[Federal Register Volume 66, Number 78 (Monday, April 23, 2001)]
[Notices]
[Pages 20425-20434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9977]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-423-809]
Stainless Steel Plate in Coils from Belgium: Preliminary Results
of Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
[[Page 20426]]
ACTION: Notice of Preliminary Results of Countervailing Duty
Administrative Review.
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SUMMARY: The Department of Commerce is conducting an administrative
review of the countervailing duty order on stainless steel plate in
coils from Belgium for the period September 4, 1998, through December
31, 1999. We have preliminarily determined that the only producer/
exporter covered by this review, ALZ N.V., received net subsidies
during the period of review. If the final results remain the same as
these preliminary results, we will instruct the U.S. Customs Service to
assess countervailing duties as detailed in the Preliminary Results of
Review section of this notice. Interested parties are invited to
comment on these preliminary results (see the Public Comment section of
this notice).
EFFECTIVE DATE: April 23, 2001.
FOR FURTHER INFORMATION CONTACT: Jarrod Goldfeder, Melani Miller, or
Anthony Grasso, AD/CVD Enforcement, Group I, Office 1, Import
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-
0189, (202) 482-0116, or (202) 482-3853, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of section 751(a) of the Tariff Act of
1930, as amended by the Uruguay Round Agreements Act (``URAA'')
effective January 1, 1995 (``the Act''). Similarly, all citations to
the Department of Commerce's (``the Department'') regulations are to
the current regulations as codified at 19 CFR Part 351 (2000),
including the new substantive countervailing duty regulations published
in the Federal Register on November 25, 1998 (63 FR 65348), unless
otherwise indicated.
Background
On May 11, 1999, the Department published in the Federal Register
(64 FR 25288) the countervailing duty order on stainless steel plate in
coils from Belgium. On May 16, 2000, the Department published a notice
of ``Opportunity to Request Administrative Review'' of this
countervailing duty order (65 FR 31141). On May 31, 2000, we received a
timely request for review of ALZ N.V. (``ALZ'') from Allegheny Ludlum
Corp., Armco, Inc., Lukens Inc., and United Steelworkers of America,
AFL-CIO/CLC (collectively, ``the petitioners'').
We initiated the review, covering calendar year 1999, on July 7,
2000 (65 FR 41942). As noted below in the Period of Review section, the
appropriate period of review (``POR'') in this proceeding is September
4, 1998 through December 31, 1999, not calendar year 1999. Corrections
to the initiation notice to revise the POR were published in the
Federal Register on October 2, 2000 (65 FR 58733) and October 30, 2000
(65 FR 64662).
On July 26, 2000, we received a timely allegation from the
petitioners concerning several additional subsidies. The petitioners
also requested that the Department re-investigate several equity
programs that had been examined in the investigation. See Final
Affirmative Countervailing Duty Determination; Stainless Steel Plate in
Coils from Belgium, 64 FR 15567 (March 31, 1999) (``Plate in Coils from
Belgium''). ALZ submitted information rebutting these allegations and
requests on August 7, 2000. We decided to include two of the newly-
alleged subsidy programs in this review; we also decided to re-examine
two previously-investigated equity investments from Plate in Coils from
Belgium. We determined not to investigate two of the newly-alleged
subsidy programs. See October 19, 2000 memorandum to Richard W.
Moreland, Deputy Assistant Secretary for AD/CVD Enforcement, entitled
``New Subsidy Allegations'' (``New Allegations Memo''), which is on
file in the Import Administration's Central Records Unit, Room B-099 of
the main Department of Commerce building (``CRU'').
In accordance with 19 CFR 351.213(b), this review of the order
covers ALZ, the only company for which a review was specifically
requested. This review covers 27 programs, including the four programs
for which we initiated an investigation or re-investigation, noted
above.
On August 9, October 4, October 19, and December 5, 2000, we issued
countervailing duty questionnaires and supplemental questionnaires to
the Government of Belgium (``GOB''), the Government of Flanders
(``GOF''), the Commission of the European Union (``EC''), and ALZ. We
received timely responses from these parties in October and November
2000 and January 2001.
On January 2, 2001, the Department published a notice in the
Federal Register extending the time limit for issuing these preliminary
results until no later than April 16, 2001 (66 FR 95).
Scope of the Review
Imports covered by this review are shipments of certain stainless
steel plate in coils. Stainless steel is an alloy steel containing, by
weight, 1.2 percent or less of carbon and 10.5 percent or more of
chromium, with or without other elements. The subject plate products
are flat-rolled products, 254 mm or over in width and 4.75 mm or more
in thickness, in coils, and annealed or otherwise heat treated and
pickled or otherwise descaled. The subject plate may also be further
processed (e.g., cold-rolled, polished, etc.) provided that it
maintains the specified dimensions of plate following such processing.
Excluded from the scope of this order are the following: (1) Plate not
in coils, (2) plate that is not annealed or otherwise heat treated and
pickled or otherwise descaled, (3) sheet and strip, and (4) flat bars.
In addition, certain cold-rolled stainless steel plate in coils is also
excluded from the scope of this order. The excluded cold-rolled
stainless steel plate in coils is defined as that merchandise which
meets the physical characteristics described above that has undergone a
cold-reduction process that reduced the thickness of the steel by 25
percent or more, and has been annealed and pickled after this cold
reduction process.
The merchandise subject to this order is currently classifiable in
the Harmonized Tariff Schedule of the United States (``HTSUS'') at
subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.05,
7219.12.00.20, 7219.12.00.25, 7219.12.00.50, 7219.12.00.55,
7219.12.00.65, 7219.12.00.70, 7219.12.00.80, 7219.31.00.10,
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60,
7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15,
7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10,
7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10,
7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTSUS
subheadings are provided for convenience and for Customs Service
(``Customs'') purposes, the written description of the scope of the
order is dispositive.
Period of Review
According to section 351.213(e)(2)(ii) of the Department's
regulations, in the case of the first administrative review of a
countervailing duty order, the POR should extend from the initial date
of suspension of liquidation of the subject merchandise to the end of
the most recently completed fiscal year. In this case, suspension of
liquidation began on September 4, 1998, the date of publication of the
preliminary results in Plate in Coils from Belgium. See
[[Page 20427]]
Preliminary Countervailing Duty Determination and Alignment of Final
Countervailing Duty Determination With Final Antidumping Duty
Determination: Stainless Steel Plate in Coils From Belgium, 63 FR 47239
(September 4, 1998). Therefore, the POR for which we are measuring
countervailable subsidies is from September 4, 1998 through December
31, 1999.
Because it is the Department's practice to calculate subsidy rates
on an annual basis, we calculated a 1998 rate and a 1999 rate for ALZ.
