[Federal Register Volume 75, Number 117 (Friday, June 18, 2010)]
[Notices]
[Pages 34689-34699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14391]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-832]
Pure Magnesium From the People's Republic of China: Preliminary
Results of the 2008-2009 Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from interested parties, the
Department of Commerce (``the Department'') is conducting an
administrative review of the antidumping duty order on pure magnesium
from the People's Republic of China (``PRC''), covering the period May
1, 2008, through April 30, 2009.
We have preliminarily determined that the respondent in this
administrative review has made sales in the United States at prices
below normal value during the period of review (``POR''). We have also
preliminarily determined that two companies for which a review was
requested have not been responsive and, thus, have not demonstrated
entitlement to a separate rate. As a result, we have preliminarily
determined that they are part of the PRC-Wide Entity and have assigned
them the PRC-Wide Entity rate. If these preliminary results are adopted
in the final results of review, we will instruct U.S. Customs and
Border Protection (``CBP'') to assess antidumping duties on all
appropriate entries.
We invite interested parties to comment on these preliminary
results. Parties who submit comments are requested to submit with each
argument a summary of the argument. We intend to issue the final
results no later than
[[Page 34690]]
120 days from the date of publication of this notice, pursuant to
section 751(a)(3)(A) of the Tariff Act of 1930, as amended (``the
Act'').
DATES: Effective Date: June 18, 2010.
FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Eugene Degnan, AD/
CVD Operations, Office 8, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4243 and (202) 482-0414, respectively.
Background
On May 12, 1995, the Department published in the Federal Register
the antidumping duty order on pure magnesium from the PRC.\1\ On May 1,
2009, the Department published in the Federal Register a notice of
opportunity to request an administrative review of the antidumping duty
order on pure magnesium from the PRC for the period May 1, 2008,
through April 30, 2009.\2\ On May 28, 2009, in accordance with 19 CFR
351.213(b)(2), Tianjin Magnesium International, Co. Ltd. (``TMI''), a
foreign exporter of the subject merchandise, requested the Department
to review its sales of subject merchandise. On May 29, 2009, US
Magnesium LLC (``Petitioner'') requested that the Department conduct an
administrative review of the exports of subject merchandise of TMI,
Tianjin Xianghaiqi Resources Import & Export Trade Co., Ltd. (``TXR''),
and Pan Asia Magnesium Co., Ltd. (``Pan Asia''). On the same date,
Alcoa Inc. and Alumax Mill Products (collectively, ``Alcoa''), a
domestic interested party, requested a review of TXR. On June 24, 2009,
the Department initiated an administrative review of the order on pure
magnesium from the PRC for the POR with respect to TMI, TXR and Pan
Asia.\3\
---------------------------------------------------------------------------
\1\ See Notice of Antidumping Duty Orders: Pure Magnesium From
the People's Republic of China, the Russian Federation and Ukraine;
Notice of Amended Final Determination of Sales at Less Than Fair
Value: Antidumping Duty Investigation of Pure Magnesium From the
Russian Federation, 60 FR 25691 (May 12, 1995).
\2\ See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity To Request Administrative
Review, 74 FR 20278 (May 1, 2009).
\3\See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Requests for Revocation in Part. 74 FR
30052 (June 24, 2009).
---------------------------------------------------------------------------
On August 3, 2009, Trade Bridge, counsel for TXR and Pan Asia,
withdrew its representation for these companies. On August 4, 2009, the
Department issued its antidumping duty questionnaire to TMI, TXR, and
Pan Asia by FedEx. TXR received and signed for the hard copy of the
Department's questionnaire on August 7, 2009, and Pan Asia received and
signed for the hard copy of the Department's questionnaire on August 8,
2009.\4\ However, neither TXR, nor Pan Asia responded to the
Department's antidumping duty questionnaire. On September 1, 2009, TMI
timely submitted its Section A questionnaire response (``TMI's AQR'').
On September 15, 2009, TMI submitted its Section C questionnaire
response (``TMI's CQR'') and on September 29, 2009, TMI submitted its D
questionnaire response (``TMI's DQR''). On November 10, 2009,
Petitioner submitted comments on TMI's AQR, CQR, and DQR. On December
23, 2009, the Department issued its first supplemental questionnaire to
TMI. On January 12, 2010, Petitioner requested that the Department
conduct verification of TMI in accordance with 19 CFR
351.307(b)(1)(iv). On February 9, 2010, TMI submitted its response to
the Department's sections A, C, and D supplemental questionnaire
(``TMI's 1st SQR''). On March 31, 2010, the Department issued the
second supplemental questionnaire to TMI and the Department received a
response on April 12, 2010.
---------------------------------------------------------------------------
\4\ See Memorandum to the file, ``Pure Magnesium from the
People's Republic of China, Tianjin Xianghaiqi Resources Import and
Export Trade Co., Ltd. (``TXR'') and Pan Asia Magnesium Co., Ltd.
(``Pan Asia''): Transmittal of FEDEX Receipt Documentation,'' dated
May 11, 2010.
---------------------------------------------------------------------------
On September 15, 2009, the Department requested that import
Administration's Office of Policy provide a list of surrogate countries
for this review.\5\ On October 13, 2009, the Office of Policy issued
its list of surrogate countries.\6\ On October 16, 2009, the Department
issued a letter to interested parties seeking comments on surrogate
country selection and surrogate values (``SV5''). On October 30, 2009,
Petitioner and TMI submitted comments on surrogate country selection
(``Petitioner's Surrogate Country Selection Letter'' and ``TMI's
Surrogate Country Selection Letter,'' respectively). On November 12,
2009, Petitioner and TMI submitted SV comments (``Petitioner's SV
Comments'' and ``TMI's SV Comments,'' respectively). On November 25,
2009, Petitioner submitted rebuttal SV comments. On November 27, 2009,
TMI submitted rebuttal SV comments. On December 7, 2009, TMI submitted
additional SV comments.
---------------------------------------------------------------------------
\5\ See Memorandum to Kelly Parkhill, Acting Director, Office of
Policy, ``Antidumping Duty Administrative Review of Pure Magnesium
from the People's Republic of China: Surrogate-Country Selection,''
dated September 15, 2009.
\6\ See Memorandum from Kelly Parkhill, Acting Director, Office
of Policy, ``Request for a list of Surrogate Countries for an
Administrative Review of the Antidumping Duty Order on Pure
Magnesium (``Pure Magnesium'') from the People's Republic of China,
dated October 13, 2009 (``Surrogate Country List'').
---------------------------------------------------------------------------
On January 6, 2010, the Department extended the time period for
completion of the preliminary results of this review by 120 days until
May 31, 2010.\7\
---------------------------------------------------------------------------
\7\ See Pure Magnesium from the Peoples Republic of China:
Extension of Time for the Preliminary Results of the Antidumping
Duty Administrative Review 75 FR 2108 (January 14, 2010).
---------------------------------------------------------------------------
On February 18, 2010, the Department requested that CBP provide
entry documentation for certain of TMI's transactions during the
POR.\8\
---------------------------------------------------------------------------
\8\ See Memorandum to Alice Buchanan, Acting Director, AD/CVD/
Revenue Policy & Programs, Office of International Trade, U.S.
Customs and Border Protection, ``Request for U.S. Entry Documents--
Pure Magnesium from People's Republic of China--A-570-832,'' dated
February 18, 2010.
---------------------------------------------------------------------------
As explained in the memorandum from the Deputy Assistant Secretary
for Import Administration, the Department has exercised its discretion
to toll deadlines for the duration of the closure of the Federal
Government from February 5, through February 12, 2010. Thus, all
deadlines in this segment of the proceeding have been extended by seven
days. As a result, the revised deadline for the preliminary results of
this administrative review became June 7, 2010.\9\
---------------------------------------------------------------------------
\9\ See Memorandum to the Record from Ronald Lorentzen, DAS for
Import Administration, regarding ``Tolling of Administrative
Deadlines As a Result of the Government Closure During the Recent
Snowstorm,'' dated February 12, 2010.
