[Federal Register Volume 67, Number 110 (Friday, June 7, 2002)]
[Notices]
[Pages 39357-39362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14377]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-475-821]
Stainless Steel Wire Rod from Italy: Notice of Preliminary
Results of Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of countervailing duty
administrative review.
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EFFECTIVE DATE: June 7, 2002.
FOR FURTHER INFORMATION CONTACT: Carrie Farley at (202) 482-0395 and
Eric Greynolds at (202) 482-6071, Office of AD/CVD Enforcement VI,
Import Administration, U.S. Department of Commerce, Room 4012, 14th
Street and Constitution Avenue, NW., Washington, DC 20230.
Preliminary Results: The Department of Commerce (the Department)
preliminarily determines that countervailable subsidies are being
provided to certain producers and exporters of stainless steel wire rod
products (subject merchandise) from Italy. The benefit provided by
these subsidies are preliminarily determined to be de minimis.
SUPPLEMENTARY INFORMATION:
Petitioners
The petition in this proceeding was filed by AL Tech Specialty
Steel Corp.; Carpenter Technology Corp.; Republic Engineered Steels;
Talley Metals Technology, Inc.; and, United Steelworkers of America,
AFL-CIO/CLC (the petitioners).
Case History
Since the publication of the notice of initiation in the Federal
Register (see Notice of Initiation of Antidumping and Countervailing
Duty Administrative Reviews and Revocations in Part, 66 FR 54195
(October 26, 2001) (Initiation Notice)), the following events have
occurred. On November 28, 2001, we issued countervailing duty
questionnaires to the Government of Italy (GOI), Acciaierie Valbruna
S.p.A (Valbruna), and the European Commission (EC). On January 25,
2002, we received responses to our initial questionnaires from the GOI,
the EC and Valbruna (respondent), the producer/exporter of the subject
merchandise.
Scope of the Investigation
For purposes of this investigation, certain stainless steel wire
rod (SSWR or subject merchandise) comprises products that are hot-
rolled or hot-rolled annealed and/or pickled and/or descaled rounds,
squares, octagons, hexagons or other shapes, in coils, that may also be
coated with a lubricant containing copper, lime or oxalate. SSWR is
made of alloy steels containing, by weight, 1.2 percent or less of
carbon and 10.5 percent or more of chromium, with or without other
elements. These products are manufactured only by hot-rolling or hot-
rolling, annealing, and/or pickling and/or descaling, and are normally
sold in coiled form, and are of solid cross-section. The majority of
SSWR sold in the United States is round in cross-sectional shape,
annealed and pickled, and later cold-finished into stainless steel wire
or small-diameter bar. The most common size for such products is 5.5
millimeters or 0.217 inches in diameter, which represents the smallest
size that normally is produced on a rolling mill and is the size that
most wire drawing machines are set up to draw. The range of SSWR sizes
normally sold in the United States is between 0.20 inches and 1.312
inches in diameter. Two stainless steel grades SF20T and K-M35FL are
excluded from the scope of the investigation. The percentages of
chemical makeup for the excluded grades are as follows:
SF20T
------------------------------------------------------------------------
------------------------------------------------------------------------
Carbon.................................... 0.05 max.
Manganese................................. 2.00 max.
Phosphorous............................... 0.05 max.
Sulfur.................................... 0.15 max.
Silicon................................... 1.00 max.
Chromium.................................. 19.00/21.00.
Molybdenum................................ 1.50/2.50.
Lead...................................... added (0.10/0.30).
Tellurium................................. added (0.03 min).
------------------------------------------------------------------------
[[Page 39358]]
K-M35FL
------------------------------------------------------------------------
------------------------------------------------------------------------
Carbon.................................... 0.015 max.
Manganese................................. 0.40 max.
Phosphorous............................... 0.04 max.
Sulfur.................................... 0.03 max.
Silicon................................... 0.70/1.00.
Chromium.................................. 12.50/14.00.
Nickel.................................... 0.30 max.
