[Federal Register Volume 63, Number 73 (Thursday, April 16, 1998)]
[Notices]
[Pages 18871-18877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10039]


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

DEPARTMENT OF COMMERCE

International Trade Administration


Policies Regarding the Conduct of Five-year (``Sunset'') Reviews 
of Antidumping and Countervailing Duty Orders; Policy Bulletin

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

ACTION: Policy Bulletin; request for comments.

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

SUMMARY: The Department of Commerce is proposing policies regarding the 
conduct of five-year (``sunset'') reviews of antidumping and 
countervailing duty orders and suspended investigations pursuant to the 
provisions of sections 751(c) and 752 of the Tariff Act of 1930, as 
amended, and the Department's regulations. The proposed policies are 
intended to complement the applicable statutory and regulatory 
provisions by providing guidance on methodological or analytical issues 
not explicitly addressed by the statute and regulations.

DATES: To be assured of consideration, written comments must be 
received not later than May 12, 1998. Rebuttal comments must be 
received not later than June 2, 1998.

ADDRESSES: A signed original and six copies of each set of comments, 
including reasons for any recommendation, along with a cover letter 
identifying the commenter's name and address, should be submitted to 
Robert S. LaRussa, Assistant Secretary for Import Administration, 
Central Records Unit, Room 1870, U.S. Department of Commerce, 
Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230; 
Attention: Sunset Policy Bulletin.

FOR FURTHER INFORMATION CONTACT: Melissa G. Skinner, Office of Policy, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, at (202) 482-1560, or Stacy J. Ettinger, Office 
of the Chief Counsel for Import Administration, U.S. Department of 
Commerce, at (202) 482-4618.

SUPPLEMENTARY INFORMATION: This policy bulletin proposes guidance 
regarding the conduct of sunset reviews. As described below, the 
proposed policies are intended to complement the applicable statutory 
and regulatory provisions by providing guidance on methodological or 
analytical issues not explicitly addressed by the statute and 
regulations. We invite public comment on the policies.

Request for Comment

    The Department solicits comments pertaining to its proposed 
policies concerning sunset reviews. Initial comments should be received 
by the Assistant Secretary not later than May 12, 1998. Any rebuttals 
to the initial comments should be received by the Assistant Secretary 
not later than June 2, 1998. Commenters should file a signed original 
and six copies of each set of initial and rebuttal comments. All 
comments will be available for public inspection and photocopying in 
the Import Administration's Central Records Unit, Room B-099, between 
the hours of 8:30 am and 5:00 pm on business days.
    Each person submitting a comment should include the commenter's 
name and address, and give reasons for any recommendations. To 
facilitate their consideration by the Department, initial and rebuttal 
comments regarding these proposed policies should be submitted in the 
following format: (1) number each comment in accordance with the 
paragraph numbering of the proposed policy being addressed; (2) begin 
each comment on a separate page; (3) provide a brief summary of the 
comment (a maximum of three sentences) and label this section ``Summary 
of the Comment;'' and (4) concisely state the issue identified and 
discussed in the comment and provide reasons for any recommendation.
    To help simplify the processing and distribution of comments, the 
Department requests the submission of initial and rebuttal comments in 
electronic form to accompany the required paper copies. Comments filed 
in electronic form should be on a DOS formatted 3.5'' diskette in 
either WordPerfect format or a format that the WordPerfect program can 
convert and import into WordPerfect. Please make each comment a 
separate file on the diskette and name each separate file using the 
paragraph numbering of the proposed policy being addressed in the 
comment.
    Comments received on diskette will be made available to the public 
on the Internet at the following address: ``http://www.ita.doc.gov/
import__admin/records/''. In addition, upon request, the Department 
will make comments filed in electronic form available to the public on 
3.5'' diskettes (at cost), with specific instructions for accessing 
compressed data (if necessary). Any questions concerning file 
formatting, document conversion, access on the Internet, or other 
electronic filing issues should be addressed to Andrew Lee Beller, IA 
Webmaster, at (202) 482-0866.

    Dated: April 10, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.

Policy Bulletin 98:3

Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of 
Antidumping and Countervailing Duty Orders

Sunset Review Policies
I. Overview
II. Sunset Reviews in Antidumping Proceedings
    A. Determination of Likelihood of Continuation or Recurrence of 
Dumping
    1. In general
    2. Basis for likelihood determination
    3. Likelihood of continuation or recurrence of dumping
    4. No likelihood of continuation or recurrence of dumping
    5. Treatment of zero or de minimis margins
    B. Magnitude of the Margin of Dumping That is Likely to Prevail
    1. In general
    2. Use of a more recently calculated margin
    3. Duty absorption
    C. Consideration of Other Factors
    1. In general
    2. Example
    3. Timing of determination of good cause
III. Sunset Reviews in Countervailing Duty Proceedings
    A. Determination of Likelihood of Continuation or Recurrence of 
a Countervailable Subsidy
    1. In general
    2. Basis for likelihood determination
    3. Continuation, temporary suspension, or partial termination of 
a subsidy program
    4. Subsidies for which benefits are allocated over time
    5. Elimination of a subsidy program or exclusion of subject 
companies by the foreign government
    6. Treatment of zero or de minimis rates
    B. Net Countervailable Subsidy That is Likely to Prevail
    1. In general
    2. Determination of net countervailable subsidy; company-
specific rates
    3. Adjustments to the net countervailable subsidy
    4. Nature of the countervailable subsidy
    C. Consideration of Other Factors
    1. Programs determined to provide countervailable subsidies in 
other investigations or reviews
    2. Programs newly alleged to provide countervailable subsidies