---------------------------------------------------------------------------
Verification
As provided in section 782(i)(3) of the Act, we verified the
information from TMI upon which we have relied in making our
preliminary results of review from April 19, 2010 to May 6, 2010. The
Department's verification report is on the record of this review in the
Central Records Unit, Room 1117 of the main Department building.\10\ We
used standard verification procedures, including examination of
relevant accounting and production records, as well as original source
documents provided by the respondent.
---------------------------------------------------------------------------
\10\ See Memorandum to the File ``Antidumping Duty
Administrative Review of Pure Magnesium From the People's Republic
of China: Verification of the Sales and Factors of Production
(``FOP'') of Tianjin Magnesium Industries (``TMI''),'' dated June 7,
2010.
---------------------------------------------------------------------------
Period of Review
The POR is May 1, 2008, through April 30, 2009.
[[Page 34691]]
Scope of Order
Merchandise covered by the order is pure magnesium regardless of
chemistry, form or size, unless expressly excluded from the scope of
the order. Pure magnesium is a metal or alloy containing by weight
primarily the element magnesium and produced by decomposing raw
materials into magnesium metal. Pure primary magnesium is used
primarily as a chemical in the aluminum alloying, desulfurization, and
chemical reduction industries. In addition, pure magnesium is used as
an input in producing magnesium alloy. Pure magnesium encompasses
products (including, but not limited to, butt ends, stubs, crowns and
crystals) with the following primary magnesium contents:
(1) Products that contain at least 99.95% primary magnesium, by
weight (generally referred to as ``ultra pure'' magnesium);
(2) Products that contain less than 99.95% but not less than 99.8%
primary magnesium, by weight (generally referred to as ``pure''
magnesium); and
(3) Products that contain 50% or greater, but less than 99.8%
primary magnesium, by weight, and that do not conform to ASTM
specifications for alloy magnesium (generally referred to as ``off-
specification pure'' magnesium).
``Off-specification pure'' magnesium is pure primary magnesium
containing magnesium scrap, secondary magnesium, oxidized magnesium or
impurities (whether or not intentionally added) that cause the primary
magnesium content to fall below 99.8% by weight. It generally does not
contain, individually or in combination, 1.5% or more, by weight, of
the following alloying elements: aluminum, manganese, zinc, silicon,
thorium, zirconium and rare earths.
Excluded from the scope of the order are alloy primary magnesium
(that meets specifications for alloy magnesium), primary magnesium
anodes, granular primary magnesium (including turnings, chips and
powder) having a maximum physical dimension (i.e., length or diameter)
of one inch or less, secondary magnesium (which has pure primary
magnesium content of less than 50% by weight), and remelted magnesium
whose pure primary magnesium content is less than 50% by weight.
Pure magnesium products covered by the order are currently
classifiable under Harmonized Tariff Schedule of the United States
(``HTSUS'') subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00,
8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope is dispositive.
Non-Market Economy Country Status
The Department has treated the PRC as a non-market economy
(``NME'') country in all past antidumping duty investigations and
administrative reviews and continues to do so in this case.\11\ The
Department has previously examined the PRC's market economy status and
determined that NME status should continue for the PRC.\12\ In
accordance with section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the administering authority.\13\ No interested party to this
proceeding has contested such treatment. Accordingly, we calculated
normal value (``NV'') using a factors of production (``FOP'')
methodology in accordance with section 773(c) of the Act, which applies
to NME countries.
---------------------------------------------------------------------------
\11\ See 771(18)(C) of the Act; see, e.g., Pure Magnesium from
the People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 73 FR 76336 (December 16, 2008) (``Pure
Magnesium 06-07''); and Frontseating Service Valves From the
People's Republic of China: Final Determination of Sales at Less
Than Fair Value and Final Negative Determination of Critical
Circumstances, 74 FR 10886 (March 13, 2009).
\12\ See Memorandum from the Office of Policy to David M.
Spooner, Assistant Secretary for Import Administration, The People's
Republic of China (PRC) Status as a Non-Market Economy (NME), dated
May 15, 2006. This document is available online at http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf.
\13\ See section 771(18)(C)(i) of the Act.
---------------------------------------------------------------------------
Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs it to base NV on the NME
producer's FOPs. The Act further instructs that valuation of the FOPs
shall be based on the best available information in a surrogate market-
economy country or countries considered to be appropriate by the
Department.\14\ When valuing the FOPs, the Department shall utilize, to
the extent possible, the prices or costs of FOPs in one or more market-
economy countries that are: (1) At a level of economic development
comparable to that of the NME country; and (2) significant producers of
comparable merchandise.\15\ Further, the Department normally values all
FOPs in a single surrogate country.\16\ The sources of SVs are
discussed under the ``Normal Value'' section below and in the Factor
Valuation Memorandum, which is on file in the Central Records Unit,
Room 1117 of the main Department building.\17\
---------------------------------------------------------------------------
\14\ See section 773(c)(1) of the Act.
\15\ See section 773(c)(4) of the Act.
\16\ See 19 CFR 351.408(c)(2).
\17\ See Memorandum to the File, ``2008-2009 Administrative
Review of the Antidumping Duty Order on Pure Magnesium from the
People's Republic of China: Factor Valuation Memorandum for the
Preliminary Results,'' dated June 7, 2010 (``Factor Valuation
Memorandum'').
---------------------------------------------------------------------------
In examining which country to select as its primary surrogate
country for this proceeding, the Department first determined that
India, the Philippines, Indonesia, Colombia, Thailand, and Peru are
countries comparable to the PRC in terms of economic development.\18\
In Petitioner's Surrogate Country Selection Letter, Petitioner contends
that the Department should continue to select India as the surrogate
country for this administrative review, as it has in previous segments
of this proceeding. In addition, Petitioner maintains that to the best
of its knowledge, there are no magnesium producers currently operating
in any of the six countries identified in the Surrogate Country
Memorandum.\19\ Petitioner states that Southern Magnesium & Chemicals
Ltd. (``Southern Magnesium''), which is located in India, has either
downsized or ceased its magnesium production operations.\20\ Petitioner
argues, however, that India is a significant producer of aluminum and
the Department has ``routinely determined that aluminum is a product
comparable to magnesium production.'' \21\ Petitioner states that India
has five major producers of aluminum.\22\ Additionally, Petitioner
contends that the Department determined that zinc is the only other
merchandise that the Department has found to be comparable to
magnesium,\23\ and India is a significant producer of zinc.\24\
Finally, Petitioner
[[Page 34692]]
contends that India is the best available surrogate country for this
proceeding because India is known to have complete, up-to-date, and
reliable publicly available information for all raw material FOPs.\25\
Petitioner states that India is the only potential surrogate country
that can be a source for surrogate financial ratios because India is a
significant producer of aluminum and zinc.\26\
---------------------------------------------------------------------------
\18\ See Surrogate Country List.
\19\ See Petitioner's Surrogate Country Selection Letter, at 3.
\20\ See 2002 Annual Report of Southern Magnesium, contained in
Petitioner's Surrogate Country Selection Letter, at 3 and Exhibit 2.
\21\ See Petitioner's Surrogate Country Selection Letter, at 4,
citing Pure Magnesium 06-07 and accompanying Issues and Decision
Memorandum at Comment 6.D.
\22\ See Petitioner's Surrogate Country Selection Letter, at 4,
citing The Mineral Industry of India--2007, at Table 2, U.S.
Geological Survey (``USGS''), contained in Exhibit 3; also citing
USGS Minerals Yearbook Zinc--2006 at Table 16, contained in Exhibit
4.
\23\ See Petitioner's Surrogate Country Selection Letter, at 5,
citing Notice of Final Determination of Sales at Not Less Than Fair
Value: Pure Magnesium From the Russian Federation, 66 FR 49347
(September 27, 2001), at Comment 1.
\24\ See Petitioner's Surrogate Country Selection Letter, at 5,
citing USGS Minerals Yearbook, Zinc--2007, at Table 2, contained in
Exhibit 3. See also USGS 2007 Minerals Yearbook, Zinc (Advance
Release), at Table 13, contained in Exhibit 4.