Lead...................................... added (0.10/0.30).
Aluminum.................................. 0.20/0.35.
------------------------------------------------------------------------
The products under investigation are currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and
7221.00.0075 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and Customs purposes, the written description of the scope of this
investigation is dispositive.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are references
to the provisions codified at 19 CFR part 351 (2001).
Period of Review
The period of review (POR) for which we are measuring subsidies is
calendar year 2000.
Corporate History: Bolzano and Valbruna
From 1985 through 1990, Bolzano was a wholly-owned subsidiary of
Acciaierie e Ferriere Lomarde Falck (Falck). Bolzano was the main
industrial company of Falck, which was a private corporate group with
holdings in steel, real estate, environmental technologies, and other
sectors. In 1990, ILVA acquired 44.8 percent of the stock in Bolzano.
ILVA acquired the shares of Bolzano by exchanging an equal value of
shares of its own subsidiary Cogne S.p.A. ILVA also acquired shares in
other Gruppo Falck steel companies. In 1993, ILVA's interest in Bolzano
was completely dissolved because of losses, and Falck again held
virtually all of the shares in Bolzano. Falck decided to sell Bolzano
based on its company-wide strategic decision to withdraw from the steel
sector. Falck contacted Valbruna as a potential buyer in late 1994.
Subsequently, the parties entered into negotiations for the transfer of
Bolzano. Each party had the value of Bolzano independently evaluated. A
third study was done to reconcile the points of the first valuations
that were in dispute relating to the final net equity and cash flow of
Bolzano for purposes of finalizing the purchase price. Valbruna
acquired 99.99 percent of the shares of Bolzano for this final price on
August 31, 1995. Since then, the two companies have issued consolidated
financial statements.
Changes in Ownership
As explained in the ``Corporate History'' section of this notice,
Valbruna purchased Bolzano from Falck. The Department has previously
determined that Bolzano received subsidies prior to being sold to
Valbruna that were not fully expensed or allocated prior to the POR.
See e.g., Final Affirmative Countervailing Duty Determination: Certain
Stainless Steel Wire Rod from Italy, 63 FR 40474, 40485 (July 29, 1998)
(Wire Rod). However, subsequent to Wire Rod, the Department determined
in the Final Affirmative Countervailing Duty Determination: Stainless
Steel Bar from Italy, 67 FR 3163 (January 23, 2002) (Steel Bar) not to
make a finding as to whether the pre-sale Bolzano and the pre-sale
Valbruna were distinct persons from post-sale Valbruna. See the
``Changes in Ownership,'' ``Background'' and ``Comment 3'' sections of
the January 23, 2002, Issues and Decision Memorandum that accompanied
Steel Bar (Steel Bar Issues and Decisions Memorandum). Specifically, in
Steel Bar, we noted that the potential benefits from any pre-sale
subsidies to Bolzano by the GOI (e.g., such programs as Bolzano Law 25/
81 that are explained below in the ``Programs Preliminarily Determined
To Be Countervailable'' section of this notice) remained insignificant,
amounting to 0.07 percent ad valorem. Id. In Steel Bar, we further
explained that assuming arguendo that these pre-sale subsidies
continued to benefit Valbruna in the POI, the final ad valorem rate
(reflecting, in full, any POI benefits of pre-sale subsidies) for
Valbruna would be de minimis. Id. Therefore, we determined that the
application of the change in ownership methodology was not relevant for
Valbruna. Id. Furthermore, in these Preliminary Results, the overall ad
valorem rate is still de minimis, even if one includes the pre-change-
in-ownership subsidies. Therefore, regardless of our treatment of the
pre-change-in-ownership subsidies in these Preliminary Results, the
highest the overall ad valorem rate could be is 0.42 percent.
In these Preliminary Results, we are reviewing the same fact
pattern for Valbruna that existed in Steel Bar (e.g., the same company,
the same subsidies, and the same time period (calendar year 2000)).
Thus, we preliminarily determine that the application of the change in
ownership methodology is not relevant for Valbruna.
