[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73155-73164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33231]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-560-806]
Final Affirmative Countervailing Duty Determination: Certain Cut-
to-Length Carbon-Quality Steel Plate from Indonesia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: December 29, 1999.
FOR FURTHER INFORMATION CONTACT: Eva Temkin or Richard Herring, Office
of CVD/AD Enforcement VI, Import Administration, U.S. Department of
Commerce, Room 4012, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone (202) 482-2786.
FINAL DETERMINATION: The Department of Commerce (the Department)
determines that countervailable subsidies are being provided to
producers and exporters of certain cut-to-length carbon-quality steel
plate from Indonesia. For information on the estimated countervailing
duty rates, please see the ``Suspension of Liquidation'' section of
this notice.
SUPPLEMENTARY INFORMATION:
Petitioners
The petition in this investigation was filed by Bethlehem Steel
Corporation, U.S. Steel Group, a unit of USX Corporation, Gulf States
Steel, Inc., IPSCO Steel, Inc., Tuscaloosa Steel Corporation, and the
United Steel Workers of America (the petitioners).
Case History
Since the publication of our preliminary determination in this
investigation on July 26, 1999 (Preliminary Affirmative Countervailing
Duty Determination and Alignment of Final Countervailing Duty
Determination With Final Antidumping Duty Determination: Certain Cut-
to-Length Carbon-Quality Steel Plate From Indonesia, 64 FR 40457
(Preliminary Determination)), the following events have occurred:
On July 15, we reissued the Department's June 22, 1999 supplemental
questionnaire to the Government of Indonesia (GOI). We received a
response on July 22, 1999. We conducted verification of the
countervailing duty questionnaire responses from July 28 through August
3, 1999. Because the final determination of this countervailing duty
investigation was aligned with the final antidumping duty determination
(see 64 FR at 40458), and the final antidumping duty determination was
postponed (see 64 FR 46341), the Department on August 25, 1999,
extended the final determination of this countervailing duty
investigation until no later than December 13, 1999 (see 64 FR 46341).
On August 26, 1999, the Department released its verification reports to
all interested parties. Petitioners filed comments on September 10,
1999. Respondents made no arguments. No rebuttal briefs were filed.
On November 23, 1999, we discontinued the suspension of liquidation
of all entries of the subject merchandise entered or withdrawn from
warehouse for consumption on or after that date, pursuant to section
703(d) of the Act. See the ``Suspension of Liquidation'' section of
this notice.
Scope of Investigation
The products covered by this scope are certain hot-rolled carbon-
quality steel: (1) universal mill plates (i.e., flat-rolled products
rolled on four faces or in a closed box pass, of a width exceeding 150
mm but not exceeding 1250 mm, and of a nominal or actual thickness of
not less than 4 mm, which are cut-to-length (not in coils) and without
patterns in relief), of iron or non-alloy-quality steel; and (2) flat-
rolled products, hot-rolled, of a nominal or actual thickness of 4.75
mm or more and of a width which exceeds 150 mm and measures at least
twice the thickness, and which are cut-to-length (not in coils).
Steel products to be included in this scope are of rectangular,
square, circular or other shape and of rectangular or non-rectangular
cross-section where such non-rectangular cross-section is achieved
subsequent to the rolling process (i.e., products which have been
``worked after rolling'')--for example, products which have been
beveled or rounded at the edges. Steel products that meet the noted
physical characteristics that are painted, varnished or coated with
plastic or other non-metallic substances are included within this
scope. Also, specifically included in this scope are high strength, low
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum.
Steel products to be included in this scope, regardless of
Harmonized Tariff Schedule of the United States (HTSUS) definitions,
are products in which: (1) iron predominates, by weight, over each of
the other contained elements, (2) the carbon content is two percent or
less, by weight, and (3) none of the elements listed below is equal to
or exceeds the
[[Page 73156]]
quantity, by weight, respectively indicated:
1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent zirconium.
All products that meet the written physical description, and in
which the chemistry quantities do not equal or exceed any one of the
levels listed above, are within the scope of these investigations
unless otherwise specifically excluded. The following products are
specifically excluded from these investigations: (1) products clad,
plated, or coated with metal, whether or not painted, varnished or
coated with plastic or other non-metallic substances; (2) SAE grades
(formerly AISI grades) of series 2300 and above; (3) products made to
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon
manganese steel or silicon electric steel.
The merchandise subject to these investigations is classified in
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030,
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000,
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050,
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,
7226.91.8000, 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
Customs purposes, the written description of the merchandise under
investigation is dispositive.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended by
the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the
Act). In addition, unless otherwise indicated, all citations to the
Department's regulations are to the current regulations as codified at
19 C.F.R. Part 351 (1998) and to the substantive countervailing duty
regulations published in the Federal Register on November 25, 1998 (63
FR 65348) (CVD Regulations).
Injury Test
Because Indonesia is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, the International Trade
Commission (ITC) is required to determine whether imports of the
subject merchandise from Indonesia materially injure, or threaten
material injury to, a U.S. industry. On April 5, 1999, the ITC
announced its preliminary finding that there is a reasonable indication
that an industry in the United States is being materially injured, or
threatened with material injury, by reason of imports from Indonesia of
the subject merchandise (see Certain Cut-to-Length Steel Plate from the
Czech Republic, France, India, Indonesia, Italy, Japan, Korea, and
Macedonia, 64 FR 17198 (April 8, 1999)).
Period of Investigation
The period of investigation for which we are measuring subsidies
(the POI) is calendar year 1998.
Attribution of Subsidies
Section 351.525 of the CVD Regulations states that the Department
will attribute subsidies received by two or more corporations to the
products produced by those corporations where cross ownership exists.
According to section 351.525(b)(6)(vi) of the CVD Regulations, cross-
ownership exists between two or more corporations where one corporation
can use or direct the individual assets of the other corporation in
essentially the same ways it can use its own assets. The regulations
state that this standard will normally be met where there is a majority
voting ownership interest between two corporations. The preamble to the
CVD Regulations identifies situations where cross ownership may exist
even though there is less than a majority voting interest between two
corporations: ``in certain circumstances, a large minority interest
(for example, 40 percent) or a `golden share' may also result in cross-
ownership.'' See 63 FR 65401.
