[Federal Register Volume 61, Number 251 (Monday, December 30, 1996)]
[Notices]
[Pages 68713-68716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33175]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
[C-357-403, C-357-005]


Oil Country Tubular Goods From Argentina and Cold-Rolled Carbon 
Steel Flat Products From Argentina: Preliminary Results of 
Countervailing Duty Administrative Reviews/Intent To Terminate 
Administrative Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of countervailing duty 
administrative reviews; intent to terminate administrative reviews.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce (``the Department'') is conducting 
administrative reviews of the countervailing duty order on Oil Country 
Tubular Goods (OCTG) from Argentina for the periods 1992, 1993, and 
1994, pursuant to section 751(a) of the Tariff Act of 1930, as amended 
(the ``Act'). Also pursuant to section 751(a), the Department is 
conducting reviews of the countervailing duty order on Cold-Rolled 
Carbon Steel Flat Products (Cold-Rolled Steel) from Argentina for the 
periods 1992 and 1993.
    The Department is also conducting changed circumstances reviews of 
the orders on OCTG and Cold-Rolled Steel from Argentina pursuant to 
section 751(b) of the Act. Initiation of Changed Circumstances 
Countervailing Duty Administrative Reviews: Leather from Argentina, 
Wool from Argentina, Oil Country Tubular Goods from Argentina, and 
Cold-Rolled Carbon Steel Flat Products from Argentina, 61 FR 14553 
(April 2, 1996) (Changed Circumstances

[[Page 68714]]

Reviews). These reviews are focused on the legal effect, if any, of 
Argentina's status as a ``country under the Agreement,'' within the 
meaning of 19 U.S.C. Sec. 1303(a)(1) (1988; repealed 1994), as of 
September 20, 1991, on the countervailing duty orders covering leather, 
wool, OCTG, and Cold-Rolled Steel.
    Because the administrative reviews cover periods after September 
20, 1991, we have had to consider in these administrative reviews a 
question which is also at issue in the changed circumstances reviews--
that is, whether the Department has the authority to assess 
countervailing duties on unliquidated entries of subject merchandise 
occurring after Argentina became a ``country under the Agreement'' and 
before January 1, 1995, the date that Argentina became a ``Subsidies 
Agreement country'' within the meaning of section 701(b) of the Act.
    The Department preliminarily determines that it lacks the authority 
to assess countervailing duties on entries of OCTG and Cold-Rolled 
Steel from Argentina made on or after September 20, 1991 and on or 
before December 31, 1994. As a result, we intend to terminate the 
pending administrative reviews of the countervailing duty order on OCTG 
covering 1992, 1993, and 1994, as well as the pending administrative 
reviews of the countervailing duty order on Cold-Rolled Steel covering 
1992 and 1993. The question of the Department's authority to assess 
duties on unliquidated entries of the subject merchandise made on or 
after January 1, 1995 under these orders (and whether to revoke these 
orders) remains to be determined in the context of the ongoing changed 
circumstances reviews.
    If the final results of these administrative reviews remain the 
same as these preliminary results, we will instruct the U.S. Customs 
Service to liquidate all entries of OCTG and Cold-Rolled Steel subject 
to these administrative reviews without regard to countervailing duties 
as detailed in the Preliminary Results of Reviews section of this 
notice. Suspension of liquidation will continue at a cash deposit rate 
of zero for OCTG, as indicated in the section below entitled Suspension 
of Liquidation. Interested parties are invited to comment on these 
preliminary results. (See Public Comment section of this notice.)

EFFECTIVE DATE: December 30, 1996.

FOR FURTHER INFORMATION CONTACT: Dana Mermelstein or Megan Waters, 
Office CVD/AD Enforcement VI, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On November 27, 1984, the Department published in the Federal 
Register (49 FR 46564) the countervailing duty order on OCTG from 
Argentina. The countervailing duty order on Cold-Rolled Steel from 
Argentina was published in the Federal Register (49 FR 18006) on April 
26, 1984.
    On November 1, 1995, November 10, 1994, and November 3, 1993, the 
Department published its annual notice of ``Opportunity to Request 
Administrative Review'' (60 FR 55540, 59 FR 56034, and 58 FR 58682) 
regarding the OCTG countervailing duty order. We received timely 
requests for each of these administrative reviews and we initiated the 
reviews pursuant to section 751(a) of the Act. The review of OCTG 
covering the period January 1 through December 31, 1994, was initiated 
on December 15, 1995 (60 FR 64413). The review of OCTG covering the 
period January 1 through December 31, 1993, was initiated on December 
15, 1994 (59 FR 64650). The review of OCTG covering the period January 
1 through December 31, 1992, was initiated on December 17, 1993 (58 FR 
65964).
    On April 7, 1994 and April 9, 1993, the Department published its 
annual notice of ``Opportunity to Request Administrative Review'' (59 
FR 16615 and 58 FR 18374) regarding the countervailing duty order on 
Cold-Rolled Steel from Argentina. We received timely requests for each 
of these administrative reviews and we initiated the reviews pursuant 
to section 751(a) of the Act. The review of Cold-Rolled Steel covering 
the period January 1 through December 31, 1993, was initiated on May 
12, 1994 (59 FR 24683). The review of Cold-Rolled Steel covering the 
period January 1 through December 31, 1992, was initiated on May 27, 
1993 (58 FR 30767).