Subsidies Valuation Information
A. Allocation Period
Under 19 CFR 351.524(b) of our regulations, non-recurring subsidies
are allocated over a period corresponding to the average useful life
(``AUL'') of the renewable physical assets used to produce the subject
merchandise. Pursuant to 19 CFR 351.524(d)(2), there is a rebuttable
presumption that the AUL will be taken from the U.S. Internal Revenue
Service's 1977 Class Life Asset Depreciation Range System (the ``IRS
Tables''), as updated by the Department of Treasury. For SSWR, the IRS
Tables prescribe an AUL of 15 years.
In Wire Rod, we countervailed certain non-recurring subsidies that
were attributable to Valbruna. See Wire Rod, 63 FR 40474 at 40476-
40477. At the time of Wire Rod, it was our practice to calculate
company-specific AULs. For Valbruna, we calculated an AUL of 12 years.
As a matter of practice, where a subsidy has been allocated over a
particular period, we will continue to use the same allocation period
for that subsidy in subsequent segments of the same proceeding and from
proceeding to proceeding. See, e.g., Final Affirmative Countervailing
Duty Determination: Stainless Steel Sheet and Strip from France, 64 FR
30774, 30778 (June 8, 1999); see also Final Affirmative Countervailing
Duty Determination: Certain Cut-to-Length Carbon-Quality Steel Plate
from France, 64 FR 73277, 73280 (December 29, 1999). Therefore, for
those subsidies to Valbruna that were allocated over a 12-year period
in Wire Rod, we have continued to use the 12-year allocation period
calculated in that segment. For subsidies to these companies that were
not countervailed in Wire Rod, we have used the 15-year allocation
period from the IRS Tables.
In Steel Bar, Valbruna/Bolzano also calculated its company-specific
AUL. However, in Steel Bar, we found that this company-specific AUL
does not differ significantly from the 15-year AUL in the IRS Tables.
See the ``Allocation Period'' section of the Steel Bar Issues and
Decision Memorandum. Therefore, pursuant to 19 CFR 351.524(d)(ii), we
allocated all subsidies received by Valbruna/Bolzano, except those
countervailed in Wire Rod, over 15 years as presumed in the IRS tables.
Id. For purposes of these preliminary
[[Page 39359]]
results, we have continued to adopt this approach.
For non-recurring subsidies, we have applied the ``0.5 percent
expense test'' described in 19 CFR 351.524(b)(2). Under this test, we
compare the amount of subsidies approved under a given program in a
particular year to sales (total or export, as appropriate) in that
year. If the amount of subsidies is less than 0.5 percent of relevant
sales, the benefits are allocated to the year of receipt rather than
being allocated over the AUL period.
B. Benchmarks for Loans and Discount Rates
Pursuant to 19 CFR 351.505(a) and 351.524(d)(3)(i), the Department
will use as long-term loan benchmarks and discount rates the actual
cost of long-term borrowing by the company, when available. In Steel
Bar, we did not accept actual borrowing rates as reported by the
respondent because the firm did not take out any comparable commercial
loans during the relevant period (i.e., the same year in which the
terms of the government-provided benefit were established). See the
``Benchmarks for Loans and Discount Rates'' and ``Comment 12'' sections
of the Steel Bar Issues and Decisions Memorandum. Instead, pursuant to
19 CFR 351.505(a)(3)(ii), we calculated the average cost of long-term
fixed-rate loans in Italy. Id. Specifically, in Steel Bar, the
Department relied on the Italian Interbank Rate (``ABI'') as the basis
for the long-term benchmark rate. Id. This approach was consistent with
past cases. See, e.g., Wire Rod, 64 FR at 40476-77; Final Affirmative
Countervailing Duty Determination: Stainless Steel Plate in Coils From
Italy, 64 FR 15508, 15510-15511 (March 31, 1999) (Plate in Coils);
Final Affirmative Countervailing Duty Determination: Stainless Steel
Sheet and Strip in Coils From Italy, 64 FR 30624, 30626-30627 (June 8,
1999) (``Sheet and Strip''); Final Affirmative Countervailing Duty
Determination: Certain Cut-to-Length Carbon Quality Steel Plate From
Italy, 64 FR 73244, 73248 (December 29, 1999) (``CTL Carbon Plate'').