Because we preliminarily found both Gunawan and Jaya Pari to have
zero subsidy rates, we did not reach the question of whether the
relationship between the companies satisfies the standard of cross-
ownership. However, in the Preliminary Determination, we stated that if
we discovered subsidies at verification or otherwise modified our
findings so that one or more of the companies did indeed have a subsidy
rate for the final determination, we would consider whether there is
cross-ownership between Gunawan and Jaya Pari and thus, whether, for
purposes of calculating a countervailing duty rate, we should attribute
any subsidies received by either or both companies to the products
produced by both companies. We invited the parties to comment on
whether the relationship between the firms satisfies our new cross-
ownership standard.
Since the publication of our Preliminary Determination, we have
found no evidence of subsidies having been given to either Gunawan or
Jaya Pari; nor have we otherwise modified our findings in a way such
that either company has a subsidy rate in this final determination.
Moreover, we received no comments from the parties on this issue. Thus,
the question of whether the relationship between the companies
satisfies the standard of cross-ownership is moot for purposes of this
investigation.
Use of Facts Available
As discussed in detail in the Preliminary Determination, Krakatau
failed to respond to any of the Department's questionnaires. The GOI
provided some, although not all, of the information requested about
Krakatau. In the Preliminary Determination, relying upon section 782(e)
of the Act, the Department determined that based on the GOI's
submission of some data, the administrative record was not so
incomplete that it could not serve as a reliable basis for reaching a
preliminary determination. Therefore, the Department used the GOI's
data where possible, i.e., the Department relied on information
provided by the GOI to reach a preliminary determination that Krakatau
had not used the Rediscount Loan Program and Tax Holiday Program. The
Department only resorted to the facts otherwise available in those
instances where data necessary for the calculation of Krakatau's
subsidy rate was missing. See Preliminary Determination. In addition,
as described in detail in the Preliminary Determination, the Department
determined that in those instances when resort to facts available was
necessary, the use of an adverse inference was warranted under section
776(b) of the Act because the Department determined that Krakatau
failed to cooperate by not acting to the best of its ability in
complying with requests for information in this investigation.
[[Page 73157]]
After the issuance of the Preliminary Determination, the Department
attempted to verify with the GOI that Krakatau had not used the
Rediscount Loan Program, but was unable to do so. See Memorandum to
David Mueller, ``Verification Report of the Government of Indonesia,''
dated August 26, 1999 (GOI Verification Report), public version on file
in the Central Records Unit (CRU) (Room B-099 of the Main Commerce
Building). We were, however, able to verify that no respondent in this
investigation used the Tax Holiday Program.
Section 782(e) of the Act provides that the Department shall not
decline to consider information submitted by an interested party, if,
among other factors, the information can be verified. Because
information submitted by the GOI concerning Krakatau's use of the
Rediscount Loan Program could not be verified, we have declined to
consider it for this final determination, and find it necessary to
resort to the facts available for this program, as well. Therefore, for
this final determination, all components of Krakatau's subsidy rate are
based on the facts available.
Moreover, the Department determines that when selecting among the
facts otherwise available for the Rediscount Loan Program, an adverse
inference is warranted because the GOI and Krakatau have failed to
cooperate by not acting to the best of their abilities. Krakatau and
the GOI failed on numerous occasions to respond to the Department's
questions. Specifically, Krakatau has failed to participate in any way
in this investigation. The GOI responded to the Department's initial
questionnaire, but did not respond fully to supplemental
questionnaires, and did not respond at all to the Department's final
questionnaire. Regarding the information that the GOI did place on the
record in this investigation, we specifically requested in the outline
sent to the GOI prior to verification that the GOI be prepared to
review any files maintained on the Rediscount Loan Program, and to
demonstrate whether Krakatau used the program for shipments of subject
merchandise to the United States in 1998. However, at verification, GOI
officials stated that due to the nature and volume of their files on
this program, they were unable to present them. Thus, the Department
was unable to verify certain information submitted by the GOI. For
these reasons, we find that the GOI, like Krakatau, did not cooperate
to the best of its ability in this investigation.
Further, as stated in the Preliminary Determination, petitioners
made new subsidy allegations with respect to Krakatau on June 7, 1999.
The Department determined that these allegations were adequate, but as
of the date of the Preliminary Determination, the Department had not
had sufficient time to collect information from Krakatau and the GOI on
the Pre-1993 Equity Infusions to Krakatau, P.T., Cold-Rolled Mill
Indonesia (CRMI) Equity Infusions, and Two-Step Loan programs. Thus, we
did not make preliminary determinations with respect to these programs'
countervailability. We asked both Krakatau and the GOI to submit
information specific to these allegations. We received no response from
Krakatau, and the GOI stated that they did not have access to the
relevant files.
Therefore, because both Krakatau and the GOI have failed to provide
information necessary for the calculation of subsidy rates for these
newly alleged programs, pursuant to section 776(a)(2)(B) of the Act, we
find it necessary to resort to the facts otherwise available for this
final determination. As described in detail in the Preliminary
Determination and above, because we have determined that both Krakatau
and the GOI have failed to cooperate to the best of their abilities in
this investigation, we find the use of adverse inferences necessary
when selecting among the facts available, in accordance with section
776(b) of the Act.
When employing an adverse inference, the statute indicates that the
Department may rely upon information derived from (1) the petition; (2)
a final determination in a countervailing duty or an antidumping
investigation; (3) any previous administrative review, new shipper
review, expedited antidumping review, section 753 review, or section
762 review; or (4) any other information placed on the record. See also
section 351.308(c) of the CVD Regulations. Due to the absence of any
other relevant information on the record, we consider the petition to
be an appropriate source for the necessary information.
Furthermore, the Statement of Administrative Action accompanying
the URAA clarifies that information from the petition and prior
segments of the proceeding is ``secondary information.'' See Statement
of Administrative Action, accompanying H.R. 5110 (H.R. Doc. No. 103-
316) (1994) (SAA), at 870. If the Department relies on secondary
information as facts available, section 776(c) of the Act provides that
the Department shall, ``to the extent practicable,'' corroborate such
information using independent sources reasonably at its disposal. The
SAA provides that to corroborate secondary information means simply
that the Department will satisfy itself that the secondary information
to be used has probative value. Furthermore, the SAA explicitly states,
``[t]he fact that corroboration may not be practicable in a given
circumstance will not prevent [Commerce] from applying an adverse
inference . . . .'' SAA at 870.
