65 FR 35324, June 2, 2000 A-570-828 A-351-824 Sunset Reviews Public Document MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Jeffrey A. May Director Office of Policy SUBJECT: Issues and Decision Memo for the Sunset Review of Silicomanganese from The People's Republic of China and Brazil; Final Results Summary We have analyzed the substantive responses of interested parties in the expedited sunset reviews of the antidumping duty orders covering silicomanganese from the People's Republic of China ("China") and Brazil. We recommend that you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Below is the complete list of the issues in these expedited sunset reviews for which we received substantive responses by parties: 1. Likelihood of continuation or recurrence of dumping Weighted-average dumping margin Volume of imports 2. Magnitude of the margin likely to prevail Margins from investigation Use of a more recent margin History of Order China The Department of Commerce (the "Department") published its final affirmative determination of sales at less than fair value ("LTFV") with respect to imports of silicomanganese from China on November 7, 1994 (59 FR 55435). In this determination, the Department published one weighted-average dumping margin of 150 percent applicable to on all entries of silicomanganese from China. This margin was later affirmed when the Department published its antidumping duty order on silicomanganese from China on December 22, 1994 (59 FR 66003). Since the issuance of the order, the Department has initiated one administrative review covering Guangxi Bayi Ferroalloy Works ("Bayi") and Sichuan Emei Ferroalloy Import and Export Co., Ltd. ("Emei"), for the December 1, 1997, through November 30, 1998, period of review. However, to date, this review has not been completed. The Department has not issued any duty-absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from China. Brazil The Department published its final affirmative determination of sales at LTFV with respect to imports of silicomanganese from Brazil on November 7, 1994 (59 FR 55432). In this determination, the Department published one weighted-average dumping margin and an "all others" rate. Specifically, the rates were 64.93 percent for Companhia Paulista de Ferro-Ligas and Sibra Electro-Siderurgia Brasileria S.A. (the "Ferro- Ligas Group") and 17.60 percent for all others. This margin was later affirmed when the Department published its antidumping duty order on silicomanganese from Brazil onDecember 22, 1994 (59 FR 66003). Since the issuance of the order the Department has completed one administrative review. (1) In that review the Department determined that the dumping margin of 88.88 percent was applicable to the Ferro- Ligas Group for the period June 17, 1994, through November 30, 1995. To date, the Department has not issued any duty-absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from Brazil. Background On November 2, 1999, the Department published the notice of initiation of sunset reviews of the antidumping duty orders on silicomanganese from China and Brazil (64 FR 59160). We received a Notice of Intent to Participate on behalf of Eramet Marietta Inc. ("Eramet"), in each of the two sunset reviews, by November 17, 1999, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. Eramet claimed interested-party status under section 771(9)(C) of the Tariff Act of 1930, as amended ("the Act"), as a domestic producer of silicomanganese. (2) We received a complete substantive response, in each of the two sunset reviews, on behalf of Eramet, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). In its substantive response, Eramet indicated that Elkem, now Eramet, was the petitioner in the original investigations and participated actively in these proceedings since their inception. We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct expedited, 120-day, reviews of these orders. In accordance with section 751(c)(5)(C)(v) of the Tariff Act of 1930, as amended ("the Act"), the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). The reviews at issue concern transition orders within the meaning of section 751(c)(6)(C)(ii) of the Act. Therefore, the Department determined that the sunset reviews of the antidumping duty orders on silicomanganese from China and Brazil are extraordinarily complicated and extended the time limit for completion of the final results of these reviews until not later than May 30, 2000, in accordance with section 751(c)(5)(B) of the Act. (3) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted these sunset reviews to determine whether revocation of the antidumping duty orders would be likely to lead to continuation or recurrence of dumping. Section 752(c) of the Act provides that, in making this determination, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping duty order. In addition, section 752(c)(3) of the Act provides that the Department shall provide to the International Trade Commission ("the Commission") the magnitude of the margin of dumping likely to prevail if the order is revoked. Below we address the comments of interested parties. Likelihood of Continuation or Recurrence of Dumping: Interested-Party Comments In its substantive responses, Eramet argues that revocation of the antidumping duty orders would likely lead to continuation or recurrence of dumping by Chinese and Brazilian manufacturers and exporters of the subject merchandise. Eramet asserts that dumping has continued throughout the life of the orders at levels above de minimis. With respect to imports of the subject merchandise from China, Eramet comments that, after the issuance of the order, imports from China virtually ceased. (4) With respect to the Brazilian order, Eramet asserts that the Ferro-Ligas Group, the only producer/exporter that has participated in the antidumping proceeding, has increased the level at which it dumps silicomanganese in the United States. Moreover, Eramet states that there were no shipments of the subject merchandise exported