[Federal Register Volume 62, Number 135 (Tuesday, July 15, 1997)]
[Notices]
[Pages 37880-37881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18450]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-423-806]


Amended Final Affirmative Countervailing Duty Determinations; 
Certain Carbon Steel Products From Belgium

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

SUMMARY: The appeal of the court decision in Geneva Steel et al. v. 
United States, 937 F. Supp. 946 (CIT 1996) (Geneva II) has been 
dismissed. Geneva Steel et al. v. United States, Appeal No. 97-1123 
(Fed. Cir., Feb. 27, 1997). On April 18, 1997, the U.S. Court of 
International Trade (CIT) vacated that part of its decision in Geneva 
II which pertained to Sidmar, N.V. (Sidmar). Therefore, Commerce is 
amending its final affirmative determinations in the countervailing 
duty investigations of certain steel products from Belgium in 
accordance with Geneva II, subject to the order of vacatur.

FOR FURTHER INFORMATION CONTACT:
Vincent Kane at (202) 482-2815, Office of Antidumping/Countervailing 
Duty Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Washington, D.C., 20230, 
or Duane Layton at (202) 482-5285, Office of the Chief Counsel for 
Import Administration, U.S. Department of Commerce.

EFFECTIVE DATE: July 15, 1997.

SUPPLEMENTARY INFORMATION:

Background

    In Geneva II, the CIT affirmed Commerce's redetermination on remand 
of the final affirmative determinations in the countervailing duty 
investigations of certain steel products from Belgium (58 FR 37273, 
July 9, 1993, as amended by 58 FR 43749, August 17, 1993). In that 
redetermination, Commerce addressed six issues, which had been remanded 
to it by the court in Geneva Steel et al. v. United States, 914 F. 
Supp. 563 (CIT 1996) (Geneva I).
    The first issue concerned an interest rate reduction on a loan 
received by Forge de Clabecq (Clabecq). In the final determinations, 
Commerce calculated a benefit for the favorable interest rate on the 
loan but failed to take into account an interest rate reduction. In the 
redetermination, Commerce recalculated the subsidy rate for Clabecq to 
take into account the interest rate reduction on the loan.
    The second issue concerned Commerce's calculation of the benefit 
realized by Clabecq in converting debt to equity. Commerce's normal 
practice in calculating the benefit from debt-to-equity conversions is 
to select a benchmark price for the equity on the date on which the 
equity is issued. In the final determinations, contrary to its normal 
practice, Commerce calculated the benefit based on the date of the 
agreement to convert debt to equity. In the redetermination on remand, 
Commerce recalculated the benefit based on the date of issuance of the 
equity.
    The third issue concerned Commerce's decision in the final 
determinations to use the price of Cockerill Sambre's (Cockerill's) and 
Clabecq's publicly traded common shares as a benchmark in determining 
whether, and to what extent, the companies benefited from selling parts 
beneficiaries (PBs) to the Government of Belgium (GOB). In the final 
determinations, Commerce gave no explanation for its selection of the 
common shares of these companies as the next most similar publicly 
traded shares to the PBs. In the remand determination, Commerce 
demonstrated from evidence on the record that the publicly traded 
shares were the next most similar publicly traded shares.
    The fourth issue concerned whether Sidmar's conversion of 
convertible debentures (OCPCs) to PBs was on terms consistent with 
commercial considerations. In the final determinations, Commerce did 
not view Sidmar to be unequityworthy and, therefore, did not consider 
whether the company's conversion of OCPCs to PBs was on terms 
inconsistent with commercial considerations. In Aimcor, Alabama 
Silicon, Inc. v. United States, 871 F. Supp. 447, 454 (CIT 1994) and in 
Geneva I, 914 F. Supp. at 582, the CIT held that investment in a 
company may be on terms inconsistent with commercial considerations, 
despite the fact that the company is not unequityworthy. Therefore, the 
court instructed Commerce to determine

[[Page 37881]]

