65 FR 35609, June 5, 2000 A-570-806 Sunset Review 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 Expedited Sunset Review of the Antidumping Duty Order on Silicon Metal from the People's Republic of China; Final Results Summary: We have analyzed the substantive response of domestic interested parties in the expedited sunset review of the antidumping duty order on silicon metal from the People's Republic of China ("PRC"). We recommend that you approve the positions we have developed in theDiscussion of the Issues section of this memorandum for these final results of review. Below is the complete list of the issues in this expedited sunset review for which we received comments 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 the investigation History of the Order: On June 10, 1991, the Department published an antidumping duty order on silicon metal from the PRC, in which the Department determined a margin of 139.49 percent for all Chinese producers/exporters of subject merchandise (56 FR 26649). There has been one administrative review of this order, covering the period June 1, 1996, through May 31, 1997, in which the Department determined a country-wide rate of 139.49 percent (63 FR 37850, July 14, 1998). There has been one scope clarification in this proceeding. In response to a request by domestic interested parties for clarification of the scope of the antidumping duty order, the Department determined that silicon metal containing between 89.00 percent and 99.00 percent silicon by weight, but which contains a higher aluminum content than the silicon metal containing at least 96.00 percent, but less than 99.99 percent silicon by weight, is the same class or kind of merchandise as the silicon metal described in the original order (58 FR 27542, May 10, 1993). Therefore, such material is within the scope of the order on silicon metal from the PRC. Id. There have been no duty absorption findings or changed circumstances reviews in this proceeding. Background: On November 2, 1999, the Department initiated a sunset review of the antidumping duty order on silicon metal from the PRC (64 FR 59160), pursuant to section 751(c) of the Tariff Act of 1930, as amended ("the Act"). The Department received a notice of intent to participate on behalf of American Silicon Technologies ("AST"), Elkem Metals Company ("Elkem"), and Globe Metallurgical Inc. ("Globe") (collectively, "domestic interested parties"), within the applicable deadline (November 15, 1999) specified in 19 CFR 351.218(d)(1)(i). Domestic interested parties claimed interested-party status under section 771(9)(C) of the Act, as U.S. producers of a domestic like product. On December 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the Sunset Regulations under 19 CFR 351.218(d)(3)(i). Domestic interested parties claim that, in 1990, Elkem, Globe, and four other domestic producers filed the petition that resulted in the issuance of the antidumping duty order on silicon metal from the PRC (see December 1, 1999, Substantive Response of domestic interested parties at 2). Domestic interested parties also claim that at least one of them has actively participated in each of the administrative reviews conducted by the Department, as well as in a number of related appeals and remand proceedings. Id. at 3. Without a substantive response from respondent interested parties, the Department, pursuant to 19 CFR 351.218(e)(1)(ii)(C), determined to conduct an expedited, 120-day review of this order. In accordance with section 751(c)(5)(C)(v) of 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). This review concerns a transition order within the meaning of section 751(c)(6)(C)(ii) of the Act. Accordingly, on February 29, 2000, the Department determined that the sunset review of silicon metal from the PRC is extraordinarily complicated, and extended the time limit for completion of the final results of this review until not later than May 30, 2000, in accordance with section 751(c)(5)(B) of the Act. (1) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted this review to determine whether revocation of the antidumping duty order 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 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 the domestic interested parties. 1. Likelihood of Continuation or Recurrence of Dumping Interested Party Comments In their substantive response of December 1, 1999, domestic interested parties contend that revocation of the subject order would result in continued and increased dumping of Chinese silicon metal in the United States. Citing the Sunset Policy Bulletin and the Statement of Administrative Action ("SAA") with respect to likelihood of dumping at any level above de minimis after the issuance of the order, domestic interested parties note that the Department's margin determination of 139.49 percent for all Chinese exporters has remained unchanged since the order was issued (see December 2, 1999, Substantive Response of domestic interested parties at 5). Domestic interested parties contend that during the more than eight years the order has been in place, no exporter of silicon metal from the PRC has demonstrated that it can ship silicon metal to the United States without dumping (or at a lower margin). Id. Further, domestic interested parties assert that, according to the U.S. Census Bureau's data, the volume of silicon metal imported into the United States from the PRC on which duty was paid has fallen to a small fraction of the pre- order level. Id. In fact, virtually no silicon metal from the PRC on which duty was paid has been imported into the United States since 1998. Id. Therefore, domestic interested parties assert that, based on these facts, in accordance with the Sunset Policy Bulletin,the Department should determine that dumping is likely to continue or recur if the antidumping duty order is revoked. Id. at 6. 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 ("the SAA"), H.R. Doc. No. 103-316, vol. 1 (1994), 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 bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis (see section II.A.2). In addition, the Department indicated that, normally, it will 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 consideration of the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of an order is likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In the instant review, the Department did not receive an adequate response (in this case, no response) from any respondent interested party. Pursuant to 19 CFR 351.218(d)(2)(iii), this constitutes a waiver of participation. As discussed in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, 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. We note that the country-wide rate of 139.49 percent has remained unchanged throughout the history of the order. Consistent with section 752(c) of the Act, the Department also considered the volume of imports before and after issuance of the order. According to the import statistics provided by domestic interested parties and, as confirmed by Census IM145 reports statistics, imports decreased dramatically, beginning in 1991 when the order was first issued, through 1999. In the seven-year period following the issuance of the order (April 1991), imports consistently remained steady at approximately 20 percent of pre-order levels. Based on this analysis, the Department finds that the existence of dumping margins after the issuance of the order is highly probative of the likelihood of continuation or recurrence of dumping. Therefore, given that dumping continued after the issuance of the order, average imports from 1991 through 1999 continued at levels far below pre-order levels, and that respondent interested parties waived participation in the review, we determine that dumping is likely to continue if the order were revoked. 2. Magnitude of the Margin Likely to Prevail: Interested Party Comments: In their substantive response, domestic interested parties cite to the Act and the Sunset Policy Bulletin and assert that, because the Department's original country- wide rate of 139.49 percent has remained unchanged, and import volumes have decreased dramatically as a result of the antidumping duty order, the Department should report to the Commission 139.49 percent for all Chinese producers/exporters. 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). Absent a corresponding increase in the margin of dumping and the volume of imports, consistent with the SAA at 890 and the House Report at 64, the Department normally will select a margin from the investigation, because that is the only calculated rate that reflects the behavior of exporters without the discipline of an order in place. The Department agrees with the arguments of the domestic interested parties. We find that the original rate of 139.49 percent is the appropriate rate to report to the Commission because it remained unchanged in 1996/97 reviews and, according to the IM145 reports, average imports decreased significantly during the period following the issuance of the order. Furthermore, it is the only margin ever determined in this proceeding. Therefore, we will report to the Commission the original rate of 139.49 percent for all Chinese producers/exporters because this is the only rate that reflects the behavior of the exporters without the discipline of the order in place. As such, the Department will report to the Commission the margin contained in the Final Results of Review section of this decision memo. Final Results of Review We determine that revocation of the antidumping duty order on silicon metal from China would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margin: Manufacturer/exporters Margin (percent) All Chinese Producers/Exporters 139.49 Recommendation Based on our analysis of the comments received, we recommend adopting all of the above positions. If the recommendations are accepted, we will publish the Final Results of Review in the Federal Register. AGREE______ DISAGREE______ _________________________________________________________________________________ End Notes 1. See Extension of Time Limit for Final Results of Expedited Five-Year Reviews, 65 FR 11761 (March 6, 2000).