As explained above, we are using the petition information as
adverse facts available in countervailing the programs involved in this
investigation. For a more detailed description of our treatment of
these programs, see the program descriptions in the ``Programs
Determined to be Countervailable'' section of this notice. Due to a
lack of available public information, with respect to the programs for
which we did not receive information from respondents, or for which we
could not verify information which had been submitted, we corroborated
the information used as adverse facts available by comparing it to the
exhibits attached to the petition, including Krakatau's financial
statements. In the case of the Rediscount Loan Program, we used
information from Final Negative Countervailing Duty Determination:
Extruded Rubber Thread From Indonesia, 64 FR 14695, (March 26, 1999)
(ERT), where we examined the same program and found it to be
countervailable. In addition, where calculations from the petition were
used, we modified and adjusted the calculation of the ad valorem
subsidy rates to conform to the Department's methodologies when
necessary or when possible. More detailed explanations of our
corroboration of the petition information is contained in the
``Equityworthiness'' and ``Programs Determined to be Countervailable''
sections of this notice. In places where we do not explain our
corroboration of information used, we did not find it practicable to
corroborate the information because of a lack of reasonably available
independent sources. However, as discussed above, a finding that it is
not practicable to corroborate certain information, does not prevent
the Department from using the information as adverse facts available.
See SAA at 870.
Changes in Ownership
In this investigation, we have examined subsidies that were
conferred upon CRMI at a time when it was partially owned by Krakatau.
Since that time, Krakatau has taken control over the remaining share of
CRMI, which is presently a wholly-owned subsidiary of Krakatau. In
change of ownership situations such as this, it is the Department's
standard practice to
[[Page 73158]]
follow the methodology outlined in the General Issues Appendix (GIA),
attached to the Final Affirmative Countervailing Duty Determination;
Certain Steel Products from Austria, 58 FR 37217, 37265 (July 9, 1993),
with respect to the treatment of subsidies received prior to the sale
of the company. See also, Final Affirmative Countervailing Duty
Determination: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel
Products from Brazil, 64 FR 38741, 38745 (July 19, 1999).
Over the course of this investigation, we repeatedly asked both
Krakatau and the government to provide information that would allow us
to use this methodology, but they did not. In the absence of this
information, as adverse facts available, for equity infusions provided
to CRMI, we treated these equity infusions as though the entire amount
was attributable to Krakatau. Accordingly, we assigned the total amount
of the equity infusions directly to Krakatau.
Subsidies Valuation Information
Allocation Period
Section 351.524(d)(2) of the CVD Regulations states that we will
presume the allocation period for non-recurring subsidies to be the
average useful life (AUL) of renewable physical assets for the industry
concerned, as listed in the Internal Revenue Service's (IRS) 1977 Class
Life Asset Depreciation Range System and updated by the Department of
Treasury. The presumption will apply unless a party claims and
establishes that these tables do not reasonably reflect the AUL of the
renewable physical assets for the company or industry under
investigation, and the party can establish that the difference between
the company-specific or country-wide AUL for the industry under
investigation is significant.
In this investigation, no party to the proceeding has claimed that
the AUL listed in the IRS tables does not reasonably reflect the AUL of
the renewable physical assets for the firm or industry under
investigation. Therefore, according to section 351.524(d)(2) of the CVD
Regulations, we have allocated Krakatau's non-recurring benefits over
15 years, the AUL listed in the IRS tables for the steel industry.
Equityworthiness
In analyzing whether a company is equityworthy, the Department
considers whether that company could have attracted investment capital
from a reasonable private investor in the year of the government equity
infusion based on the information available at that time. In this
regard, the Department has consistently stated that a key factor for a
company in attracting investment capital is its ability to generate a
reasonable return on investment within a reasonable period of time. In
making an equityworthiness determination, in accordance with section
351.507(a)(4) of the CVD Regulations, the Department may examine the
following factors, among others:
A. Objective analyses of the future financial prospects of the
recipient firm or the project as indicated by, inter alia, market
studies, economic forecasts, and project or loan appraisals prepared
prior to the government-provided equity infusion in question;
B. Current and past indicators of the recipient firm's financial
health calculated from the firm's statements and accounts, adjusted, if
appropriate, to conform to generally accepted accounting principles;
C. Rates of return on equity in the three years prior to the
government equity infusion; and
D. Equity investment in the firm by private investors.
The Department has examined Krakatau's equityworthiness for the
period 1988 through 1992, as well as in 1995, to the extent that equity
infusions may have been received in these years. In our preliminary
determination, we found that Krakatau was unequityworthy in 1995. We
received no comments from the interested parties relating to our
analysis of Krakatau's equityworthiness. Thus, for the reasons
specified in the Preliminary Determination, we determine that Krakatau
was unequityworthy in 1995. See Preliminary Determination, 64 FR at
40460.
The Department has also examined Krakatau's equityworthiness for
the period 1988 through 1992, to the extent equity infusions may have
been received in these years. Because neither Krakatau nor the GOI
responded to our repeated attempts to gather information regarding the
new allegations pertaining to the period 1988 through 1992, we used the
information in the petition as adverse facts available in accordance
with section 776(b) of the Act to conclude that Krakatau was
unequityworthy during the period 1988 through 1992. (For further
discussion, see the ``Facts Available'' section of this notice.)
With respect to factor A, no studies or other relevant data have
been submitted to the record. The petition cites several press articles
which describe Krakatau as inefficient, unprofitable, and uncompetitive
during the years prior to 1992. See Countervailing Duty Petition,
public version on file in the CRU. In order to corroborate the petition
information demonstrating that Krakatau was inefficient and
unprofitable prior to 1992, we examined the newspaper articles cited by
the petition. We found that these independent sources did indeed
describe Krakatau's financial and operational difficulties, thus
corroborating a finding of unequityworthiness.
To address factors B and C, we examined Krakatau's financial ratios
for 1990 through 1992, provided in the petition, which show that
Krakatau's rates of return were far less than the average rate of
return available in Indonesia. With respect to the final factor,
Krakatau has no private investors. Therefore, there are no private
investments that may be used to evaluate Krakatau's equityworthiness.
The available financial ratios, coupled with press reports used as
adverse facts available, demonstrate that no reasonable private
investor would have made equity investments in Krakatau during the
period 1988 through 1992. On this basis, we find that Krakatau was
unequityworthy during the period 1988 through 1992.
We have also examined the equityworthiness of Krakatau's
subsidiary, the Cold Rolling Mill of Indonesia (CRMI), in 1989 and
1990, to the extent that equity infusions may have been received in
these years. As discussed above, because neither Krakatau nor the GOI
responded to our repeated attempts to gather information regarding the
allegations pertaining to CRMI, we have relied upon the information
provided in the petition as adverse facts available in accordance with
section 776(b) of the Act. (For further discussion, see the ``Facts
Available'' section of this notice.)
