65 FR 35607, June 5, 2000 A-351-806 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 Brazil; 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 Brazil. We recommend that you approve the positions we have developed in the Discussion 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 Use of a more recent margin History of the Order: On July 31, 1991, the Department published an antidumping duty order on silicon metal from Brazil (56 FR 36135). The Department assigned Companhia Brasileira Carbureto de Calcio ("CBCC") a margin of 87.79 percent, Camargo Correa Metais, S.A. ("CCM") a margin of 93.20 percent, and "all others" a margin of 91.06 percent. Id. There have been seven completed administrative reviews of this order. Period of Review Citation 29 Mar 1991 - 30 June 1992 59 FR 42806 (August 19, 1994) 1 July 1992 - 30 June 1993 62 FR 47441 (September 9, 1997) Amended 1 July 1993 - 30 June 1994 62 FR 54094 (October 17, 1997) Amended 1 July 1994 - 30 June 1995 62 FR 54087 (October 17, 1997) Amended 1 July 1995 - 30 June 1996 63 FR 6899 (February 11, 1998) 1 July 1996 - 30 June 1997 64 FR 6305 (February 9, 1999) 1 July 1997 - 30 June 1998 65 FR 7497 ( February 15, 2000) 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 on silicon metal from the People's Republic of China, the Department determined that silicon metal containing between 89 percent and 99 percent silicon by weight, but which contains a higher aluminum content than the silicon metal containing at least 96 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 now within the scope of the order on silicon metal from Brazil (64 FR 6305, February 9, 1999). 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 Brazil (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 November 29, 1999, we received a waiver of response from respondent interested parties CCM, CBCC, Ligas de Aluminio S.A. ("LIASA"), Companhia Ferroligas Minas Gerais - Minasligas ("Minasligas"), and RIMA Industrial S.A. ("RIMA"), pursuant to 19 CFR 351.218(d)(2)(i). On December 2, 1999, we received a waiver of response from respondent interested party Eletrosilex Bela Horizonte ("Electrosilex"). 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 Brazil (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)(ii) of the Act. Accordingly, on February 29, 2000, the Department determined that the sunset review of silicon metal from Brazil 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 Brazilian 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 assert that, even though certain companies have received zero margins in certain reviews, the overall pattern of conduct since the issuance of the order has been one of continued dumping at levels far above de minimis. Domestic interested parties note that the every Brazilian producer that made commercial sales of silicon to the United States has been found to be dumping at a rate exceeding 30 percent during the life of the order. Id. at 5. Moreover, no Brazilian producer has been found to have sustained dumping margins below de minimis for more than two consecutive years during the eight-year life of the order. Id. Therefore, domestic interested parties assert that this history of continued dumping at levels above de minimis conclusively demonstrates that dumping is likely to continue or recur if the antidumping duty order is revoked. Id. In addition, domestic interested parties also assert that the Department's data shows that the volume of imports decreased from 29,106 metric tons ("MT") during 1990 (the year the petition was filed), to as little as 338 MT per annum while the dumping order has been in place. Id. Further, domestic interested parties contend that U.S. Census Bureau data show that the volume of silicon metal imported into the United States from Brazil has significantly decreased since the antidumping duty order's issuance in 1991. Id. 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, respondent interested parties waived their 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 there have been above de minimis margins for at least one of the investigated companies in each administrative review 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 IM146 reports statistics, average imports of subject merchandise during the period 1992 through 1994 have significantly decreased from their pre-order levels. Although imports began to increase in 1995, average imports from 1995 through 1999 were determined by the Department to be lower than average 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 continued at levels below pre-order levels from 1992 through 1999, and respondent interested parties waived their right to participate in this 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 the Department should, in the case of CCM, report to the Commission a margin of 93.20 percent because this margin was calculated in the original investigation and reflects the behavior of the exporter without the discipline of the order in place (see December 1, 1999, Substantive Response of domestic interested parties at 7). Domestic interested parties note that the Department found a margin of 35.23 percent for CCM in two of its administrative reviews. Further, although CCM's dumping margins declined since the original investigation, its import volume did not increase, but rather decreased over the same period and, since the 1994/95 review, CCM has not imported any silicon metal into the United States. Id. at 7-8. Accordingly, the Department should report to the Commission the original margin of 93.20 percent for CCM. Id. at 8. With respect to the margin for CBCC, domestic interested parties assert that the Department should specify a margin of 87.79 percent based on the company-specific margin calculated in the original investigation. Id. Domestic interested parties note that, while CBCC has received zero margins in the last two completed reviews (the 1995/96 and 1996/97 reviews), CBCC has engaged in dumping at high margins in various periods during the life of the order. Id. Specifically, although CBCC had a zero margin during the 1995/96 review, the company's annual volume of sales to the United States was only 264 metric tons ("MT"), less than one-sixth the volume of U.S. sales during the previous review. Id. In the 1996/97 review, although CBCC's annual U.S. sales increased to 3,000 MT, this annual level of sales was still significantly below the level of U.S. sales for CBCC during the period of investigation. Id. Domestic interested parties note that, according to the Sunset Policy Bulletin, the Department uses a lower current rate only if the dumping margins declined over the life of the order and imports have remained steady or increased. Id. at 9. Therefore, in this case, because the level of imports has fallen since the order was in place, the Department must reasonably conclude that the margin of 87.79 percent from the original investigation is the only margin that reflects the behavior of CBCC without the discipline of the order in place. Id. For the remaining four companies, Electrosilex, LIASA, Minasligas, and RIMA, domestic interested parties contend that, according to the Sunset Policy Bulletin, the Department should specify for each company not specifically investigated a margin of 91.06 percent, the margin based on the "all others" rate from the investigation. Domestic interested parties add that there is no basis for providing a lower margin to the Commission for any of these companies because there is no evidence demonstrating that the margins for any company have consistently declined over the life of the order while the volume of imports remained steady or increased. Id. at 10. 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. With respect to CCM's rate, we find that the original rate of 93.20 percent is the appropriate rate to report to the Commission. Although the Department determined a lower rate of 35.23 percent for CCM in the 1993/94 and 1994/95 reviews, these lower rates do not correspond to an increase in imports. According to the IM145 reports, average imports decreased significantly from 1992 through 1999, the period after the issuance of the order. Therefore, without a corresponding increase in the margin of dumping and the volume of imports, we will report to the Commission the original rate of 93.20 percent for CCM because this is the only rate that reflects the behavior of the exporter without the discipline of an order in place. With respect to CBCC's rate, we find that the original rate of 87.79 percent is the appropriate rate to report to the Commission. Although the Department determined zero margins in the 1995/96 and 1996/97 reviews, and a de minimis margin of 0.05 percent in the 1997/98 review for CBCC, average imports decreased from pre- order levels. The Sunset Policy Bulletinstates that the Department may use a lower current rate if the dumping margins declined over the life of the order and imports have remained steady or increased. Therefore, without a corresponding increase in the margin of dumping and the volume of imports, we will report to the Commission the original rate of 87.79 percent for CBCC because this is the only rate that reflects the behavior of the exporter without the discipline of an order in place. With respect to Electrosilex, LIASA, Minasligas, and RIMA, the Department will report to the Commission the "all others" rate of 91.06 percent from the original investigation. According to the Sunset Policy Bulletin, the Department will normally provide the "all others" rate for companies not specifically investigated in the original investigation. As such, the Department will report to the Commission the margins 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 Brazil would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: Manufacturer/exporters Margin (percent) Companhia Brasileira Carbureto de Calcio ("CBCC") 87.79 Camargo Correa Metais, S.A. ("CCM") 93.20 All Others 91.06 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).