----------------------------------------------------------------------- DEPARTMENT OF COMMERCE INTERNATIONAL TRADE ADMINISTRATION [A-570-832] Pure Magnesium From the People's Republic of China: Preliminary Results of Antidumping Duty New Shipper Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce
SUMMARY: In response to a request from one manufacturer/exporter, Taiyuan Heavy Machinery Import and Export Corporation, the Department of Commerce is conducting a new shipper administrative review of the antidumping duty order of Pure Magnesium from the People's Republic of China. The review covers the period May 1, 1996, through October 31, 1996. We have preliminarily determined that U.S. sales have been made below the normal value (``NV''). If these preliminary results are adopted in our final results of administrative review, we will instruct the U.S. Customs Service to assess antidumping duties based on the difference between Export Price (``EP'') and NV. Interested parties are invited to comment on these preliminary results. EFFECTIVE DATE: October 23, 1997. FOR FURTHER INFORMATION CONTACT: Everett Kelly or Brian Smith, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-4194 or (202) 482-1766, respectively. SUPPLEMENTARY INFORMATION: Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930, as amended (``the Act''), by the Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise indicated, all citations to the Department's regulations are to those codified at 19 CFR Part 353 (April 1997). Where appropriate, references are made to the Department's final regulations, codified at 19 CFR 351 (62 FR 27296), as a statement of current departmental practice. Background On November 3, 1997, the Department of Commerce (``the Department'') received a request from Taiyuan Heavy Machinery Import and Export Corporation (``Taiyuan'') for a new shipper review pursuant to section ---- page 55216 ---- 751(a)(2)(B) of the Act and section 19 CFR 353.22(h) of the Department's regulations. Section 751(a)(2) of the Act and section 19 CFR 353.22(h) of the Department's regulations govern determinations of antidumping duties for new shippers. These provisions state that, if the Department receives a request for review from an exporter or producer of the subject merchandise stating that it did not export the merchandise to the United States during the period covered by the original less-than- fair-value investigation (the ``POI'') and that such exporter or producer is not affiliated with any exporter or producer who exported the subject merchandise during that period, the Department shall conduct a new shipper review to establish an individual weighted- average dumping margin for such exporter or producer, if the Department has not previously established such a margin for the exporter or producer. The regulations require that the exporter or producer shall include in its request, with appropriate certifications: (i) the date on which the merchandise was first entered, or withdrawn from warehouse, for consumption, or, if it cannot certify as to the date of first entry, the date on which it first shipped the merchandise for export to the United States or if the merchandise has not yet been shipped or entered, the date of sale; (ii) a list of the firms with which it is affiliated; and (iii) a statement from such exporter or producer, and from each affiliated firm, that it did not, under its current or a former name, export the merchandise during the POI (19 CFR 353.22(h)(2)). Taiyuan's request was accompanied by information and certifications establishing the effective date on which it first shipped and entered pure magnesium. Taiyuan also has no affiliated companies and therefore is not affiliated with any person or corporation which exported pure magnesium from the People's Republic of China (``PRC'') during the POI. Based on the above information, the Department initiated this new shipper review of Taiyuan (Notice of Initiation of New Shipper Antidumping Duty Administrative Review: Pure Magnesium from the People's Republic of China (61 FR 69067 December 31, 1996)). The Department is now conducting this review in accordance with section 751 of the Act and section 19 CFR 353.22. Taiyuan submitted responses to the Department's antidumping questionnaire and the Department attempted to verify this information at the facilities of Taiyuan and its supplier in May 1997. Scope of Review The product covered by this review is pure primary magnesium regardless of chemistry, form or size, unless expressly excluded from the scope of this investigation. Primary 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 primary magnesium is used as an input in producing magnesium alloy. Pure primary magnesium encompasses: (1) Products that contain at least 99.95% primary magnesium, by weight (generally referred to as ``ultra-pure'' magnesium); (2) Products containing less than 99.95% but not less than 99.8% primary magnesium, by weight (generally referred to as ``pure'' magnesium); and (3) Products (generally referred to as ``off-specification pure'' magnesium) 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. ``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 this investigation are alloy primary magnesium (that meets as 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 or less than 50% by weight), an remelted magnesium whose pure primary magnesium content is less than 50% by weight. Pure magnesium products covered by this 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. Separate Rates In proceedings involving non-market-economy (``NME'') countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty deposit rate. To establish whether a firm is sufficiently independent from government control to be entitled to a separate rate, the Department analyzes each exporting entity under a test arising out of the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China (56 FR 20588, May 6, 1991) and amplified in 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''). Under the separate rates criteria, the Department assigns separate rates in nonmarket economy cases only if the respondent can demonstrate the absence of both de jure and de facto governmental control over export activities. 