[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14851]
[[Page Unknown]]
[Federal Register: June 17, 1994]
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DEPARTMENT OF COMMERCE
[A-823-805]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Silicomanganese From
Ukraine
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: June 17, 1994.
FOR FURTHER INFORMATION CONTACT: Stephen Alley or Donna Berg, Office of
Antidumping Investigations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW, Washington, D.C. 20230; telephone: (202) 482-
5288 or (202) 482-0114, respectively.
Preliminary Determination
We preliminarily determine that silicomanganese from Ukraine is
being, or is likely to be, sold in the United States at less than fair
value (LTFV), as provided in section 733 of the Tariff Act of 1930, as
amended (the Act). The estimated margin is shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on December 2, 1993, (58
FR 64553, December 8, 1993), the following events have occurred:
On December 27, 1993, the U.S. International Trade Commission (ITC)
notified us of its preliminary determination that there is a reasonable
indication that an industry in the United States is materially injured,
or threatened with material injury, by reason of imports of
silicomanganese from Ukraine that are alleged to be sold at less than
fair value.
On January 11, 1994, the Department of Commerce (the Department)
sent to the Embassy of Ukraine the antidumping questionnaire. (The
antidumping questionnaire was divided into three sections. Section A
requesting general information on each company, section C requesting
information on, and a listing of, U.S. sales made during the period of
investigation (POI), and section D requesting information on the
production process, including specific amounts of each input used in
manufacturing silicomanganese.) We requested that the Embassy of
Ukraine forward the questionnaire to all Ukrainian exporters and
producers of silicomanganese and ensure that complete questionnaire
responses were submitted on their behalf.
During the week of January 31, 1994, representatives of the
Department met with officials in Ukraine to provide further explanation
regarding the antidumping questionnaire and to answer outstanding
technical and procedural questions.
The two Ukrainian producers/exporters, Nikopol Ferroalloys Plant
(Nikopol) and Zaporozhye Ferroalloys Plant (Zaporozhye) submitted
responses to section A of the questionnaire on February 18, 1994, and
section C of the questionnaire on March 14, 1994. Responses to section
D of the questionnaire were submitted by Zaporozhye and Nikopol on
March 31, 1994, and April 8, 1994, respectively. Petitioners submitted
deficiency comments on April 22, 1994. The Department requested
clarifications regarding the responses from both respondents on May 6,
1994, and additionally from Nikopol on May 13, 1994. Both respondents
submitted these clarifications on May 26, 1994.
On March 2, 1994, the Department determined that this investigation
was extraordinarily complicated due to the dramatic changes occurring
in the Ukrainian economy and, in accordance with section
733(c)(1)(B)(i)(II) of the Tariff Act of 1930, extended the preliminary
determination until June 10, 1994.
On March 15, 1994, the Department requested comments concerning
appropriate surrogate countries for Ukraine from all interested
parties. Only petitioners submitted comments.
Because this investigation involves a non-market economy (NME), on
May 4, 1994, the Department sent Nikopol and Zaporozhye supplemental
questionnaires to elicit information necessary to determine whether
either company merits a separate antidumping rate. To date, neither
respondent has submitted a response.
On May 20, 1994, petitioners alleged that critical circumstances
exist with respect to imports of silicomanganese from Ukraine. Pursuant
to the Department's request, respondents submitted shipment data on
June 1, 1994.
Petitioners provided surrogate value information on May 27, 1994,
and on May 31, 1994, submitted comments to be considered for the
preliminary determination.
Postponement of Final Determination
In accordance with 19 CFR 353.20(b), Nikopol and Zaporozhye, which
together account for all exports of the merchandise covered in this
proceeding, have requested that, in the event of an affirmative
determination, the Department postpone the final determination until
135 days after the date of publication of the preliminary
determination. Because we find no compelling reason to deny the
request, we are postponing the date of the final determination until
not later than 135 days after the date of publication of this notice.
Scope of Investigation
The merchandise covered by this investigation is silicomanganese.
