally contains at least 96.00 percent but less than 99.99 percent silicon by weight. The merchandise covered by this investigation also includes silicon metal from Russia containing between 89.00 and 96.00 percent silicon by weight, but containing more aluminum than the silicon metal which contains at least 96.00 percent but less than 99.99 percent silicon by weight. Silicon metal currently is classifiable under subheadings 2804.69.10 and 2804.69.50 of the Harmonized Tariff Schedule of the United States (“HTSUS”). This investigation covers all silicon metal meeting the above specification, regardless of tariff classification.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs to this investigation are addressed in the Issues and Decision Memorandum from Joseph A. Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, Assistant Secretary (February 3, 2003) (“Decision Memo”), which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, and other issues addressed, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in the Decision Memo, a public memorandum which is on file at the U.S. Department of Commerce, in the Central Records Unit, in room B-099. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memo are identical in content.

Changes Since the Preliminary Determination

Based on our findings at verification, and analysis of comments received, we have made adjustments to the calculation methodology in calculating the final dumping margin in this proceeding. See Analysis Memorandum of Bratsk Aluminum Smelter and Rual Trade Limited: Final Determination in the Less Than Fair Value Investigation of Silicon Metal from the Russian Federation (February 3, 2003) (“BAS and RTL Final Analysis Memo”). Also, see Analysis Memorandum of ZAO Kremny/Sual-Kremny-Ural Ltd. and Pultwen Ltd.: Final Determination in the Less Than Fair Value Investigation of Silicon Metal from the Russian Federation (February 3, 2003) (“Kremny/SKU and Pultwen Final Analysis Memo”).

Verification

As provided in section 782(i) of the Act, we verified the information submitted by BAS and RTL and Kremny/SKU and Pultwen for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by BAS and RTL and Kremny/SKU and Pultwen. For changes from the Preliminary Determination as a result of verification, see BAS and RTL Final Analysis Memo or Kremny/SKU and Pultwen Final Analysis Memo.

Nonmarket Economy Country

On June 6, 2002, the Department revoked Russia's status as a non-market economy (“NME”), effective April 1, 2002. See Memorandum from Albert Hsu, Barbara Mayer, and Christopher Smith through Jeffrey May, Director, Office of Policy, to Faryar Shirzad, Assistant Secretary, Import Administration: Inquiry into the Status of the Russian Federation as a Non-Market Economy Country under the U.S. Antidumping Law, dated June 6, 2002. Because the period of investigation pre-dates the effective date of the Department's determination, we are continuing to utilize the NME methodology in this investigation. Should an antidumping order be issued in this case, the NME antidumping duty rates will remain in effect until they are changed as a result of a review, pursuant to section 751 of the Act, of a sufficient period of time after April 1, 2002.

Separate Rates

In our Preliminary Determination, we found that the respondents had met the criteria for the application of separate antidumping duty rates. We have not received any other information since the Preliminary Determination which would warrant reconsideration of our separates rates determination with respect to the respondents. Therefore, we continue to find that the respondents should be assigned individual dumping margins. For a complete discussion of the Department's determination that the respondents are entitled to separate rates, see the Preliminary Determination.

Russia-Wide Rate

For the reasons set forth in the Preliminary Determination, we continue to believe that use of adverse facts available for the Russia-wide rate is appropriate. See Preliminary Determination.

Use of Facts Otherwise Available

Section 776(a)(2) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides information which cannot be verified, the Department shall use, subject to sections 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination. Thus, pursuant to section 776(a) of the Act, the Department is required to apply, subject to section 782(d), facts otherwise available. Pursuant to section 782(e), the Department shall not decline to consider such information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties. In addition, section 776(b) of the Act provides that, if the Department finds that an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information,” the Department may use information that is adverse to the interests of the party as the facts otherwise available. The statute also provides that such an adverse inference may be based on secondary information, including information drawn from the petition, a final determination in an investigation, any previous administrative review, or any other information placed on the record.

In the Preliminary Determination, the Department applied total facts available for the Russia-wide rate using BAS's calculated margin, as it was the highest margin. For the final determination, BAS's calculated margin is less than the margin in the petition. Section 776(b) of the Act also provides that an adverse inference may include reliance on information from the petition. See also Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316 at 870 (1994) (“SAA”). Section 776(c) of the Act provides that where the Department selects from among the facts otherwise available and relies on “secondary information,” such as the petition, the Department shall to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The SAA states that “corroborate” means to determine that the information used has probative value. See SAA, at 870. The petitioners' methodology for calculating the EP and NV, in the petition, is discussed in the initiation notice. To corroborate the petitioners' EP calculations, we compared the prices in the petition to the prices submitted by respondents for silicon metal. Based on a comparison of the U.S. Census Bureau's official IM-145 import statistics with the average unit values in the petition, we find the export price suggested in the petition to be consistent with those statistics. To corroborate the petitioners' NV calculation, we compared the petitioners' factor consumption data to the data reported by respondents and found them to be similar. Finally, we valued the factors in the petition using the surrogate values we selected for the final determination. However, by using the surrogate values we selected for the final determination, the petition margin is lower than BAS's calculated margin. Therefore, for the final determination, we have continued to apply total facts available for the Russia-wide rate using BAS's calculated margin for the final determination.