\25\ See Petitioner's Surrogate Country Selection Letter, at 5-
6.
\26\ Id.
---------------------------------------------------------------------------
In TMI's Surrogate Country Selection Letter, TMI contends that
India is the most appropriate surrogate country for the PRC in this
review.\27\ TMI reiterates the reasons that the Department articulated
in its determination to use India as the appropriate surrogate country
in the 2006-2007 administrative review of pure magnesium from the PRC:
(1) India is a significant producer of comparable merchandise; (2)
India is at a level of economic development comparable to the PRC; and
(3) the Department has reliable data to use from India.\28\ Both
Petitioner and TMI submitted Indian sourced data to value FOPs.
---------------------------------------------------------------------------
\27\ See TMI's Surrogate Country Selection Letter at 1.
\28\ See id. at 3, citing, Pure Magnesium from the People's
Republic of China: Preliminary Results of 2007-2008 Antidumping Duty
Administrative Review, 74 FR 27090 (June 8, 2009); Pure Magnesium
06-07; and Pure Magnesium from the People's Republic of China: Final
Results of 2004-2005 Antidumping Duty Administrative Review, 71 FR
61019 (October 17, 2006).
---------------------------------------------------------------------------
After evaluating interested parties' comments, the Department has
determined that India is the appropriate surrogate country to use in
this review in accordance with section 773(c)(4) of the Act. The
Department based its decision on the following facts: (1) India is at a
level of economic development comparable to that of the PRC; (2) India
is a significant producer of comparable merchandise, i.e., aluminum and
zinc; and (3) India provides the best opportunity to use quality,
publicly available data to value the FOPs. All the data submitted by
both Petitioner and TMI for our consideration as potential SVs and
surrogate financial ratios are sourced from India. Finally, on the
record of this review, we have usable SV data (including financial
data) from India, but no such surrogate data from other potential
surrogate country.
Therefore, because India best represents the experience of
producers of comparable merchandise operating in a surrogate country,
we have selected India as the surrogate country and, accordingly, have
calculated NV using Indian prices to value TMI's FOPs, when available
and appropriate. We have obtained and relied upon publicly available
information wherever possible.
In accordance with 19 CFR 351.301 (c)(3)(ii), interested parties
may submit publicly available information to value the FOPs within 20
days after the date of publication of the preliminary results of
review.\29\
---------------------------------------------------------------------------
\29\ In accordance with 19 CFR 351.301(c)(1), for the final
determination of this review, interested parties may submit factual
information to rebut, clarify, or correct factual information
submitted by an interested party less than ten days before, on, or
after the applicable deadline for submission of such factual
information. However, the Department notes that 19 CFR 351.301
(c)(1) permits new information only insofar as it rebuts, clarifies,
or corrects information recently placed on the record. The
Department generally cannot accept the submission of additional,
previously absent-from-the-record alternative SV information
pursuant to 19 CFR 351.301(c)(1). See Glycine from the People's
Republic of China: Final Results of Antidumping Duly Administrative
Review and Final Rescission, in Part, 72 FR 58809 (October 17,
2007), and accompanying Issues and Decision Memorandum at Comment 2.
---------------------------------------------------------------------------
Separate Rates
In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the country are
subject to government control and thus should be assessed a single
antidumping duty rate. It is the Department's policy to assign all
exporters of subject merchandise in an NME country this single rate
unless an exporter can demonstrate that it is sufficiently independent
so as to be entitled to a separate rate. Exporters can demonstrate this
independence through the absence of both dejure and defacto
governmental control over export activities. The Department analyzes
each entity exporting the subject merchandise under a test arising from
the Final Determination of Sales at Less Than Fair Value: Sparklers
From the People's Republic of China, 56 FR 20588 (May 6, 1991)
(``Sparklers''), as further developed in Notice of Final Determination
of Sales at Less Than Fair Value. Silicon Carbide From the People's
Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide'').
However, if the Department determines that a company is wholly foreign-
owned or located in a market economy, then a separate rate analysis is
not necessary to determine whether it is independent from government
control.
Separate Rate Recipients
TMI is the only responsive respondent in this administrative
review. TMI reported that it is a wholly Chinese-owned company.
Therefore, the Department must analyze whether it can demonstrate the
absence of both dejure and defacto government control over export
activities. Because neither TXR nor Pan Asia responded to the
Department's questionnaire, these companies did not provide separate
rate information to demonstrate their eligibility for separate-rate
status. As a result, the Department is treating these companies as part
of the PRC-Wide Entity.
a. Absence of De Jure Control
The Department considers the following dejure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies.\30\
---------------------------------------------------------------------------
\30\ Sparklers, 56 FR at 20589.
---------------------------------------------------------------------------
The evidence provided by TMI supports a preliminary finding of
dejure absence of government control based on the following: (1) An
absence of restrictive stipulations associated with its business and
export licenses; (2) applicable legislative enactments decentralizing
control of companies; and (3) formal measures by the government
decentralizing control of companies.\31\
---------------------------------------------------------------------------
\31\ See Foreign Trade Law of the People's Republic of China,
contained in TMI's AQR, at Exhibit A-2; see also Regulations of the
People's Republic of China on Company Registration contained in
TMI's AQR at Exhibit A-5.
---------------------------------------------------------------------------
b. Absence of De Facto Control
Typically, the Department considers four factors in evaluating
whether each respondent is subject to defacto government control of its
export functions: (1) Whether the export prices are set by or are
subject to the approval of a government agency; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses.\32\ The Department has determined that an analysis
of de facto control is critical in determining whether respondents are,
in fact, subject to a degree of governmental control,
[[Page 34693]]
which would preclude the Department from assigning separate rates.
---------------------------------------------------------------------------
\32\ See Silicon Carbide, 59 FR at 22587; see also Notice of
Final Determination of Sales at Less Than Fair Value: Furfuryl
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May
8, 1995).
---------------------------------------------------------------------------
The evidence provided by TMI supports a preliminary finding of
defacto absence of government control based on the following: (1) The
absence of evidence that the export prices are set by or are subject to
the approval of a government agency; \33\ (2) the respondent has
authority to negotiate and sign contracts and other agreements; \34\
(3) the respondent has autonomy from the government in making decisions
regarding the selection of management; \35\ and (4) the respondent
retains the proceeds of its export sales and makes independent
decisions regarding disposition of profits or financing of losses.\36\
---------------------------------------------------------------------------
\33\ See TMI's AQR, at 7; see also the contract and the purchase
order between TMI and a U.S. Customer contained in TMI's AQR at
Exhibit A-6. See also TMI's 1st SQR at 19-22 and Exhibit SA-7a and
SA-7b.
\34\ See TMI's AQR, at 7-8.
\35\ See TMI's AQR at 8.
\36\ See TMI's AQR at 9-10.
---------------------------------------------------------------------------
Therefore, the evidence placed on the record of this review by TMI
demonstrates an absence of dejure and defacto government control with
respect to TMI's exports of the merchandise under review, in accordance
with the criteria identified in Sparklers and Silicon Carbide.
Accordingly, we have determined that TMI has demonstrated its
eligibility for a separate rate.
Fair Value Comparisons
To determine whether sales of pure magnesium to the United States
by TMI were made at NV, we compared Export Price (``EP'') to NV, as
described in the ``Export Price'' and ``Normal Value'' sections of this
notice.
Export Price
In accordance with section 772(a) of the Act, EP is the price at
which the subject merchandise is first sold (or agreed to be sold)
before the date of importation by the producer or exporter of the
subject merchandise outside of the United States to an unaffiliated
purchaser in the United States or to an unaffiliated purchaser for
exportation to the United States, as adjusted under section 772(c) of
the Act. In accordance with section 772(a) of the Act, we have used EP
for TMI's U.S. sales because the subject merchandise was sold directly
to the unaffiliated customers in the United States prior to importation
and because Constructed Export Price was not otherwise warranted.