Silicomanganese, which is sometimes called ferrosilicon manganese, is a
ferroalloy composed principally of manganese, silicon, and iron, and
normally containing much smaller proportions of minor elements, such as
carbon, phosphorous and sulfur. Silicomanganese generally contains by
weight not less than 4% iron, more than 30% manganese, more than 8%
silicon and not more than 3% phosphorous. All compositions, forms and
sizes of silicomanganese are included within the scope of these
investigations, including silicomanganese slag, fines and briquettes.
Silicomanganese is used primarily in steel production as a source of
both silicon and manganese. These investigations cover all
silicomanganese, regardless of its tariff classification. Most
silicomanganese is currently classifiable under subheading 7202.30.0000
of the Harmonized Tariff Schedule of the United States (HTSUS). Some
silicomanganese may also be classifiable under HTSUS subheading
7202.99.5040. Although the HTSUS subheading is provided for convenience
and customs purposes, our written description of the scope is
dispositive.
Period of Investigation
The period of investigation (POI) is June 1, 1993, through November
30, 1993.
Surrogate Country
In past antidumping investigations, the Department has considered
Ukraine to be a NME country. Ukraine has not contested this
designation, and we are continuing to consider it a NME country.
Therefore, in accordance with section 773(c) of the Act, the Department
has based foreign market value on factors of production, and has valued
the factors of production using surrogate values from market economy
countries that are at a level of economic development comparable to
that of Ukraine, and that are significant producers of comparable
merchandise.
Due to dramatic and ongoing changes in Ukraine's economy, we were
not able to identify a single preferred surrogate country for Ukraine.
Therefore, we have ranked groups of surrogates into three tiers: Egypt,
Colombia, Morocco, and Peru, which we determined were most similar to
Ukraine in per capita GNP and population size, were assigned to tier
one; Ecuador, Guatemala, Bolivia, the Dominican Republic, and Indonesia
were placed in tier two; and finally, the Philippines and El Salvador
were included in tier three. (See Memorandum from Dave Mueller,
Director, Office of Policy, to Gary Taverman, dated May 2, 1994 on file
in Room B-099 of the Main Commerce Department building.) It should be
noted that although the tiers are ranked hierarchically, the surrogate
countries are not hierarchically ranked within each tier.
We considered surrogate values for the factors of production from
first-tier countries as most desirable and surrogate values from
second-tier countries the next most desirable. Values from third-tier
countries were used only as a last resort when factor-price data were
not available from countries in the first two tiers.
In some instances, we were able to obtain surrogate values for a
particular factor of production from only one country. Where surrogate
values were available from more than one country within a tier, we
averaged the pricing data for all of the countries. We then used the
average price for that tier to value the factor of production. For
purposes of this preliminary determination, we determined that this was
the most objective method given that there was no basis for
distinguishing countries included within the same tier.
When we were not able to value factors of production using
published, publicly-available information from any surrogate country,
we relied on information provided by U.S. embassies and consulates in
the surrogate countries.
Fair Value Comparisons
To determine whether sales of silicomanganese from Ukraine to the
United States were made at less than fair value, we compared the United
States price (USP) to the foreign market value (FMV), as specified in
the ``United States Price'' and ``Foreign Market Value'' sections of
this notice.
United States Price
In accordance with section 772(b) of the Act, we based USP for
Zaporozhye on purchase price because all sales were made to unrelated
parties prior to importation into the United States. For Nikopol, we
have based USP on exporter's sales price (ESP), under section 772(c) of
the Act.
We calculated purchase price for Zaporozhye based on prices to an
unrelated purchaser in the United States. We made deductions, where
appropriate, for foreign inland freight and loading expense (which were
both valued in a surrogate country), to adjust the prices to an ex-
factory basis.
