Initiation of Anticircumvention Inquiry on Antidumping Duty Order on Ferrovanadium and Nitrided Vanadium From the Russian Federation, 26243-26247 [2011-11121]
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Final Results of Review
The Department determines that
revocation of the antidumping duty
order on paper clips from the PRC
would be likely to lead to continuation
or recurrence of dumping at the
following weighted-average margins:
Weightedaverage margin
(percent)
Manufacturers/exporters/producers
Shanghai Lansheng Corporation .....................................................................................................................................................
Zhejiang Light Industrial Products Import & Export Corporation ....................................................................................................
Zhejiang Machinery and Equipment Import & Export Corporation .................................................................................................
PRC-wide Rate ................................................................................................................................................................................
Notification Regarding Administrative
Protective Order
This notice also serves as the only
reminder to parties subject to
administrative protective order (‘‘APO’’)
of their responsibility concerning the
return or destruction of proprietary
information disclosed under APO in
accordance with 19 CFR 351.305.
Timely notification of the return or
destruction of APO materials or
conversion to judicial protective order is
hereby requested. Failure to comply
with the regulations and terms of an
APO is a violation which is subject to
sanction.
We are issuing and publishing the
results and notice in accordance with
sections 751(c), 752(c), and 777(i)(1) of
the Act.
Dated: April 26, 2011.
Paul Piquado,
Acting Deputy Assistant Secretary for Import
Administration.
[FR Doc. 2011–11126 Filed 5–5–11; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–821–807]
Initiation of Anticircumvention Inquiry
on Antidumping Duty Order on
Ferrovanadium and Nitrided Vanadium
From the Russian Federation
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from
AMG Vanadium, Inc. (AMG Vanadium),
the Department of Commerce (the
Department) is initiating an
anticircumvention inquiry to determine
whether imports of vanadium pentoxide
from the Russian Federation (Russia)
that is converted into ferrovanadium in
the United States are circumventing the
antidumping duty order on
ferrovanadium and nitrided vanadium
(ferrovanadium) from Russia. See Notice
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AGENCY:
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of Antidumping Order: Ferrovanadium
and Nitrided Vanadium From the
Russian Federation, 60 FR 35550 (July
10, 1995).
DATES: Effective Date: May 6, 2011.
FOR FURTHER INFORMATION CONTACT:
David Goldberger or Rebecca Trainor,
AD/CVD Operations, Office 2, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–4136 or (202) 482–
4007, respectively.
SUPPLEMENTARY INFORMATION:
Background
On February 25, 2011, AMG
Vanadium submitted a request that the
Department initiate an
anticircumvention inquiry (AMG
Request), pursuant to section 781(a) of
the Tariff Act of 1930, as amended (the
Act), and 19 CFR 351.225(c) and (g), to
determine whether imports of vanadium
pentoxide from Russia that is processed
into ferrovanadium in the United States
are circumventing the antidumping duty
order on ferrovanadium from Russia.
Specifically, AMG Vanadium alleges
that the Evraz Group 1 is importing
vanadium pentoxide, an intermediate
product used in the production of
ferrovanadium, from its Russian affiliate
OAO Vanady-Tula. The imported
vanadium pentoxide is then tollconverted into ferrovanadium in the
United States by an unaffiliated
processor (which never takes title), prior
to sale in the United States. AMG
Vanadium alleges that this trade pattern
is circumventing the antidumping duty
order within the meaning of section
781(a) of the Act.
AMG Vanadium further claims that:
(1) The ferrovanadium sold in the
United States is of the same class or
kind of merchandise as the
ferrovanadium that is subject to the
order; (2) the ferrovanadium is
1 The Evraz Group includes OAO Vanady-Tula,
East Metals S.A., and East Metals N.A.
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26243
57.64
46.01
60.70
126.94
completed or assembled in the United
States from parts or components
produced in Russia; (3) the process of
converting vanadium pentoxide to
ferrovanadium in the United States is
minor or insignificant; and (4) the value
of the Russian vanadium pentoxide
constitutes a significant portion of the
value of the finished ferrovanadium
sold in the United States. Accordingly,
AMG Vanadium requests that the
Department include within the scope of
the ferrovanadium order vanadium
pentoxide manufactured in Russia,
regardless of form, that is produced,
exported, or imported by the Evraz
Group or any of its affiliates.
In response to the Department’s
March 9, 2011, request, on March 16,
2011, AMG Vanadium provided
additional information pertinent to its
anticircumvention inquiry request
(March 16 Submission).
On March 25, 2011, the Evraz Group
filed comments opposing AMG
Vanadium’s circumvention allegation
on the grounds that the Department is
legally precluded from including
vanadium pentoxide in the scope of the
order. The Evraz Group included in its
submission calculations performed
using a cost-based methodology, as an
alternative to the value-based
methodology used by AMG Vanadium,
arguing that AMG Vandium’s approach
leads to misleading results. Between
April 1 and 22, 2011, AMG Vanadium
and the Evraz Group submitted
additional comments with respect to
whether the Department should initiate
this anticircumvention inquiry. The
Department met with representatives of
AMG Vanadium and the Evraz Group on
March 3, and April 5, 2011,
respectively, to discuss the request.
Scope of the Order
The products covered by the
antidumping duty order are
ferrovanadium and nitrided vanadium,
regardless of grade, chemistry, form or
size, unless expressly excluded from the
scope of this order. Ferrovanadium
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includes alloys containing
ferrovanadium as the predominant
element by weight (i.e., more weight
than any other element, except iron in
some instances) and at least 4 percent
by weight of iron. Nitrided vanadium
includes compounds containing
vanadium as the predominant element,
by weight, and at least 5 percent, by
weight, of nitrogen. Excluded from the
scope of the order are vanadium
additives other than ferrovanadium and
nitrided vanadium, such as vanadiumaluminum master alloys, vanadium
chemicals, vanadium waste and scrap,
vanadium-bearing raw materials, such
as slag, boiler residues, fly ash, and
vanadium oxides.
The products subject to this order are
currently classifiable under subheadings
2850.00.20, 7202.92.00, 7202.99.50.40,
8112.40.30.00, and 8112.40.60.00 of the
Harmonized Tariff Schedule of the
United States (HTSUS). Although the
HTSUS subheadings are provided for
convenience and customs purposes, our
written description of the scope is
dispositive.
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Scope of the Anticircumvention Inquiry
The product subject to this
anticircumvention inquiry is vanadium
pentoxide (V2O5) from Russia, which is
usually in a granular form and may
contain other substances, including
silica (SiO2), manganese, and sulfur, and
which is converted into ferrovanadium
in the United States. Such merchandise
is classifiable under subheading
2825.30.0010 of the HTSUS.
