[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Notices]
[Pages 16549-16551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8842]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-401-401]
Certain Carbon Steel Products from Sweden; Final Results of
Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of countervailing duty administrative
review.
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SUMMARY: On December 3, 1996, the Department of Commerce (``the
Department'') published in the Federal Register its preliminary results
of administrative review of the countervailing duty order on Certain
Carbon Steel Products from Sweden for the period January 1, 1994
through December 31, 1994 (61 FR 64062; December 3, 1996). The
Department has now completed this administrative review in accordance
with section 751(a) of the Tariff Act of 1930, as amended. For
information on the net subsidy for the reviewed company, and for all
non-reviewed companies, please see the Final Results of Review section
of this notice. We will instruct the U.S. Customs Service to assess
countervailing duties as detailed in the Final Results of Review
section of this notice.
EFFECTIVE DATE: April 7, 1997.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Lorenza Olivas,
Office of 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
Pursuant to 19 C.F.R. 355.22(a), this review covers only those
producers or exporters of the subject merchandise for which a review
was specifically requested. Accordingly, this review covers SSAB
Svenskt Stal AB (``SSAB''), the sole known producer/exporter of the
subject merchandise during the review period. This review also covers
the period January 1, 1994 through December 31, 1994, and 10 programs.
We published the preliminary results on December 3, 1996 (61 FR
64062). We invited interested parties to comment on the preliminary
results. We received no comments from any of the parties.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended by
the Uruguay Round Agreements Act (``URAA'') effective January 1, 1995
(``the Act''). The Department is conducting this administrative review
in accordance with section 751(a) of the Act.
Scope of the Review
Imports covered by this review are shipments of certain carbon
steel products from Sweden. These products include cold-rolled carbon
steel, flat-rolled products, whether or not corrugated, or crimped:
whether or not pickled, not cut, not pressed and not stamped to non-
rectangular shape; not coated or pleated with metal and not clad; over
12 inches in width and of any thickness; whether or not in coils.
During the review period, such merchandise was classifiable under the
Harmonized Tariff Schedule (HTS) item numbers 7209.11.0000,
7209.12.0000, 7209.13.0000, 7209.21.0000, 7209.22.0000, 7209.23.0000,
7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000,
7209.41.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7211.30.5000,
7211.41.7000 and 7211.49.5000. The HTS item numbers are provided for
convenience and customs purposes. The written description remains
dispositive.
Allocation Methodology
In the past, the Department has relied upon information from the
U.S. Internal Revenue Service on the industry-specific average useful
life (``AUL'') of assets in determining the allocation period for
nonrecurring grant benefits. See General Issues Appendix appended to
Final Countervailing Duty Determination; Certain Steel Products from
Austria, 58 FR 37217, 37226 (July 9, 1993) (``General Issues
Appendix''). However, in British Steel plc. v. United States, 879 F.
Supp. 1254 (CIT 1995) (``British Steel''), the U.S. Court of
International Trade (``the Court'') ruled against this allocation
methodology. In accordance with the Court's remand order, the
Department calculated a company-specific allocation period for
nonrecurring subsidies based on the AUL of non-renewable physical
assets. This remand determination was affirmed by the Court on June 4,
1996. British Steel, 929 F. Supp. 426, 439 (CIT 1996).
The Department has decided to acquiesce to the Court's decision
and, as such, we intend to determine the allocation period for
nonrecurring subsidies using company-specific AUL data where reasonable
and practicable. In the preliminary results (61 FR 64062), the
Department preliminarily determined that it is reasonable and
practicable to allocate all new nonrecurring subsidies (i.e., subsidies
that have not yet been assigned an allocation period) based on a
company-specific AUL. However, if a subsidy has already been
countervailed based on an allocation period established in an earlier
segment of the proceeding, it does not appear reasonable or
[[Page 16550]]
practicable to reallocate that subsidy over a different period of time.