We have based the EP on delivered prices to unaffiliated purchasers
in the United States. In accordance with section 772(c)(2)(A) of the
Act, we have made deductions from the starting price for movement
expenses, including expenses for foreign inland freight from the plant
to the port of exportation, domestic brokerage and handling,
international freight, marine insurance, brokerage and handling
expenses incurred in the U.S., U.S. customs duty, freight from the U.S.
port to the customer, rebanding, inventory and warehouse handling
expenses. TMI neither reported nor claimed other adjustments to EP.\37\
---------------------------------------------------------------------------
\37\ See Memorandum to the File ``Analysis Memorandum for the
Preliminary Results of the 2008-2009 Administrative Review of Pure
Magnesium from the People's Republic of China: Tianjin Magnesium
International Co., Ltd. (``TMI'')'' (``TMI's Analysis Memorandum''),
dated June 7, 2010.
---------------------------------------------------------------------------
Normal Value
Section 773(c)(1) of the Act provides that, the Department shall
determine NV using an FOP methodology if the merchandise is exported
from an NME country and the Department finds that the available
information does not permit the calculation of NV using home-market
prices, third-country prices, or constructed value under section 773(a)
of the Act. When determining NV in an NME context, the Department will
base NV on FOPs because the presence of government controls on various
aspects of these economies renders price comparisons and the
calculation of production costs invalid under our normal methodologies.
The Department's questionnaire requires that TMI provide information
regarding the weighted-average FOPs across all of the company's plants
that produce the subject merchandise, not just the FOPs from a single
plant. This methodology ensures that the Department's calculations are
as accurate as possible.\38\
---------------------------------------------------------------------------
\38\ See e.g., Final Determination of Sales at Less Than Fair
Value and Critical Circumstances: Certain Malleable Iron Pipe
Fittings From the People's Republic of China, 68 FR 61395 (October
28, 2003), and accompanying Issue and Decision Memorandum at Comment
19.
---------------------------------------------------------------------------
In accordance with 19 CFR 351.408(c)(1), the Department will
normally use publicly available information to find an appropriate SV
to value FOPs, but when a producer sources an input from a market
economy and pays for it in market-economy currency, the Department may
value the factor using the actual price paid for the input.\39\ TMI
reported that it did not purchase inputs from market-economy suppliers
for the production of the subject merchandise.\40\
---------------------------------------------------------------------------
\39\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly
Components, Div. of Ill. Tool Works, Inc. v. United States, 268 F.3d
1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of
market-based prices to value certain FOPs).
\40\ See TMJ's DQR at D-5.
---------------------------------------------------------------------------
We calculated NV based on FOPs in accordance with section 773(c)(3)
and (4) of the Act and 19 CFR 351.408(c). The FOPs include but are not
limited to: (1) Hours of labor required; (2) quantities of raw
materials employed; (3) amounts of energy and other utilities consumed;
and (4) representative capital costs. The Department used FOPs reported
by TMI for materials, energy, labor, by-products, and packing.
TMI stated that it generates three by-products during the
production process: magnesium waste, cement clinker and coal tar.\41\
TMI requested a by-product offset for all three products. However, TMI
failed to establish that the magnesium waste and cement clinker
generated during the course of production has commercial value.\42\
Therefore, for these preliminary results, we have granted TMI a by-
product offset solely for coal tar.\43\
---------------------------------------------------------------------------
\41\ Id. at D-13-15 and Exhibits D-8 through D-10.
\42\ See TMI's Verification Report, section XVI, ``By-
Products.''
\43\ See TMI s Analysis Memorandum at 4.
---------------------------------------------------------------------------
Factor Valuations
In accordance with section 773(c) of the Act, the Department
calculated NV based on FOPs reported by TMI for the POR. To calculate
NV, the Department multiplied the reported per-unit factor consumption
quantities by publicly available Indian SVs. In selecting the SVs, the
Department considered the quality, specificity, and contemporaneity of
the data. The Department adjusted input prices by including freight
costs to make them delivered prices, as appropriate. Specifically, the
Department added to Indian import SVs a surrogate freight cost using
the shorter of the reported distance from the domestic supplier to the
factory or the distance from the nearest seaport to the factory of
production. This adjustment is in accordance with the decision of the
U.S. Court of Appeals for the Federal Circuit in Sigma Corp. v. United
States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997). A detailed description
of all SVs used to value TMI's reported FOPs may be found in the Factor
Valuation Memorandum.
The Department calculated SVs for the majority of reported FOPs
purchased from NME sources using the contemporaneous, weighted-average
unit import value derived from the Monthly Statistics of the Foreign
Trade of India, as published by the Directorate General of Commercial
Intelligence and
[[Page 34694]]
Statistics of the Ministry of Commerce and Industry, Government of
India in the World Trade Atlas (``WTA''), available at http://www.gtis.comlwta.htm (``WTA Indian Import Statistics'').\44\ WTA Indian
Import Statistics were reported in U.S. dollars \45\ and are
contemporaneous with the POR to calculate SVs for TMI's material
inputs. In selecting the best available information for valuing FOPs in
accordance with section 773(c)(1) of the Act, the Department's practice
is to select, to the extent practicable, SVs which are non-export
average values, most contemporaneous with the period of review,
product-specific, and tax-exclusive.\46\
---------------------------------------------------------------------------
\44\ See Factor Valuation Memorandum.
\45\ The import data obtained from the WTA as published by
Global Trade Information Services began identifying the original
reporting currency for India as the U.S. dollar. See Memorandum to
the file, ``Indian Import Statistics Currency Denomination in the
World Trade Atlas,'' dated March 29, 2010.
\46\ See, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value, Negative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain
Frozen and Canned Warmwater Shrimp From the Socialist Republic of
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69
FR 71005 (December 8, 2004).
---------------------------------------------------------------------------
In those instances where the Department could not obtain publicly
available information contemporaneous with the POR with which to value
FOPs, the Department adjusted the publicly available SVs using the
Indian Wholesale Price Index, as published in the International
Financial Statistics of the International Monetary Fund.\47\
---------------------------------------------------------------------------
\47\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
Furthermore, with regard to Indian import-based SVs, we have
disregarded prices that we have reason to believe or suspect may be
subsidized, such as those from Indonesia, South Korea, and Thailand. We
have found in other proceedings that these countries maintain broadly
available, non-industry-specific export subsidies and, therefore, it is
reasonable to infer that all exports to all markets from these
countries may be subsidized.\48\ We are also guided by the statute's
legislative history that explains that it is not necessary to conduct a
formal investigation to ensure that such prices are not subsidized.\49\
Rather, the Department was instructed by Congress to base its decision
on information that is available to it at the time it is making its
determination. In accordance with the foregoing, we have not used
prices from these countries in calculating the Indian import-based SVs.
---------------------------------------------------------------------------
\48\ See Final Results Of Redetermination Pursuant To Court
Remand, dated February 25, 2010, Jinan Yipin Corp., Ltd. v. United
States, 637 F. Supp. 2d 1183 (CIT 2009). See also Certain Frozen
Fish Fillets from the Socialist Republic of Vietnam: Preliminary
Results and Preliminary Partial Rescission of Antidumping Duty
Administrative Review, 70 FR 54007, 54011 (September 13, 2005),
unchanged in Certain Frozen Fish Fillets From the Socialist Republic
of Vietnam: Final Results of the First Administrative Review, 71 FR
14170 (March 21, 2006); and China Nat'l Mach. Import & Export Corp.
v. United States, 293 F. Supp. 2d 1334 (CIT 2003), affirmed 104 Fed.
Appx. 183 (Fed. Cir. 2004).
\49\ See H.R. Rep. No. 100-576 at 590 (1988).
---------------------------------------------------------------------------
The Department used WTA Indian Import Statistics to calculate SVs
for raw materials, packing materials and by-products including
ferrosilicon, fluorite powder, sulphur powder, sulfuric acid, magnesium
metal waste, magnesium waste, coal tar, plastic bags, steel bands and
plastic bands.