Because no financial statements for CRMI for years prior to 1994
have been available, the petition cites to several press articles to
demonstrate CRMI's unequityworthiness. One such article, from 1989,
quotes a government official (who was also a company official at the
time) as stating that CRMI had failed to make a profit since being
inaugurated in 1987. Another 1989 article reports that CRMI's money-
losing performance was caused by large debts, technical problems and
poor sales, which led to accumulated losses of about US$120 million. At
the same time, CRMI's estimated debt was reported to be US$485 million.
The petition shows that CRMI's financial situation declined further in
1990. According to press reports from 1990, the company's losses
[[Page 73159]]
increased to US$150 million and its outstanding debts grew to US$492
million. In order to corroborate this petition information
demonstrating CRMI's unequityworthiness, we examined the independent
press reports cited in the petition and confirmed that they in fact
described CRMI's operational and financial difficulties in a manner
that supports an unequityworthy determination.
These articles are the only evidence on the record concerning
CRMI's equityworthiness, and suggest that no reasonable private
investor would have deemed CRMI capable of generating a reasonable rate
of return within a reasonable period at the time of the equity
infusions. On this basis, we determine that CRMI was unequityworthy in
1989 and 1990.
Equity Methodology
In measuring the benefit from a government equity infusion, in
accordance with section 351.507(a)(2) of the CVD Regulations, the
Department compares the price paid by the government for the equity to
actual private investor prices, if such prices exist. According to
section 351.507(a)(3) of the CVD Regulations, where actual private
investor prices are unavailable, the Department will determine whether
the firm was unequityworthy at the time of the equity infusion. In
these cases, private investor prices were unavailable; thus, we
conducted equityworthy analyses. As discussed above, we have determined
that Krakatau was unequityworthy during the period from 1988 to 1992,
and in 1995, and that CRMI was unequityworthy from 1989 to 1990.
Section 351.507(a)(3) of the CVD Regulations provides that a
determination that a firm is unequityworthy constitutes a determination
that the equity infusion was inconsistent with the usual investment
practices of private investors. The Department will then apply the
methodology described in section 351.507(a)(6) of the regulations, and
treat the equity infusion as a grant. Use of the grant methodology for
equity infusions into an unequityworthy company is based on the premise
that an unequityworthiness finding by the Department is tantamount to
saying that the company could not have attracted investment capital
from a reasonable investor in the infusion year based on the available
information.
Creditworthiness
As discussed in the Preliminary Determination, we only initiated an
investigation of Krakatau's creditworthiness during 1995. In the
Preliminary Determination, based on adverse facts available, we found
Krakatau to be uncreditworthy in 1995. We received no comments from the
interested parties relating to our analysis of Krakatau's
creditworthiness. Thus, for the reasons specified in the Preliminary
Determination, we continue to find that Krakatau was uncreditworthy in
1995. See Preliminary Determination, 64 FR at 40461.
Discount Rates and Loan Benchmarks
For equity infusions given to Krakatau, we calculated the discount
rates in accordance with the formula for constructing a long-term
interest rate benchmark for uncreditworthy companies as stated in the
Department's new regulations. See Section 351.505 (a)(3)(iii) of the
CVD Regulations. This formula requires values for the probability of
default by uncreditworthy and creditworthy companies. For the
probability of default by an uncreditworthy company, we relied on the
average cumulative default rates reported for the Caa to C-rated
category of companies as published in Moody's Investors Service,
``Historical Default Rates of Corporate Bond Issuers, 1920-1997,''
(February 1998). For the probability of default by a creditworthy
company, we used the average cumulative default rates reported for the
Aaa to Baa.1 Because no timely allegation of
uncreditworthiness was made against CRMI in this investigation, no
determination has been made regarding CRMI. Thus, we did not add an
uncreditworthiness margin to interest rates used to calculate benefits
received by CRMI.
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\1\ We note that since publication of the CVD Regulations,
Moody's Investors Service no longer reports default rates for Caa to
C-rated category of companies. Therefore for the calculation of
uncreditworthy interest rates, we will continue to rely on the
default rates as reported in Moody Investor Service's publication
dated February 1998 (see Exhibit 28).
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For subsidies received by Krakatau between 1994 and 1998, we used
the average cost of long-term fixed-rate loans in Indonesia as the
interest rates that would have been paid by a creditworthy company,
specifically the investment rates offered by commercial banks in
Indonesia as reported in the Indonesian Financial Statistics of
February 1999, attached to the GOI's April 29, 1999, questionnaire
response, a public document on file in the CRU. In order to calculate a
benefit for long-term allocable subsidies that were received prior to
1994, we used interest rate data for Indonesian long-term non-
guaranteed commercial loans as published in the International Monetary
Fund's International Financial Statistics. For 1998, since Indonesia
experienced very high inflation during this year, we converted the
subsidy into U.S. dollars and then applied a long-term dollar rate as
the discount rate, specifically, the average yield to maturity on
selected long-term Baa-rated bonds. See Memorandum to David Mueller,
``Preliminary Analysis and Calculations,'' dated July 16, 1999
(Preliminary Analysis Memo), public version on file in the CRU. This
conforms with our practice in Final Affirmative Countervailing Duty
Determination: Steel Wire Rod from Venezuela, 62 FR 55014, 55019
(October 22, 1997).
To calculate the benefit from the Two-Step Loan Program, because
the loans were denominated in Austrian schillings, we used as our
benchmark the Austrian national average government bond rate, as
published in the International Monetary Fund's International Financial
Statistics. While it is not our policy to use government bonds as a
benchmark, due to the lack of record evidence in this investigation, a
commercial lending rate was unavailable. Therefore, this is the only
information we were able to find for a schilling benchmark. As with the
equity infusions, we calculated the discount rates in accordance with
the formula for constructing a long-term interest rate benchmark for
uncreditworthy companies as stated in the Department's new regulations.
See Section 351.505 (a)(3)(iii) of the CVD Regulations
For the Rediscount Loan Program, we used as our benchmark the
reported average cost of short-term fixed-rate loans in Indonesia as
the interest rate that would be paid by a creditworthy company,
specifically the working capital rate offered by commercial banks in
Indonesia as reported in the Indonesian Financial Statistics of
February 1999, attached to the GOI's April 29, 1999, questionnaire
response, a public document on file in the CRU.