The rate calculated for 1998 will be applicable only to entries, or
withdrawals from warehouse, for consumption made on and after September
4, 1998 through the end of 1998.
Subsidies Valuation Information
Responding Producers
In Plate in Coils from Belgium, we found that ALZ had two
subsidiaries which were involved in the production of the subject
merchandise, ALBUFIN N.V. (``Albufin'') and AL-FIN N.V. (``Alfin'').
ALZ has reported in the instant review that, as of the end of 1998,
Albufin was merged into ALZ and no longer exists as a separate entity.
We have included subsidies to these companies in the subsidy rate for
ALZ for the POR. Furthermore, SIDMAR (``Sidmar'') owns either directly
or indirectly 100 percent of ALZ's voting shares and is the overall
majority shareholder of ALZ. Therefore, in accordance with section
351.525(a)(6)(iii) of the Department's regulations, because ALZ is a
fully consolidated subsidiary of Sidmar, any untied subsidies provided
to Sidmar are attributable to ALZ.
Benchmarks for Long-term Loans and Discount Rates
Both ALZ and Sidmar obtained long-term commercial loans
contemporaneously with the receipt of certain government loans or
grants that are under review. Therefore, where ALZ or Sidmar obtained
long-term commercial loans, we used the company-specific interest rates
as the long-term loan benchmark interest rate or discount rate. See
section 351.505(a)(2)(ii) of the Department's regulations. For all
other years, we used national average rates for long-term, fixed-rate
debt as the long-term loan benchmark interest rate or discount rate.
See section 351.505(a)(3)(ii) of the Department's regulations.
Equity Methodology
Section 771(5)(E)(i) of the Act and section 351.507 of the
Department's regulations state that, in the case of government-provided
equity infusion, a benefit is conferred if an equity investment
decision is inconsistent with the usual investment practice of private
investors.
Consistent with the methodology discussed in section 351.507 of the
Department's regulations, the first question in analyzing a benefit
with respect to an equity infusion is whether, at the time of the
infusion, there was a market price for similar newly-issued equity. If
so, the Department will consider an equity infusion to be inconsistent
with the usual investment practice of private investors if the price
paid by the government for newly-issued shares is greater than the
price paid by private investors for the same, or similar, newly-issued
shares.
If actual private investor prices are not available, then the
Department will determine whether the firm funded by the government-
provided infusion was equityworthy or unequityworthy at the time of the
equity infusion. (See section 351.507(a)(3)(i) of the Department's
regulations.) Section 351.507(a)(4)(ii) of the Department's current
regulations further stipulates that the Department will ``normally
require from the respondents the information and analysis completed
prior to the infusion, upon which the government based its decision to
provide the equity infusion.'' Absent an analysis containing
information typically examined by potential private investors
considering an equity investment, the Department will normally
determine that the equity infusion provides a countervailable benefit.
This is because, before making a significant equity infusion, it is the
usual investment practice of private investors to evaluate the
potential risk versus the expected return, using the most objective
criteria and information available to the investor.
In this review, as noted above, the Department is examining three
government equity infusions. See 1984 Purchase of Sidmar's Common and
Preference Shares, 1985 ALZ Share Subscriptions, and Sidmar's Debt to
Equity (OCPC-to-PB) conversion in 1985 in the individual program
descriptions, below, for an individual analysis relating to each of the
three GOB equity infusions.
Allocation Period
In Plate in Coils from Belgium, in accordance with a Court of
International Trade (``CIT'') decision, we calculated company-specific
allocation periods for non-recurring subsidies using company-specific
average useful life (``AUL'') data. (See British Steel plc v. United
States, 929 F. Supp. 426, 439 (CIT 1996)). We determined that the AUL
for ALZ was 15 years, and that the AUL for Sidmar was 19 years.
Since Plate in Coils from Belgium, new countervailing duty
regulations have come into force and are applicable to this review.
Pursuant to section 351.524(d)(2) of these regulations, the Department
will presume the allocation period for non-recurring subsidies to be
the AUL of renewable physical assets as listed in the IRS tables unless
a party claims and establishes that the IRS tables do not reasonably
reflect the company-specific AUL or the country-wide AUL for the
industry. In this case, the AUL in the IRS tables is 15 years.
With respect to non-recurring subsidies received prior to the POR
which have already been countervailed and allocated based on an
allocation period established in Plate in Coils from Belgium, it is
neither reasonable nor practicable to reallocate those subsidies over a
different time period. Therefore, we have preliminarily decided to
allocate non-recurring subsidies countervailed in Plate in Coils from
Belgium over 15 years for ALZ and over 19 years for Sidmar. This
methodology is consistent with our approach in Certain Carbon Steel
Products from Sweden; Final Results of Countervailing Duty
Administrative Review, 62 FR 16549 (April 7, 1997) and Certain Pasta
from Italy: Final Results of Third Countervailing Duty Administrative
Review, 66 FR 11269 (February 23, 2001).
With respect to new non-recurring subsidies which have not been
previously allocated, ALZ (also responding on behalf of Sidmar) does
not contest the use of the 15-year allocation period in the IRS tables
for both ALZ and Sidmar. The petitioners, however, have argued that,
because a 19-year company-specific AUL for Sidmar was verified in Plate
in Coils from Belgium, and because that AUL differs from the IRS table
AUL by more than one year, the presumption that the IRS AUL is the most
appropriate for Sidmar has been rebutted. (The petitioners do not
contest the use of the AUL from the IRS tables for ALZ.) Moreover, the
petitioners note that, in Plate in Coils from Belgium, ALZ itself
argued that the Department should use the 19-year AUL for Sidmar. The
petitioners point out that ALZ, in its case brief in Plate in Coils
from Belgium, noted that, even if that investigation had been conducted
under the new regulations, Sidmar would qualify for a company-specific
AUL.
[[Page 20428]]
ALZ disagrees with the petitioners, and argues that the 15-year AUL
included in the IRS tables is the most appropriate AUL to use for
Sidmar. ALZ argues that any entity wishing to rebut the presumption of
the use of the IRS tables must actually demonstrate that the IRS table
AUL is inappropriate. ALZ contends that the petitioners did not meet
the burden of proof set forth in section 351.524(d)(2)(iii) of the
Department's regulations, and, hence, have not rebutted the presumption
of a 15-year AUL for Sidmar.
In further support of its arguments, ALZ notes that the 19-year AUL
derived in the investigation was based on information derived from
Sidmar NV, not on information from the entire Sidmar Group (of which
Sidmar NV is one part). Given that the subsidies in question were
received by the Sidmar Group, Sidmar NV's experience should not be
sufficient to rebut the presumption as it applies to the Sidmar Group.