As noted above, interested parties
have filed comments concerning the
initiation of this anticircumvention
inquiry. Although vanadium pentoxide
is excluded from the scope of the order,
AMG Vanadium argues that the
Department’s regulations and legal
precedent allow for the Department to
consider expressly-excluded
merchandise in an anticircumvention
proceeding. AMG Vanadium cites Steel
Wire Rope from Mexico; Affirmative
Final Determination of Circumvention
of Antidumping Duty Order, 60 FR
10831 (February 28, 1995) and several
cases decided by the Court of Appeals
for the Federal Circuit (the Court),2 in
support of its contention that
anticircumvention determinations are
distinguished from conventional scope
determinations, in that the criteria the
Department considers in making an
anticircumvention determination do not
include whether the imported
2 See, e.g., Nippon Steel Corp. v. United States,
219 F.3d 1348 (Fed. Cir. 2000) (Nippon Steel); and
Target Corp. v. United States, 609 F.3d 1352 (July
23, 2010).
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merchandise was initially excluded
from the scope of the order.
The Evraz Group argues that
including vanadium pentoxide within
the scope of the antidumping duty order
would be inconsistent with the
International Trade Commission’s (ITC)
injury investigation, and the legal
precedent in Wheatland Tube Co. v.
United States, 161 F.3d 1365, 1370 (Fed.
Cir. 1998) (Wheatland Tube).
Specifically, the Evraz Group argues
that the ITC expressly excluded
vanadium pentoxide from the scope of
the injury investigation at the request of
the domestic industry. In Wheatland
Tube, the Evraz Group asserts, the Court
ruled that the domestic industry cannot
seek to broaden the scope after having
made representations to the ITC that the
product at issue was not a like product
for purposes of the injury
determination; and that although the
Department may interpret and clarify
the scope of the antidumping duty
orders, it may not change or interpret
them contrary to their terms.
The Department addressed this issue
in the Initiation of Anticircumvention
Inquiry on Antidumping and
Countervailing Duty Orders on HotRolled Lead and Bismuth Carbon Steel
Products from the United Kingdom and
Germany, 62 FR 34213 (June 25, 1997)
(Lead and Bismuth). In that case, the
Department concluded that the theory
that parts expressly excluded from the
scope of an antidumping order cannot
be subject to an anticircumvention
inquiry is contrary to, and would
undermine, the core principles of the
anticircumvention statute. Citing the
legislative history, we observed that
Congress intended to allow
anticircumvention inquiries into parts
or components that meet the criteria of
section 781(a), as ‘‘{t}he underlying
rationale of the anticircumvention
statute is that, where the criteria of
section 781(a) are met, the parts and
components subject to the finding of
circumvention are, in all meaningful
respects, being imported as the subject
merchandise, not as parts or
components per se. The processing in
the United States is of such a minor or
insignificant nature as to be
irrelevant.’’ 3 Thus, ‘‘{t}he application of
the U.S. finishing or assembly provision
will not require new injury findings as
to each part or component. The
anticircumvention provision is intended
to cover efforts to circumvent an order
by importing disassembled or
unfinished merchandise for assembly in
3 See, H.R. Conf. Rep. No. 576, 100th Cong., 2d
Sess. 603 (1988) and Lead and Bismuth, 62 FR
34213, 34215.
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the United States. Hence, the ITC would
generally advise as to whether the parts
or components taken as a whole fall
within the injury determination.’’ 4
This is consistent with the Federal
Circuit’s opinions reviewing the
Department’s anticircumvention
inquiries. Although Wheatland Tube
and Nippon Steel dealt with the minor
alteration provision (section 781(c) of
the Act), rather than the provision for
merchandise completed in the United
States (section 781(a) of the Act) at issue
here, the Court’s analysis is instructive.
In Wheatland Tube, the Court held that
‘‘the line and dual-certified pipe accused
of circumventing the Standard Pipe
Orders is the same pipe that the orders
expressly exclude.’’ Wheatland Tube,
161 F. 3d at 1369. In contrast, in Nippon
Steel, the Court held that ‘‘Commerce
was performing a function Congress has
given to it—to determine whether an
antidumping duty order has been
circumvented by making minor
alterations in the form of the product
otherwise subject to that order.’’ Nippon
Steel, 219 F. 3d at 1354. The Court’s
analysis allowed that a circumvention
inquiry is proper where, but for an act
meant to circumvent the order, the
product would be covered (contrast the
carbon steel in Nippon Steel with the
line pipe in Wheatland Tube). Here, the
covered product is ferrovanadium and
the alleged act meant to circumvent the
order on ferrovanadium from Russia is
further processing in the United States.
For these reasons, we determine that the
Evraz Group’s arguments do not provide
a legal basis for rejecting AMG
Vanadium’s application for an
anticircumvention inquiry pursuant to
section 781(a) of the Act.
Initiation of Anticircumvention
Proceeding
Applicable Statute
Section 781(a) of the Act provides that
the Department may find circumvention
of an antidumping duty order when
merchandise of the same class or kind
subject to the order is completed or
assembled in the United States. In
conducting anticircumvention inquiries
under section 781(a)(1) of the Act, the
Department relies upon the following
criteria: (A) Merchandise sold in the
United States is of the same class or
kind as any other merchandise that is
the subject of an antidumping duty
order produced in a foreign country that
is subject to an antidumping duty order;
(B) such merchandise sold in the United
States is completed or assembled in the
United States from parts or components
4 Id.
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produced in the foreign country with
respect to which the antidumping duty
order applies; (C) the process of
assembly or completion in the United
States is minor or insignificant; and (D)
the value of the parts or components
referred to in (B) is a significant portion
of the total value of the merchandise. As
discussed below, AMG Vanadium
presented evidence with respect to these
criteria.
A. Merchandise of the Same Class or
Kind
AMG Vanadium states that the
merchandise sold in the United States is
ferrovanadium. As this merchandise is
covered by the scope of the
antidumping duty order, the
merchandise is of the same class or kind
as the merchandise subject to the
antidumping duty order.
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B. Completion of Merchandise in the
United States
AMG Vanadium alleges that
vanadium pentoxide produced in Russia
is imported into the United States and
further processed into ferrovanadium.
According to AMG Vanadium, the
Russian vanadium pentoxide is
converted into ferrovanadium by Bear
Metallurgical Company (Bear), a toll
processor unaffiliated with the Evraz
Group. AMG Vanadium believes that
Evraz Group member, East Metals NA,
retains title to the merchandise during
the toll conversion. See AMG Request at
pages 5–7, and March 16 Response at
pages 6–10.
C. Minor or Insignificant Process
AMG Vanadium asserts that the
process of converting vanadium
pentoxide into ferrovanadium is a
limited and minor process as compared
to the production process for vanadium
pentoxide. See AMG Request at pages
7–10, and Exhibits 13–15 for a detailed
discussion of the two production
processes.
AMG Vanadium argues that an
analysis of the relevant statutory factors
of section 781(a)(2) of the Act supports
its conclusion that the processing in the
United States is ‘‘minor or insignificant.’’
These factors include: (1) The level of
investment in the United States; (2) the
level of research and development in
the United States; (3) the nature of the
production process in the United States;
(4) the extent of production facilities in
the United States; and (5) whether the
value of the processing performed in the
United States represents a small
proportion of the value of the
merchandise sold in the United States.
