FTZB Bans Admission of AD/CV Silicon Metal into Dow Corning's Subzone
The Foreign-Trade Zone Board has issued an order granting Dow Corning Corporation’s request to establish a subzone in Kentucky, but with a restriction that prohibits the admission of silicon metal subject to an antidumping or countervailing duty order into the subzone.
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Concerned with Impact on Domestic Silicon Metal, Avoidance of AD/CV Duties
The order follows the staff’s preliminary June 2010 recommendation that the application be approved but with a restriction prohibiting silicon metal subject to an AD or CV duty order, because full approval could negatively impact domestic silicon metal production.
The preliminary recommendation was based primarily on the potential impact to domestic silicon metal prices from the volume of production involved and the cumulative impact of multiple applications potentially involving avoidance of AD/CV duties on silicon metal used in export production.
It stated that given the volume of silicon metal consumed by the Dow Corning in the U.S., the ripple effect on silicon metal suppliers could be significant, and the likely resulting impact would be a decline in the U.S. price of silicon metal.
FTZ Association Says Board Took Similar Decision with REC Silicon
According to a statement by the National Association of Foreign-Trade Zones (NAFTZ), the FTZB has made a similar decision in REC Silicon’s application for subzone status, for which the FTZ staff issued a nearly identical preliminary recommendation in June. (See ITT’s Online Archives or 06/30/10 news, 10063007, for BP summary of the preliminary recommendation.)
Says Int’l Competitors Have Access to Lower Cost Silicon
The NAFTZ expressed disappointment with these decisions, noting that international competitors have access to silicon metal at much lower prices, and these applications were well within past precedent for FTZ use.
Concern that Order May Deter Future FTZ Applications
The group is also concerned that restricting the use of this export benefit in the Dow Corning and REC Silicon cases may have the unintended consequence of discouraging other companies from filing applications for FTZ exports.
(FR Pub 01/06/11, Order No. 1730)