The Ceramica Decision

    On September 6, 1995, the Court of Appeals for the Federal Circuit 
(CAFC) held, in a case involving imports of dutiable ceramic tile, that 
Mexico became a ``country under the Agreement'' within the meaning of 
19 U.S.C. Sec. 1303(a)(1) (1988; repealed 1994) on the date that it 
signed its ``Understanding'' with the United States ``Regarding 
Subsidies and Countervailing Duties'' (``Mexican MOU''). Ceramica 
Regiomontana v. United States, 64 F.3d 1579, 1583 (Fed. Cir. 1995) 
(Ceramica). According to the court, language in the agreement which 
suggested a later date (i.e., only for pending and new investigations) 
was ``trumped'' by the statute. Id.
    Once Mexico became a country under the Agreement, the court 
declared, the Department could not assess countervailing duties on tile 
from that country under former section 303(a)(1) of the Act. 64 F.3d at 
1582. ``After Mexico became a `country under the Agreement,' the only 
provision under which ITA could continue to impose countervailing 
duties was section 1671.'' Id.
    One of the prerequisites to the assessment of countervailing duties 
under 19 U.S.C. 1671 (1988) is an affirmative injury determination. See 
also Id. at Sec. 1671e. However, at the time the countervailing duty 
order on ceramic tile was issued, the requirement of an affirmative 
injury determination under U.S. law was not applicable. Therefore, the 
court looked to see whether the statute contained any means by which 
the order on tile could receive an injury test. Specifically, the court 
looked at section 104(b) of the Trade Agreements Act of 1979, Public 
Law N. 96-39 (July 20, 1979) (1979 Act).
    Section 104(b) was designed to provide an injury test for certain 
countervailing duty orders issued under former section 303 prior to the 
effective date of the 1979 Act (which established Title VII and, in 
particular, section 701 of the Act). However, in order to induce other 
countries to accede to the 1979 Subsidies Code (or substantially 
equivalent agreements), the window of opportunity was intentionally 
limited. In order to qualify (i) the exporting nation had to be a 
country under the Agreement (e.g., a signatory of the Subsidies Code) 
by January 1, 1980, (ii) the order had to be in existence on January 1, 
1980 (i.e., the effective date of Title VII), and (iii) the exporting 
country (or in some instances its exporters) had to request the injury 
test on or before January 2, 1983.
    The countervailing duty order on ceramic tile from Mexico was 
issued in 1982 and Mexico did not become a country under the Agreement 
until April 23, 1985. Therefore, the court held that, in the absence of 
an injury test and the statutory means to provide one, the Department 
could not assess countervailing duties on ceramic tile and ordered the 
Department to revoke the order effective April 23, 1985. Ceramica, 64 
F.3d at 1583.

[[Page 68715]]

The Argentine Memorandum of Understanding

    The effective date of the Understanding Between the United States 
of America and the Republic of Argentina Regarding Subsidies and 
Countervailing Duties (Argentine MOU), under which Argentina attained 
the status of a ``country under the Agreement,'' was September 20, 
1991. Therefore, in consideration of the Ceramica decision, on April 2, 
1996, the Department initiated changed circumstances reviews of the 
orders on Leather, Wool, OCTG and Cold-Rolled Steel from Argentina. 
Changed Circumstances Reviews, 61 FR at 14553. The Department initiated 
these reviews to determine whether Argentina's status as a ``country 
under the Agreement'' affects its authority to assess countervailing 
duties on unliquidated entries of subject merchandise occurring after 
September 20, 1991. As part of this inquiry, the Department will 
determine whether the requests for injury investigations received by 
the U.S. International Trade Commission under section 753(a) of the Act 
in connection with the countervailing duty orders covering Leather, 
Wool, and OCTG from Argentina have any bearing on the Department's 
authority to assess duties on entries occurring on or after January 1, 
1995.

Scope of the Reviews

OCTG from Argentina.