AMG Vanadium argues that the
processing in the United States is
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‘‘minor and insignificant’’ as the term is
defined in section 781(a)(2) of the Act
when compared to the complex and
capital-intensive process involved in
producing vanadium pentoxide. AMG
Vanadium’s analysis of the statutory
factors to determine whether the process
is minor or insignificant in accordance
with section 782(a)(2) of the Act follows
below.
(1) Level of Investment
AMG Vanadium asserts that the
processing of vanadium pentoxide into
ferrovanadium, as discussed in the
AMG Request,5 is neither complex nor
capital-intensive and does not require
extensive production facilities.
Accordingly, AMG Vanadium contends
that the level of investment for
ferrovanadium conversion from
vanadium pentoxide is low relative to
the level of investment associated with
vanadium pentoxide production.
(2) Level of Research and Development
AMG Vanadium states that the
process for converting vanadium
pentoxide into ferrovanadium as
performed by the toll-processor Bear is
unchanged since the initiation of the
underlying antidumping duty
investigation in 1994. Accordingly,
AMG Vanadium believes the level of
research and development in the United
States for converting vanadium
pentoxide into ferrovanadium is low.
(3) Nature of the Production Process in
the United States
The production processes for both
vanadium pentoxide and ferrovanadium
are detailed in the AMG Request, as
referenced above. AMG Vanadium
maintains that the process of converting
vanadium pentoxide into ferrovanadium
is limited and minor as compared to the
process of manufacturing vanadium
pentoxide.
(4) Extent of Production Facilities in the
United States
AMG Vanadium asserts that,
consistent with its description of the
production process, the conversion of
vanadium pentoxide requires minimal
capital equipment. At Exhibit 16 of the
AMG Request, AMG Vanadium
provided overhead photos comparing
the extensive size of the Evraz Group’s
vanadium pentoxide production facility
with the considerably smaller
‘‘footprint’’ of Bear’s toll-processing
facility in order to support its
contention that the facilities necessary
for processing vanadium pentoxide into
ferrovanadium are significantly smaller
5 See
PO 00000
AMG Request at 7–11.
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26245
than those necessary for vanadium
pentoxide production.
(5) Value of Processing in the United
States Compared to Value of the
Merchandise Sold in the United States
To support its contention that the
value of the processing performed in the
United States is a small portion of the
total value of the merchandise sold in
the United States, AMG Vanadium
calculated the difference between the
value of ferrovanadium sold in the
United States, and the value of the
vanadium pentoxide consumed to
produce the ferrovanadium. For this
calculation, AMG Vanadium based the
value of ferrovanadium on the monthly
average of the U.S. market prices for
ferrovanadium with 80 percent
vanadium content, as published in the
metals industry publication Ryan’s
Notes. Similarly, AMG Vanadium based
the value of vanadium pentoxide on the
monthly average of the U.S. market
prices for vanadium pentoxide
published in Ryan’s Notes, and then
calculated the total value of vanadium
pentoxide required to produce one unit
of ferrovanadium with 80 percent
vanadium content. In its calculations,
AMG Vanadium added an amount to the
vanadium pentoxide price to represent
the estimated cost of freight from the
U.S. port to the processing facility. AMG
Vanadium calculated a ratio of the
differences between the two sets of
prices to average ferrovanadium prices,
and found that the average annual value
for processing vanadium pentoxide into
ferrovanadium ranged from 6.5 to
approximately 7 percent of the value of
finished ferrovanadium during 2009,
and approximately 15 to 15.8 percent in
2010. See AMG Request at pages 12–14
and Exhibits 17 and 18, and March 16
Response at pages 13–18 and Exhibit 10.
D. Value of Merchandise Produced in
the Foreign Country Is a Significant
Portion of the Value of the Merchandise
Sold in the United States
As stated above, AMG Vanadium
contends that the value of the
processing performed in the United
States represents a minor portion of the
value of the completed merchandise.
Therefore, that analysis necessarily
implies that the value of the Russianorigin vanadium pentoxide consumed to
produce ferrovanadium is a significant
portion of the total value of the
merchandise sold in the United States.
AMG Vanadium estimates the value of
the Russian vanadium pentoxide
consumed to produce ferrovanadium to
be 84 percent or greater of the value of
the ferrovanadium sold in the United
States (i.e., the difference between the
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total value of the ferrovanadium sold in
the United States and the value of the
U.S. conversion described above). See
AMG Request at page 14.
E. Factors To Consider in Determining
Whether Action Is Necessary
Section 781(a)(3) of the Act identifies
additional factors that the Department
shall consider in the Department’s
decision to include parts or components
in an antidumping duty order as part of
an anticircumvention investigation.
These factors are discussed below.
Pattern of Trade, Including Sourcing
Patterns
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Affiliation
Under section 781(a)(3)(B) of the Act,
the Department shall take into account
whether the manufacturer or exporter of
the parts or components is affiliated
with the person who assembles or
completes the merchandise sold in the
United States from the parts or
components produced in the foreign
country when making a decision in an
anticircumvention case. As described
above and in the AMG Request, AMG
Vanadium states that the Evraz Group,
through its affiliates, produces
vanadium pentoxide in Russia, ships
and imports it into the United States,
has it converted into ferrovanadium by
an unaffiliated company while
maintaining title to the product, and
sells the completed ferrovanadium to
customers in the United States.
Accordingly, AMG Vanadium maintains
that the manufacturer, exporter, and
U.S. importer of the Russian vanadium
pentoxide, as well as the party
overseeing the conversion process and
ultimate sale of the ferrovanadium, are
all under the common ownership and
control of a single entity, the Evraz
Group.
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Under section 781(a)(3)(C) of the Act,
the Department shall take into account
whether imports into the United States
of the parts or components produced in
the foreign country have increased after
the initiation of the investigation, which
resulted in the issuance of the order,
when making a decision in an
anticircumvention case. As described
above, AMG Vanadium reports that
imports of vanadium pentoxide from
Russia have risen from zero from 1995
to 2004, to approximately 2,680 MT in
2010.
Analysis
AMG Vanadium explains in the AMG
Request that, following the imposition
of the antidumping duty order in 1995,
imports of ferrovanadium from Russia
ceased in total by 1997. Since 2005,
however, imports of vanadium
pentoxide from Russia have increased
from 27 MT in 2005, to 450 MT in 2006,
to 2,680 MT in 2010. At the same time,
AMG Vanadium states that the average
unit value of the vanadium pentoxide
imports, according to U.S. import
statistics, has decreased by half. AMG
Vanadium concludes that this
information demonstrates that the
pattern of trade has shifted from imports
of ferrovanadium from Russia to an
increasing flow of vanadium pentoxide
from Russia that is converted into
ferrovanadium in the United States.
VerDate Mar<15>2010
Subsequent Import Volume
Based on our analysis of the AMG
Request and the March 16 Response, the
Department determines that a formal
anticircumvention inquiry is warranted.