Given that we relied on Sidmar NV's data to calculate Sidmar's AUL
in Plate in Coils from Belgium and, thus, we have a relative recently
calculated AUL that has been applied to Sidmar, we have continued to
use a 19-year AUL for these preliminary results. However, we invite
further comment on this issue for the final results. While we
acknowledge that we used Sidmar NV's data in Plate in Coils from
Belgium, we did so because it was the best company-specific information
we had at that time. However, given the preference in the new
regulations for IRS data, we believe that it is appropriate to
reconsider whether IRS data should not be preferred to company-specific
data which is flawed because it is based only on a portion of the
subsidy recipient's data.
As for ALZ, because no party has demonstrated that another period
was more appropriate than the AUL period required by the Department's
current regulations, any new, not previously allocated non-recurring
subsidies received by ALZ during the current POR are being allocated
over 15 years as specified in the IRS tables.
Analysis of Programs
I. Programs Preliminarily Determined to Confer Subsidies
A. 1985 ALZ Share Subscriptions (identified as 1985 ALZ Share
Subscriptions and Subsequent Transactions in Plate In Coils from
Belgium)
In 1985, the GOB made three share subscriptions (one subscription
for ordinary shares and two for preference shares) in ALZ. These
purchases followed Royal Decree No. 245 of December 31, 1983, which
allowed the GOB to make preference share subscriptions in the steel
industry as long as the subscriptions did not exceed one-half of the
social capital of the company. ALZ, the GOB, and the Nationale
Maatschappig voor de Herstructurering van de Nationale Sectoren
(``NMNS''), the government agency purchasing the shares, signed an
agreement with respect to these purchases on July 10, 1985. ALZ's
shareholders approved of these share acquisitions on September 26,
1985.
In Plate in Coils from Belgium, we analyzed whether the GOB's 1985
share purchases conferred a benefit on ALZ according to the equity
methodology that was in place prior to the issuance of the Department's
current subsidy regulations. We found in our investigation that ALZ was
equityworthy and that the GOB's 1985 share subscriptions in ALZ did not
constitute a countervailable subsidy within the meaning of section
771(5) of the Act. However, in the instant review, as explained in our
New Allegations Memo, we have re-initiated an investigation of these
1985 share subscriptions based on the change in our equity methodology
from the time of the original investigation of this program.
ALZ has reported that there was no market price for similar newly-
issued equity at the time the GOB purchased ALZ's equity, as neither
ALZ's common nor preference shares were publicly traded. Therefore, we
must determine whether ALZ was equityworthy or unequityworthy at the
time of the 1985 equity infusion.
As explained in the Equity Methodology section, above, we first
examined any analysis relied upon by the GOB in making its decision to
invest in ALZ. Based on our review of this information, we have
preliminarily determined that no objective studies of ALZ had been
prepared prior to the GOB's investment decision on which the GOB could
have based its investment decision. See the Department's April 16,
2001, memorandum to Richard W. Moreland, Deputy Assistant Secretary for
AD/CVD Enforcement entitled ``Government of Belgium Equity Infusions:
1984 Infusion in Sidmar, 1985 Infusion in ALZ, and the Conversion of
Sidmar's Debt to Equity (OCPC-to-PB) in 1985'' (``Equity Infusions
Memorandum'') (on file in the CRU).
Therefore, we preliminarily determine that the GOB's purchases of
ALZ's ordinary and preferred shares in 1985 constitute a
countervailable subsidy within the meaning of section 771(5) of the
Act. These investments provide a financial contribution, as described
in section 771(5)(D)(i) of the Act. Also, in Plate in Coils from
Belgium, we determined that benefits under Royal Decree No. 245 are
available only to the steel sector. On this basis, we preliminarily
determine that this program is specific under section 771(5A)(D)(i) of
the Act. Finally, because no analysis was performed containing
information typically examined by potential private investors
considering an equity investment prior to the GOB's decision to invest
in ALZ, the investment decision was inconsistent with the usual
investment practice of private investors. Therefore, a benefit exists
according to section 771(5)(E)(i) of the Act in the amount of the
equity infusion.
To calculate the benefit applicable to the POR, we applied the
Department's standard grant methodology. Because we could not determine
according to section 351.524(b)(2) of the Department's regulations
whether we should allocate this non-recurring expense to the year in
which it was approved because we did not have relevant sales
information for that year, we preliminarily allocated the benefit over
the AUL for ALZ. We will seek information from ALZ with respect to the
appropriate sales information for the final results. We divided the
total benefit attributable to 1998 and 1999 by ALZ's total sales during
1998 and 1999, respectively. On this basis, we preliminarily determine
the countervailable subsidy for 1998 to be 0.69 percent ad valorem, and
the countervailable subsidy for 1999 to be 0.62 percent ad valorem.
B. 1987 ALZ Common Share Transaction Between the GOB and Sidmar (also
identified as 1985 ALZ Share Subscriptions and Subsequent Transactions
in Plate In Coils from Belgium)
As discussed above, in 1985, the GOB made three share subscriptions
in ALZ involving both common shares and preference shares. In 1987, the
GOB sold the common shares it had purchased to Kempense
Investeringsvennootschap, a company controlled by Sidmar.
In Plate in Coils from Belgium, we concluded that the GOB did not
behave as a private investor when selling its shares in 1987 because it
accepted a lower price than it otherwise could have obtained for the
shares. Therefore, we determined that the GOB's 1987 sale of ALZ's
common shares to Sidmar constituted a countervailable subsidy
[[Page 20429]]
within the meaning of section 771(5) of the Act. The sale provided a
financial contribution, as described in section 771(5)(D)(i) of the
Act. Moreover, we found that benefits under Royal Decree No. 245 were
available only to the steel sector. On this basis, we determined that
the program was specific under section 771(5A)(D)(i) of the Act. In
this review, no new information has been placed on the record which
would warrant reconsideration of this determination.
To calculate the benefit conferred during the POR, we took the
difference between market value for ALZ's common stock and the price
paid by Sidmar for the stock, and treated the difference as a grant. We
then applied the Department's standard grant methodology and divided
the benefit in 1998 and 1999 by Sidmar's total consolidated sales
during 1998 and 1999, respectively. On this basis, we preliminarily
determine the countervailable subsidy for 1998 to be 0.07 percent ad
valorem, and the countervailable subsidy for 1999 to be 0.07 percent ad
valorem.