    Imports covered by this order include shipments of Argentine oil 
country tubular goods. Oil country tubular goods include hollow steel 
products of circular cross-section intended for use in the drilling of 
oil or gas and oil well casing, tubing and drill pipe or carbon or 
alloy steel, whether welded or seamless, manufactured to either 
American Petroleum Institute (API) or proprietary specifications. The 
scope covers both finished and unfinished OCTG. The products covered in 
this review are provided for under item numbers of the Harmonized 
Tariff Schedule (HTS): 7304.20.20, 7304.20.40, 7304.20.50, 7304.20.60, 
7304.20.80, 7304.39.00, 7304.51.50, 7304.20.70, 7304.59.60, 7304.59.80, 
7304.90.70, 7305.20.40, 7305.20.60, 7305.20.80, 7305.31.40, 7305.31.60, 
7305.39.10, 7305.39.50, 7305.90.10, 7305.90.50, 7306.20.20, 7306.20.30, 
7306.20.40, 7306.20.60, 7306.20.80, 7306.30.50, 7306.50.50, 7306.60.70, 
7306.90.10. The HTS subheadings are provided for convenience and 
Customs purposes. The written description remains dispositive.
    Cold-Rolled Steel from Argentina. Imports covered by this order 
include shipments of Argentine cold-rolled carbon steel flat products, 
whether or not corrugated or crimped; whether or not painted or 
varnished and whether or not pickled; not cut, not pressed, and not 
stamped to non-rectangular shape; not coated or plated with metal; over 
12 inches in width and under 0.1875 inches in thickness whether or not 
in coils; as currently provided for under the following item numbers of 
the HTS: 7209.11.00, 7209.12.00, 7209.13.00, 7209.14.00, 7209.21.00, 
7209.22.00, 7209.23.00, 7209.24.00, 7209.31.00, 7209.32.00, 7209.33.00, 
7209.34.00, 7209.41.00, 7209.42.00, 7209.43.00, 7209.44.00, 7209.90.00, 
7210.70.00, 7211.30.50, 7211.41.70, 7211.49.50, 7211.90.00, 7212.40.50. 
The HTS item numbers are provided for convenience and Customs purposes. 
The written description remains dispositive.

Preliminary Results of Reviews / Intent To Terminate Administrative 
Reviews

    Unliquidated entries of subject merchandise which occurred on or 
after September 20, 1991 and on or before December 31, 1994, involve 
the same set of pertinent facts as the Department faced in connection 
with the countervailing duty order on ceramic tile from Mexico.
    First, at the time the countervailing duty orders on Mexico and 
Argentina were issued, the requirement of an affirmative injury 
determination under U.S. law was not applicable. Second, both countries 
concluded similar agreements with the United States which resulted in 
their becoming ``countries under the Agreement'' within the meaning of 
former section 303(a)(1) of the Act. Third, at the time Mexico and 
Argentina qualified as countries under the Agreement, the assessment of 
countervailing duties on subsequent entries of dutiable merchandise 
became dependent upon a finding of subsidization and injury in 
accordance with section 701 of the Act. Fourth, none of the transition 
rules in the statute can be applied to the subject entries. 
Specifically, section 104 of the 1979 Act only applies to 
countervailing duty orders issued before January 1, 1980. Also, there 
is a question, at issue in the changed circumstances reviews, whether 
section 753 of the Act applies to these orders. In all events, however, 
it is clear that section 753 does not apply to entries occurring on or 
before December 31, 1994.
    Therefore, we preliminarily determine that the Department cannot 
assess duties on entries made on or after September 20, 1991 and on or 
before December 31, 1994. If these preliminary results are made final, 
the Department will terminate these administrative reviews. However, we 
intend to complete the pending 1991 administrative reviews of these two 
orders in order to determine the appropriate countervailing duty 
assessment rate for those 1991 entries made prior to September 20, 
1991. The question of the Department's authority to assess duties on 
unliquidated entries of OCTG made on or after January 1, 1995 remains 
to be determined in the context of the ongoing changed circumstances 
reviews.

Suspension of Liquidation

    The suspension of liquidation for entries of Cold-Rolled Steel and 
OCTG from Argentina made on or after January 1, 1991 and before 
September 20, 1991 will continue pending the completion of the 1991 
administrative reviews. The suspension of liquidation for entries of 
OCTG from Argentina made on or after January 1, 1995 will continue, at 
the cash deposit rate of zero. Because the countervailing duty order on 
Cold-Rolled Steel was revoked effective January 1, 1995 (60 FR 40568), 
the Department instructed Customs to discontinue the suspension of 
liquidation for entries made on or after that date.

Public Comment

    Interested parties may request a hearing not later than 10 days 
after the date of publication of this notice. Interested parties may 
submit written arguments in case briefs on these preliminary results 
within 30 days of the date of publication. We request that parties 
limit arguments in the case briefs to the issue of whether the 
Department has the authority to assess countervailing duties on 
shipments of OCTG and Cold-Rolled Steel from Argentina entered on or 
after September 20, 1991 and on or before December 31, 1994. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Parties who 
submit argument in this proceeding are requested to submit with the 
argument (1) a statement of the issue, and (2) a brief summary of the 
argument. Any hearing, if requested, will be held seven days after the 
scheduled date for submission of rebuttal briefs. Copies of case briefs 
and rebuttal briefs must be served on interested parties in accordance 
with 19 C.F.R. Sec. 355.38.
    The Department will publish the final results of these 
administrative reviews, including the results of its analysis of

[[Page 68716]]

issues raised in any case or rebuttal brief or at a hearing.
    These administrative reviews and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: December 20, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-33175 Filed 12-27-96; 8:45 am]
BILLING CODE 3510-DS-P