In accordance with 19 CFR 351.225(e),
if the Department finds that the issue of
whether a product is included within
the scope of an order cannot be
determined based solely upon the
request and the descriptions of the
merchandise, the Department will notify
by mail all parties on the Department’s
scope service list of the initiation of a
scope inquiry, including an
anticircumvention inquiry. In addition,
in accordance with 19 CFR
351.225(f)(1), a notice of the initiation of
an anticircumvention inquiry issued
under 19 CFR 351.225(e) will include a
description of the product that is the
subject of the anticircumvention
inquiry—in this case, vanadium
pentoxide from Russia that is converted
into ferrovanadium in the United
States—and an explanation of the
reasons for the Department’s decision to
initiate an anticircumvention inquiry, as
provided below.
With regard to whether the
merchandise sold in the United States is
of the same class or kind as the
merchandise covered by the
antidumping duty order, AMG
Vanadium presented information
indicating that the merchandise sold in
the United States, ferrovanadium, is of
the same class or kind as ferrovanadium
from Russia, which is subject to the
antidumping duty order.
With regard to completion of
merchandise in the United States, AMG
Vanadium has also presented
information to support its contention
that ferrovanadium sold in the United
States is produced from vanadium
pentoxide imported into the United
States from Russia which is further
processed in the United States.
With regard to whether the
conversion of ferrovanadium in the
United States from vanadium pentoxide
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Sfmt 4703
imported from Russia is a ‘‘minor or
insignificant process,’’ AMG Vanadium
addressed the relevant statutory factors
used to determine whether the
processing of vanadium pentoxide is
minor or insignificant with the best
information available to it at the time of
its anticircumvention inquiry request.
AMG Vanadium relied on publiclyavailable information for this purpose.
As AMG noted in the March 16
Response at pages 10–12, it does not
have access to the Evraz Group’s cost or
price data regarding vanadium
pentoxide and ferrovanadium prices,
and therefore relied on the Ryan’s Notes
price comparisons to demonstrate that,
quantitatively, the value of the
vanadium pentoxide conversion in the
United States is minor or insignificant.
Based on our analysis of the
information in AMG Vanadium’s
submissions, we find that AMG
Vanadium provided sufficient evidence
for each of the criteria enumerated in
the statute to initiate an
anticircumvention inquiry. As AMG
Vanadium acknowledged, the price
information derived from Ryan’s Notes
is based on price observations for
domestic and imported products and,
thus, is not limited to the Russiansourced vanadium pentoxide or U.S.converted ferrovanadium at issue.
However, AMG Vanadium explained
that the Ryan’s Notes prices are widely
used in price negotiations in the
industry and fairly represent the value
of ferrovanadium and vanadium
pentoxide in the United States,
regardless of source, and are the best
information available to AMG
Vanadium regarding the value of the
imported input and the finished
product. See March 16 Response at
pages 10–15.
AMG Vanadium also acknowledged
certain inconsistent fluctuations in the
pricing spread between vanadium
pentoxide and ferrovanadium according
to the Ryan’s Notes prices listed for
certain months in Exhibit 18 of the
AMG Request. AMG Vanadium asserted
that these short-term fluctuations do not
adversely affect the reliability of using
the difference between the published
Ryan’s Notes market prices for
ferrovanadium and vanadium pentoxide
over a longer period of time to
determine the value of the U.S.
processing. We note that the
inconsistent price fluctuations occurred
in 2009, when vanadium pentoxide
imports from Russia were much lower
than during 2010 (see Exhibit 2 of the
ACI Request). According to AMG
Request Exhibit 18 and March 16
Response Exhibit 10, the price spread
between vanadium pentoxide and
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06MYN1
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ferrovanadium was more stable during
2010, and provides reasonable support
for AMG Vanadium’s contention that
the value of processing vanadium
pentoxide into ferrovanadium may be
considered minor or insignificant for
purposes of initiating this
anticircumvention inquiry. At the same
time, we acknowledge the Evraz Group’s
comments regarding the use of this
pricing information and an alternative,
cost-based comparison methodology for
determining whether the value of
processing vanadium pentoxide into
ferrovanadium in the United States is
minor or insignificant. We will consider
this issue further during our
anticircumvention inquiry.
With respect to the value of the
merchandise produced in Russia, AMG
Vanadium relied on the information and
arguments in the ‘‘minor or insignificant
process’’ portion of its
anticircumvention request to indicate
that the value of the Russian vanadium
pentoxide is significant relative to the
total value of finished ferrovanadium
sold in the United States. We find that
this information adequately meets the
requirements of this factor, as discussed
above.
Finally, AMG Vanadium argued that
the Department should also consider the
pattern of trade, affiliation, and
subsequent import volume as factors in
determining whether to initiate the
anticircumvention inquiry. The import
volume data submitted by AMG
Vanadium indicates that vanadium
pentoxide imports from Russia have
increased significantly in recent years,
while imports of ferrovanadium from
Russia ceased within a few years after
imposition of the antidumping duty
order. In addition, AMG Vanadium
provided information suggesting that
the Evraz Group, through its various
affiliates, is managing the importation of
vanadium pentoxide from Russia, the
processing of this vanadium pentoxide
into ferrovanadium in the United States,
and the sale of the ferrovanadium in the
United States, which together reflect an
intention to shift to the United States
completion of merchandise subject to
the order on ferrovanadium from Russia.
Accordingly, we are initiating an
anticircumvention inquiry concerning
the antidumping duty order on
ferrovanadium from Russia, pursuant to
section 781(a) of the Act. In accordance
with 19 CFR 351.225(l)(2), if the
Department issues a preliminary
affirmative determination, we will then
instruct U.S. Customs and Border
Protection to suspend liquidation and
require a cash deposit of estimated
duties, at the applicable rate, for each
unliquidated entry of the merchandise
VerDate Mar<15>2010
17:26 May 05, 2011
Jkt 223001
at issue, entered or withdrawn from
warehouse for consumption on or after
the date of initiation of the inquiry.
The Department is focusing its
analysis of the significance of the
ferrovanadium production process in
the United States based on the entries of
vanadium pentoxide produced in Russia
by OAO Vanady-Tula that are imported
by or consigned to any company in the
Evraz Group, as discussed in the AMG
Request and about which sufficient
information to initiate an
anticircumvention inquiry has been
provided. If the Department receives a
request from an interested party
regarding potential circumvention by
other companies involved in processing
Russian vanadium pentoxide into
ferrovanadium in the United States
within sufficient time, we will consider
conducting the inquiries concurrently.
The Department will, following
consultation with interested parties,
establish a schedule for questionnaires
and comments on the issues. The
Department intends to issue its final
determination within 300 days of the
date of publication of this initiation
consistent with section 781(f) of the Act.
This notice is published in
accordance with 19 CFR 351.225(f).
Dated: May 2, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. 2011–11121 Filed 5–5–11; 8:45 am]
BILLING CODE 3510–DS–P
26247
Room 4053, 1401 Constitution Ave,
NW., Washington, DC 20230. (Phone:
202–482–4877; Fax: 202–482–5665;
e-mail: todd.delelle@trade.gov.) This
meeting is physically accessible to
people with disabilities. Requests for
sign language interpretation or other
auxiliary aids should be directed to
OEEI at (202) 482–5225 no less than one
week prior to the meeting.