For purposes of these preliminary results, we have adopted the same
approach and used the ABI as the basis for Valbruna's long-term
benchmark rate.
Next, we added two amounts to the ABI rate. First, an upward
adjustment is necessary because the ABI rate represents a long-term
interest rate to banks' most-preferred customers with established low-
risk credit histories. For other customers, banks will typically add a
spread ranging from 0.55 percent to 4 percent, to the ABI rate
depending on the company's financial health. To reflect this, we have
added the average of this spread, 2.28 percent, to the ABI rate.
Second, we added an additional amount to the benchmark interest rate to
reflect the charges associated with long-term lending activities that
are levied by commercial banks. We note that our derivation of the
long-term benchmark interest rate is consistent with Department's past
practice concerning the ABI rate. See e.g., the ``Benchmarks for Loans
and Discount Rates'' section of the Steel Bar Issues and Decisions
Memorandum; Plate in Coils, 64 FR at 15511; Sheet and Strip, 64 FR at
30627; and CTL Carbon Plate, 64 FR at 73248.
I. Programs Preliminarily Determined To Be Countervailable
A. Government of Italy Law 451/94 Early Retirement Benefits
Law 451/94 authorized early retirement packages for steel workers
for the years 1994 through 1996. The law entitled men of 50 years of
age and women of 47 years of age with at least 15 years of pension
contributions to retire early. Benefits were applied for between 1994
to 1996 and, upon early retirement, workers received benefits until
their normal ages of retirement, for a maximum of ten years. Employees
of Bolzano used the measures in all three years of the program.
Bolzano, which is wholly-owned by Valbruna, had workers retire under
Law 451/94 during or before the POR.
In Wirw Rod, we learned that, pursuant to extraordinary Cassa
Integrazione (CIG) and Article 2120 of the Italian Civil Code, most
Italian companies are legally obligated to pay a small percentage of
the employee's salary and set aside severance contributions. See Wire
Rod, 63 FR at 40480. In addition, we found that, when comparing the
costs under the two programs, the costs incurred by companies covered
by Law 451/94 were lower than those companies operating under the CIG
and Article 2120 of the Italian Civil Code. Id. Thus, in Wire Rod, we
determined that Law 451/94 provides a government financial contribution
under section 771(5)(D)(i) of the Act and confers a benefit to the
recipient in the amount of costs covered by the GOI that the company
would normally incur. Id. In Wire Rod, we further determined that Law
451/94 was specific under section 771(5A)(D))i) of the Act because
early retirement benefits under this program are limited, by law, to
the steel industry. Id. No new information or evidence of changed
circumstances were presented in this review to warrant any
reconsideration of these findings. Thus, for purposes of these
preliminary results, we continue to find that Law 451/94 provided
countervailable benefits to Valbruna during the POR.
Consistent with the Department's regulations, we have treated
payments under Law 451/94 as recurring grants expensed in the year of
receipt. See 19 CFR 351.524(a) and 351.513(b) and (c). In addition, we
have adopted the calculation methodology adopted in Steel Bar. In Steel
Bar, Valbruna reported that several employees had reached their normal
retirement age prior to the POI. See Preliminary Affirmative
Countervailing Duty Determination and Alignment of Final Countervailing
Duty Determination With Final Antidumping Duty Determination: Stainless
Steel Bar from Italy, 66 FR 30414 at 30419 (June 6, 2001) (Steel Bar
Preliminary Determination). Therefore, in Steel Bar, the Department
found that these employees were no longer receiving early retirement
benefits under Law 451/94 and were instead receiving normal retirement
benefits from Valbruna. Id.
