Suspension Agreement on Silicomanganese from Ukraine; Preliminary Results of Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary 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 preliminarily determines that the Government of Ukraine (“the GOU”) is not in compliance with the Agreement. The preliminary results are listed in the section titled “Preliminary Results of Review,” infra. Interested parties are invited to comment on these preliminary results. Parties who submit comments are requested to submit with the argument: (1) A statement of the issues, and (2) a brief summary of the arguments.

EFFECTIVE DATE:

December 5, 2000.

FOR FURTHER INFORMATION CONTACT:

Jean Kemp or Carrie Blozy, 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) 482-0165, 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 Government of Ukraine 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 (“Initiation Notice”), 64 FR 72644 (December 28, 1999).

On August 4, 2000, the Department extended the time limit for the preliminary results of review by 120 days. See Notice of Extension of Time Limits for the Preliminary Results of Administrative Review of the Suspension Agreement on Silicomanganese From Ukraine, 65 FR 47959 (August 4, 2000). On October 6, 2000, petitioner submitted a letter to the Department requesting that the Department determine within the administrative review that the Government of Ukraine has violated the Agreement. On November 14, 2000, the Department placed on the record of this administrative review a copy of the public version of all sales reports filed by the GOU which cover the reporting periods during the period of review.

The Department is conducting this review in accordance with section 751(a)(1) 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.

Preliminary 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. 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), which are attached as exhibit 1 to petitioner's October 6, 2000 letter.

For the first three reporting periods of the POR, the GOU timely submitted their sales reports; however, to date, the GOU has not filed a sales report for the fourth reporting period of the POR. In their October 6, 2000 letter, which was filed on the record of this administrative review, petitioner, arguing that the GOU has violated the Agreement and that the Agreement can no longer be effectively monitored, calls for the Department to cancel the Agreement, issue the antidumping duty order and take the other actions required by law when a suspension agreement has been violated. Specifically, as evidence that the GOU has violated the Agreement, petitioner cites the failure by the GOU to file a sales report for the last four reporting periods as well as other alleged sales reporting and implementation violations, which were alleged in a February 3, 1998 letter to the Department, a copy of which is attached as an exhibit to the October 6, 2000 letter.

It is indisputable that the GOU failed to file a required sales report for the last period of the POR. Although parties may dispute whether this omission alone constitutes non-compliance with the Agreement, absent complete and verifiable information on sales of silicomanganese from Ukraine during the POR, the Department cannot conclusively determine whether the GOU has complied with the provisions of the Agreement restricting the price and volume of direct and indirect exports of silicomanganese from Ukraine to the United States over the POR. Therefore, we preliminarily determine that the GOU has not been in compliance with the Agreement during the POR. Nevertheless, at this time we are not reaching a determination on petitioner's allegation that the Agreement has been violated. As stated at the beginning of this section, the purpose of this administrative review is to “review the current status of, and compliance with” the Agreement. Consequently, within this administrative review, the Department will determine the status of the Agreement and whether the GOU was in compliance with the Agreement over the POR. 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.

Therefore, to provide all interested parties an opportunity to address our preliminary finding of non-compliance and whether such non-compliance constitutes a violation, we are extending the deadline for submission of factual information, other than the reports required under the Agreement, until 30 days after publication of this notice in the Federal Register.

Public Comment

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 60 days of the date of publication of this notice. Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief, and may make rebuttal presentations only on arguments included in that party's rebuttal brief. See 19 C.F.R. 351.310(c).

Any hearing, if requested, will be held 67 days after the date of publication or the first business day thereafter. Case briefs from interested parties may be submitted not later than 60 days after publication. Rebuttal briefs, limited to issues raised in case briefs, may be filed not later than five days after the date of filing of case briefs. If this review proceeds normally, the Department will publish the final results of this administrative review, including its analysis of issues raised in the case and rebuttal briefs, not later than 120 days after the date of publication of this notice.

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