In other words, since the countervailing duty rate in earlier segments
of the proceeding was calculated based on a certain allocation period
and resulting benefit stream, redefining the allocation period in later
segments of the proceeding would entail taking the original grant
amount and creating an entirely new benefit stream for that grant. Such
a practice may lead to an increase or decrease in the total amount
countervailed and, thus, would result in the possibility of over-
countervailing or under-countervailing the actual benefit. The
Department preliminarily determined that a more reasonable and accurate
approach is to continue using the allocation period first assigned to
the subsidy. We invited the parties to comment on the selection of this
methodology and to provide any other reasonable and practicable
approaches for complying with the Court's ruling. We received no
comments on this issue.
In the current review, there are no new subsidies. All of the
nonrecurring subsidies currently under review were provided prior to
the period of review (``POR''); allocation periods for these grants
were established during prior segments of this proceeding. Therefore,
for purposes of these final results, the Department is using the
original allocation period assigned to each nonrecurring subsidy.
Privatization and Sale of Productive Units
SSAB is the only company that produces and exports the subject
merchandise from Sweden. SSAB has sold several productive units and the
company was partially privatized twice, in 1987 and in 1989. During the
review period, SSAB was completely privatized.
In Final Affirmative Countervailing Duty Determinations: Certain
Steel Products from Sweden, 58 FR 37385 (July 9, 1993) (``Final
Determination''), the Department found that SSAB had received
countervailable subsidies prior to the sale of the productive units and
the two partial privatizations. Further, the Department found that a
private party purchasing all or part of a government-owned company can
repay prior subsidies on behalf of the company as part or all of the
sales price (see General Issues Appendix, 58 FR at 37262 (July 9,
1993)). Therefore, to the extent that a portion of the sales price paid
for a privatized company can be reasonably attributed to prior
subsidies, that portion of those subsidies will be extinguished.
To calculate a rate for the subsidies that were allocated to the
spin-offs, i.e., productive units that were sold, we first determined
the amount of the subsidies attributable to each productive unit by
dividing the asset value of that productive unit by the total asset
value of SSAB in the year of the spin-off. We then applied this ratio
to the net present value (``NPV''), in the year of the spin-off, of the
future benefit streams from all of SSAB's prior subsidies allocable to
the POR. The future benefit streams at the time of the sale of each
productive unit reflect the Department's allocation over time of prior
subsidies to SSAB in accordance with the declining balance methodology
(see e.g., Final Affirmative Countervailing Duty Determination: Fresh
Chilled Atlantic Salmon from Norway, 56 FR 7678; 7679 (February 25,
1991)), and reflect also the prior spin-offs of SSAB productive units.
We next estimated the portion of the purchase price which
represents repayment of prior subsidies by determining the portion of
SSAB's net worth that was accounted for by subsidies. To do that, we
divided the face value of the allocable subsidies received by SSAB in
each year from fiscal year 1979 through fiscal year 1993 by SSAB's net
worth in the same year. We calculated a simple average of these ratios,
which was then multiplied by the purchase price of the productive unit.
Thus, we determined the amount of the purchase price which represents
repayment of prior subsidies. This amount was subtracted from the
subsidies attributed to the productive unit at the time of sale to
arrive at the amount of subsidies allocated to the productive unit
being spun-off.
To calculate the subsidies remaining with SSAB after privatization,
we performed the following calculations. We first calculated the NPV of
the future benefit stream of the subsidies at the time of the sale of
the shares taking into account the spin-offs. Next, we estimated the
portion of the purchase price which represents repayment of prior
subsidies in accordance with the methodology described in the
``Privatization'' section of the General Issues Appendix at 37259. This
amount was then subtracted from the amount of the NPV eligible for
repayment, and the result was divided by the NPV to calculate the ratio
representing the amount of subsidies remaining with SSAB.
To calculate the benefit provided to SSAB in the POR, where
appropriate, we multiplied the benefit calculated for 1994, adjusted
for sales of productive units, by the ratio representing the amount of
subsidies remaining with SSAB after privatization. We then divided the
results by the company's total sales in 1994.