For dolomite, we continue to find, as we did in the previous
segments of this proceeding, that it is reasonable to conclude that WTA
data represent prices of imported dolomite in the high-end, value-added
product range while the dolomite used to produce subject merchandise is
the high-bulk, low-value commodity.\50\ Therefore, as in the 2006-07
administrative review, we have preliminarily determined to use the
audited financial statements of Indian producers submitted on the
record of this review as the basis of the SV for dolomite.\51\ TMI
placed the audited financial statements of four companies on the record
covering the period April 1, 2008 through March 31, 2009: Madras
Cements Ltd. (``Madras Cements''), Tata Sponge Iron Ltd. (``Tata Sponge
Iron''), The Bisra Stone Lime Company Ltd. (``Bisra''), and Steel
Authority of India, Limited (``SAIL'').\52\ In examining these
financial statements, we have determined that the prices reflected in
the financial statements of Madras Cements and Tata Sponge Iron
represent the best available information on the record with which to
value dolomite. Both of these financial statements are fully legible
and generally contemporaneous with the POR. The companies were both
profitable and did not receive subsidies that the Department has found
to be countervailable and would otherwise taint the prices of materials
that it sold or consumed. However, we have determined not to rely on
Bisra's financial statements because Bisra was unprofitable.
Consequently, we cannot determine whether Bisra's dolomite sales prices
represent market prices or were made below market value. Additionally,
we have determined not to use SAIL's audited financial statements
because SAIL received loans from the Steel Development Fund,\53\ which
the Department has previously determined are countervailable.\54\
Because the dolomite prices recorded on SAIL's financial statements
reflect SAIL's consumption of raw materials produced in captive
mines,\55\ these prices have been tainted by the subsidies reflected on
its financial statements.\56\ Therefore, we have determined the SV of
dolomite based on the simple average of domestic prices for dolomite
provided in the audited financial statements of Madras Cements and Tata
Sponge Iron.
---------------------------------------------------------------------------
\50\ See Pure Magnesium 06-07, and accompanying Issues and
Decision Memorandum at Comment 1. In addition, see TMI's SV Comments
at Exhibits SV-2C and SV-2D, which respectively contain, British
Geological Survey (2006): Dolomite and A Review of the Dolomite and
Limestone Industry in South Africa Report R43/2003.
\51\ Id.
\52\ See TMI's SV Comments at Exhibits SV-2f through SV-2i.
\53\ See TMI's SV Comments at Exhibit SV-2i, at page 50 and 103.
\54\ See, e.g., Certain Hot-Rolled Carbon Steel Flat Products
From India: Final Results of Countervailing Duty Administrative
Review, 73 FR 40295 (July 14, 2008).
\55\ See TMI's SV Comments at Exhibit SV-2i, at page 12.
\56\ See TMI's SV Comments at Exhibit SV-2i, at page 50 and 103.
---------------------------------------------------------------------------
We valued flux No. 2, which consists of magnesium chloride,
potassium chloride and sodium chloride, using data from Chemical
Weekly. We consider both Chemical Weekly and WTA Indian Import
Statistics to be reliable sources and, as such, the Department has used
them in past cases to value chemical component inputs. In the instant
case, however, we have determined that Chemical Weekly is the best
available information for valuing flux because the quantity of the
total imports of magnesium chloride in the WTA Indian Import Statistics
is very small and, thus, does not appear to represent commercial
quantities.\57\
---------------------------------------------------------------------------
\57\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
TMI requested that the Department offset its NV for three by-
products generated in the course of the production process: Coal tar,
magnesium waste and cement clinker.\58\ At verification, TMI
established that its producers sold coal tar in arm's length
transactions and received payments for those sales.\59\ However, none
of the parties placed a SV for coal tar on the record of this review.
Therefore, for the preliminary results, we will value coal tar using
HTS 2706, Tar Distilled From Coal, Lignite Or Peat and Other
Minerals,\60\ and will ask parties to
[[Page 34695]]
comment on the record concerning the appropriate SV for coal tar for
the final results. For magnesium waste and cement clinker, TMI reported
a three-party arrangement whereby the magnesium producers provide the
by-product to a freight provider in return for offsets to the money
owed to that freight provider by the magnesium producer for previous
services rendered.\61\ However, TMI could not demonstrate actual
payment received for these by-products and, therefore, failed to
establish that its by-products for magnesium waste and cement clinker
have commercial value.\62\ Specifically, TMI was unable to show
receipts that its freight provider received from the purchaser to
demonstrate that the by-products of magnesium waste and cement clinker
have commercial value. Therefore, the Department has preliminarily
determined not to grant TMI a by-product offset for magnesium waste and
cement clinker.
---------------------------------------------------------------------------
\58\ See TMI's DQR at D-13 to D-15.
\59\ See TMI Verification Report at section XVI, ``By-
Products.''
\60\ See Factor Valuation Memorandum.
\61\ See TMI Verification Report at section XVI, ``By-
Products.''
\62\ See TMI Verification Report at section XVI, ``By-
Products.''
---------------------------------------------------------------------------
For direct labor, indirect labor, and packing labor, consistent
with 19 CFR 351.408(c)(3), the Department used the PRC regression-based
wage rate as reported on Import Administration's Web site.\63\ Because
this regression-based wage rate does not separate the labor rates into
different skill levels or types of labor, the Department has applied
the same wage rate to all skill levels and types of labor reported by
TMI.
---------------------------------------------------------------------------
\63\ See ``Expected Wages of Selected NME Countries,'' revised
in December 2009, available at http://ia.ita.doc.gov/wages/07wages/final/final-2009-2007-wages.html. The source of these wage-rate data
is the Yearbook of Labour Statistics 2007, ILO (Geneva: 2008),
Chapter 5B: Wages in Manufacturing. The years of the reported wage
rates are from 2006 and 2007.
---------------------------------------------------------------------------
We valued electricity using the updated electricity price data for
small, medium, and large industries, as published by the Central
Electricity Authority, an administrative body of the Government of
India, in its publication titled Electricity Tariff & Duty and Average
Rates of Electricity Supply in India, dated March 2008.\64\ These
electricity rates represent actual country-wide, publicly available
information on tax-exclusive electricity rates charged to small,
medium, and large industries in India. We did not inflate this value
because utility rates represent current rates, as indicated by the
effective dates listed for each of the rates provided.
---------------------------------------------------------------------------
\64\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
To value steam coal, we used steam coal prices from the December
12, 2007, CIL's Coal Pricing Circular. See CIL: S&M: GM(F): Pricing
1124, dated 12 December 2007).\65\ Since TMI reports using non-coking
coal with a useful heat value of 5500 kcal/kg,\66\ we calculated the SV
for steam coal by averaging the prices of grades B and C steam coal
from the December 12, 2007, CIL Coal Pricing Circular.\67\ We did not
inflate this value to the current POR because the steam coal rates
represent the rates that were in effect until October 16, 2009,\68\ and
are, therefore, contemporaneous with the POR. Finally, we have applied
an additional fixed surcharge of 165 rupees (``Rs.'')/metric ton
(``MT'') to our calculation of the average of B and C grades of steam
coal.
---------------------------------------------------------------------------
\65\ See Factor Valuation Memorandum.
\66\ TMI's DQR at D-12. See also Annexure X of CIL's Coal
Pricing Circular in the Factor Valuation Memorandum (identifying the
range of kcal/kg in each grade of coal).
\67\ See Factor Valuation Memorandum.
\68\ See http://www.coalindia.in/Business.aspx?tab=2.
---------------------------------------------------------------------------
We valued truck freight expenses using an Indian per-unit average
rate calculated from data on the following Web site: http://www.infobanc.com/logistics/logtruck.htm.\69\ The logistics section of
this Web site contains inland freight truck rates between many large
Indian cities. We did not inflate this rate since it is contemporaneous
with the POR.
---------------------------------------------------------------------------
\69\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
We valued brokerage and handling using a price list of export
procedures necessary to export a standardized cargo of goods in India.
