[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