We calculated ESP for Nikopol based on prices at which the
merchandise was sold on various terms to unrelated purchasers in the
United States. We made deductions, where appropriate, for foreign
inland freight and loading expense (which were both valued in a
surrogate country), marine insurance, ocean freight, U.S. customs duty,
U.S. customs brokerage and U.S. inland freight, to adjust the prices to
an ex-factory basis.
In calculating U.S. price for Nikopol, we excluded one sale of
silicomanganese fines because this sale was atypical of Nikopol's U.S.
sales and represented an insignificant amount of Nikopol's total U.S.
sales during the POI.
Foreign Market Value
We calculated FMV based on factors of production reported by
Zaporozhye and Nikopol. The factors used to produce silicomanganese
include materials, labor, and energy. To calculate FMV, the reported
factors of production were valued using prices obtained in surrogate
countries.
In the case of material inputs, we also used surrogate
transportation rates to value the transportation of inputs from their
sources to the silicomanganese factories.
To value manganese ore, we used an average of CIF import values
from two first-tier surrogate countries: Colombia and Egypt. The source
of both values was United Nations Trade Statistics for 1992.
We were unable to find published, publicly-available information
for manganese sinter, and we received no relevant information from the
U.S. diplomatic posts. Therefore, for the preliminary determination, we
have valued this product using manganese ore prices.
To value quartzite, we relied on a publicly-available Moroccan
import value contained in United Nations statistics. To value coke, the
most current publicly-available source was a Colombian value for 1992
exports reported on an FOB basis in statistics published by the United
Nations.
To value electricity, we used publicly-available information from
Colombia contained in the Departamento Nacional de Planeacion's Junta
Nacional de Tarifas de Servicios Publicos (June 1993). We selected this
source because it provided an electricity rate for industrial use
during the POI.
To value natural gas, we relied on an average of two published,
publicly-available values for our first-tier surrogate countries,
Colombia and Morocco. The Colombian value was reported on a FOB
Colombian port basis and was obtained from U.S. import statistics for
1993. The Moroccan value was the average price at which natural gas was
imported into that country in 1992. The source of this value was the
1992 International Trade Statistics Yearbook, Volume 1, 1993. Before
averaging these values, we converted the Moroccan value into a price
per cubic meter.
To value production labor, we used published, publicly-available
values for Egypt from the 1993 Year Book of Labour Statistics, 52nd
edition. We used the most recent statistics available, values from
1987, which we inflated to the POI using statistics published by The
Economist Intelligence Unit: Egypt Country Profile 1993/94.
For selling, general and administrative expenses (SG&A), and
profit, we found no publicly-available, published information. In
addition, we were unable to use information provided by the U.S.
Embassy in Egypt for SG&A and profit because we were unable to
determine the cost bases upon which the Egyptian percentages were
calculated. Therefore, we relied on the statutory minimums of ten
percent for SG&A and eight percent for profit (see section 773(e)(1)(B)
of the Act).
For factory overhead, we also found no publicly-available,
published information. In addition, we were unable to use the
information provided by the U.S. Embassy in Egypt for factory overhead
because we were unable to determine the cost basis upon which the
overhead percentage was calculated. Furthermore, the statute does not
provide any minimum percentage for factory overhead. Therefore, we
relied upon information from the second-tier surrogate country of
Bolivia provided by the U.S. Embassy in Bolivia. This information was
used during the recent antidumping investigation of Refined Antimony
Trioxide (See Final Determination of Sales at Less Than Fair Value:
Refined Antimony Trioxide From the People's Republic of China, 57 FR
6801, February 28, 1992.) The information is in a cable in the public
file for this case (see La Paz Cable 14178, September 23, 1991). Except
as noted below, where necessary, we adjusted the above surrogate
country prices for inflation to the POI using the wholesale price
indices published for each of the surrogate countries by the
International Monetary Fund (IMF). In the case of Peru, we used the
consumer price index of the IMF because the IMF does not publish a
wholesale price index for that country. In the case of Egypt, for which
the IMF publishes neither wholesale nor consumer price indices, we
adjusted for inflation, where necessary, using statistics published by
The Economist Intelligence Unit: Egypt Country Profile 1993/94.
