Suspension Agreement on Silicomanganese From Ukraine; Final Results of Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of the administrative review of the suspension agreement on silicomanganese from Ukraine.

SUMMARY:

In response to a request from Eramet Marietta Inc. (petitioner), the Department of Commerce (“the Department”) is conducting an administrative review of the suspension agreement on silicomanganese from Ukraine (“the Agreement”) for the period November 1, 1998 through October 31, 1999, to review the current status of, and compliance with, the Agreement. For the reasons stated in this notice, the Department determines that the Government of Ukraine (“the GOU”) is not in compliance with the Agreement. The final results are listed in the section titled “Final Results of Review,” infra.

EFFECTIVE DATE:

June 11, 2001.

FOR FURTHER INFORMATION CONTACT:

Jean Kemp or Stephen Bailey, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone: (202) 482-4037 or (202) 482-1102, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

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 (“Act”) by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR Part 351 (2000).

Background

On October 31, 1994, the Department signed an agreement with the GOU which suspended the antidumping investigation on silicomanganese from Ukraine. See Silicomanganese from Ukraine; Suspension of Investigation 59 FR 60951 (November 29, 1994). In accordance with section 734(g) of the Act, on December 6, 1994, the Department published its final determination of sales at less than fair value in this case. See Notice of Final Determination of Sales at Less Than Fair Value: Silicomanganese From Ukraine, 59 FR 62711(December 6, 1994).

On November 30, 1999, petitioner submitted a request for an administrative review pursuant to the notice of Antidumping and Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 64 FR 62167 (November 16, 1999). On December 28, 1999, the Department initiated a review of the Agreement. See Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews, 64 FR 72644, (“Initiation Notice”). On December 5, 2000, the Department of Commerce (“the Department”) published the preliminary results of its administrative review of the Suspension Agreement on Silicomanganese from Ukraine (65 FR 75921) (“Preliminary Results”). The Department is conducting this review in accordance with section 751(a)(1) of the Act.

On November 2, 1999, the Department initiated (Notice of Inititation of Five-Year “Sunset” Reviews, 64 FR 59160) and the International Trade Commission (“ITC”) instituted (Silicon Metal From Argentina, Brazil, and China and Silicomanganese From Brazil, China, and Ukraine, 64 FR 59204, 59209) a sunset review of the suspended antidumping duty investigation on silicomanganese from Ukraine, pursuant to section 751(c) of the Act. As a result of its review, on September 27, 2000, the Department determined (Final Results of Full Sunset Review: Silicomanganese from Ukraine, 65 FR 58045) that termination of the agreement on silicomanganese from Ukraine would be likely to lead to continuation or recurrence of dumping and notified the ITC of the magnitude of the margin likely to prevail were the agreement terminated. On February 5, 2001, the ITC determined (Silicomanganese from Brazil, China, and Ukraine Investigations Nos. 731-TA-671-673 (Review), 66 FR 8981; ITC Publication # 3386) that termination of the suspended investigation on silicomanganese from Ukraine would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. Therefore, on February 16, 2001, the Department published, (Continuation of Antidumping Duty Orders on Silicon Metal From Brazil and China and on Silicomanganese From Brazil and China, and Continuation of Suspended Antidumping Duty Investigation on Silicomanganese From Ukraine, 66 FR 10669) notice of continuation of the suspended investigation on silicomanganese from Ukraine, pursuant to section 751(c) and 752 of the Act.

Scope of Review

The merchandise covered by this agreement is silicomanganese. Silicomanganese, which is sometimes called ferrosilicon manganese, is a ferroalloy composed principally of manganese, silicon, and iron, and normally containing much smaller proportions of minor elements, such as carbon, phosphorous and sulfur. Silicomanganese generally contains by weight not less than 4 percent iron, more than 30 percent manganese, more than 8 percent silicon and not more than 3 percent phosphorous. All compositions, forms and sizes of silicomanganese are included within the scope of this agreement, including silicomanganese slag, fines and briquettes. Silicomanganese is used primarily in steel production as a source of both silicon and manganese. This agreement covers all silicomanganese, regardless of its tariff classification. Most silicomanganese is currently classifiable under subheading 7202.30.0000 of the Harmonized Tariff Schedule of the United States (“HTS”). Some silicomanganese may also currently be classifiable under HTS subheading 7202.99.5040. Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope is dispositive.

Period of Review

The period of review (“POR”) is November 1, 1998 through October 31, 1999.

Analysis of Comments Received

All issues raised in the case brief to this administrative review are addressed in the “Issues and Decision Memorandum” (“Decision Memorandum”) from Joseph A. Spetrini, Deputy Assistant Secretary, Import Administration, to Faryar Shirzad, Assistant Secretary for Import Administration, dated June, 4, 2001, which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, Room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based upon our analysis of the comments received, there have been no changes since issuing the preliminary results.