C. Industrial Reconversion Zones
Alfin
Alfin was established as a ``proper'' reconversion company in 1985
under the reconversion program ``Herstelwet 1984.'' Alfin was financed
by a government agency, Nationale Investeringsmaatschappij (``NIM''),
and ALZ. In exchange for its investment, NIM received non-voting
preferred shares and a two percent annual return on its investment. ALZ
was obligated to repurchase all of the shares purchased by NIM at the
issued price over a ten-year period.
Using the hierarchical criteria discussed in the ``Classification
of Hybrid Financial Instruments Issue'' section of the General Issues
Appendix to the Final Affirmative Countervailing Duty Determination:
Certain Steel Products from Austria, 58 FR 37217, 37239 (July 9, 1993),
we found in Plate In Coils from Belgium that these shares constituted
debt instruments because they have a fixed repayment period. These debt
instruments remained outstanding during part of the POR.
In Plate In Coils from Belgium, we found that this program
conferred a countervailable subsidy within the meaning of section
771(5) of the Act. This program provided a financial contribution as
described in section 771(5)(D)(i) of the Act. Moreover, because
benefits under the ``Herstelwet 1984'' law were limited to firms in
certain regions of the country, the program was specific under section
771(5A)(D)(iv) of the Act. In this review, no new information has been
placed on the record which would warrant reconsideration of this
determination.
To measure the benefit conferred by this loan during the POR, we
used our long-term fixed-rate loan methodology. We divided the subsidy
allocated to 1998 by ALZ's total sales for 1998. On this basis, we
preliminarily determine the countervailable subsidy for 1998 to be 0.17
percent ad valorem.
ALZ reported that it completed its repurchase of the shares held by
NIM in 1998. Therefore, we preliminarily determine that this program
did not confer a countervailable subsidy in 1999.
Albufin
Albufin was established as an ``improper'' reconversion company in
1989, also under the reconversion program ``Herstelwet 1984.'' Albufin
received its initial capital from the government (NIM), the Sidmar
Group (FININDUS), a private company (Klockner Stahl), and ALZ. In Plate
In Coils from Belgium, we determined that, because Klockner Stahl was a
private company at the time of Albufin's establishment, and it invested
on the same terms as the government, there was no countervailable
benefit resulting from the establishment of the company. However, we
found that, as an ``improper'' reconversion company, Albufin benefitted
from a tax exemption on dividend payments and was exempt from the
capital registration tax.
In Plate In Coils from Belgium, we determined that these tax
benefits received by Albufin were countervailable subsidies within the
meaning of section 771(5) of the Act. The tax benefits were a financial
contribution as described in section 771(5)(D)(ii) of the Act which
provided a benefit to the recipient in the amount of the tax savings.
Because benefits under the ``Herstelwet 1984'' law were limited to
firms in certain regions of the country, we determined that this
program was specific under section 771(5A)(D)(iv) of the Act. In this
review, no new information has been placed on the record which would
warrant reconsideration of this determination.
During the POR, Albufin (which merged into ALZ on November 1,
1998), did not receive tax savings under the capital registration tax;
Albufin did, however, benefit during the POR from the exemption on
dividend payments. To measure the benefit from this tax exemption, we
treated the 1998 and 1999 tax savings as a recurring benefit and
divided them by ALZ's total sales during 1998 and 1999, respectively.
On this basis, we preliminarily determine the countervailable subsidy
for 1998 to be 0.05 percent ad valorem, and the countervailable subsidy
for 1999 to be 0.03 percent ad valorem.
D. Regional Subsidies under the Economic Expansion Law of 1970
The 1970 Law offers various incentives to enterprises located
within designated disadvantaged regions. Although the GOB originally
oversaw the implementation of the 1970 Law, pursuant to the overall
devolution of power from the GOB to the regional governments since the
early 1980s, the authority to administer the 1970 Law has been
transferred to the regional governments. With respect to Flanders, many
of the 1970 Law subsidy programs have been implemented and administered
by the GOF since the late 1980s and the ``execution modalities'' have
been amended by several Flemish decrees. Currently, the GOB funds the
programs under the 1970 Law as part of a lump sum provided to finance
the overall operations of the GOF.
The Department found in Plate in Coils from Belgium that ALZ
received several types of assistance under the 1970 Law subsidy: 1993
Expansion Grant, Investment and Interest Subsidies, Accelerated
Depreciation, and Real Estate Tax Exemption. Most of this assistance
was provided after the GOF assumed control of the subsidy programs.
Therefore, pursuant to Plate in Coils from Belgium, we are treating the
GOF as the authority providing these subsidies. However, ALZ received
one grant in 1983 (Investment and Interest Subsidies). The Department
considers this grant bestowed by the GOB because it was received prior
to the GOF takeover of 1970 Law authority.
The GOF's framework for economic expansion consists of the 1970 Law
(for medium and large-sized businesses located in a disadvantaged
region), the Act of August 4, 1978 (``1978 Act,'' for small businesses
and one-man companies), and the 1993 Economic Expansion Decree (``1993
Decree,'' for medium and large-sized businesses not eligible for
assistance under the 1970 Law). These laws provide various subsidies
designed to promote expansion, employment, investment, research and
development, and conformance with environmental standards.
In Plate in Coils from Belgium, the Department determined that, in
certain instances, subsidies provided under the current economic
expansion laws--the 1978 Act, the 1993 Decree, and the 1970 Law--should
be considered as one
[[Page 20430]]
program for specificity purposes. Specifically, the Department found
that the environmental grants and environmental real estate tax
exemptions provided pursuant to those laws are integrally linked.
Moreover, we determined that environmental grants and environmental
real estate tax exemptions are not specific and, therefore, not
countervailable. However, with respect to the other subsidies received
by Albufin under the 1970 Law (i.e., the 1993 Expansion Grant, the Real
Estate Tax Exemption for Albufin's expansion investment, and
Accelerated Depreciation), these subsidies were either not available to
large companies under the 1993 Decree or the 1978 Act, or, in the case
of the 1993 Expansion Grant, the 1993 Decree was not in effect at the
time the subsidy was approved. Therefore, we determined that these
subsidies provided under the 1970 Law cannot be integrally linked with
the 1993 Decree or the 1978 Act.
Following is a discussion relating to the Expansion Real Estate Tax
Exemption and Accelerated Depreciation programs. The 1993 Expansion
Grant and Investment and Interest Subsidies programs can be found below
in the Programs Preliminarily Determined to Be Not Used section.
Expansion Real Estate Tax Exemption
Pursuant to Article 16 of the 1970 Law, assets acquired using
benefits received under the 1970 Law may be exempted from real estate
taxes for up to five years, depending on the extent to which objectives
of the 1970 Law are achieved. Albufin utilized this tax exemption for
an expansion project.