Analysis of Programs
Based upon our analysis of the information on the record, we
determine the following:
I. Programs Previously Determined to Confer Subsidies
We did not receive any comments on the following programs from the
interested parties; however, our review of the record uncovered a
clerical error in our preliminary calculations. In our calculation of
the subsidies remaining with SSAB after its privatization, we
inadvertently took the face value of the subsidies in calculating the
future benefit stream from the nonrecurring subsidies at the time of
the sale. Instead, we should have calculated their net present value,
which is the methodology set forth in the General Issues Appendix, to
determine the amount of subsidies remaining with SSAB and the amount of
subsidies repaid at the time of the sale. Accordingly, for these final
results, we have adjusted our calculations to reflect the net present
value of the remaining stream of benefits from the nonrecurring
subsidies. The corrected rates are listed below.
1. Equity Infusions
In the preliminary results, we found that this program conferred
countervailable subsidies on the subject merchandise. We did not
receive any comments on this program from interested parties; however,
due to the clerical error explained above, the net subsidy for this
program has changed from 0.53 percent ad valorem to 0.51 percent ad
valorem for SSAB.
2. Structural Loans
In the preliminary results, we found that this program conferred
countervailable subsidies on the subject merchandise. We did not
receive any comments on this program from interested parties; however,
due to the clerical error explained above, the net subsidy for this
program has changed from 0.27 percent ad valorem to 0.26 percent ad
valorem for SSAB.
3. Forgiven Reconstruction Loans
In the preliminary results, we found that this program conferred
countervailable subsidies on the subject merchandise. We did not
receive any comments on this program from interested parties; however,
due to the clerical error explained above, the net subsidy for this
program has changed
[[Page 16551]]
from 1.18 percent ad valorem to 1.14 percent ad valorem for SSAB.
II. Programs Found Not to Confer Subsidies
A. Research & Development (R&D) Loans and Grants.
B. Fund for Industry and New Business R&D.
In the preliminary results, we found these programs did not confer
subsidies during the POR. We did not receive any comments on these
programs from the interested parties, and our review of the record has
not led us to change our findings from the preliminary results.
III. Programs Found To Be Not Used
In the preliminary results, we found that the producer/exporter of
the subject merchandise did not apply for or receive benefits under the
following programs:
A. Regional Development Grants.
B. Transportation Grants.
C. Location-of Industry Loans.
We did not receive any comments on these programs from the
interested parties, and our review of the record has not led us to
change our findings from the preliminary results.
IV. Program Found To Be Terminated
In the preliminary results, we found the following program to be
terminated and that no residual benefits were being provided:
Mining Exploration Grants.
We did not receive any comments on this program from the interested
parties, and our review of the record has not led us to change our
findings from the preliminary results.
Final Results of Review
In accordance with 19 CFR 355.22(c)(7)(ii), we calculated an
individual subsidy rate for each producer/exporter subject to this
administrative review. As a result of correcting the clerical errors in
the preliminary results, we determine the net subsidy for SSAB to be
1.91 percent ad valorem for the period January 1, 1994 through December
31, 1994.
We will instruct the U.S. Customs Service (``Customs'') to assess
countervailing duties as indicated above. The Department will also
instruct Customs to collect cash deposits of estimated countervailing
duties in the percentages detailed above of the f.o.b. invoice price on
all shipments of the subject merchandise from the reviewed company,
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 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
355.22(a). Pursuant to 19 CFR 355.22(g), 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 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 countervailing
duty regulation on automatic assessment). Therefore, the cash deposit
rates for all companies except SSAB 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 pursuant to the statutory
provisions that were in effect prior to the URAA amendment. See Certain
Carbon Steel Products from Sweden; Final Results of Countervailing Duty
Administrative Review, 61 FR 5378 (February 12, 1996). 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, 1994 through December 31, 1994, 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.
This notice serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 C.F.R. 355.34(d). Timely written notification
of return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 C.F.R.
355.22(c)(8).
Dated: March 28, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-8842 Filed 4-4-97; 8:45 am]
BILLING CODE 3510-DS-P