The price list is compiled based on a survey case study of the
procedural requirements for trading a standard shipment of goods by
ocean transport in India that is published in Doing Business 2010:
India, published by the World Bank.\70\
---------------------------------------------------------------------------
\70\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
We valued marine insurance using the price quote retrieved from RJG
Consultants, online at http://www.rjgconsultants.com/163.html, a
market-economy provider of marine insurance.\71\ We did not inflate
this rate since it is contemporaneous with the POR
---------------------------------------------------------------------------
\71\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------
19 CFR 351.408(c)(4) directs the Department to value overhead,
general, and administrative expenses (``SG&A''), and profit using non-
proprietary information gathered from producers of identical or
comparable merchandise in the surrogate country. In this administrative
review, Petitioner placed the 2008-2009 financial statements on the
record for one Indian producer of aluminum products--National Aluminum
Company Limited (``NALCO''), and one producer of zinc products--
Hindustan Zinc Limited (``Hindustan Zinc''). TMI placed the 2008-2009
financial statements on the record for five Indian producers of
aluminum products: Madras Aluminum Company Ltd. (``MALCO''), HINDALCO
Industries Limited (``HINDALCO''), Century Extrusions Ltd.
(``Century''), Sudal Industries Ltd. (``Sudal''), and Bhoruka Aluminum
(``Bhoruka'').
For the following reasons, we have determined not to rely on the
2008-2009 audited financial statements of MALCO, HINDALCO, Hindustan
Zinc, NALCO, Century and Bhoruka as surrogate financial statements
under 19 CFR 351.408(c)(4). First, we determined not to rely on MALCO's
audited financial statements because MALCO suspended production of
aluminum and alumina in November 2008, seven months into its fiscal
year (and the POR).\72\ In addition, since it suspended aluminum and
alumina production, it switched the use of its power generation from
captive consumption to external sales.\73\ As a result, the financial
statements do not reflect the cost experience of producing a product
comparable to the subject merchandise for five months of the POR.
---------------------------------------------------------------------------
\72\ See The Madras Aluminum Company Limited, 49th Annual report
2008-09, at 4, contained in TMI's SV Comments at Exhibit SV-11D.
MALCO's fiscal year coincides with the POR.
\73\ See id. at 4.
---------------------------------------------------------------------------
Second, we have determined not to rely on the financial statements
of HfNDALCO, NALCO, and Century because the record indicates that
during this period these companies received subsidies the Department
has previously determined to be countervailable. Congress indicated
that the Department should ``avoid using any prices which it had reason
to believe or suspect may be dumped or subsidized prices.'' \74\
Consistent with this Congressional directive, the Department's practice
is to not use financial statements of a company that we have reason to
believe or suspect may have received subsidies, where there are other
sufficient reliable and representative data on the record for purposes
of calculating the surrogate financial ratios, because the financial
statements of companies receiving actionable subsidies are less
representative of the financial experience of the relevant industry
than the ratios derived from financial statements that do not contain
evidence
[[Page 34696]]
of subsidization.\75\ In this case, HINDALCO's 2008-2009 financial
statements indicate that HINDALCO received benefits under the Duty Free
Import Entitlement Scheme (``EPCG Scheme'').\76\ Similarly, NALCO's
financial statements indicate that NALCO received benefits under the
Duty Entitlement Pass Book (``DEPB Premium'') \77\ and obtained EPCG
licenses.\78\ Century's audited financial statements demonstrated that
it also received benefits under the EPCG Scheme.\79\ India's EPCG
Scheme and DEPB Premiums each have been found by the Department to
provide a countervailable subsidy.\80\ Third, we rejected Bhoruka's
audited financial statements because they did not show a profit for the
2008-2009 fiscal years.\81\ The Department has an established practice
of not relying on financial statements that are unprofitable.\82\
Fourth, we have determined not to use the 2008-2009 financial
statements of Hindustan Zinc because Hindustan Zinc has four captive
mines and did not include the cost of materials produced on its income
statement.\83\
---------------------------------------------------------------------------
\74\ Omnibus Trade and Competitiveness Act of 1988, H.R. Rep.
No. 576, 100th Cong., 2nd Sess., at 59091 (1988).
\75\ See Certain Steel Threaded Rod from the People's Republic
of China: Final Determination of Sales at Less Than Fair Value, 74
FR 8907 (February 27, 2009), and accompanying Issues and Decision
Memorandum at Comment 1; Certain New Pneumatic Off-The-Road Tires
from the People's Republic of China: Final Affirmative Determination
of Sales at Less Than Fair Value and Partial Affirmative
Determination of Critical Circumstances, 73 FR 40485 (July 15, 2008)
(``OTR Tires'') at Comment 17A; Certain Frozen Warmwater Shrimp From
the People's Republic of China: Notice of Final Results and
Rescission, in Part, of 2004/2006 Antidumping Duty Administrative
and New Shipper Reviews, 72 FR 52049 (September 12, 2007) at Comment
2, citing Freshwater Crawfish Tail Meat From the People's Republic
of China: Notice of Final Results And Rescission, In Part, of 2004/
2005 Antidumping Duty Administrative and New Shipper Reviews, 72 FR
19174 (April 17, 2007), and accompanying Issues and Decision
Memorandum at Comment 1.
\76\ See Annual Report 2008-2009, Hindalco Industries Limited,
at 91 contained in TMI's SV Comments at Exhibit SV-11E.
\77\ See 28th Annual Report 2008-2009, National Aluminum Company
Limited, at 71 contained in Petitioner's SV Comments at Exhibit 5.
\78\ See id. at 72.
\79\ See Century Extrusion Limited, Twenty First Annual Report
2008-2009, at pages 35 and 41, in TMJ's SV Comments at Exhibit SV-
11B.
\80\ See e.g., Certain Iron-Metal Castings From India:
Preliminary Results and Partial Rescission of Countervailing Duty
Administrative Review, 64 FR 61592 (November 12, 1999), unchanged in
Certain Iron-Metal Castings from India: Final Results of
Countervailing Duty Administrative Review, 65 FR 31515 (May 18,
2000); see also http://ia.ita.doc.gov/esel/eselframes.html; and
Notice of Final Affirmative Countervailing Duty Determination and
Final Negative Critical Circumstances Determination: Certain Lined
Paper Products from India, 71 FR 45034 (August 8, 2006), and
accompanying Issues and Decision Memorandum at ``Benchmarks for
Loans and Discount Rate.''
\81\ See 29th Annual Report 2008-09, Bhoruka Aluminum Limited,
at 31 contained in TMI's SV Comments at Exhibit SV-11C.
\82\ See OTR Tires at Comment 17A.
\83\ See Annual Report 2008-09, Hindustan Zinc Limited, at 61,
79 and 93, contained in Petitioner's SV Comments at Exhibit 6.
---------------------------------------------------------------------------
As a result, we have preliminarily determined to use the 2008-2009
audited financial statements of Sudal as the basis of the financial
ratios in this review. Sudal is a secondary aluminum extrusion
manufacturer that used, purchased, or imported aluminum metals as raw
materials to manufacture aluminum extrusions and fabricated products;
\84\ Sudal earned a profit; \85\ and there is no record evidence to
indicate that it received benefits that the Department has determined
to be countervailable.\86\ Further, its audited financial statements
are complete and are sufficiently detailed to disaggregate materials,
labor, overhead, and SG&A expenses.\87\
---------------------------------------------------------------------------
\84\ Annual Report 2008-2009, Sudal Industries Limited, at 33
contained in TMI's SV Comments at Exhibit SV-1 1A.
\85\ See Annual Report 2008-2009, Sudal Industries Limited, at
19 contained in TMI's SV Comments at Exhibit SV-1 1A. See also
Century Extrusions Ltd., at 33 contained in TMI's SV Comments at
Exhibit SVI1B.
\86\ See id.
\87\ See id. See also the appropriate schedules to the financial
statements as indicated on page 33 for Century and page 19 for
Sudal.
---------------------------------------------------------------------------
While the Department has not previously determined whether the
production process for extruded aluminum is similar to that of pure
magnesium for purposes of calculating surrogate financial ratios, we
find that it is the best available information on the record. While it
is the Department's practice to reject financial statements of
surrogate producers whose production process is not comparable to the
respondent's production process when better information is
available,\88\ there is insufficient evidence to conclude in this case
that production processes at issue are too dissimilar for purposes of
using the Sudal financial statements. Accordingly, we invite parties to
provide additional information and explanation on the record concerning
the comparability of the manufacturing process for pure magnesium and
extruded aluminum products, and to provide additional suitable
financial statements from Indian producers of comparable merchandise.