Verification
As provided in section 776(b) of the Act, we will verify the
accuracy of all information used in making our final determination.
Critical Circumstances
Petitioners alleged that critical circumstances exist with respect
to imports of silicomanganese from Ukraine. Pursuant to section
733(e)(1) of the Act and 19 CFR 353.16 (1993), we requested shipment
information from Zaporozhye and Nikopol and attempted to analyze that
information using the Department's standard methodology. To find
critical circumstances, we must determine whether there is a reasonable
basis to believe or suspect that 1) there is a history of dumping in
the United States or elsewhere of the same class or kind of subject
merchandise, or the importer knew or should have known that the
producer or reseller was selling the subject merchandise at less than
its foreign market value; and 2) there have been massive imports of the
subject merchandise over a relatively short period.
We have not found a history of dumping of Ukrainian silicomanganese
in the United States or elsewhere. According to Department practice,
however, we will impute knowledge of dumping to importers of subject
merchandise when the dumping margin exceeds 25 percent in purchase
price situations. In this case, the estimated dumping margin for
silicomanganese imports from Ukraine is 123.02 percent, a rate which
exceeds our benchmark for imputing knowledge of dumping. Therefore, we
have preliminarily found that importers should be imputed knowledge of
dumping of the subject merchandise.
Pursuant to 19 CFR 353.16(f)(2), the Department considers imports
of subject merchandise to be massive if there has been an increase of
15 percent or more over a relatively short period of time. We also
consider, when possible, the respondent's share of import penetration
of the domestic market in making this determination. In this case,
evidence indicates that Ukrainian U.S. market penetration has
increased.
To determine whether imports increased, we have examined the volume
of imports by comparing volumes for the five months subsequent to the
filing of the petition (November 1993 through March 1994) to the five
months prior to the filing of the petition (June 1993 through October
1993). Although Zaporozhye has provided adequate information to perform
an analysis of whether imports have increased, Nikopol has not done so.
Specifically, the shipment information provided by Nikopol was
inconsistent with its sales data. (See the concurrence memorandum,
dated June 10, 1994.) Given that neither company has established its
eligibility for separate dumping margins, the data concerning critical
circumstances must be considered in a consolidated manner. Accordingly,
given the lack of adequate information, we preliminarily determined
that there have been massive imports of silicomanganese from the
Ukraine.
Based on the foregoing, the Department preliminarily finds that
critical circumstances exist in this case.
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the Customs Service to suspend liquidation of all entries of
silicomanganese from Ukraine that are entered, or withdrawn from
warehouse, for consumption on or after 90 days prior to the date of
publication of this notice in the Federal Register. The Customs Service
shall require a cash deposit or posting of a bond equal to the
estimated amount by which the FMV exceeds the USP as shown below. These
suspension of liquidation instructions will remain in effect until
further notice.
The weighted-average dumping margin is as follows:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/producer/exporter margin
percentage
------------------------------------------------------------------------
All exports................................................. 123.02
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary for Import Administration no later than September 23, 1994,
and rebuttal briefs no later than September 28, 1994. In accordance
with 19 CFR 353.38(b), we will hold a public hearing, if requested, to
afford interested parties an opportunity to comment on arguments raised
in case or rebuttal briefs. Tentatively, the hearing will be held on
September 30, 1994, at 2 p.m. at the U.S. Department of Commerce, Room
3708, 14th Street and Constitution Avenue NW., Washington, DC 20230.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
B-099, within ten days of the publication of this notice. Requests
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. In accordance with 19 CFR 353.38(b), oral presentations will
be limited to issues raised in the briefs. We will make our final
determination not later than 135 days from the date of publication of
this notice.
This determination is published pursuant to section 733(f) of the
Act and 19 CFR 353.15(a)(4).
Dated: June 10, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-14851 Filed 6-16-94; 8:45 am]
BILLING CODE 3510-DS-P