whether Sidmar's conversion of OCPCs to PBs was on terms inconsistent 
with commercial considerations.
    In its redetermination on remand, Commerce determined that the 
conversion was on terms inconsistent with commercial considerations. In 
making this redetermination, Commerce compared the price paid by the 
GOB for the PBs to the value of a non-publicly traded common share of 
Sidmar's stock, as reported by an independent accounting firm. Before 
comparing the value of a common share with the price paid by the GOB 
for PBs, Commerce compared the principal characteristics of Sidmar's 
common shares and PBs. In comparing the price of Sidmar's PBs to the 
value of its common stock, Commerce made adjustments for differences in 
voting rights, dividend rights, and transferability. On this basis 
Commerce found Sidmar's conversion to be inconsistent with commercial 
considerations.
    We note that in the final determinations, Commerce found the 
conversion of Clabecq's and Cockerill's OCPCs to PBs to be 
countervailable, based on a comparison of the prices of the PBs to the 
market prices of these companies' publicly traded shares. However, 
Commerce made no adjustment in the final determinations for the 
inferior characteristics of these companies' PBs (i.e., inferior voting 
rights, dividend rights, and transferability). In the redetermination 
on remand, Commerce adjusted for these characteristics, as it did for 
the conversion of Sidmar's OCPCs to PBs.
    The fifth issue concerned the early redemption of Sidmar's 
preferred shares. In the final determinations, Commerce found that 
Sidmar, to redeem its preferred shares early, paid in 1991 an amount 
equal to the net present value of the amount it would have paid had it 
redeemed the shares in 2004, the original redemption date. For this 
reason, Commerce concluded that the redemption was not inconsistent 
with commercial considerations. In its remand order, the CIT directed 
Commerce to explicate the record evidence, which the agency reviewed, 
in determining that the redemption of the preferred shares was not on 
terms inconsistent with commercial considerations. In its 
redetermination on remand, Commerce detailed in full the particulars of 
this redemption and demonstrated from evidence on the record that early 
redemption was requested by the GOB for budgetary reasons and that the 
GOB agreed to accept payment of the net present value of the shares 
rather than face an uncertain outcome in 2004.
    The sixth issue concerned Commerce's determination that the GOB's 
funding of additional allowance benefits under the Steel Collective 
Labor Convention bestowed a recurring benefit based on the criteria 
outlined in the allocation section of the General Issues Appendix (58 
FR 37225, July 9, 1993). The CIT found that Commerce failed to provide 
an explanation and evidence to support the agency's finding that the 
additional allowance benefits were recurring. In its redetermination on 
remand, Commerce demonstrated from evidence on the record that steel 
firms automatically qualified for benefits from prepensioning, 
including reimbursements from the GOB for additional allowance 
payments, and that these benefits were received over a long period of 
time. Therefore, Commerce concluded that the benefits were recurring.
    On October 3, 1996, Commerce published notice of the court decision 
in Geneva II (61 FR 51682). In that notice the agency stated that it 
must continue to suspend liquidation until a ``conclusive'' decision in 
this action is reached. Because the appeal filed by Sidmar challenging 
the court decision in Geneva II has been dismissed and the opportunity 
for further appeals has expired, the Department is amending the rates 
calculated in the final determination and order, subject to the order 
of vacatur entered by the CIT on April 18, 1997. The new rates are as 
follows:

Certain Hot-Rolled Carbon Steel Flat Products

Country-Wide Rate--0.68 percent
Cockerill--23.15 percent

Certain Cold-Rolled Carbon Steel Flat Products

Country-Wide Rate--0.58 percent
Cockerill--23.15 percent

Certain Cut-To-Length Carbon Steel Plate

Country-Wide Rate--5.92 percent
Cockerill--23.15 percent

    Subsequent to our final determinations on July 9, 1993, the 
International Trade Commission (ITC) issued negative determinations 
with regard to injury resulting from the importation of hot-rolled and 
cold-rolled flat-rolled carbon steel products from Belgium in Certain 
Steel Products from Belgium, 58 FR 43905 (ITC August 18, 1993). These 
determinations were affirmed by the CIT in decisions issued on December 
30, 1994, for hot-rolled carbon steel products, and January 27, 1995, 
for cold-rolled carbon steel products. See United States Steel Group--A 
Unit of USX Corp. v. United States, 873 F. Supp. 673 (CIT 1994); Kern-
Liebers USA, Inc. v. United States, Slip Op. 95-9 (1995 Ct. Int'l Trade 
LEXIS 10). The decisions of the CIT were subsequently affirmed by the 
Court of Appeals for the Federal Circuit on August 29, 1996. United 
States Steel Group et al. v. United States, 96 F.3d 1352 (Fed. Cir. 
1996), reh'g denied, 1996 U.S. App. LEXIS 31227 (Nov. 21, 1996).
    Therefore, we will instruct Customs to continue to suspend 
liquidation on entries of cut-to-length carbon steel plate from 
Belgium, the only merchandise covered by the countervailing duty order 
issued on August 17, 1993 (58 FR 43749), entered, or withdrawn from 
warehouse, for consumption and to collect cash deposits, at the new 
rates on all such entries made on or after publication of this notice 
in the Federal Register.

    Dated: July 1, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-18450 Filed 7-14-97; 8:45 am]
BILLING CODE 4310-MR-M