1. De Jure Control Taiyuan has placed on the administrative record documents to demonstrate absence of de jure control; the ``Law of the People's Republic of China on Industrial Enterprises Owned by the Whole People,'' adopted on April 13, 1988, (the Industrial Enterprises Law), and the 1992 regulations that supplemented it, ``Regulations for Transformation of Operational Mechanisms of State-Owned Industrial Enterprises'' (Business Operation Provisions). We have analyzed these laws in previous cases and have found them to sufficiently establish an absence of de jure control of companies ``owned by the whole people,'' such as Taiyuan. (See, e.g., Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol from the People's Republic of China (``Furfuryl Alcohol'') 60 FR 22544 (May 8, 1995)). The Industrial Enterprises Law provides that enterprises owned by ``the whole people'' shall make their own management decisions, be responsible for their own profits and losses, choose their own suppliers, and purchase their own goods and materials. The Business Operation Provisions confer upon state-owned enterprises the responsibility for making investment decisions, the right to dispose of retained capital and assets, and the authority to form joint ventures and to merge with other enterprises. Taiyuan also states that pure magnesium does not appear on any government lists regarding export ---- page 55217 ---- provisions or export licensing, and that no quotas are imposed on pure magnesium. In sum, in prior cases, the Department examined both the Industrial Enterprises Law and the Business Operations Provisions, and found that they establish an absence of de jure control. We have no new information in this proceedings which would cause us to reconsider this determination with regard to Taiyuan. 2. De Facto Control The Department typically considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the EPs are set by or subject to the approval of a governmental authority; (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 (see Silicon Carbide and Furfuryl Alcohol). Taiyuan asserted the following: (1) It establishes its own EPs; (2) it negotiates contracts, without guidance from any governmental entities or organizations; (3) it makes its own personnel decisions; and (4) it retains the proceeds of its export sales, uses profits according to its business needs and has the authority to sell its assets and to obtain loans. During verification proceedings, Department officials viewed such evidence as sales documents that showed Taiyuan sales prices were negotiated solely by Taiyuan and its customer. In addition, the Department generally noted no significant indication of government involvement in Taiyuan's business operations. Taiyuan officials are appointed by a bureau of the provincial government, not the central government and there are no other known exporters under the control of the provincial government. Sales documents reviewed indicated that Taiyuan sales prices were negotiated solely by Taiyuan and its customer. In addition, the Department reviewed sales payments, bank statements and accounting documentation that provided evidence that Taiyuan received payment in U.S. dollars, which was deposited into its bank account after being converted to RMB (see Taiyuan Sales Verification Report at pg 7). This information, taken in its entirety, supports a finding that there is de facto an absence of governmental control of export functions. Consequently, we have preliminarily determined that Taiyuan has met the criteria for the application of separate rates (see Notice of Final Determination at Less Than Fair Value: Persulfates from the Peoples Republic of China, 62 FR 27222, May 19, 1997). Fair Value Comparisons To determine whether sales of the subject merchandise by Taiyuan to the United States were made at less than fair value, we compared the EP to the NV, as described in the ``Export Price and Constructed Export Price'' and ``Normal Value'' sections of this notice, below. Export Price and Constructed Export Price The Department used EP, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly by the PRC exporter to unrelated parties in the United States prior to importation into the United States and the constructed EP methodology was not warranted based on the facts of record. We calculated EP based on packed, FOB foreign-port prices to unrelated purchasers in the United States. We made deductions for foreign inland freight, loading, and port handling expenses, valued in a surrogate country. To value freight, we used Indonesia freight rates from a 1991 cable from the U.S. Embassy in Jakarta (see Preliminary Determination of Sales at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the PRC, 56 FR 66831, December 26, 1991). We selected India as the primary surrogate country for reasons explained in the ``Normal Value'' section below. Normal Value In every case conducted by the Department involving the PRC, the PRC has been treated as an non-market economy (``NME'') country. None of the parties to this proceeding has contested such treatment. Accordingly, we calculated NV in accordance with section 773(c) of the Act, which applies to non-market economy countries. In accordance with section 773(c)(4) of the Act, we must, to the extent possible, value the factors of production in one or more market economy countries that (1) are at a level of economic development comparable to that of the non-market economy country, and (2) are significant producers of comparable merchandise. We first determined that India, Pakistan, Egypt, Sri Lanka and Indonesia are each at a level of economic development comparable to the PRC in terms of per capita gross national product (``GNP''), the growth rate in per capita income, and the national distribution of labor. However, none of the countries are significant producers of the subject merchandise. Accordingly, we considered whether any of the potential surrogates produce comparable merchandise. As stated in previous cases, the material inputs used to produce magnesium and aluminum are different. However, according to both U.S. Bureau of Mines and Department of Commerce experts, both (1) are light metals in terms of molecular weight; (2) are produced using an electrolytic process, and (3) share some common end uses (e.g., dye casting) (see Notice of Final Determination: Pure and Alloy Magnesium from the Peoples Republic of China (60 FR 16437,16440, March 30, 1995) (``the PRC Magnesium Investigation'')). Therefore, in this administrative review, we have