Final Results of Review

Section 751(a)(1)(C) of the Act specifies that the Department shall “review the current status of, and compliance with, any agreement by reason of which an investigation was suspended* * *.” In this case the Department and the GOU signed the Agreement suspending the antidumping duty investigation on silicomanganese from Ukraine on October 31, 1994.

As discussed in the Preliminary Results, in order to effectively restrict the volume of exports of silicomanganese from Ukraine to the United States, the Agreement provides for the implementation by the GOU of certain provisions (Article VII). Moreover, Article IX of the Agreement (Monitoring) requires the GOU to “provide to the Department such information as is necessary and appropriate to monitor the implementation of and compliance with the terms of {the} Agreement.” One of the tools the Department uses to monitor the Agreement is sales reports filed by the GOU. Specifically, the GOU is required to collect and provide to the Department sales data on silicomanganese from Ukraine to the United States, in the home market, and to countries other than the United States in the format specified in Appendix B. Although the Agreement specifies that these sales reports are to be submitted to the Department on a semi-annual basis, subsequent to the signing of the Agreement the GOU agreed to submit the sales reports on a quarterly basis. See Paris Minutes, Memorandum of Consultations Regarding Administration of the Silicomanganese Suspension Agreement, (May 28, 1998), attached as exhibit 1 to petitioner's October 6, 2000 letter.

For this administrative review, we find that the GOU failed to provide the Department with sales reports required by the Agreement. The GOU failed to submit a sales report due December 1, 1999. The GOU also denied the Department's request that sales reports, placed on the administrative record of the Agreement on December 1, 1998, March 1, 1999, May 31, 1999 and September 10, 1999, also be placed onto the administrative record of this review. The GOU expressed concern that the previously submitted sales reports, if submitted in this review, would be released to the general public. In a public letter dated February 14, 2001, the GOU pointed out that disclosure of “economic activity” and “commercial secrets” would cause damage to Ukrainian silicomanganese producers Nikopol Ferroalloys (“Nikopol”) and Zaporizhzhya Ferroalloys (“Zaporizhzhya”). The Department replied to this letter on February 16, 2001, pointing out that the information contained in the reports would be protected by administrative protective order (APO) and would not be available to the general public as part of this administrative review.

As discussed above, these sales reports are important in order to determine whether or not the GOU has effectively restricted the volume of exports of silicomanganese from Ukraine to the United States. Despite the Department's letter of February 16, 2001, the GOU has not responded to the Department's request to allow these reports to be placed on the administrative record of this proceeding. Moreover, the GOU has never submitted the sales report required on December 1, 1999. As a result, the Department does not believe the GOU has acted to the best of its ability to cooperate in this administrative review.

Section 776 (b) of the Act provides that, in selecting from the facts available, adverse inferences may be used when an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. Because the GOU, as discussed above, has not acted to the best of its ability in this administrative review, the Department finds, as adverse facts available, that the GOU is not in compliance with the Agreement. Moreover, we note that the GOU has continued its pattern of non-compliance beyond this POR, by failing to file any required quarterly sales reports since, and including, the report required on December 1, 1999.

In the preliminary results of this administrative review, the Department stated, “If the Department makes a final determination of non-compliance, it will then be necessary to determine whether this non-compliance rises to the level of a violation as defined in Article XII of the Agreement.” The Department finds non-compliance on the part of the GOU for its failure to submit the December 1, 1999 sales report and its failure to place sales reports, placed on the administrative record of the Agreement, onto the administrative record of this review. In addition, the Department views the GOU's failure to provide sales reports for any of the reporting periods after December 1999 as a continuing pattern of uncooperative behavior. Article XII of the Agreement requires that prior to making a determination of an alleged violation, the Department will engage in emergency consultations with the GOU. Therefore, the Department has requested emergency consultations with the GOU, consistent with Article XII of the Agreement. If, pursuant to these consultations, the Department finds that the GOU's non-compliance constitutes a violation pursuant to section 351.209 of the Department's regulations, the Department will terminate the Agreement and issue an antidumping duty order.

This notice is published in accordance with sections 751(a) and 777(i) of the Act.

Appendix—List of Issues

1. Whether the GOU has failed to comply with the information reporting requirements of the Agreement.

2. Whether the GOU has failed to establish and maintain the required regimes necessary to implement the price and volume restrictions of the Agreement.

3. Whether the GOU's failures to comply with the Agreement constitute violations of the Agreement.

4. Whether the GOU has effectively given notice of termination of the Agreement, requiring the Department to issue an order and take the other steps required when an Agreement has been violated.