I. Programs Determined To Be Countervailable
A. 1995 Equity Infusion into Krakatau
In the Preliminary Determination, because Krakatau did not respond
to this allegation, we used the information and data provided in the
petition as adverse facts available, in accordance with section 776(b)
of the Act (see ``Facts Available'' discussion above). We corroborated
this information in accordance with section 776(c) of the Act as
described in the Preliminary
[[Page 73160]]
Analysis Memo. We received no comments from the interested parties
relating to our analysis of Krakatau's 1995 equity infusion. Thus, for
the reasons specified in the Preliminary Determination, we determine
that this equity infusion constituted a countervailable subsidy. See
Preliminary Determination, 64 FR at 40461.
As explained in the ``Equity Methodology'' section above, we have
treated equity infusions into unequityworthy companies as grants given
in the year the infusion was received because no market benchmark
exists. In accordance with section 351.507(c) of the CVD Regulations,
the equity infusion is allocated as a non-recurring subsidy. We
allocated the subsidy and converted the remaining face value of the
infusion in 1998 into U.S. dollars using the average 1997 rupiah/dollar
exchange rate and applied the long-term U.S. dollar uncreditworthy
interest rate described in the ``Discount Rate'' section of this
notice. We then divided the benefit amount allocable to the POI by
Krakatau's estimated 1998 U.S. dollar total sales figure, which was
calculated based on the facts available in the petitioner's submission
and corroborated as detailed in the Preliminary Analysis Memo, public
version on file in the CRU. On this basis, we determine the net
countervailable subsidy to be 16.21 percent ad valorem for Krakatau.
B. Pre-1993 Equity Infusions to Krakatau
As discussed in the Preliminary Determination, on June 7, 1999,
petitioners alleged that the GOI had made equity infusions into
Krakatau prior to 1993. At the time of the preliminary determination,
the Department had not had sufficient time to collect information from
Krakatau and the GOI on the alleged Pre-1993 Equity Infusions to
Krakatau, and so did not make a determination with respect to this
program's countervailability.
After the preliminary determination, both Krakatau and the GOI were
given an opportunity to provide information regarding these programs,
but they did not. Therefore, in accordance with section 776(b) of the
Act, we have used the information contained in the petition as adverse
facts available in order to make a determination with regard to this
program. (See ``Facts Available'' discussion above).
According to the petitioners, the GOI provided Krakatau with equity
infusions totaling US$765 million during the period from 1988 to 1992.
We corroborated the assertion made in the petition by comparing it to
the independent newspaper article cited in the petition which states
that, ``Excluding the cold-rolled mill, government subsidies for
Krakatau totaled Rps. 1.6 trillion (US$765 million) in the five years
to 31 December 1992.''
Because we have determined that Krakatau was unequityworthy during
this period in accordance with section 776(b) of the Act, we determine
that under section 771(5)(E)(i) of the Act, these equity infusions into
Krakatau were not consistent with the usual investment practice of a
private investor and confer a benefit in the amount of each infusion
(see ``Equityworthiness'' section above). The equity infusions are
specific within the meaning of section 771(5A)(D) of the Act because
they were limited to Krakatau. Accordingly, we find that the equity
granted to Krakatau during the period in question provides a
countervailable subsidy within the meaning of section 771(5) of the
Act.
As explained in the ``Equity Methodology'' section above, we have
treated equity infusions into unequityworthy companies as grants given
in the year the infusion was received because no market benchmark
exists. In accordance with section 351.507(c) of the CVD Regulations,
the equity conversion is allocated as a non-recurring subsidy. Due to
the lack of record information regarding this program, we were unsure
of the years in which the equity was given. Therefore, we treated the
entire amount as a grant provided in equal payments over the five-year
period from 1988 to 1992. We allocated the subsidy and converted the
remaining face value of the infusion in 1998 into U.S. dollars using
the average 1997 rupiah/dollar exchange rate and applied the long-term
U.S. dollar interest rate to uncreditworthy companies described in the
``Discount Rate'' section of this notice. We then divided the benefit
amount allocable to the POI by Krakatau's estimated 1998 U.S. dollar
total sales figure, which was calculated based on the facts available
in the petitioner's submission and corroborated as detailed in our
Preliminary Analysis Memo. On this basis, we determine the net
countervailable subsidy to be 16.66 percent ad valorem for Krakatau.
C. 1989 Equity Infusion to CRMI
As discussed in the Preliminary Determination, on June 7, 1999,
petitioners alleged that massive equity infusions were provided to
Krakatau's subsidiary, the Cold Rolling Mill of Indonesia (CRMI).
Krakatau owned 40 percent of CRMI's equity until 1991, when it
purchased the remaining shares to become a 100 percent owner.
Petitioners alleged that these 1989 and 1990 equity infusions provided
a countervailable benefit to Krakatau based on its ownership share in
CRMI. At the time of the preliminary determination, the Department had
not had sufficient time to collect information from Krakatau and the
GOI on the alleged Equity Infusions to CRMI, and so did not make a
determination with respect to this program's countervailability. Since
the preliminary determination, however, the Department afforded both
Krakatau and the GOI the opportunity to provide information regarding
these subsidy allegations. Because neither party responded to our
questionnaires, we have used the information contained in the petition
as adverse facts available, in accordance with section 776(b) of the
Act. (See ``Facts Available'' discussion above).
According to the Countervailing Duty Petition, the GOI provided
CRMI with an equity infusion totaling US$75 million in 1989. In support
of this allegation, the petition points to quotes from GOI officials
regarding the cash injections. To the extent practicable, we have
corroborated the information provided in the petition with numerous
press articles which describe the equity infusion, provided as
attachments to the petition. On the basis of this information, as
adverse facts available, we determine that under section 771(5)(E)(i)
of the Act, these equity infusions into CRMI were not consistent with
the usual investment practices of a private investor and confer a
benefit to CRMI in the amount of each infusion (see
``Equityworthiness'' section above). The equity infusions are specific
within the meaning of section 771(5A)(D) of the Act because they were
limited to CRMI. Accordingly, we find that the equity granted to CRMI
during the period in question provides a countervailable subsidy within
the meaning of section 771(5) of the Act.