To calculate a subsidy rate, we first deducted these employees from
the total number of employees who were approved to receive benefits
during the application period, 1994 to 1996. The resulting number
(i.e., the number of employees who retired early and continued to
receive Law 451/94 benefits in the POI), categorized by employee type
(i.e., blue collar, white collar, and senior executive), was multiplied
by their respective average salary during the POI. Because the GOI made
payments to these workers equaling eighty percent of their salary, we
find forty percent of this amount benefitted Valbruna. We then divided
this benefit by Valbruna's and Bolzano's consolidated sales during the
POI. Accordingly, we preliminarily determine that a countervailable
benefit of 0.09 percent ad valorem exists for Valbruna.
B. Province of Bolzano Law 25/81, Articles 13 through 15
The Province of Bolzano Law 25/81 is a general aid measure that
provides grants to companies with limited investments in technical
fixed assets. It targets advanced technology, environmental investment,
or restructuring projects. Restructuring assistance is provided to
companies under Articles 13 through 15. These two articles establish
different eligibility requirements, different application procedures,
different levels of available aid, and different types of aid (grants
and loans) than assistance provided
[[Page 39360]]
under other Articles of Law 25/81. Therefore, we find it appropriate to
examine Articles 13 through 15 of Law 25/81 as a separate program. See,
e.g., Wire Rod, 63 FR at 40485-40486. Bolzano received a total of 18.6
billion lire in restructuring grants from 1983 through 1992.
Specifically, Bolzano received grants for four restructuring projects
under this law: one was approved in 1983, another in 1985, and two in
1988. It also had a small amount from restructuring loans outstanding
during the POR, which were provided at concessionary, long-term fixed
rates.
In Steel Bar, we determined that Bolzano was the major recipient in
each of the years that it received funds under this program and Bolzano
received a significant percentage of total assistance awarded. See
``Province of Bolzano Law 25/81, Articles 13 through 15'' of the Steel
Bar Issues and Decisions Memorandum. See also Wire Rod, 64 FR at 40486.
While assistance was provided to a number of firms during this period,
Bolzano was the largest single recipient of restructuring assistance,
receiving far more than the average recipient over this period. Thus,
we conclude that the restructuring assistance granted to Bolzano under
Articles 13 through 15 of Law 25/81 is de facto specific within the
meaning of section 771(5A)(D)(iii)(III) of the Act because Bolzano
received a disproportionately large share of benefits. The
restructuring aid constitutes a government financial contribution which
confers a benefit in the amount of grants, and interest savings on
reduced-rate long-term loans. See Wire Rod, 63 FR 40486. Therefore, we
determine that Articles 13 through 15 of Provincial Law 25/81 provide a
countervailable subsidy within the meaning of section 771(5) of the
Act. Id.
We note that on July 17, 1996, the European Union (EU) found in its
decision number 96/617/ECSC that the aid granted to Bolzano under Law
25/81 was illegal because it was not notified to the EU, and was
``incompatible with the common market pursuant to Article 4(c) of the
ECSC treaty.'' As a result, the EU ordered the repayment of all grants
and loans made to Bolzano which were approved after January 1, 1986.
The EU decision did not require the repayment of Bolzano assistance
approved prior to January 1, 1986. We note that Falck unsuccessfully
appealed the EU's decision. As of the end of the POR, Falck's second,
and final, appeal was still before the EU. In Steel Bar, we determined
that pursuant to the EU's 1996 ruling, Falck effectively repaid the
assistance under Law 25/81 approved and granted to Bolzano after
January 1, 1986. See Steel Bar Preliminary Determination, 66 FR at
30421, which was unchanged in Steel Bar. With respect to Falck's second
appeal, we stated in Steel Bar that given the diminished prospects for
Falck to recover the amount it had repaid, there was no benefit to
Bolzano or Valbruna from the grants and loans received under this
program after January 1, 1986. Id. However, in Steel Bar, we further
stated that if Falck does prevail in its second appeal and the monies
it has repaid are refunded, it would be appropriate at that time to
consider whether a benefit exits. Id. Thus, in Steel Bar, we only
countervailed those grants for which the EU did not require a repayment
(e.g., those grants provided to Bolzano prior to January 1, 1986).