In Plate in Coils from Belgium, we found that this expansion real
estate tax exemption was countervailable within the meaning of section
771(5) of the Act. We determined it to be a financial contribution as
described in section 771(5)(D)(ii) of the Act that provides a benefit
to the recipient in the amount of the tax savings. As noted above, only
the 1970 Law provides tax exemptions for expansion investments to large
enterprises and since the 1970 Law only provides subsidies to companies
located in certain regions, we determined that this expansion real
estate tax exemption was specific under section 771(5A)(D)(iv) of the
Act. In this review, no new information has been placed on the record
that would warrant reconsideration of this determination.
In 1998, Albufin received tax savings under this plan. To measure
the benefit from this tax exemption, we treated the 1998 tax savings as
a recurring benefit and divided it by ALZ's total sales during 1998. On
this basis, we preliminarily determine the countervailable subsidy for
1998 to be 0.10 percent ad valorem. This tax benefit expired for
Albufin in 1998. Therefore, we preliminarily determine that this
program did not confer a countervailable subsidy in 1999 upon Albufin.
Accelerated Depreciation
Article 15 of the 1970 Law allows certain companies to declare
twice the standard depreciation for assets acquired using grants
bestowed under the law.
In Plate in Coils from Belgium, we found that this tax benefit
received by Albufin, an ALZ subsidiary, was countervailable within the
meaning of section 771(5) of the Act. The Department determined this
tax benefit to be a financial contribution as described in section
771(5)(D)(ii) of the Act that provides a benefit to the recipient in
the amount of the tax savings. The Department also determined this
program to be specific under section 771(5A)(D)(iv) of the Act because
only enterprises that were situated in certain development zones were
eligible to apply for accelerated depreciation. In this administrative
review, no new information has been placed on the record that would
warrant reconsideration of this determination.
In the instant review, ALZ claimed accelerated depreciation related
to environmental investment projects during fiscal years 1997 (tax form
filed in 1998) and 1998 (tax form filed in 1999). In Plate in Coils
from Belgium, we found environmental grants and environmental real
estate tax exemptions provided pursuant to the 1970 Law, the 1978 Act,
and the 1993 Decree to be integrally linked, because in this respect,
each of these laws complements and cross references the others in its
``area of application.'' The 1970 Law provides environmental grants and
real estate tax exemptions for investments by medium- and large-sized
enterprises located in development zones, the 1993 Decree provides them
for investments by medium- and large-sized firms ``not eligible for
assistance under the 1970 Law,'' and the 1978 Act provides the same
subsidies for investments by small-sized companies.
In Plate in Coils from Belgium, we did not make a similar
determination with respect to accelerated depreciation as ALZ was in a
tax loss position during the period of investigation and, thus, did not
benefit from this program. However, because only the 1970 Law allows
accelerated depreciation claims on environmental investment projects
(grants), we preliminarily find the 1970 Law not to be integrally
linked with the 1978 Act and the 1993 Decree in this regard.
In calculating ALZ's benefit from accelerated depreciation, we
treated the tax savings as a recurring benefit and divided it by ALZ's
total sales during the POR. On this basis, we preliminarily determine
ALZ's countervailable subsidy for 1998 to be 0.06 percent ad valorem.
As in Plate in Coils from Belgium, we did not find ALZ's use of
accelerated depreciation to confer a countervailable benefit in 1999 as
ALZ was in a tax loss position for the return filed in that year.
E. Belgian Industrial Finance Company (``Belfin'') Loans
Belfin was established by Royal Decree on June 29, 1981, as a mixed
corporation with 50 percent GOB participation and 50 percent private
industry participation. In the Final Affirmative Countervailing Duty
Determinations: Certain Steel Products from Belgium, 58 FR 37273 (July
9, 1993) (``Certain Steel''), we determined that Belfin's objective is
to finance investments needed for the restructuring and development of
various sectors of industry, commerce, and state services. Belfin
borrows money in Belgium and on international markets, with the benefit
of government guarantees, in order to obtain the funds needed to make
loans to Belgian companies. The government's guarantee makes it
possible for Belfin to borrow at favorable interest rates and to pass
the savings along when it lends the funds to Belgian companies. Belfin
loans to Belgian companies are not guaranteed by the GOB. Moreover,
these loans carry a one percent commission which is used to maintain a
guarantee fund to support the GOB's guarantee of Belfin's borrowing.
ALZ had Belfin loans outstanding during the POR.
In Plate in Coils from Belgium, we determined that this program
constituted a countervailable subsidy within the meaning of section
771(5) of the Act. These loans provided a financial contribution, as
described in section 771(5)(D)(i) of the Act, with the benefit equal to
the difference between the benchmark rate and the rate ALZ pays on
these loans. Although the objective of Belfin loans is to assist the
restructuring and development of various sectors, we found that steel
companies were the predominant recipients of Belfin loans. Therefore,
we determined that the Belfin loans to the steel industry were specific
under section 771(5A)(D)(iii) of the Act. In this review, no new
information has been
[[Page 20431]]
placed on the record that would warrant reconsideration of this
determination.
To measure the benefit of these loans, we used our long-term fixed-
rate loan methodology. For the outstanding Belfin loan to ALZ, we
divided the subsidy amount received in 1998 by ALZ's total sales during
1998. On this basis, we preliminarily determine the countervailable
subsidy for 1998 to be 0.00 percent ad valorem. The Belfin loan to ALZ
was repaid in 1998. Therefore, we preliminarily determine that this
loan did not confer a countervailable subsidy on ALZ in 1999.
There was also an outstanding Belfin loan to Alfin. We
preliminarily determine that no benefit was conferred in either 1998 or
1999; therefore, this loan did not confer a countervailable subsidy
within the POR.
F. Societe Nationale de Credite a l'Industrie (``SNCI'') Loans
SNCI was a public credit institution, which, through medium-term
and long-term financing, encouraged the development and growth of
industrial and commercial enterprises in Belgium. SNCI was organized as
a limited liability company and, until 1997, was 50 percent owned by
the Belgian government. ALZ received investment loans from SNCI which
were outstanding during the POR.
In Plate in Coils from Belgium, we determined that loans made
through SNCI conferred countervailable subsidies within the meaning of
section 771(5) of the Act. These loans provided a financial
contribution as described in section 771(5)(D)(i) of the Act. As for
the specificity of these loans, we determined that SNCI loans for the
years 1987 through 1990 were not specific and, thus, not
countervailable. For SNCI loans made since 1991, because we found that
the GOB did not participate to the best of its ability with respect to
providing information relating to these loans, we used adverse facts
available to determine that SNCI loans provided after 1991 were
specific under section 771(5A)(D)(iii) of the Act. (See Plate in Coils
from Belgium, 64 FR at 15570.) In this review, no new information has
been placed on the record that would warrant reconsideration of this
determination.