from Brazil to the United States between January 1996 and September 1999. In summary, Eramet argues that the Department should determine that there is a likelihood that dumping would continue were the orders revoked because (1) dumping margins at levels above de minimis have been in place since the imposition of the orders and (2) imports of the subject merchandise have declined significantly, and in recent years ceased, since the imposition of the orders. Department's Position Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("SAA"), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order-wide basis (see section II.A.2 of the Sunset Policy Bulletin). In addition, the Department indicated that it will normally determine that revocation of an antidumping duty order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3). In addition to considering the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of the order would be likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In these instant reviews, the Department did not receive a substantive response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. As noted above, the Department has conducted administrative reviews of these orders finding dumping margins above de minimis for each producer/exporter reviewed. The Department also considered the volume of imports before and after issuance of the orders. Based on U.S. Customs import statistics, the Department disagrees with Eramet's assertion that imports of the subject merchandise ceased following the imposition of the orders. Eramet's statement that imports ceased after the issuance of the orders was based solely on one HTSUS subheading rather than the two HTSUS subheadings which cover the subject merchandise. When both HTSUS subheadings are examined, the data indicates that imports have decreased, not ceased, since the issuance of the orders. Notwithstanding Eramet's assertion that imports of silicomanganese from China and Brazil have ceased in recent years, the Department can confirm that deposit rates above de minimis remain in effect for exports of silicomanganese by all Chinese and Brazilian manufacturers/exporters subject to the orders. As set forth in the Sunset Policy Bulletin (section II.A.3), and consistent with the SAA at 889-90 and the House Report at 63-64, if companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. In the instant cases, dumping margins at levels above de minimis have continued to exist for shipments of the subject merchandise throughout the life of the orders. Based on our analysis of the records in these proceedings, we find that the existence of dumping margins after the issuance of the orders is highly probative of the likelihood of continuation or recurrence of dumping. Dumping margins at levels above de minimiscontinue in effect for exports of silicomanganese by all Chinese and Brazilian manufacturers and/or exporters subject to the orders. Therefore, given that dumping has continued over the life of the orders and respondent interested parties have waived their right to participate in these reviews before the Department, and absent argument and evidence to the contrary, the Department determines that dumping is likely to continue if the orders were revoked. Magnitude of the Margin Likely to Prevail: Interested-Party Comments In its substantive responses, Eramet recommends that, consistent with the Sunset Policy Bulletin,the Department provide to the Commission the company-specific margins from the original investigations for all companies other than the Ferro- Ligas Group. Moreover, regarding companies not reviewed in the original investigations, Eramet suggests that the Department report the "all others" rates included in the original investigations. However, Eramet asserts that the Department should find that the margin of dumping likely to prevail for the Ferro- Ligas Group is the weighted-average dumping margin found in the 1994-95 review, 88.87 percent (62 FR 37869), because the increased margin reflects more accurately the Ferro-Ligas Group's likely behavior in the absence of an order. Department's Position In the Sunset Policy Bulletin, the Department stated that it will normally provide to the Commission the margin that was determined in the final determination in the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the "all others" rate from the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty-absorption determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.) We determine that the margins from the original investigations are probative of the behavior of Chinese and Brazilian manufacturers and exporters of silicomanganese if the orders were revoked because they are the only calculated rates which reflect the behavior of exporters without the discipline of the orders in place. We do not agree, however, that the use of a more recently calculated margin is appropriate in the Brazilian review for the Ferro-Ligas Group. Absent argument and company- specific data indicating that the Ferro-Ligas Group chose to increase dumping in order to maintain or increase market share, the Department will provide the Commission with the rate calculated for the Ferro-Ligas Group in the original investigation. Recommendation Based on our analysis of the substantive responses received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of reviews in the Federal Register. AGREE_________ DISAGREE___________ _____________________________________________________________________________ End Notes 1. See Silicomanganese from Brazil: Final Results of Antidumping Duty Administrative Review, 62 FR 37869 (July 15, 1997). 2. Eramet asserts that on June 30, 1999, Elkem Metals Company ("Elkem"), the original petitioner, sold its silicomanganese operations to Eramet SA. As a result, Eramet, a subsidiary of Eramet SA, now owns these operations. 3. 4. Eramet notes that Bayi and Emei reported a very small volume of sales to the United States during the ongoing 1997-98 administrative review of the Chinese order.