Since we are examining the same program, company, and review period
in these Preliminary Results that were at issue in Steel Bar, we are
adopting the same approach. Thus, as in Steel Bar, only the grants
approved before 1986 will be considered countervailable.
Bolzano submitted a separate application to the regional authority
for each project, so we are treating the grants received under Articles
13 through 15 of Provincial Law 25/81 as non-recurring. See 19 CFR
351.524(b). Pursuant to the Department's non-recurring grant
methodology, to calculate the benefit from the restructuring grants, we
allocated the grants over Valbruna/Bolzano's AUL to determine the
benefit in each year. To determine the benefit from the restructuring
loans that were still outstanding during the POI, we compared the long-
term fixed-rate provided under the program to the benchmark rate
described in the ``Subsidies Valuation Information'' section above
since the company did not have long-term fixed rate loans from the same
period. We then applied the Department's standard long-term loan
methodology and calculated the grant equivalent for the loans. We then
summed the benefit amounts attributable to the POI from Bolzano's
grants and loans and divided the total benefit by Valbruna's and
Bolzano's consolidated total sales. On this basis, we determine the
countervailable subsidy would be 0.07 percent ad valorem for Valbruna,
if we were to assume that all of the pre-change-in-ownership subsidies
were countervailable.
C. European Social Fund
The European Social Fund (``ESF''), one of the Structural Funds
operated by the EC, was established in 1957 to improve workers'
employment opportunities and to raise their living standards. The main
purpose of the ESF is to make employing workers easier and to increase
the geographical and occupational mobility of workers within the EU. It
accomplishes this by providing support for vocational training,
employment, and self-employment.
Like the other EC Structural Funds, ESF seeks to achieve six
different objectives explicitly identified in the EC's framework
regulations for Structural Funds: Objective 1 is to promote development
and structural adjustment in underdeveloped regions; Objective 2 is to
assist areas in industrial decline; Objective 3 is to combat long-term
unemployment and to create jobs for young people, and people excluded
from the labor market; Objective 4 is to assist workers adapting to
industrial changes and changes in production systems; Objective 5 is to
promote rural development; and Objective 6 is to aid sparsely populated
areas in northern Europe.
The EU Member States are responsible for the identification of
projects to receive ESF financing and their subsequent implementation.
The Member States must also contribute to the financing of the
projects. In general, the maximum benefit provided by ESF is 50 percent
of the total cost of projects geared toward Objectives 2, 3, 4, and 5b,
and 75 percent of the project's total cost for Objective 1 projects.
For Objective 4 programs implemented in Italy, generally 45 percent of
the funding is provided by the EC and 35 percent by the GOI. Companies
usually receive 50 percent of the aid up-front and the remainder upon
satisfactory completion of the training program.
According to the questionnaire responses, Valbruna received or
benefitted from ESF grants. We find these grants from the EU to
constitute a government financial contribution within the meaning of
section 771(5)(D)(i) of the Act.
All of the grants Valbruna received were given for Objective 4
projects involving worker assistance in the form of employee training.
The Department considers worker assistance programs to provide a
benefit to a company when the company is relieved of a contractual or
legal obligation it would otherwise have incurred. See 19 CFR section
351.513(a). Concerning specificity, in Steel Bar, we stated that
because the GOI and Valbruna declined to provide industry and regional
distribution information, we applied an adverse inference and,
therefore, concluded that the ESF program was de facto specific within
the meaning of section 771(5A) of the Act. See the ``European Social
[[Page 39361]]
Fund'' section of the Steel Bar Issues and Decisions Memorandum. We
note the Department took the same approach in Plate in Coils, 64 FR
15508 at 15517. For purposes of these Preliminary Results, it is not
necessary to determine whether an adverse inference is appropriate
because, even if the Department were to make such an inference, the
over all ad valorem rate would remain de minimis.