Also in the Preliminary Determination, for Kremny/SKU, we applied partial facts available for the quantity of unreported sales by the U.S. trading company. We continue to find partial facts available are appropriate for valuing the quantity of unreported sales by the U.S. trading company and will continue to apply partial adverse facts available for the final determination. See Decision Memo, at Comment 19. As discussed above, BAS's calculated margin for the final determination is the highest corroborated margin in this investigation. Therefore, we have continued to apply partial adverse facts available to the quantity of unreported sales by the U.S. trading company using BAS's calculated margin for the final determination.

Additionally, we are applying adverse facts available to certain unreported raw materials by Kremny. See Decision Memo, at Comment 11. We are using the highest surrogate value for a mineral to value the quantity of unreported raw materials.

Critical Circumstances

In the Department's Preliminary Determination, we determined that critical circumstances exist for imports of silicon metal from Russia manufactured and/or exported by the Russia-wide entity. We preliminarily found, however, that critical circumstances do not exist for BAS and RTL and Kremny/SKU and Pultwen because there was no evidence of “massive imports” based on a five-month comparison period. At the time of the Preliminary Determination, the Department received shipment data from BAS and RTL and Kremny/SKU and Pultwen through July 2002. Since the Preliminary Determination, BAS and RTL and Kremny/SKU and Pultwen have submitted shipment data through November 2002 . We have reviewed this data and we continue to find that critical circumstances do not exist for BAS and RTL and Kremny/SKU and Pultwen based on the lack of “massive imports” as shown by the six-month shipment data. However, we continue to find that critical circumstances exist for the Russia-wide entity as discussed in the Preliminary Determination.

Suspension Agreement

On October 1, 2002, we received a joint request from the two primary exporters of silicon metal from Russia, BAS and Kremny/SKU, proposing a suspension agreement pursuant to 734(c) of the Act. Under a suspension agreement concluded pursuant to section 734(c) of the Act, the normal value cannot exceed the U.S. market price by more than 15 percent. Morever, we may only accept a suspension agreement under 734(c) of the Act if we determine that “extraordinary circumstances are present in a case,” such as the suspension of the investigation will be more beneficial to the domestic industry than the continuation of the investigation, and the investigation is complex. No agreement was concluded.

Fair Value Comparisons

To determine whether sales of silicon metal from Russia were made in the United States at less than fair value, we compared export price to NV, as described in the “Export Price” and “Normal Value” sections of the Preliminary Determination. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs.

Surrogate Country

For purposes of the final determination, we continue to find that Egypt remains the appropriate primary surrogate country for Russia. For certain factors of production values, where we could not locate usable Egyptian prices, we used Thai import prices (for charcoal) or domestic South African prices (for quartzite and quartzite fines). For further discussion and analysis regarding the surrogate country selection for Russia, see the “Surrogate Country” section of our Preliminary Determination and the Issues and Decision Memorandum, at Comments 1-9.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing the U.S. Customs Service (“Customs”) to continue to suspend liquidation of imports of subject merchandise, which is produced by BAS and Kremny/SKU, and entered, or withdrawn from warehouse, for consumption on or after the date of publication of the Preliminary Determination in the Federal Register. Additionally, in accordance with section 735(c)(1)(B) of the Act, we are directing Customs to continue to suspend liquidation of imports of subject merchandise, which is produced by the Russia-wide entity (all entries of subject merchandise except for entries of Kremny/SKU or BAS material), and entered, or withdraw from warehouse, for consumption on or after the date following 90 days prior to the date of publication of the Preliminary Determination in the Federal Register. We will instruct Customs to continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP, as indicated below. These suspension of liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

Silicon Metal

Exporter	Weighted-Average margin (percent)
Kremny/SKU	54.77
BAS	77.51
Russia-Wide Rate	77.51

Disclosure

The Department will disclose calculations performed, within five days of the date of publication of this notice, to the parties in this investigation, in accordance with section 351.224(b) of the Department's regulations.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the ITC of our affirmative determination of sales at LTFV. As our final determination is affirmative, the ITC will determine within 45 days after our final determination whether imports of silicon metal from Russia are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or cancelled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: February 3, 2003.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix I

Petitioners' Comments

Comment 1: Egypt as a primary surrogate country

Comment 2: Valuation of quartzite

Comment 3: Valuation of coal

Comment 4: Valuation of petroleum coke

Comment 5: Valuation of wood charcoal

Comment 6: Valuation of electrodes

Comment 7: Valuation of rail freight

Comment 8: Valuation of electricity

Comment 9: Valuation of financial ratios

Comment 10: Valuation of profit

Comment 11: Silicon metal fines

Comment 12: Kremny's unreported raw materials

Comment 13: RTL's date of sale

Comment 14: Pultwen's sales to a certain U.S. customer

Comment 15: Discounts

Comment 16: Brokerage and handling expenses

Comment 17: Expenses Related to a Certain Sale

Kremny/SKU's and Pultwen's Comments

Comment 18: Relationship between Pultwen and the U.S. trading company

Comment 19: Use of Adverse Facts Available regarding the U.S. trading company's sales

BAS's and RTL's Comments

Comment 20: Valuing of inland freight added to surrogate import values for raw materials

Comment 21: Packing materials

Comment 22: Electricity usage

Comment 23: Insurance expense

Comment 24: Labor hours

Comment 25: Electrodes