SUPPLEMENTARY INFORMATION: This is the
first meeting of the newly appointed
committee. The meeting will take place
from 9 a.m. to 3:30 p.m. This meeting
is open to the public and time will be
permitted for public comment from
3–3:30 p.m. Written comments
concerning ETTAC affairs are welcome
any time before or after the meeting.
Minutes will be available within 30
days of this meeting.
Background: The ETTAC is mandated
by Public Law 103–392. It was created
to advise the U.S. government on
environmental trade policies and
programs, and to help it to focus its
resources on increasing the exports of
the U.S. environmental industry.
ETTAC operates as an advisory
committee to the Secretary of Commerce
and the Trade Promotion Coordinating
Committee (TPCC). ETTAC was
originally chartered in May of 1994. It
was most recently re-chartered until
October 2012.
Edward A. O’Malley,
Director, Office of Energy and Environmental
Industries.
[FR Doc. 2011–11051 Filed 5–5–11; 8:45 am]
DEPARTMENT OF COMMERCE
BILLING CODE 3510–DR–P
International Trade Administration
DEPARTMENT OF COMMERCE
Environmental Technologies Trade
Advisory Committee Public Meeting
International Trade
Administration, DOC.
ACTION: Notice of Federal Advisory
Committee Meeting.
AGENCY:
This notice sets forth the
schedule and proposed agenda of a
meeting of the Environmental
Technologies Trade Advisory
Committee (ETTAC).
DATES: The meeting is scheduled for
Thursday, June 16, 2011, at 9 a.m.
Eastern Daylight Time (EDT).
ADDRESSES: The meeting will be held in
Room 4830 at the U.S. Department of
Commerce, Herbert Clark Hoover
Building, 1401 Constitution Ave., NW.,
Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: Mr.
Todd DeLelle, Office of Energy &
Environmental Industries (OEEI),
International Trade Administration,
SUMMARY:
PO 00000
Frm 00009
Fmt 4703
Sfmt 4703
International Trade Administration
[A–821–819]
Magnesium Metal From the Russian
Federation: Preliminary Results of
Antidumping Duty Administrative
Review
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to timely
requests, the Department of Commerce
(the Department) is conducting an
administrative review of the
antidumping duty order on magnesium
metal from the Russian Federation for
the period of review (POR) April 1,
2009, through March 31, 2010. The
review covers two respondents, PSC
VSMPO–AVISMA Corporation
(AVISMA) and Solikamsk Magnesium
Works (SMW).
AGENCY:
E:\FR\FM\06MYN1.SGM
06MYN1
]]>Agencies
[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Notices]
[Pages 26243-26247]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11121]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-821-807]
Initiation of Anticircumvention Inquiry on Antidumping Duty Order
on Ferrovanadium and Nitrided Vanadium From the Russian Federation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from AMG Vanadium, Inc. (AMG
Vanadium), the Department of Commerce (the Department) is initiating an
anticircumvention inquiry to determine whether imports of vanadium
pentoxide from the Russian Federation (Russia) that is converted into
ferrovanadium in the United States are circumventing the antidumping
duty order on ferrovanadium and nitrided vanadium (ferrovanadium) from
Russia. See Notice of Antidumping Order: Ferrovanadium and Nitrided
Vanadium From the Russian Federation, 60 FR 35550 (July 10, 1995).
DATES: Effective Date: May 6, 2011.
FOR FURTHER INFORMATION CONTACT: David Goldberger or Rebecca Trainor,
AD/CVD Operations, Office 2, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4136 or (202) 482-4007, respectively.
SUPPLEMENTARY INFORMATION:
Background
On February 25, 2011, AMG Vanadium submitted a request that the
Department initiate an anticircumvention inquiry (AMG Request),
pursuant to section 781(a) of the Tariff Act of 1930, as amended (the
Act), and 19 CFR 351.225(c) and (g), to determine whether imports of
vanadium pentoxide from Russia that is processed into ferrovanadium in
the United States are circumventing the antidumping duty order on
ferrovanadium from Russia. Specifically, AMG Vanadium alleges that the
Evraz Group \1\ is importing vanadium pentoxide, an intermediate
product used in the production of ferrovanadium, from its Russian
affiliate OAO Vanady-Tula. The imported vanadium pentoxide is then
toll-converted into ferrovanadium in the United States by an
unaffiliated processor (which never takes title), prior to sale in the
United States. AMG Vanadium alleges that this trade pattern is
circumventing the antidumping duty order within the meaning of section
781(a) of the Act.
---------------------------------------------------------------------------
\1\ The Evraz Group includes OAO Vanady-Tula, East Metals S.A.,
and East Metals N.A.
---------------------------------------------------------------------------
AMG Vanadium further claims that: (1) The ferrovanadium sold in the
United States is of the same class or kind of merchandise as the
ferrovanadium that is subject to the order; (2) the ferrovanadium is
completed or assembled in the United States from parts or components
produced in Russia; (3) the process of converting vanadium pentoxide to
ferrovanadium in the United States is minor or insignificant; and (4)
the value of the Russian vanadium pentoxide constitutes a significant
portion of the value of the finished ferrovanadium sold in the United
States. Accordingly, AMG Vanadium requests that the Department include
within the scope of the ferrovanadium order vanadium pentoxide
manufactured in Russia, regardless of form, that is produced, exported,
or imported by the Evraz Group or any of its affiliates.
In response to the Department's March 9, 2011, request, on March
16, 2011, AMG Vanadium provided additional information pertinent to its
anticircumvention inquiry request (March 16 Submission).
On March 25, 2011, the Evraz Group filed comments opposing AMG
Vanadium's circumvention allegation on the grounds that the Department
is legally precluded from including vanadium pentoxide in the scope of
the order. The Evraz Group included in its submission calculations
performed using a cost-based methodology, as an alternative to the
value-based methodology used by AMG Vanadium, arguing that AMG
Vandium's approach leads to misleading results. Between April 1 and 22,
2011, AMG Vanadium and the Evraz Group submitted additional comments
with respect to whether the Department should initiate this
anticircumvention inquiry. The Department met with representatives of
AMG Vanadium and the Evraz Group on March 3, and April 5, 2011,
respectively, to discuss the request.
Scope of the Order
The products covered by the antidumping duty order are
ferrovanadium and nitrided vanadium, regardless of grade, chemistry,
form or size, unless expressly excluded from the scope of this order.
Ferrovanadium
[[Page 26244]]
includes alloys containing ferrovanadium as the predominant element by
weight (i.e., more weight than any other element, except iron in some
instances) and at least 4 percent by weight of iron. Nitrided vanadium
includes compounds containing vanadium as the predominant element, by
weight, and at least 5 percent, by weight, of nitrogen. Excluded from
the scope of the order are vanadium additives other than ferrovanadium
and nitrided vanadium, such as vanadium-aluminum master alloys,
vanadium chemicals, vanadium waste and scrap, vanadium-bearing raw
materials, such as slag, boiler residues, fly ash, and vanadium oxides.