determined that aluminum constitutes comparable merchandise in the context of surrogate selection. The Department has determined that Indonesia and India are the countries most comparable to the PRC in terms of overall economic development and both are significant producers of comparable merchandise (aluminum) (see the PRC Magnesium Investigation). We have selected India as a reasonable surrogate country because it meets the Department's criteria for surrogate country selection. Where we could not find surrogate values from India, we valued those factors using values from Indonesia. Petitioner and respondent submitted publicly available information on surrogate values for the Department's consideration. The factors used to produce pure magnesium include materials, labor, and energy. To calculate NV, the reported factor quantities were multiplied by the appropriate surrogate values from India for the different inputs. To value each factor of production, we used, where possible, publicly available information. We have preliminarily accepted Taiyuan's reporting of its suppliers' factors of production based on its entire fiscal year rather than the POR because POR production was limited. For purposes of calculating NV, we valued reported PRC factors of production (adjusted based on verification findings) as follows, in accordance with section 773(c) of the Act: The factors of production for which we used surrogate values included: raw materials, packing materials, labor, diesel fuel, electricity, truck freight, factory overhead, selling, general and administrative and profit we used ---- page 55218 ---- public information from various sources. See October 16, 1997, Calculation Memorandum for details. Reported raw materials include: ferrosilicon, dolomite, calcinate dolomite, flux (powder), flux (lump), sulphuric acid, fluorite powder, sulphur powder, and barium chloride. Reported packing materials include: wooden crates, plastic bags, and steel straps. With regard to labor, the Department has concluded that, while wages and per-capita GNP are positively correlated, there is a great variation in the wage rates of the market economy countries that the Department treats as being economically comparable. As a practical matter, this means that the result of an NME case can vary widely depending on which of several economically comparable countries is selected as the surrogate. In order to eliminate the variability of wage rates in countries with similar per capita GNPs, we used a regression-based wage rate. See October 16, 1997, Calculation Memorandum for details of valuation of factors of Production. Verification As provided in section 782(i) of the Act, we verified information provided by the respondent by using standard verification procedures, including on-site inspection of the respondent's facilities, the examination of relevant sales and financial records, and selection of original documentation containing relevant information. Our verification findings are outlined in the verification report. Currency Conversion We made currency conversions pursuant to section 773A(a) of the Act and section 353.60 of the Department's regulations based on the rates certified by the Federal Reserve Bank. Preliminary Results of the Review As a result of this review, we preliminarily determine that the following margin exists for the period May 1, 1996, through October 31, 1996: ------------------------------------------------------------------------ Percent Manufacturer/producer/exporter margin ------------------------------------------------------------------------ Taiyuan Heavy Machinery Import and Export Corporation......... 83.92 ------------------------------------------------------------------------ Interested parties may request disclosure within 5 days of the date of publication of this notice and may request a hearing within 10 days of publication. Any hearing, if requested, will be held at the earliest convenience of the parties but not later than 34 days after the date of publication or the first business day thereafter. Case briefs from interested parties may be submitted not later than 20 days after the date of publication. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 27 days after the date of publication. The Department will issue the final results of this new shipper administrative review, including the results of its analysis of issues raised in any such written comments or at a hearing, within 90 days of issuance of these preliminary results. Upon completion of this new shipper review, the Department will issue appraisement instructions directly to the Customs Service. The results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by this review and for future deposits of estimated duties. Furthermore, upon completion of this review, the posting of a bond or security in lieu of a cash deposit, pursuant to section 751(a)(2)(B)(iii) of the Act and section 353.22(h)(4) of the Department's interim regulations, will no longer be permitted and, should the final results yield a margin of dumping, a cash deposit will be required for each entry of the merchandise. The following deposit requirements will be effective upon publication of the final results of this new shipper antidumping duty administrative review for all shipments of pure magnesium from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for the reviewed company will be that established in the final results of this new shipper administrative review; (2) the cash deposit rate for all other PRC exporters will continue to be 108.26 percent, the PRC-wide rate established in the LTFV and (3) the cash deposit rate for non-PRC exporters of subject merchandise will be the rate applicable to the PRC supplier of that exporter. investigation. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 353.36 to file a certificate regarding the reimbursement of 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 new shipper administrative review and notice are in accordance with section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and Section 19 CFR 353.22(h) 1996. Dated: October 16, 1997. Robert S. LaRussa, Assistant Secretary for Import Administration. [FR Doc. 97-28154 Filed 10-22-97; 8:45 am] BILLING CODE 3510-DS-P
The Contents entry for this article reads as follows: International Trade Administration NOTICES Antidumping: Magnesium, pure, from-- China, 55215