To calculate the benefit applicable to the POR, we used both the
former and the current regulations' long-term fixed-interest rate loan
methodologies. We did this because, for certain of ALZ's SNCI loans,
the fixed interest rates were revised for the POR. Therefore, in
allocating the benefit, if the fixed interest rate changed since Plate
in Coils from Belgium, we utilized the methodology from the new
regulations; if the interest rate did not change, we continued to
follow the methodology used in Plate in Coils from Belgium.
To measure the benefit of these loans, we divided the benefit
attributable to 1998 and 1999 by ALZ's total sales in 1998 and 1999,
respectively. On this basis, we preliminarily determined the
countervailable subsidy for 1998 to be 0.04 percent ad valorem, and the
countervailable subsidy for 1999 to be 0.01 percent ad valorem.
G. Subsidies Provided to Sidmar that are Attributable to ALZ
As discussed in the Responding Producers section above, Sidmar owns
either directly or indirectly 100 percent of ALZ's voting shares.
Because ALZ is a fully consolidated subsidiary of Sidmar, any untied
subsidies provided to Sidmar are attributable to ALZ (see, e.g.,
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the
United Kingdom; Final Results of Countervailing Duty Administrative
Review, 63 FR 18367 (April 15, 1998)). In Plate in Coils from Belgium,
Certain Steel, and the Department's redetermination on remand of
Certain Steel, we found that Sidmar received countervailable benefits
that were attributable to the entire Sidmar Group. Thus, we determine
that the following three programs provide countervailable benefits to
ALZ via its parent company, Sidmar:
1984 Purchase of Sidmar's Common and Preference Shares
In 1984, the GOB made two share subscriptions (one for preference
shares and the other for common shares) in Sidmar. The purchase of
preference shares was authorized by Royal Decree 245 of December 31,
1983. This Royal Decree allowed the GOB to make preference share
subscriptions in the steel industry as long as the subscriptions did
not exceed one-half of the social capital of the company.
On January 13, 1984, a Memorandum of Understanding (``MOU'') was
signed with respect to the ordinary and preference share subscriptions
in Sidmar. On April 27, 1984, NMNS (the GOB agency purchasing the
shares), Sidmar, and the GOB signed an agreement committing to these
share subscriptions. On May 2, 1984, Sidmar's shareholders approved
both the ordinary share and the preference share increases. However, as
a result of EC objections, the preference share transaction previously
approved by the shareholders was nullified on September 25, 1984.
Sidmar shareholders approved a modified preference share subscription
on October 16, 1984. The original April 27, 1984 agreement between
NMNS, Sidmar, and the GOB was modified in December 1984 to reflect the
preference share subscription changes noted above.
In Certain Steel and its attendant litigation, the Department
examined the early redemption of the preference shares purchased by the
GOB as part of this 1984 transaction, but not the original purchase of
the shares, as we found that the petition did not contain enough
evidence to support the allegation that Sidmar was unequityworthy in
1984.
As there was no market price for a similar newly-issued equity at
the time of the 1984 GOB equity infusions into Sidmar, we examined
whether Sidmar was equityworthy or unequityworthy at the time of the
1984 subscriptions. As explained in the Equity Infusions Memorandum, we
have preliminarily determined that the January 13, 1984 MOU was the
point at which the GOB determined that it would make the equity
infusions into Sidmar in exchange for ordinary and preference shares.
Furthermore, we have preliminarily determined that the April 14, 1983
study, the only study performed prior to the GOB's decision to invest
in Sidmar, was not sufficient to allow the GOB to evaluate the
potential risk versus the expected return in its investment in Sidmar.
Thus, the analyses did not contain information typically examined by
potential private investors considering an equity investment.
Therefore, we preliminarily determine that the GOB's purchases of
Sidmar's ordinary and preferred shares in 1984 constitute a
countervailable subsidy within the meaning of section 771(5) of the
Act. This investment provides a financial contribution, as described in
section 771(5)(D)(i) of the Act. Also, in Plate in Coils from Belgium
we determined that benefits under Royal Decree No. 245 are available
only to the steel sector. On this basis, we preliminarily determine
that this program is specific under section 771(5A)(D)(i) of the Act.
Finally, because the analysis performed prior to the 1984 infusion in
Sidmar did not contain information typically examined by potential
private investors considering an equity investment, the investment
decision was inconsistent with the usual investment practice of private
investors. Therefore, a benefit exists according to section
771(5)(E)(i) of the Act in the amount of the equity infusion.
[[Page 20432]]
To calculate the benefit applicable to the POR, we applied the
Department's standard grant methodology and divided the benefit
attributable to 1998 and 1999 by Sidmar's total sales during 1998 and
1999, respectively. On this basis, we preliminarily determine the
countervailable subsidy for 1998 to be 1.14 percent ad valorem, and the
countervailable subsidy for 1999 to be 1.10 percent ad valorem.
Conversion of Sidmar's Debt to Equity (OCPC-to-PB) in 1985
Between 1979 and 1983, the GOB assumed the interest costs
associated with medium- and long-term loans for certain steel
producers, including Sidmar. In exchange for the GOB's assumption of
financing costs, Sidmar agreed to the conditional issuance of
convertible profit sharing bonds (``OCPCs'') to the GOB. In 1985,
Sidmar and the GOB agreed to substitute parts beneficiaires (``PBs'')
for the OCPCs.
In Plate in Coils from Belgium, we analyzed this program according
to the equity methodology that was in place prior to the issuance of
the Department's current subsidy regulations. We found in our
investigation that: (1) The GOB's initial assumption of interest costs
were specific under section 771(5A) of the Act; (2) the OCPCs were
properly classifiable as debt and that the conversion of OCPCs to PBs
constituted a debt-to-equity conversion; and (3) based on a comparison
of the price paid for the PBs to an adjusted market value of Sidmar's
common stock, the debt-to-equity conversion provided a benefit to
Sidmar as the share transactions were on terms inconsistent with the
usual practice of a private investor.
On this basis, we determined that this program constituted a
countervailable subsidy within the meaning of section 771(5) of the
Act. The debt-to-equity conversion provided a financial contribution,
as described in section 771(5)(D)(i) of the Act. Moreover, because
benefits under this program were available only to certain steel
producers, we determined that the program was specific under section
771(5A)(D)(i) of the Act.
In the instant review, we are re-examining this debt-to-equity
conversion based on the change in our equity methodology effected by
our new regulations, noted above. See New Allegations Memo.