The products subject to this order are currently classifiable under
subheadings 2850.00.20, 7202.92.00, 7202.99.50.40, 8112.40.30.00, and
8112.40.60.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope is
dispositive.
Scope of the Anticircumvention Inquiry
The product subject to this anticircumvention inquiry is vanadium
pentoxide (V2O5) from Russia, which is usually in
a granular form and may contain other substances, including silica
(SiO2), manganese, and sulfur, and which is converted into
ferrovanadium in the United States. Such merchandise is classifiable
under subheading 2825.30.0010 of the HTSUS.
As noted above, interested parties have filed comments concerning
the initiation of this anticircumvention inquiry. Although vanadium
pentoxide is excluded from the scope of the order, AMG Vanadium argues
that the Department's regulations and legal precedent allow for the
Department to consider expressly-excluded merchandise in an
anticircumvention proceeding. AMG Vanadium cites Steel Wire Rope from
Mexico; Affirmative Final Determination of Circumvention of Antidumping
Duty Order, 60 FR 10831 (February 28, 1995) and several cases decided
by the Court of Appeals for the Federal Circuit (the Court),\2\ in
support of its contention that anticircumvention determinations are
distinguished from conventional scope determinations, in that the
criteria the Department considers in making an anticircumvention
determination do not include whether the imported merchandise was
initially excluded from the scope of the order.
---------------------------------------------------------------------------
\2\ See, e.g., Nippon Steel Corp. v. United States, 219 F.3d
1348 (Fed. Cir. 2000) (Nippon Steel); and Target Corp. v. United
States, 609 F.3d 1352 (July 23, 2010).
---------------------------------------------------------------------------
The Evraz Group argues that including vanadium pentoxide within the
scope of the antidumping duty order would be inconsistent with the
International Trade Commission's (ITC) injury investigation, and the
legal precedent in Wheatland Tube Co. v. United States, 161 F.3d 1365,
1370 (Fed. Cir. 1998) (Wheatland Tube). Specifically, the Evraz Group
argues that the ITC expressly excluded vanadium pentoxide from the
scope of the injury investigation at the request of the domestic
industry. In Wheatland Tube, the Evraz Group asserts, the Court ruled
that the domestic industry cannot seek to broaden the scope after
having made representations to the ITC that the product at issue was
not a like product for purposes of the injury determination; and that
although the Department may interpret and clarify the scope of the
antidumping duty orders, it may not change or interpret them contrary
to their terms.
The Department addressed this issue in the Initiation of
Anticircumvention Inquiry on Antidumping and Countervailing Duty Orders
on Hot-Rolled Lead and Bismuth Carbon Steel Products from the United
Kingdom and Germany, 62 FR 34213 (June 25, 1997) (Lead and Bismuth). In
that case, the Department concluded that the theory that parts
expressly excluded from the scope of an antidumping order cannot be
subject to an anticircumvention inquiry is contrary to, and would
undermine, the core principles of the anticircumvention statute. Citing
the legislative history, we observed that Congress intended to allow
anticircumvention inquiries into parts or components that meet the
criteria of section 781(a), as ``{t{time} he underlying rationale of
the anticircumvention statute is that, where the criteria of section
781(a) are met, the parts and components subject to the finding of
circumvention are, in all meaningful respects, being imported as the
subject merchandise, not as parts or components per se. The processing
in the United States is of such a minor or insignificant nature as to
be irrelevant.'' \3\ Thus, ``{t{time} he application of the U.S.
finishing or assembly provision will not require new injury findings as
to each part or component. The anticircumvention provision is intended
to cover efforts to circumvent an order by importing disassembled or
unfinished merchandise for assembly in the United States. Hence, the
ITC would generally advise as to whether the parts or components taken
as a whole fall within the injury determination.'' \4\
---------------------------------------------------------------------------
\3\ See, H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 603
(1988) and Lead and Bismuth, 62 FR 34213, 34215.
\4\ Id.
---------------------------------------------------------------------------
This is consistent with the Federal Circuit's opinions reviewing
the Department's anticircumvention inquiries. Although Wheatland Tube
and Nippon Steel dealt with the minor alteration provision (section
781(c) of the Act), rather than the provision for merchandise completed
in the United States (section 781(a) of the Act) at issue here, the
Court's analysis is instructive. In Wheatland Tube, the Court held that
``the line and dual-certified pipe accused of circumventing the
Standard Pipe Orders is the same pipe that the orders expressly
exclude.'' Wheatland Tube, 161 F. 3d at 1369. In contrast, in Nippon
Steel, the Court held that ``Commerce was performing a function
Congress has given to it--to determine whether an antidumping duty
order has been circumvented by making minor alterations in the form of
the product otherwise subject to that order.'' Nippon Steel, 219 F. 3d
at 1354. The Court's analysis allowed that a circumvention inquiry is
proper where, but for an act meant to circumvent the order, the product
would be covered (contrast the carbon steel in Nippon Steel with the
line pipe in Wheatland Tube). Here, the covered product is
ferrovanadium and the alleged act meant to circumvent the order on
ferrovanadium from Russia is further processing in the United States.
For these reasons, we determine that the Evraz Group's arguments do not
provide a legal basis for rejecting AMG Vanadium's application for an
anticircumvention inquiry pursuant to section 781(a) of the Act.
Initiation of Anticircumvention Proceeding
Applicable Statute
Section 781(a) of the Act provides that the Department may find
circumvention of an antidumping duty order when merchandise of the same
class or kind subject to the order is completed or assembled in the
United States. In conducting anticircumvention inquiries under section
781(a)(1) of the Act, the Department relies upon the following
criteria: (A) Merchandise sold in the United States is of the same
class or kind as any other merchandise that is the subject of an
antidumping duty order produced in a foreign country that is subject to
an antidumping duty order; (B) such merchandise sold in the United
States is completed or assembled in the United States from parts or
components
[[Page 26245]]
produced in the foreign country with respect to which the antidumping
duty order applies; (C) the process of assembly or completion in the
United States is minor or insignificant; and (D) the value of the parts
or components referred to in (B) is a significant portion of the total
value of the merchandise. As discussed below, AMG Vanadium presented
evidence with respect to these criteria.
A. Merchandise of the Same Class or Kind
AMG Vanadium states that the merchandise sold in the United States
is ferrovanadium. As this merchandise is covered by the scope of the
antidumping duty order, the merchandise is of the same class or kind as
the merchandise subject to the antidumping duty order.
B. Completion of Merchandise in the United States
AMG Vanadium alleges that vanadium pentoxide produced in Russia is
imported into the United States and further processed into
ferrovanadium. According to AMG Vanadium, the Russian vanadium
pentoxide is converted into ferrovanadium by Bear Metallurgical Company
(Bear), a toll processor unaffiliated with the Evraz Group. AMG
Vanadium believes that Evraz Group member, East Metals NA, retains
title to the merchandise during the toll conversion. See AMG Request at
pages 5-7, and March 16 Response at pages 6-10.