---------------------------------------------------------------------------
\88\ See, e.g., Persulfates from the People's Republic of China:
Final Results of Antidumping Duty Administrative Review, 70 FR 6836
(February 9, 2005), and accompanying Issues and Decision Memorandum
at Comment 1.
---------------------------------------------------------------------------
For a complete listing of all the inputs and a detailed discussion
about our SV selections, see the Factor Valuation Memorandum.
Currency Conversion
Where necessary, the Department made currency conversions into U.S.
dollars, in accordance with section 773A(a) of the Act, based on the
exchange rates in effect as certified by the Federal Reserve Bank on
the date of the U.S. sale.
Use of Facts Available and Adverse Facts Available (``AFA'')
Section 776(a) of the Act provides that the Department shall apply
``facts otherwise available'' if (1) necessary information is not on
the record, or (2) an interested party or any other person (A)
withholds information that has been requested, (B) fails to provide
information within the deadlines established, or in the form and manner
requested by the Department, subject to subsections (c)(1) and (e) of
section 782 of the Act, (C) significantly impedes a proceeding, or (D)
provides information that cannot be verified as provided by section
782(i) of the Act.
Where the Department determines that a response to a request for
information does not comply with the request, section 782(d) of the Act
provides that the Department will so inform the party submitting the
response and will, to the extent practicable, provide that party the
opportunity to remedy or explain the deficiency. If the party fails to
remedy the deficiency within the applicable time limits and subject to
section 782(e) of the Act, the Department may disregard all or part of
the original and subsequent responses, as appropriate.
Section 782(e) of the Act provides that the Department ``shall not
decline to consider information that is submitted by an interested
party and is necessary to the determination but does not meet all
applicable requirements established by the administering authority'' if
the information is timely, can be verified, is not so incomplete that
it cannot be used, and if the interested party acted to the best of its
ability in providing the information. Where all of these conditions are
met, the statute requires the Department to use the information
supplied if it can do so without undue difficulties. Section 776(b) of
the Act further provides that the Department may use an adverse
inference in applying the facts otherwise available when a party has
failed to cooperate by not acting to the best of its ability to comply
with a request for information. Such an adverse inference may include
reliance on information derived from the petition, the final
determination, a previous administrative review, or other information
placed on the record.
[[Page 34697]]
Application of Total AFA to the PRC-Wide Entity
Because TXR and Pan Asia did not respond to the Department's
antidumping duty questionnaire, we preliminarily determine that these
companies' withheld information requested by the Department in
accordance with sections 776(a)(2)(A) and (B) of the Act. Furthermore,
these companies' refusal to participate in the review significantly
impeded the proceeding in accordance with section 776(a)(2)(C) of the
Act. Specifically, had TXR and Pan Asia participated in the review, the
Department would have determined whether they were entitled to a
separate rate and calculated company specific dumping margins for these
companies.
Thus, because there is no information on the record demonstrating
TXR's or Pan Asia's entitlement to a separate rate in accordance with
section 776(a) of the Act, the Department has preliminarily treated
these companies as part of the PRC-Wide Entity.
Further, because these parties did not respond to the Department's
antidumping questionnaire and are part of the PRC-Wide Entity, the
Department is basing the dumping margin of the PRC-Wide Entity on the
facts otherwise available on the record. Furthermore, the PRC-Wide
Entity's refusal to provide the requested information constitutes
circumstances under which it is reasonable to conclude that less than
full cooperation has been shown.\89\ Hence, pursuant to section 776(b)
of the Act, the Department has determined that, when selecting from
among the facts otherwise available, an adverse inference is warranted
with respect to the PRC-Wide Entity.
---------------------------------------------------------------------------
\89\ See Nippon Steel Corporation v, United States, 337 F.3d
1373, 1383 (Fed. Cir. 2003), where the Court of Appeals for the
Federal Circuit provided an explanation of the ``failure to act to
the best of its ability'' standard noting that the Department need
not show intentional conduct existed on the part of the respondent,
but merely that a ``failure to cooperate to the best of a
respondent's ability'' existed (i.e., information was not provided
``under circumstances in which it is reasonable to conclude that
less than full cooperation has been shown'').
---------------------------------------------------------------------------
Selection of AFA Rates
In deciding which facts to use as AFA, section 776(b) of the Act
and 19 CFR 351.308(c)(l) provide that the Department may rely on
information derived from (1) the petition, (2) a final determination in
the investigation, (3) any previous review or determination, or (4) any
information placed on the record. The Department's practice is to
select an AFA rate that is sufficiently adverse ``as to effectuate the
purpose of the facts available rule to induce respondents to provide
the Department with complete and accurate information in a timely
manner'' and that ensures ``that the party does not obtain a more
favorable result by failing to cooperate than if it had cooperated
fully.\90\ Specifically, the Department's practice in reviews, in
selecting a rate as total AFA, is to use the highest rate on the record
of the proceeding which, to the extent practicable, can be corroborated
(assuming the rate is based on secondary information).\91\ The Court of
International Trade and the Court of Appeals for the Federal Circuit
have affirmed decisions to select the highest margin from any prior
segment of the proceeding as the AFA rate on numerous occasions.\92\
Therefore, as AFA, the Department has preliminarily assigned the PRC-
Wide Entity a dumping margin of 111.73 percent. This margin is the
highest calculated rate for a respondent on the record of any segment
of the proceeding.\93\
---------------------------------------------------------------------------
\90\ See Notice of Final Determination of Sales at Less than
Fair Value: Static Random Access Memory Semiconductors From Taiwan,
63 FR 8909, 8911 (February 23, 1998); see also Brake Rotors From the
People's Republic of China: Final Results and Partial Rescission of
the Seventh Administrative Review; Final Results of the Eleventh New
Shipper Review, 70 FR 69937, 69939 (November 18, 2005) and the SAA
at 870.
\91\ See Glycine from the People's Republic of China:
Preliminary Results of Antidumping Duty Administrative Review, 74 FR
15930, 15934 (April 8, 2009), unchanged in Glycine From the People's
Republic of China: Final Results of Antidumping Duty Administrative
Review, 74 FR 41121 (August 14, 2009); see also Fujian Lianfu
Forestry Co., Ltd. v. United States, 638 F. Supp. 2d 1325, 1336 (CIT
August 10, 2009) (``Commerce may, of course, begin its total AFA
selection process by defaulting to the highest rate in any segment
of the proceeding, but that selection must then be corroborated, to
the extent practicable.'').
\92\ See e.g. NSK Ltd. v. United States, 346 F. Supp. 2d 1312,
1335 (Ct. Int'l Trade 2004) (affirming a 73.55 percent total AFA
rate, the highest available dumping margin from a different
respondent in the investigation); Kompass Food Trading International
v. United States, 24 CIT 678, 683-84 (2000) (affirming a 51.16
percent total AFA rate, the highest available dumping margin from a
different, fully cooperative respondent); and Shanghai Taoen
International Trading Co., Ltd. v. United States, 360 F. Supp. 2d
1339, 1348 (Ct. Int'l Trade 2005) (affirming a 223.01 percent total
AFA rate, the highest available dumping margin from a different
respondent in a previous administrative review).
\93\ See Pure Magnesium 06-07.
---------------------------------------------------------------------------
Corroboration of Secondary Information
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation or review, it shall, to the extent
practicable, corroborate that information from independent sources that
are reasonably at its disposal. Secondary information is defined as
information derived from the petition that gave rise to the
investigation or review, the final determination concerning the subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.\94\ Corroborate means that the Department will
satisfy itself that the secondary information to be used has probative
value.\95\ To corroborate secondary information, the Department will,
to the extent practicable, examine the reliability and relevance of the
information to be used.\96\ Independent sources used to corroborate
such evidence may include, for example, published price lists, official
import statistics and customs data, and information obtained from
interested parties during the particular investigation.\97\
---------------------------------------------------------------------------
\94\ See SAA at 870.
\95\ See id.