D. Lease of Bolzano Industrial Site to Valbruna
Falck sold Bolzano to Valbruna in 1995. Concurrent with the change
in ownership, Falck and Bolzano sold Bolzano's industrial site to the
Province of Bolzano (``Province''). In Wire Rod, we determined that the
Province paid for the property in full. See 63 FR at 40483. Nothing on
the record in the current review leads us to a different conclusion. At
the same time, Valbruna negotiated with the Province to lease the
Bolzano industrial site and, on July 31, 1995, signed a thirty-year
lease.
We preliminarily determine that the Province's lease of the
industrial site to Valbruna constitutes a financial contribution within
the meaning of section 771(5)(D)(iii) of the Act and that the lease is
de jure specific within the meaning of 771(5)(D)(i) of the Act because
the lease was limited to Valbruna.
In determining the existence and amount of the benefit, we have
adopted the approach used in Steel Bar. Specifically, we compared the
average annual return on industrial leased property in Italy during the
POR to the rent paid by Valbruna during the POR. See Steel Bar
Preliminary Determination at 30423. This comparison indicates that
Valbruna received a benefit in the amount of the difference. We also
included in our calculations the benefits stemming from Valbruna's late
lease payment to the Government of the Province of Bolzano (GOB). In
Steel Bar, we explained that the GOB's lease states that Valbruna's
payments were due no later than sixty days after the invoice date. See
the ``Lease of Bolzano Industrial Site to Valbruna'' section and
``Comment 7: Bolzano's Industrial Lease and Extraordinary Maintenance''
of the Steel Bar Issues and Decision Memorandum. Therefore, we found in
Steel Bar that the non-collection of these monies provided Valbruna
with a financial contribution in the form of a direct transfer of
funds, i.e., a zero-interest loan. Id. at Comment 7. We also note that,
consistent with the Department's approach in Steel Bar, we have not
adjusted the benchmark lease rate to reflect the assumption by Valbruna
of responsibility for extraordinary maintenance. Id. at Comment 7.
To calculate the subsidy to Valbruna during the POR, we divided the
benefit (i.e., the difference between the average rate of return on
leased commercial property in Italy during the POI and the actual rent
paid by Valbruna during the POR) by Valbruna and Bolzano's total
consolidated sales during the POR. Accordingly, we preliminarily
determine that a countervailable benefit of 0.11 percent ad valorem for
Valbruna.
E. Environmental and Research and Development Assistance to Bolzano
Under Law 25/81
Valbruna reported receiving two grants under Law 25/81 for the
adaptation of existing facilities to new environmental requirements
(``environmental grants''). As discussed earlier, we found assistance
provided under Article 13 through 15 of Law 25/81 to be countervailable
in Wire Rod. Though environmental grants under 25/81 were not
investigated in Wire Rod, we examined them in Steel Bar and found them
to be distinct from Articles 13 through 15 grants. See Steel Bar
Preliminary Determination at 30423, which was unchanged in Steel Bar.
In Steel Bar, we determined that the environmental grants Valbruna
received during the POR under Law 25/81 were countervailable subsidies
because they were specific within the meaning of 771(5A)(D)(iii) of the
Act and because they constituted government financial contributions and
a benefit under sections 771(5)(D)(i) and 771(5)(E) of the Act,
respectively. See the ``Environmental and Research and Development
Assistance to Bolzano Under Law 25/81'' section of the Steel Bar Issues
and Decision Memorandum. Regarding the Department's specificity
determination in Steel Bar, we made the decision on the basis of an
adverse inference because the Province of Bolzano provided insufficient
information regarding the specificity of the environmental grants. See
Steel Bar Preliminary Determination, 66 FR at 30423, which was
unchanged in Steel Bar. For purposes of these Preliminary Results, it
is not necessary to determine whether an adverse inference is
appropriate because, even if the Department were to make such an
inference, the over all ad valorem rate would remain de minimis.