C. Minor or Insignificant Process
AMG Vanadium asserts that the process of converting vanadium
pentoxide into ferrovanadium is a limited and minor process as compared
to the production process for vanadium pentoxide. See AMG Request at
pages 7-10, and Exhibits 13-15 for a detailed discussion of the two
production processes.
AMG Vanadium argues that an analysis of the relevant statutory
factors of section 781(a)(2) of the Act supports its conclusion that
the processing in the United States is ``minor or insignificant.''
These factors include: (1) The level of investment in the United
States; (2) the level of research and development in the United States;
(3) the nature of the production process in the United States; (4) the
extent of production facilities in the United States; and (5) whether
the value of the processing performed in the United States represents a
small proportion of the value of the merchandise sold in the United
States.
AMG Vanadium argues that the processing in the United States is
``minor and insignificant'' as the term is defined in section 781(a)(2)
of the Act when compared to the complex and capital-intensive process
involved in producing vanadium pentoxide. AMG Vanadium's analysis of
the statutory factors to determine whether the process is minor or
insignificant in accordance with section 782(a)(2) of the Act follows
below.
(1) Level of Investment
AMG Vanadium asserts that the processing of vanadium pentoxide into
ferrovanadium, as discussed in the AMG Request,\5\ is neither complex
nor capital-intensive and does not require extensive production
facilities. Accordingly, AMG Vanadium contends that the level of
investment for ferrovanadium conversion from vanadium pentoxide is low
relative to the level of investment associated with vanadium pentoxide
production.
---------------------------------------------------------------------------
\5\ See AMG Request at 7-11.
---------------------------------------------------------------------------
(2) Level of Research and Development
AMG Vanadium states that the process for converting vanadium
pentoxide into ferrovanadium as performed by the toll-processor Bear is
unchanged since the initiation of the underlying antidumping duty
investigation in 1994. Accordingly, AMG Vanadium believes the level of
research and development in the United States for converting vanadium
pentoxide into ferrovanadium is low.
(3) Nature of the Production Process in the United States
The production processes for both vanadium pentoxide and
ferrovanadium are detailed in the AMG Request, as referenced above. AMG
Vanadium maintains that the process of converting vanadium pentoxide
into ferrovanadium is limited and minor as compared to the process of
manufacturing vanadium pentoxide.
(4) Extent of Production Facilities in the United States
AMG Vanadium asserts that, consistent with its description of the
production process, the conversion of vanadium pentoxide requires
minimal capital equipment. At Exhibit 16 of the AMG Request, AMG
Vanadium provided overhead photos comparing the extensive size of the
Evraz Group's vanadium pentoxide production facility with the
considerably smaller ``footprint'' of Bear's toll-processing facility
in order to support its contention that the facilities necessary for
processing vanadium pentoxide into ferrovanadium are significantly
smaller than those necessary for vanadium pentoxide production.
(5) Value of Processing in the United States Compared to Value of the
Merchandise Sold in the United States
To support its contention that the value of the processing
performed in the United States is a small portion of the total value of
the merchandise sold in the United States, AMG Vanadium calculated the
difference between the value of ferrovanadium sold in the United
States, and the value of the vanadium pentoxide consumed to produce the
ferrovanadium. For this calculation, AMG Vanadium based the value of
ferrovanadium on the monthly average of the U.S. market prices for
ferrovanadium with 80 percent vanadium content, as published in the
metals industry publication Ryan's Notes. Similarly, AMG Vanadium based
the value of vanadium pentoxide on the monthly average of the U.S.
market prices for vanadium pentoxide published in Ryan's Notes, and
then calculated the total value of vanadium pentoxide required to
produce one unit of ferrovanadium with 80 percent vanadium content. In
its calculations, AMG Vanadium added an amount to the vanadium
pentoxide price to represent the estimated cost of freight from the
U.S. port to the processing facility. AMG Vanadium calculated a ratio
of the differences between the two sets of prices to average
ferrovanadium prices, and found that the average annual value for
processing vanadium pentoxide into ferrovanadium ranged from 6.5 to
approximately 7 percent of the value of finished ferrovanadium during
2009, and approximately 15 to 15.8 percent in 2010. See AMG Request at
pages 12-14 and Exhibits 17 and 18, and March 16 Response at pages 13-
18 and Exhibit 10.
D. Value of Merchandise Produced in the Foreign Country Is a
Significant Portion of the Value of the Merchandise Sold in the United
States
As stated above, AMG Vanadium contends that the value of the
processing performed in the United States represents a minor portion of
the value of the completed merchandise. Therefore, that analysis
necessarily implies that the value of the Russian-origin vanadium
pentoxide consumed to produce ferrovanadium is a significant portion of
the total value of the merchandise sold in the United States. AMG
Vanadium estimates the value of the Russian vanadium pentoxide consumed
to produce ferrovanadium to be 84 percent or greater of the value of
the ferrovanadium sold in the United States (i.e., the difference
between the
[[Page 26246]]
total value of the ferrovanadium sold in the United States and the
value of the U.S. conversion described above). See AMG Request at page
14.
E. Factors To Consider in Determining Whether Action Is Necessary
Section 781(a)(3) of the Act identifies additional factors that the
Department shall consider in the Department's decision to include parts
or components in an antidumping duty order as part of an
anticircumvention investigation. These factors are discussed below.
Pattern of Trade, Including Sourcing Patterns
AMG Vanadium explains in the AMG Request that, following the
imposition of the antidumping duty order in 1995, imports of
ferrovanadium from Russia ceased in total by 1997. Since 2005, however,
imports of vanadium pentoxide from Russia have increased from 27 MT in
2005, to 450 MT in 2006, to 2,680 MT in 2010. At the same time, AMG
Vanadium states that the average unit value of the vanadium pentoxide
imports, according to U.S. import statistics, has decreased by half.
AMG Vanadium concludes that this information demonstrates that the
pattern of trade has shifted from imports of ferrovanadium from Russia
to an increasing flow of vanadium pentoxide from Russia that is
converted into ferrovanadium in the United States.
Affiliation
Under section 781(a)(3)(B) of the Act, the Department shall take
into account whether the manufacturer or exporter of the parts or
components is affiliated with the person who assembles or completes the
merchandise sold in the United States from the parts or components
produced in the foreign country when making a decision in an
anticircumvention case. As described above and in the AMG Request, AMG
Vanadium states that the Evraz Group, through its affiliates, produces
vanadium pentoxide in Russia, ships and imports it into the United
States, has it converted into ferrovanadium by an unaffiliated company
while maintaining title to the product, and sells the completed
ferrovanadium to customers in the United States. Accordingly, AMG
Vanadium maintains that the manufacturer, exporter, and U.S. importer
of the Russian vanadium pentoxide, as well as the party overseeing the
conversion process and ultimate sale of the ferrovanadium, are all
under the common ownership and control of a single entity, the Evraz
Group.