As discussed in the ``Changes in Ownership'' section, above, as
adverse facts available, we are assuming that Krakatau did not pay for
its total acquisition of CRMI in 1991. Therefore, all of the benefit to
CRMI would have passed through to Krakatau at the time of the
acquisition. As explained in the ``Equity Methodology'' section above,
we have treated equity infusions into unequityworthy companies as
grants given in the year the infusion was received because no market
benchmark exists. In accordance with section 351.507(c) of the CVD
Regulations, the equity conversion is allocated as a non-
[[Page 73161]]
recurring subsidy. Therefore, we treated the entire amount as a grant
given to Krakatau in 1989. We allocated the subsidy over 15 years, and
applied the long-term U.S. dollar uncreditworthy interest rate
described in the ``Discount Rate'' section of this notice. We then
divided the benefit amount allocable to the POI by Krakatau's estimated
1998 U.S. dollar total sales figure, which was calculated based on the
facts available in the petitioner's submission and corroborated as
detailed in our Preliminary Analysis Memo. On this basis, we determine
the net countervailable subsidy to be 1.50 percent ad valorem for
Krakatau.
D. Three-Step Equity Infusion to CRMI
Information in the petition indicates that in 1989, an equity
infusion of US$357 million was to be provided to CRMI in three
installments--US$290 million, US$49 million and US$18 million. A 1990
article corroborates that the GOI was considering an equity infusion in
the amount of US$290 to CRMI. See Third Petition Attachment, Exhibits
15, 48. At the time of the preliminary determination, the Department
had not had sufficient time to collect information from Krakatau and
the GOI on these alleged Equity Infusions to CRMI, and so did not make
a determination with respect to this program's countervailability.
After the preliminary determination, both Krakatau and the GOI were
given the opportunity to provide information regarding these programs,
but did not. Therefore, as adverse facts available, we determine that
under section 771(5)(E)(i) of the Act, these equity infusions into CRMI
were not consistent with the usual investment practice of a private
investor and confer a benefit to CRMI in the amount of each infusion
(see ``Equityworthiness'' section above). To the extent that Krakatau
had a 40 percent stake in CRMI at the time of the infusion, and has
full ownership presently, the benefit to CRMI is equivalent to a
benefit to Krakatau. The equity infusions are specific within the
meaning of section 771(5A)(D) of the Act because they were limited to
CRMI. Accordingly, we find that the equity granted to CRMI during the
period in question provides a countervailable subsidy within the
meaning of section 771(5)(A) of the Act.
As explained in the ``Changes in Ownership'' section above, as
adverse facts available, we are assuming that all of the benefit to
CRMI would have passed through to Krakatau at the time of the
acquisition. As explained in the ``Equity Methodology'' section above,
we have treated equity infusions into unequityworthy companies as
grants given in the year the infusion was received because no market
benchmark exists. In accordance with section 351.507(c) of the CVD
Regulations, the equity conversion is allocated as a non-recurring
subsidy. Therefore, we treated the entire amount as a grant. The
information in the petition, corroborated by an independent newspaper
article attached to the petition, indicated that the GOI was going to
give the infusion in 1990; likewise, we have treated this equity
infusion as a grant given to Krakatau in 1990. We allocated the subsidy
and applied the long-term U.S. dollar interest rate described in the
``Discount Rate'' section of this notice. We then divided the benefit
amount allocable to the POI by Krakatau's estimated 1998 U.S. dollar
total sales figure, which was calculated based on the facts available
in the petitioner's submission and corroborated as detailed in our
Preliminary Analysis Memo. On this basis, we determine the net
countervailable subsidy to be 7.64 percent ad valorem for Krakatau.
E. Two-Step Loan Program
Prior to the Department's preliminary determination in this
proceeding, the petitioners alleged that the GOI had provided so-called
``two-step loans'' to Krakatau for the construction of certain fixed
assets. At the time of the preliminary determination, the Department
had not had sufficient time to collect information from Krakatau and
the GOI regarding this alleged Two-Step Loan program, and so did not
make a determination with respect to this program's countervailability.
Although the GOI and Krakatau were both asked repeatedly to respond to
the Department's questions about this program, neither party provided
any information that could be used in making a determination with
respect to this program's countervailability. Thus, in accordance with
section 776(b) of the Act, we have used the information provided by
petitioner as adverse facts available. (See ``Facts Available''
discussion above).
According to the petition, and corroborated by the descriptions
contained in Krakatau's 1996 and 1997 annual reports, these two-step
loans were drawn by Krakatau from ``credit facilities'' (i.e., lines of
credit) in the billing currencies of its equipment suppliers, who, in
turn, receive payment from banks appointed by lenders. According to
Krakatau's annual reports, the loans, which were converted into rupiah
based on the exchange rate on the drawing date, are repayable in the
currency in which they were borrowed, Austrian schillings. Krakatau's
annual reports indicate that Krakatau received a credit facility from
the GOI in fiscal year (FY) 1995 for ``optimization projects for the
slab steel plant and billet steel plant'' from which it drew down loan
amounts in FY 1995, FY 1996, and FY 1997. For all loan amounts drawn
under this credit facility, Krakatau pays interest at a rate of 4
percent per annum. The first principal installment on the loan balance
is scheduled for April 30, 2003 and last payment on October 30, 2020.
In 1995, the year in which the credit facilities were extended, a
lending rate of 4 percent would be inconsistent with an interest rate
the company would have received on a comparable commercial loan
denominated in Austrian schillings, and would thus provide a benefit
pursuant to section 351.505(a) of the Department's regulations. (See
the International Monetary Fund's International Financial Statistics,
October 1999, at 110). The information provided in the petition and
corroborated by the company's financial statements further demonstrates
that these loans are specific because they were provided by the GOI as
part of the financing for Krakatau's projects. There is no information
on the record of this investigation which would indicate that the two-
step loan was provided to Krakatau pursuant to a program to which other
companies ostensibly had access. As adverse facts available, pursuant
to section 776(b) of the Act, we find that the loan is specific as a
matter of law. Accordingly, we find that the two-step loan granted to
Krakatau provides a countervailable subsidy within the meaning of
section 771(5) of the Act.
In order to calculate the benefit from this program, we compared
the interest rates Krakatau paid on these two-step loans during the POI
to the interest rates the company would have paid for comparable
commercial loans, based on the long-term Austrian schilling loan
benchmark for uncreditworthy companies described in the ``Discount
Rates'' section of this notice, above. This difference was then divided
by Krakatau's estimated sales during the POI which were calculated
based on petition information and corroborated as detailed in the
Preliminary Analysis Memo. On this basis, we determine the
countervailable subsidy from this program to be 0.65 percent ad valorem
for Krakatau.
