of Public Affairs
Market Economy Analysis of Kazakhstan
On Tuesday, March 26, 2002, the Department of Commerce announced that it is revoking Kazakhstan's non-market economy (NME) status under the U.S. antidumping law. The Department found that Kazakhstan has operated as a market-economy country, effective October 1, 2001, and that this finding will be effective for all current and future administrative proceedings. This decision was made in the context of the Department's ongoing antidumping investigation of silicomanganese from Kazakhstan.
Background: On April 6, 2001, the Department published a notice of initiation for the antidumping investigation on silicomanganese from Kazakhstan. On July 5, 2001, the Government of Kazakhstan submitted a letter in that proceeding requesting that Kazakhstan's NME status be revoked.
reviewing Kazakhstan's non-market economy status, the Department was required
to take into account six statutory factors: (1) the degree of currency
convertability, (2) free wage rate determination, (3) foreign investment,
(4) government ownership or control of production, (5) government ownership
over the allocation of resources, and (6) other appropriate factors. Because
Kazakhstan has graduated to market economy status, the calculation of
dumping for products from Kazakhstan in future antidumping proceedings
will be determined by using a normal value (market economy) methodology
based on prices and costs within Kazakhstan rather than a factor valuation
(non-market economy) methodology based on costs in a similar "surrogate"
market economy country.
Market Economy Analysis
Question: Why is the Department revoking Kazakhstan's NME status at this time?
Answer: The government of Kazakhstan and the Kazakh company involved in the antidumping investigation on silicomanganese requested that the Department review Kazakhstan's NME status within this investigation. As a result, the Department is announcing its determination regarding Kazakhstan's NME status as part of its final determination in the antidumping investigation. The investigation was completed in accordance with statutory deadlines.
Question: What are the administrative implications of graduating Kazakhstan in terms of the U.S. antidumping and countervailing duty laws?
Answer: Because Kazakhstan has graduated to market economy status, the calculation of dumping for products from Kazakhstan in future antidumping proceedings will be determined by using a normal value (market economy) methodology based on prices and costs within Kazakhstan rather than a factor valuation (non-market economy) methodology based on costs in a similar "surrogate" market economy country.
Question: Do problems in Kazakhstan, such as corruption and barter, suggest that the country still behaves as a NME?
Answer: In making its determination, the Department has taken a number of issues into account, such as corruption and barter. However, we do not find such issues to be particularly persuasive in the context of our analysis. While corruption is a serious concern in Kazakhstan, we note that even in market economies, there exist varying degrees of corruption. Further, barter transactions remain a problem in Kazakhstan, but barter appears to be declining in importance.
Question: Does the Department's decision regarding Kazakhstan imply the same regarding the Russian Federation's request to revoke Russia's NME status?
Answer: No, the Department's decision regarding Kazakhstan does not pre-judge our decision regarding Russia.
Question: What is the status of the Russian NME decision?
Answer: The Department will conduct a hearing on this proceeding on March 27, 2002, to provide the public an opportunity to present issues related to the case. The decision on Russia's NME status will be made some time thereafter.
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