Information on the record indicates that no private investors
purchased the PBs or similar shares at the time of the GOB's debt-to-
equity conversion. Therefore, we examined whether Sidmar was
equityworthy or unequityworthy at the time of the 1985 debt-to-equity
conversion.
As explained in the Equity Methodology section, above, we examined
any analysis relied upon by the GOB in making its decision to purchase
the PBs as part of the debt-to-equity conversion. Based on our review
of this information, we have preliminarily determined that no objective
studies of Sidmar, containing information typically examined by
potential private investors considering an equity investment, had been
prepared prior to the GOB's investment decision on which the GOB could
have based its decision to participate in the debt-for-equity
conversion. See the Equity Infusions Memorandum.
Therefore, we preliminarily determine that the GOB's 1985 debt-to-
equity conversion constitutes a countervailable subsidy within the
meaning of section 771(5) of the Act. This debt-to-equity conversion
provides a financial contribution, as described in section 771(5)(D)(i)
of the Act. Also, in Plate in Coils from Belgium, we determined that
because benefits under this program were available only to certain
steel producers, the program was specific under section 771(5A)(D)(i)
of the Act. Finally, because the analyses performed prior to the debt-
to-equity conversion did not contain information typically examined by
potential private investors considering an equity investment, the
investment decision was inconsistent with the usual investment practice
of private investors. Therefore, a benefit exists according to section
771(5)(E)(i) of the Act in the amount of the equity infusion.
In Plate in Coils from Belgium, to measure the benefit from the
debt-to-equity conversion, we calculated the premium paid by the
government as the difference between the price paid by the government
for the PBs and the adjusted market price of the common shares. For
purposes of these preliminary results, we have treated the entire price
paid by the government as the amount of the benefit. For the portion of
the benefit that was previously countervailed, we have continued to
rely on an AUL of 19 years as we did in Plate in Coils from Belgium;
for the portion not previously allocated, we allocated the remaining
amount over Sidmar's current AUL for this review, also 19 years. We
applied the Department's standard grant methodology and divided the
total benefit in 1998 and 1999 by Sidmar's total sales during 1998 and
1999, respectively. On this basis, we preliminarily determine the
countervailable subsidy for 1998 to be 0.68 percent ad valorem, and the
countervailable subsidy for 1999 to be 0.67 percent ad valorem.
SidInvest
The right to establish ``Invests'' was limited to the five national
industries, including the steel industry. SidInvest was incorporated on
August 31, 1982, as a holding company jointly owned by Sidmar and the
Societe Nationale d'Investissement, S.A. (``SNI'') (a government
financing agency). SidInvest was given drawing rights on SNI to finance
specific projects. The drawing rights took the form of conditional
refundable advances (``CRAs''), which were interest-free, but repayable
to SNI based on a company's profitability.
SidInvest made periodic repayments of the CRAs it had drawn from
SNI. However, in 1987, the GOB moved to accelerate the repayment of the
CRAs. The government agency NMNS and SidInvest discussed two options
including (i) paying back the CRAs at a rate of three percent per year
and (ii) repaying immediately the discounted value calculated as if the
full amount were due 32 years later. In early 1988, under the first
option, SidInvest agreed to pay back the outstanding balance on the
CRAs at a rate of 3 percent per year.
Later, in July 1988, an agreement was reached for NMNS to become a
shareholder in SidInvest by contributing the CRAs owed to the
government by SidInvest in exchange for SidInvest stock. In a second
agreement, through a series of transactions, the Sidmar Group then
repurchased the SidInvest shares obtained by NMNS.
Consistent with Plate In Coils from Belgium and Certain Steel, we
determine that the CRAs were interest-free loans with no fixed
repayment period. However, the various agreements that took place on
July 29, 1988, changed the CRAs. First, it was agreed that repayment
would be achieved over 32 years. Second, the GOB swapped that repayment
obligation for shares in SidInvest and sold those shares back to
various members of the Sidmar group. The benefit to Sidmar in these
transactions was that it was able to purchase the GOB's shares at too
low a price. This occurred because: (i) The GOB agreed to accept in
payment the net present value of the amount due in 32 years and (ii) it
calculated the net present value using a non-commercial interest rate.
The combination of these two elements of the July 29, 1988 agreements
meant that the GOB forgave a considerable portion of the amount it had
loaned through the CRAs.
In Plate In Coils from Belgium, we found that this program
conferred a
[[Page 20433]]
countervailable subsidy within the meaning of section 771(5) of the
Act. This program provided a financial contribution as described in
section 771(5)(D)(i) of the Act. Moreover, because the right to
establish ``Invests'' (and, consequently, any forgiveness of loans
given to the Invests) was limited to the five national sectors, the
program was specific under section 771(5A)(D)(i) of the Act. In this
review, no new information has been placed on the record which would
warrant reconsideration of this determination.
To measure the benefit arising from the events of July 29, 1988, we
have deducted from SidInvest's outstanding indebtedness the cash
received by the GOB. We have treated the remainder as a grant and
allocated the benefit over Sidmar's AUL. We divided the total benefit
attributable to 1998 and 1999 by Sidmar's total sales during 1998 and
1999, respectively. On this basis, we preliminarily determine the
countervailable subsidy for 1998 to be 0.40 percent ad valorem, and the
countervailable subsidy for 1999 to be 0.40 percent ad valorem.
II. Programs Preliminarily Determined to Be Not Used
We examined the following programs and preliminarily determine that
ALZ did not apply for or receive benefits under these programs during
the POR:
A. Government of Belgium Programs
1. Subsidies Provided to Sidmar that are Potentially Attributable to
ALZ Water Purification Grants
2. Societe Nationale pour la Reconstruction des Secteurs Nationaux
3. Regional subsidies under the 1970 Law Investment and Interest
Subsidies
4. Reduced Social Security Contributions Pursuant to the Maribel Scheme
(Article 35 of the Law of June 29, 1981)
Under Article 35 of the Law of June 29, 1981 (called the ``Maribel
scheme''), companies in Belgium that employed manual workers were
granted a reduction in social security contributions for each manual
worker. This law was amended several times to allow even smaller
contributions for companies employing manual laborers in certain
industries. A 1993 Royal Decree introduced the ``Maribel Bis'' scheme,
which reduced contributions for companies employing manual workers in
processing industries most exposed to internal competition. The 1994
Royal Decrees, which introduced the ``Maribel Ter'' scheme, reduced
contributions for companies employing manual workers in sectors most
exposed to international competition, as well as the international
transportation, horticulture, forestry, and the exploitation of
forestry sectors.