F. Rediscount Loan Program
In our Preliminary Determination, the Department found that
Krakatau had not
[[Page 73162]]
used this program. This determination was based on information provided
by the GOI; this information indicated that while Krakatau was eligible
to receive benefits under this program, it had neither applied for nor
received such benefits. The Department found, at the preliminary stage
of this investigation, that the administrative record with regard to
Krakatau was not so incomplete that it could not serve as a reliable
basis for reaching a determination with regard to this program.
According to section 782(e)(2) of the Act, the Department shall not
decline to consider information submitted by an interested party if,
among other factors, the information can be verified. We attempted to
verify with the GOI that Krakatau had not used the Rediscount Loan
Program, but were unable to do so. See, GOI Verification Report at 3.
As explained in the ``Facts Available'' section of this notice, we have
determined to resort to adverse facts available for our determination
with regard to this program.
Under Decree No. 132/MPP/Kep/1996 of June 4, 1996, the Ministry of
Industry and Trade, the Ministry of Finance, and the Bank of Indonesia
(BI) provide support for certain exporters with the goal of achieving
diversification of the Indonesian export base. Companies designated as
Perusahaan Eksportir Tertentu (PET) are eligible to participate in this
program. Under the program, PETs sell their letters of credit and
export drafts at a discount to the BI through participating foreign
exchange banks, which are commercial banks that have obtained a license
to conduct activities in foreign currencies. The sale of the letters of
credit and export drafts by the PETs provides them with working capital
at lower interest rates than they would otherwise pay on short-term
commercial loans.
This same program was determined to constitute an export subsidy in
Final Negative Countervailing Duty Determination: Extruded Rubber
Thread From Indonesia, 64 FR 14695 (March 26, 1999) (ERT).
On the basis of this information, and in conformance with section
776(b) of the Act, we determine that the loans provided under this
program are countervailable in accordance with section 771(5)(A) of the
Act. Through this program, the BI provides working capital to PETs at
interest rates which are more favorable than those provided to non-
PETs. The benefit is the difference between the amount the borrower of
the loan pays on the loan and the amount the borrower would pay on a
comparable commercial loan. Finally, because the program is contingent
upon export performance, it is an export subsidy under section
771(5A)(B) and is, therefore, specific.
In the ERT determination, the Department verified that the interest
rates in effect during that investigation's POI were the Singapore
Interbank Offering Rate (SIBOR) for PETs, and SIBOR plus 1 percent for
non-PETs. See ERT, 64 FR at 14696. The interest rates used in the
petition, as corroborated by the questionnaire response of the GOI were
SIBOR for PET exporters, and SIBOR plus 1 percent for non-PET exporters
during the first half of the POI. During the second half of the POI
rediscount loan rates rose to SIBOR plus 3 percent for PET exporters,
and SIBOR plus 4 percent for non-PET exporters. See Third Petition
Amendment, Exhibit 42; see also GOI Verification at 2. Thus, we have
used these interest rates to calculate the benefit to Krakatau. We
compared the interest rates Krakatau paid on loans for shipments to the
United States to the interest rates that non-PET companies would have
had to pay for comparable commercial short-term loans. This difference
was then divided by Krakatau's total exports sales. As adverse facts
available, we used the estimated export sales calculated in the
petition to calculate the subsidy rate. On this basis, we determine the
countervailable subsidy from this program to be 5.05 percent ad valorem
for Krakatau.
Based on the verified information provided by respondents and the
GOI, we determine that neither Gunawan nor Jaya Pari applied for or
received benefits under the Rediscount Loan Program during the POI.
II. Program Determined Not To Exist
Reduction in Electricity Tariffs
In the Preliminary Determination, the Department found no basis for
concluding that the steel industry had received a special electricity
discount. Moreover, based on the record evidence, the electricity
discount was not limited to a specific enterprise, industry or group
thereof, but was available to all industrial users in the country.
Therefore, we preliminarily determined that the electricity discount
program is not countervailable. (See Preliminary Determination, 64 FR
at 40462).
At verification, we met with officials from the government-owned
electricity company, PLN, to discuss the tariff rates. Officials
explained that, prior to the increase in question, the last tariff
schedule was implemented in 1994. The President established a tariff
increase with Decree No. 70 of 1998, because of the increased costs of
providing electricity. The increase was to be implemented in three
stages. However, due to the financial crisis and the instability of the
rupiah, only the first of these three stages was actually implemented,
in May 1998. In early 1999, with Presidential Decree No. 1, 1999, the
second two stages were officially postponed in a decree which legalized
the existing tariff schedule. See Exhibit 12 to the GOI's June 2, 1999,
questionnaire response, public version on file in the CRU. Thus, the
subsequent stages were never implemented and there were no refunds. The
May 1998 tariff schedule is still presently in place.
Additionally, we verified that there are no special rates for
particular industries; all industries are charged based on industrial
usage categories. On these bases, we find this program not to exist.
III. Program Determined To Be Not Used
Based on the verified information provided by respondents and the
GOI, we determine that neither Gunawan nor Jaya Pari applied for or
received benefits from Corporate Income Tax Holidays during the POI.
With regard to Krakatau, the facts available regarding this program
have not changed from the preliminary determination; therefore we
continue to find that Krakatau did not use this program during the POI.
Interested Party Comments
Comment 1: Whether the Department Should Countervail the 1989 Equity
Infusion to CRMI, the Three-Step Equity Infusion, and the Two-Step Loan
from the GOI
Petitioners argue that the Department should countervail three
subsidies to Krakatau which were outlined in the June 7, 1999 amendment
to the petition: the 1989 Equity Infusion to CRMI, the Three-Step
Equity Infusion, and the Two-Step Loan from the GOI. The information in
the petition amendment was not rebutted by Krakatau or the GOI, nor did
Krakatau or the GOI present any affirmative information regarding these
programs in the investigation. Therefore, petitioners argue, the
Department should apply adverse facts available in its final
determination, in accordance with the Department's own regulations.
Department's Position: We agree with Petitioners. In the
Preliminary Determination, we stated that due to the lateness of the
allegations, the parties had not been given sufficient time to provide
information with regard to these alleged programs. However, since the
[[Page 73163]]
preliminary determination, both Krakatau and the GOI have been afforded
opportunities to present information regarding these allegations.