II. Programs Preliminarily Determined To Be Not Used
A. Capacity Reduction Payments under Articles 3 and 4 of Law 193/1984
B. Law 796/76 Exchange Rate Guarantees
C. Article 33 of Law 227/77, Export Credit Financing Under Law 227/77,
and Decree Law 143/98
D. Grants under Laws 46/82 and 706/85
E. Law 181/89 and Law 120/89
F. Law 488/922, Legislative Decree 96/93 and Circolare 38522
G. Law 341/95 and Circolare 50175/95
H. Law 675/77
1. Interest Grants on Bank Loans
2. Mortgage Loans
3. Interest Contribution on IRI Loans
4. Personnel Retraining Aid
I. Law 394/81 Export Marketing Loans
J. Law 481/94 (and Precursors) Grants for Reduced Production
K. Law 489/94
L. Law 10/91
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we
calculated an individual rate for each manufacturer of the subject
merchandise participating in this administrative review. We
preliminarily determine the total estimated net countervailable subsidy
rate to be:
------------------------------------------------------------------------
Producer/exporter Net subsidy rate
------------------------------------------------------------------------
Acciaierie Valbruna S.r.l./Acciaierie 0.27 percent ad valorem.
Bolzano S.r.l.
------------------------------------------------------------------------
As provided for in the Act and 19 CFR 351.106 (c)(1), any rate less
than 0.5 percent ad valorem in an administrative review is de minimis.
Accordingly, if the final results of this review remain the same as
these preliminary results, no customs duties will be assessed. The
Department will instruct Customs to liquidate without regard to
countervailing duties, shipments of the subject merchandise for
Valbruna/Bolzano entered, or withdrawn from warehouse, for consumption
from January 1, 2000, through December 31, 2000. Also, the cash deposit
will be set at zero for this company.
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 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
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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 and The Torrington Company v.
United States, 822 F. Supp. 782 (CIT 1993) and Floral Trade Council v.
United States, 822 F. Supp. 766 (CIT 1993) (interpreting 19 CFR
353.22(e), the antidumping regulation on automatic assessment, which is
identical to 19 CFR 355.22(g), the predecessor to 19 CFR 351.222(c)).
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. See Wire Rod, 63 FR
40474 at 40503. These rates shall apply to all non-reviewed companies
until a review of a company assigned these rates is requested. In
addition, for the period January 1, 2000 through December 31, 2000, 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
In accordance with 19 CFR 351.310, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
these preliminary results. The hearing is tentatively scheduled to be
held 37 days from the date of publication of these preliminary results,
at the U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230. Individuals who wish to request a
hearing must submit a written request within 30 days of the publication
of this notice in the Federal Register to the Assistant Secretary for
Import Administration, U.S. Department of Commerce, Room 1870, 14th
Street and Constitution Avenue, NW., Washington, DC. 20230. Parties
should confirm by telephone the time, date, and place of the hearing 48
hours before the scheduled time.
Requests for a public hearing should contain: (1) The party's name,
address, and telephone number; (2) the number of participants; and, (3)
to the extent practicable, an identification of the arguments to be
raised at the hearing. In addition, six copies of the business
proprietary version and six copies of the non-proprietary version of
the case briefs must be submitted to the Assistant Secretary no later
than 30 days from the date of publication of the preliminary
determination. As part of the case brief, parties are encouraged to
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations, and cases cited. Six copies of the business
proprietary version and six copies of the non-proprietary version of
the rebuttal briefs must be submitted to the Assistant Secretary no
later than 5 days from the date of filing of the case briefs. An
interested party may make an affirmative presentation only on arguments
included in that party's case or rebuttal briefs. Written arguments
should be submitted in accordance with 19 CFR 351.309 and will be
considered if received within the time limits specified above.
This determination is published pursuant to sections 751(f) and
777(i) of the Act.
Dated: June 3, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-14377 Filed 6-6-02; 8:45 am]
BILLING CODE 3510-DS-P