ALZ and the GOB both claimed in their responses that neither ALZ
nor Sidmar received benefits under the Maribel Bis or Maribel Ter
systems. Both parties stated that the Maribel Bis and Maribel Ter
systems were terminated effective July 1, 1997, although neither ALZ
nor the GOB was able to produce any decree or other document clearly
stating that the program was terminated as of that date (or any other
date). Pursuant to a Royal Decree of December 24, 1999, the GOB
required the companies that had received reductions under Maribel Bis
and Ter to repay to the GOB the monies they received under Maribel Bis
and Ter. Since the GOB terminated Maribel Bis and Maribel Ter, and
neither ALZ, Albufin, nor Sidmar have received reductions in their
social security contributions as a result of these systems since the
second quarter of 1997, the respondents claimed that no benefit could
have possibly accrued to ALZ, Albufin, or Sidmar during the POR.
Despite the claims by the GOB and ALZ that the companies under
review did not benefit from these programs, the petitioners argue that
the Department has not made a determination that these programs were
recurring or non-recurring and allege that record evidence suggests
that the respondents continue to receive benefits under the Maribel
Schemes. In particular, the petitioners point out that (1) the 1998 and
1999 financial statements of ALZ and Sidmar confirm that benefits were
provided by the GOB to these companies; (2) the GOB admits that no
specific document terminating this program exists; and (3) ALZ and the
GOB failed to provide any documentation showing that payments received
were returned to the GOB by ALZ, Albufin or Sidmar.
For purposes of these preliminary review results, we are not
calculating a subsidy for this program. We agree with ALZ that the
Department normally treats reduced social security contributions as
recurring benefits under section 351.524(c) of our regulations.
Consequently, if the Maribel Bis and Ter schemes were terminated in
1997, there would be no benefit to ALZ during the POR. ALZ has
explained that the references to Maribel in its 1998 and 1999 financial
statements are to the general Maribel scheme and not to Maribel Bis and
Ter (the only parts of the Maribel program being reviewed).
Prior to our final results, we intend to seek further information
from the GOB and ALZ regarding the termination of the Maribel Bis and
Ter schemes, or repayment of any benefits received by ALZ under these
programs.
B. Government of Flanders Programs
1. Regional subsidies under the 1970 Law
a. Corporate Income Tax Exemption
b. Capital Registration Tax Exemption
c. Government Loan Guarantees
d. 1993 Expansion Grant
2. Special Depreciation Allowance
3. Preferential Short-Term Export Credit
4. Interest Rate Rebates
C. Programs of the European Commission
1. ECSC Article 54 Loans and Interest Rebates
2. ECSC Article 56 Conversion Loans, Interest Rebates and Redeployment
Aid
3. European Social Fund Grants
4. European Regional Development Fund Grants
5. Resider II Program
Preliminary Results of Review
In accordance with 19 CFR 351.221(b)(4)(i), we calculated an
individual subsidy rate for ALZ, the only producer/exporter subject to
this administrative review. For the period September 4, 1998 through
December 31, 1998, we preliminarily determine the net subsidy rate for
ALZ to be 3.40 percent; for January 1, 1999 and for the period May 11,
1999 through December 31, 1999, we preliminarily determine the net
subsidy rate for ALZ to be 2.90 percent. (In accordance with section
703(d) of the Act, countervailing duties will not be assessed on
entries made during the period January 2, 1999 through May 10, 1999.)
If the final results of this review remain the same as these
preliminary results, the Department intends to instruct Customs to
assess countervailing duties at these net subsidy rates.
The Department also intends to instruct Customs to collect cash
deposits of estimated countervailing duties at the 1999 rate on the
f.o.b. value of all shipments of the subject merchandise from ALZ
entered, or withdrawn from warehouse, for consumption on or after the
date of publication of the final results of this administrative review.
Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for
investigated and
[[Page 20434]]
reviewed companies, the procedures for establishing countervailing duty
rates, including those for non-reviewed companies, are now essentially
the same as those in antidumping cases, except as provided for in
section 777A(e)(2)(B) of the Act. The requested review will normally
cover only those companies specifically named. See 19 CFR 351.213(b).
Pursuant to 19 CFR 351.212(c), for all companies for which a review was
not requested, duties must be assessed at the cash deposit rate, and
cash deposits must continue to be collected, at the rate previously
ordered. As such, the countervailing duty cash deposit rate applicable
to a company can no longer change, except pursuant to a request for a
review of that company. See Federal-Mogul Corporation v. United States,
822 F.Supp. 782 (CIT 1993), and Floral Trade Council v. United States,
822 F.Supp. 766 (CIT 1993). Therefore, the cash deposit rates for all
companies, except those covered by this review, will be unchanged by
the results of this review.
We will instruct Customs to continue to collect cash deposits for
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company. Accordingly, the cash deposit
rates that will be applied to non-reviewed companies covered by this
order are those established in the most recently completed
administrative proceeding conducted under the URAA. If such a review
has not been conducted, the rate established in the most recently
completed administrative proceeding pursuant to the statutory
provisions that were in effect prior to the URAA amendments is
applicable. See Certain Cut-to-Length Carbon Steel Plate from Mexico:
Final Results of Countervailing Duty Administrative Review, 65 FR
13368, 13369 (March 13, 2000). These rates shall apply to all non-
reviewed companies until a review of a company assigned these rates is
requested. In addition, for the periods September 4, 1998 through
January 1, 1999 and May 11, 2000 through December 31, 1999, the
assessment rates applicable to all non-reviewed companies covered by
this order are the cash deposit rates in effect at the time of entry.
Public Comment
Pursuant to 19 CFR 351.224(b), the Department will disclose to
parties to the proceeding any calculations performed in connection with
these preliminary results within five days of the date of the public
announcement of this notice. Pursuant to 19 CFR 351.309, interested
parties may submit written arguments in case briefs within 30 days of
the date of publication of this notice. Rebuttal briefs, limited to
issues raised in case briefs, may be filed not later than five days
after the date of filing the case briefs. Parties who submit briefs in
this proceeding should provide a summary of the arguments not to exceed
five pages and a table of statutes, regulations, and cases cited.
Copies of case briefs and rebuttal briefs must be served on interested
parties in accordance with 19 CFR 351.303(f).
Interested parties may request a hearing within 30 days after the
date of publication of this notice. Any hearing, if requested, will be
held two days after the scheduled date for submission of rebuttal
briefs.
The Department will publish a notice of the final results of this
administrative review within 120 days from the publication of these
preliminary results.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act. Effective January 20,
2001, Bernard T. Carreau is fulfilling the duties of the Assistant
Secretary for Import Administration.
Dated: April 16, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-9977 Filed 4-20-01; 8:45 am]
BILLING CODE 3510-DS-P