Neither Krakatau nor the GOI responded to our questions concerning
these programs. Therefore, as discussed in detail in both the ``Use of
Facts Available'' and ``Programs Determined to be Countervailable''
sections of this notice, we have applied adverse facts available in
accordance with the Department's regulations, at 351.308(a) and with
section 776(b) of the Act.
Comment 2: Whether the GOI has Failed Verification with Respect to the
Rediscount Loan Subsidy
In the Preliminary Determination, the Department found that
Krakatau had not used rediscount loans, on the basis of the GOI's
questionnaire responses. However, petitioners assert that the GOI had
placed conflicting information on the record, information that should
have been clarified at verification. As the Department was unable to
verify this program, petitioners argue that the Department should
resort to the use of facts available to countervail Krakatau's use of
this program, which has been found to be countervailable in prior
proceedings. To support their position, petitioners point to the
verification outlines, which clearly stated that the Department would
need to examine records maintained on Krakatau with regard to this
subsidy. Because the Department requested that the GOI be prepared to
present documentation at verification, petitioners argue that the GOI
should have been fully prepared for verification.
Simply put, petitioners argue that because officials from the GOI
were unable to present information beyond mere assertions at
verification that Krakatau did not use this program, the GOI failed
verification with respect to this program and the Department is obliged
to countervail Krakatau's use of this program as adverse facts
available. Petitioners cite to Stainless Steel Sheet and Strip in Coils
from Taiwan, in which the Department applied adverse facts available
because a party was in control of necessary information but did not
provide that information.
Department's Position: As discussed in the ``Use of Facts
Available'' section of this notice, above, according to section
782(e)(2) of the Act, the Department shall not decline to consider
information if, among other factors, that information can be verified.
In this case, we attempted to verify with the GOI that Krakatau had not
used the Rediscount Loan Program, but were unable to do so. At
verification, we asked to review any records the Bank of Indonesia
maintains with regard to the users of this program. The officials
indicated that, although they searched their files for any information
on Krakatau Steel and did not find anything, it was not possible to
review each and every file to demonstrate that Krakatau did not use the
program. See, GOI Verification Report, page 3. Moreover, the government
officials did not propose any other way in which Krakatau's non-use
could be adequately verified. Consequently, we agree with petitioners'
assertion that the Department was unable to verify Krakatau's non-use
of the rediscount loan program and we must, therefore, base our final
determination on the facts available on the record. Additionally, as
explained in the ``Facts Available'' section above, because we
determined that the GOI failed to cooperate by not acting to the best
of its ability in this investigation, we determined that an adverse
inference is warranted when selecting among the facts available. For
more information, see the ``Programs Determined to be Countervailable''
section of this notice.
Verification
In accordance with section 782(i) of the Act, except as noted in
the ``Facts Available'' and ``Programs Determined to Be
Countervailable'' sections, above, we verified the information used in
making our final determination. We followed standard verification
procedures, including meeting with the government and company
officials, and examining relevant accounting records and original
source documents. Our verification results are outlined in detail in
the public versions of the verification reports, which are on file in
the CRU.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated individual rates for each of the companies under
investigation.
According to section 705(5)(A)(i) of the Act, the all others rate
normally will be ``an amount equal to the weighted average
countervailable subsidy rates established for exporters and producers
individually investigated, excluding any zero and de minimis
countervailable subsidy rates and any rates determined entirely under
section 776.'' In this case, all exporters and producers individually
investigated have zero rates or a rate based entirely on facts
available.
According to section 705(5)(A)(ii) of the Act, in situations where
the countervailable subsidy rates established for all exporters and
producers individually investigated are zero or de minimis rates, or
are determined entirely under section 776, the Department may use any
reasonable method to establish an all others rate. In antidumping duty
investigations, where petitions typically have a range of calculated
dumping rates, the Department often bases the all others rate on a
simple average of the petition rates in such situations. See, e.g.,
Notice of Final Determination of Sales at Less Than Fair Value:
Stainless Steel Plate in Coils From Italy, 64 FR 15458, 15459 (Mar. 31,
1999). In this investigation, we do not have information from the
petition that would allow us to calculate the all others rate in this
fashion. Therefore, we have considered the options of using a weighted
average of the countervailing subsidy rates of the exporters and
producers individually examined in this investigation or a simple
average of these same rates. Because of concerns about the potential
disclosure of proprietary data through the use of a weighted average of
the subsidy rates in this case, the Department has decided to use a
simple average of the subsidy rates of the producers and exporters
examined as the all others rate in this case.
------------------------------------------------------------------------
Producer/exporter Net subsidy rate
------------------------------------------------------------------------
P.T. Krakatau Steel....................... 47.71% ad valorem
P.T. Gunawan Steel........................ 0.00% ad valorem
P.T. Jaya Pari............................ 0.00% ad valorem
All others rate........................... 15.90% ad valorem
------------------------------------------------------------------------
In accordance with our preliminary affirmative determination, we
instructed the U.S. Customs Service to suspend liquidation of all
entries of certain cut-to-length carbon-quality steel plate from
Indonesia which were entered, or withdrawn from warehouse, for
consumption on or after July 26, 1999, the date of the publication of
our preliminary determination in the Federal Register. In accordance
with section 703(d)(3) of the Act, which provides that suspension
ordered after the preliminary determination may not remain in effect
for more than four months, we instructed the U.S. Customs Service to
discontinue the suspension of liquidation for merchandise entered on or
after November 23, 1999, but to continue the suspension of liquidation
of entries made between July 26 and November 22, 1999.
We will reinstate suspension of liquidation under section 706(a) of
the Act if the ITC issues a final affirmative injury determination, and
will require a cash deposit of estimated countervailing duties for such
entries of merchandise in the amounts indicated above. Because the
estimated net
[[Page 73164]]
countervailing duty rates for Gunawan and Jaya Pari are zero, these
companies will be excluded from the suspension of liquidation, and the
order, if one is issued.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files provided the ITC confirms
that it will not disclose such information, either publicly or under an
administrative protective order, without the written consent of the
Assistant Secretary for Import Administration.
If the ITC determines that material injury, or threat of material
injury, does not exist, this proceeding will be terminated and all
estimated duties deposited or securities posted as a result of the
suspension of liquidation will be refunded or canceled. If, however,
the ITC determines that such injury does exist, we will issue a
countervailing duty order.
Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to Administrative Protective Order (APO) of their
responsibility concerning the destruction of proprietary information
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to
comply is a violation of the APO.
This determination is published pursuant to sections 704(g) and
777(i) of the Act.
Dated: December 13, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33231 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-P