Subsequent Import Volume
Under section 781(a)(3)(C) of the Act, the Department shall take
into account whether imports into the United States of the parts or
components produced in the foreign country have increased after the
initiation of the investigation, which resulted in the issuance of the
order, when making a decision in an anticircumvention case. As
described above, AMG Vanadium reports that imports of vanadium
pentoxide from Russia have risen from zero from 1995 to 2004, to
approximately 2,680 MT in 2010.
Analysis
Based on our analysis of the AMG Request and the March 16 Response,
the Department determines that a formal anticircumvention inquiry is
warranted. In accordance with 19 CFR 351.225(e), if the Department
finds that the issue of whether a product is included within the scope
of an order cannot be determined based solely upon the request and the
descriptions of the merchandise, the Department will notify by mail all
parties on the Department's scope service list of the initiation of a
scope inquiry, including an anticircumvention inquiry. In addition, in
accordance with 19 CFR 351.225(f)(1), a notice of the initiation of an
anticircumvention inquiry issued under 19 CFR 351.225(e) will include a
description of the product that is the subject of the anticircumvention
inquiry--in this case, vanadium pentoxide from Russia that is converted
into ferrovanadium in the United States--and an explanation of the
reasons for the Department's decision to initiate an anticircumvention
inquiry, as provided below.
With regard to whether the merchandise sold in the United States is
of the same class or kind as the merchandise covered by the antidumping
duty order, AMG Vanadium presented information indicating that the
merchandise sold in the United States, ferrovanadium, is of the same
class or kind as ferrovanadium from Russia, which is subject to the
antidumping duty order.
With regard to completion of merchandise in the United States, AMG
Vanadium has also presented information to support its contention that
ferrovanadium sold in the United States is produced from vanadium
pentoxide imported into the United States from Russia which is further
processed in the United States.
With regard to whether the conversion of ferrovanadium in the
United States from vanadium pentoxide imported from Russia is a ``minor
or insignificant process,'' AMG Vanadium addressed the relevant
statutory factors used to determine whether the processing of vanadium
pentoxide is minor or insignificant with the best information available
to it at the time of its anticircumvention inquiry request. AMG
Vanadium relied on publicly-available information for this purpose. As
AMG noted in the March 16 Response at pages 10-12, it does not have
access to the Evraz Group's cost or price data regarding vanadium
pentoxide and ferrovanadium prices, and therefore relied on the Ryan's
Notes price comparisons to demonstrate that, quantitatively, the value
of the vanadium pentoxide conversion in the United States is minor or
insignificant.
Based on our analysis of the information in AMG Vanadium's
submissions, we find that AMG Vanadium provided sufficient evidence for
each of the criteria enumerated in the statute to initiate an
anticircumvention inquiry. As AMG Vanadium acknowledged, the price
information derived from Ryan's Notes is based on price observations
for domestic and imported products and, thus, is not limited to the
Russian-sourced vanadium pentoxide or U.S.-converted ferrovanadium at
issue. However, AMG Vanadium explained that the Ryan's Notes prices are
widely used in price negotiations in the industry and fairly represent
the value of ferrovanadium and vanadium pentoxide in the United States,
regardless of source, and are the best information available to AMG
Vanadium regarding the value of the imported input and the finished
product. See March 16 Response at pages 10-15.
AMG Vanadium also acknowledged certain inconsistent fluctuations in
the pricing spread between vanadium pentoxide and ferrovanadium
according to the Ryan's Notes prices listed for certain months in
Exhibit 18 of the AMG Request. AMG Vanadium asserted that these short-
term fluctuations do not adversely affect the reliability of using the
difference between the published Ryan's Notes market prices for
ferrovanadium and vanadium pentoxide over a longer period of time to
determine the value of the U.S. processing. We note that the
inconsistent price fluctuations occurred in 2009, when vanadium
pentoxide imports from Russia were much lower than during 2010 (see
Exhibit 2 of the ACI Request). According to AMG Request Exhibit 18 and
March 16 Response Exhibit 10, the price spread between vanadium
pentoxide and
[[Page 26247]]
ferrovanadium was more stable during 2010, and provides reasonable
support for AMG Vanadium's contention that the value of processing
vanadium pentoxide into ferrovanadium may be considered minor or
insignificant for purposes of initiating this anticircumvention
inquiry. At the same time, we acknowledge the Evraz Group's comments
regarding the use of this pricing information and an alternative, cost-
based comparison methodology for determining whether the value of
processing vanadium pentoxide into ferrovanadium in the United States
is minor or insignificant. We will consider this issue further during
our anticircumvention inquiry.
With respect to the value of the merchandise produced in Russia,
AMG Vanadium relied on the information and arguments in the ``minor or
insignificant process'' portion of its anticircumvention request to
indicate that the value of the Russian vanadium pentoxide is
significant relative to the total value of finished ferrovanadium sold
in the United States. We find that this information adequately meets
the requirements of this factor, as discussed above.
Finally, AMG Vanadium argued that the Department should also
consider the pattern of trade, affiliation, and subsequent import
volume as factors in determining whether to initiate the
anticircumvention inquiry. The import volume data submitted by AMG
Vanadium indicates that vanadium pentoxide imports from Russia have
increased significantly in recent years, while imports of ferrovanadium
from Russia ceased within a few years after imposition of the
antidumping duty order. In addition, AMG Vanadium provided information
suggesting that the Evraz Group, through its various affiliates, is
managing the importation of vanadium pentoxide from Russia, the
processing of this vanadium pentoxide into ferrovanadium in the United
States, and the sale of the ferrovanadium in the United States, which
together reflect an intention to shift to the United States completion
of merchandise subject to the order on ferrovanadium from Russia.
Accordingly, we are initiating an anticircumvention inquiry
concerning the antidumping duty order on ferrovanadium from Russia,
pursuant to section 781(a) of the Act. In accordance with 19 CFR
351.225(l)(2), if the Department issues a preliminary affirmative
determination, we will then instruct U.S. Customs and Border Protection
to suspend liquidation and require a cash deposit of estimated duties,
at the applicable rate, for each unliquidated entry of the merchandise
at issue, entered or withdrawn from warehouse for consumption on or
after the date of initiation of the inquiry.
The Department is focusing its analysis of the significance of the
ferrovanadium production process in the United States based on the
entries of vanadium pentoxide produced in Russia by OAO Vanady-Tula
that are imported by or consigned to any company in the Evraz Group, as
discussed in the AMG Request and about which sufficient information to
initiate an anticircumvention inquiry has been provided. If the
Department receives a request from an interested party regarding
potential circumvention by other companies involved in processing
Russian vanadium pentoxide into ferrovanadium in the United States
within sufficient time, we will consider conducting the inquiries
concurrently.
The Department will, following consultation with interested
parties, establish a schedule for questionnaires and comments on the
issues. The Department intends to issue its final determination within
300 days of the date of publication of this initiation consistent with
section 781(f) of the Act.
This notice is published in accordance with 19 CFR 351.225(f).
Dated: May 2, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-11121 Filed 5-5-11; 8:45 am]
BILLING CODE 3510-DS-P