\96\ See Tapered Roller Bearings and Parts Thereof Finished and
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or
Less in Outside Diameter, and Components Thereof From Japan:
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 61 FR 57391, 57392
(November 6, 1996), unchanged in Tapered Roller Bearings and Parts
Thereof Finished and Unfinished, From Japan, and Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof From Japan; Final Results of Antidumping Duty Administrative
Reviews and Termination in Part, 62 FR 11825 (March 13, 1997).
\97\ See Notice of Preliminary Determination of Sales at Less
Than Fair Value: High and Ultra-High Voltage Ceramic Station Post
Insulators from Japan, 68 FR 35627, 35629 (June 16, 2003), unchanged
in Notice of Final Determination of Sales at Less Than Fair Value:
High and Ultra High Voltage Ceramic Station Post Insulators from
Japan, 68 FR 62560 (November 5, 2003); and Notice of Final
Determination of Sales at Less Than Fair Value: Live Swine From
Canada, 70 FR 12181, 12183-84 (March 11, 2005).
---------------------------------------------------------------------------
The 111.73 percent AFA rate is the highest calculated rate on the
record of any segment of the proceeding.\98\ No additional information
has been presented in the current review which calls into question the
reliability of the information. This rate was calculated for a
mandatory respondent in the 06-07 administrative review of pure
magnesium and was assigned to TMI as AFA in the last completed segment
of the proceeding. Thus, we have determined this information continues
to be reliable.
---------------------------------------------------------------------------
\98\ See Pure Magnesium 06-07.
---------------------------------------------------------------------------
With respect to the relevance aspect of corroboration, the
Department will consider information reasonably at its disposal to
determine whether a margin continues to have relevance. Where
circumstances indicate that the selected margin is not appropriate as
AFA, the Department will disregard the margin
[[Page 34698]]
and determine an appropriate margin.\99\ Similarly, the Department does
not apply a margin that has been discredited.\100\ To assess the
relevancy of the rate used, the Department compared the transaction-
specific margins calculated for TMI in the instant administrative
review with the 111.73 percent rate calculated in the 06-07 review of
pure magnesium. The Department found that the 111.73 percent margin was
within the range of the margins calculated on the record of the instant
administrative review. Since the 111.73 percent margin is within the
range of transaction-specific margins on the record of this
administrative review, the Department has determined that the 111.73
percent margin continues to be relevant for use as an AFA rate for the
PRC-Wide Entity in this administrative review.
---------------------------------------------------------------------------
\99\ See Fresh Cut Flowers From Mexico; Final Results of
Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February
22, 1996) (where the Department disregarded the highest margin in
that case as adverse best information available (the predecessor to
facts available) because the margin was based on another company's
uncharacteristic business expense resulting in an unusually high
margin).
\100\ See D & L Supply Co. v. United States, 113 F.3d 1220, 1221
(Fed. Cir. 1997) (ruling that the Department will not use a margin
that has been judicially invalidated).
---------------------------------------------------------------------------
As the adverse margin is both reliable and relevant, the Department
has determined that it has probative value. Accordingly, the Department
has determined that this rate meets the corroboration criterion
established in section 776(c) of the Act.
Duty Absorption
Section 751(a)(4) of the Act provides for the Department, if
requested, to determine during an administrative review initiated two
or four years after publication of the order, whether antidumping
duties have been absorbed by a foreign producer or exporter, if the
subject merchandise is sold in the United States through an affiliated
importer. See also, 19 CFR 351.213(j). On July 24, 2009, Petitioner
requested that the Department determine whether TMI had absorbed
antidumping duties for U.S. sales of pure magnesium made during the
POR. Since the instant review was initiated more than four years after
publication of the pure magnesium order, this request is untimely and,
as such, we have not conducted a duty absorption analysis.
Weighted-Average Dumping Margins
The preliminary weighted-average dumping margin is as follows:
Magnesium Metal From the PRC
------------------------------------------------------------------------
Weighted-
Exporter average margin
(percentage)
------------------------------------------------------------------------
Tianjin Magnesium International Co. Ltd............... 15.23
PRC-Wide Entity **.................................... 111.73
------------------------------------------------------------------------
** Pan Asia and TXR are part of this PRC-Wide Entity.
Disclosure
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b). Any
interested party may request a hearing within 30 days of publication of
these preliminary results.\101\ If a hearing is requested, the
Department will announce the hearing schedule at a later date.
Interested parties may submit case briefs and/or written comments no
later than seven days after the release of the verification report
issued in this review.\102\ Rebuttal briefs and rebuttals to written
comments, limited to issues raised in such briefs or comments, may be
filed no later than five days after the time limit for filing the case
briefs.\103\ Further, we request that parties submitting written
comments provide the Department with an additional electronic copy of
those comments on a CD-ROM. The Department intends to issue the final
results of this administrative review, which will include the results
of its analysis of issues raised in all comments, and at a hearing,
within 120 days of publication of these preliminary results, pursuant
to section 751(a)(3)(A) of the Act.
---------------------------------------------------------------------------
\101\ See 19 CFR 351.310(c).
\102\ See 19 CFR 351.309(c)(ii).
\103\ See 19 CFR 351.309(d).
---------------------------------------------------------------------------
Assessment Rates
The Department will determine, and CBP shall assess, antidumping
duties on all appropriate entries of subject merchandise in accordance
with the final results of this review.\104\ For assessment purposes, we
calculated importer- or customer-specific assessment rates for
merchandise subject to this review. We calculated an ad valorem rate
for each importer or customer by dividing the total dumping margins for
reviewed sales to that party by the total entered value associated with
those transactions. For duty assessment rates calculated on this basis,
we will direct CBP to assess the resulting ad valorem rate against the
entered customs values for the subject merchandise. Where appropriate,
we calculated a per-unit rate for each importer or customer by dividing
the total dumping margins for reviewed sales to that party by the total
sales quantity associated with those transactions. For duty-assessment
rates calculated on this basis, we will direct CBP to assess the
resulting per-unit rate against the entered quantity of the subject
merchandise. Where an importer- or customer-specific assessment rate is
de minimis (i.e., less than 0.50 percent) in accordance with the
requirement of 19 CFR 351.106(c)(2), the Department will instruct CBP
to assess that importer's or customer's entries of subject merchandise
without regard to antidumping duties. We intend to instruct CBP to
liquidate entries containing subject merchandise exported by the PRC-
wide entity at the PRC-wide rate we determine in the final results of
this review. The Department intends to issue appropriate assessment
instructions directly to CBP 15 days after publication of the final
results of this review.
---------------------------------------------------------------------------
\104\ See 19 CFR351.212(b).
---------------------------------------------------------------------------
Cash Deposit Requirements
The following cash deposit requirements will be effective upon
publication of the final results of this administrative review for
shipments of the subject merchandise from the PRC entered, or withdrawn
from warehouse, for consumption on or after the publication date, as
provided by sections 751(a)(2)(C) of the Act: (1) For TMI, which has a
separate rate, the cash deposit rate will be that established in the
final results of this review (except, if the rate is zero or de
minimis, zero cash deposit will be required); (2) for previously
investigated or reviewed PRC and non-PRC exporters not listed above
that received a separate rate in a prior segment of this proceeding,
the cash deposit rate will continue to be the exporter-specific rate;
(3) for all PRC exporters of subject merchandise that have not been
found to be entitled to a separate rate, the cash deposit rate will be
the PRC-wide rate of 111.73 percent; and (4) for all non-PRC exporters
of subject merchandise which have not received their own rate, the cash
deposit rate will be the rate applicable to the PRC exporter that
supplied that non-PRC exporter. These deposit requirements, when
imposed, shall remain in effect until further notice.
Notification to Importers
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f)(2) to file a certificate
regarding the reimbursement of
[[Page 34699]]
antidumping duties prior to liquidation of the relevant entries during
this review period. Failure to comply with this requirement could
result in the Secretary's presumption that reimbursement of antidumping
duties occurred and the subsequent assessment of double antidumping
duties.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.
Dated: June 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-14391 Filed 6-17-10; 8:45 am]
BILLING CODE 3510-DS-M