[[Page 18872]]

Sunset Review Policies

I. Overview

    The Uruguay Round Agreements Act (``URAA'') revised the Tariff Act 
of 1930, as amended (``the Act''), by requiring that antidumping 
(``AD'') and countervailing duty (``CVD'') orders be revoked, and 
suspended investigations be terminated, after five years unless 
revocation or termination would be likely to lead to a continuation or 
recurrence of (1) dumping or a countervailable subsidy, and (2) 
material injury to the domestic industry. The URAA assigns to the 
Department of Commerce (``the Department'') the responsibility of 
determining whether revocation of an antidumping or countervailing duty 
order, or termination of a suspended investigation, would be likely to 
lead to a continuation or recurrence of dumping or a countervailable 
subsidy. The Department then must transmit to the International Trade 
Commission (``the Commission'') its likelihood determination and its 
determination regarding the magnitude of the margin of dumping or the 
net countervailable subsidy that is likely to prevail if the order is 
revoked or the suspended investigation is terminated. The URAA also 
requires that the Department begin initiating sunset reviews in July 
1998, that all sunset reviews of ``transition orders''--those 
antidumping and countervailing duty orders and suspended investigations 
in effect on January 1, 1995, the effective date of the URAA--be 
initiated by December 31, 1999, and that all reviews of transition 
orders be completed by June 30, 2001. The URAA further requires that 
the Department initiate a sunset review of each order or suspended 
investigation that is not a ``transition order'' not later than 30 days 
before the fifth anniversary of publication of the order or suspension 
agreement in the Federal Register. Pursuant to section 751(c)(1) of the 
Act, initiation of sunset reviews is automatic.
    Sunset reviews of antidumping and countervailing duty orders and 
suspended investigations will be conducted pursuant to the provisions 
of the Act, including sections 751(c) and 752 of the Act, and the 
Department's regulations at 19 CFR Part 351, including Secs. 351.218, 
351,221, 351.222(i), 351.307, 351.308(f), 351.309, and 351.310 (see 
Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping 
and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (interim 
final rules)). These policies are intended to complement the applicable 
statutory and regulatory provisions by providing guidance on 
methodological or analytical issues not explicitly addressed by the 
statute and regulations. In developing these policies, the Department 
has drawn on the guidance provided by the legislative history 
accompanying the URAA, specifically the Statement of Administrative 
Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1 (1994), the House 
Report, H.R. Rep. No. 103-826, pt. 1 (1994), and the Senate Report, S. 
Rep. No. 103-412 (1994).

II. Sunset Reviews in Antidumping Proceedings

A. Determination of Likelihood of Continuation or Recurrence of Dumping

1. In General
    In accordance with section 752(c)(1) of the Act, in determining 
whether revocation of an antidumping order or termination of a 
suspended dumping investigation would be likely to lead to continuation 
or recurrence of dumping, the Department will consider--
    (a) the weighted-average dumping margins determined in the 
investigation and subsequent reviews, and
    (b) the volume of imports of the subject merchandise for the period 
before and the period after the issuance of the antidumping order or 
acceptance of suspension agreement.
2. Basis for Likelihood Determination
    Consistent with the SAA at 879, and the House Report at 56, the 
Department will make its determination of likelihood on an order-wide 
basis.
3. Likelihood of Continuation or Recurrence of Dumping
    The SAA at 889, the House Report at 63, and the Senate Report at 
52, state that,

    [D]eclining import volumes accompanied by the continued 
existence of dumping margins after the issuance of the order may 
provide a strong indication that, absent an order, dumping would be 
likely to continue, because the evidence would indicate that the 
exporter needs to dump to sell at pre-order volumes.

    In addition, the SAA at 890, and the House Report at 63-64, state 
that,

    [E]xistence of dumping margins after the order, or the cessation 
of imports after the order, is highly probative of the likelihood of 
continuation or recurrence of dumping. If companies continue to dump 
with the discipline of an order in place, it is reasonable to assume 
that dumping would continue if the discipline were removed. If 
imports cease after the order is issued, it is reasonable to assume 
that the exporters could not sell in the United States without 
dumping and that, to reenter the U.S. market, they would have to 
resume dumping.

    Therefore, the Department normally will determine that revocation 
of an antidumping order or termination of a suspended dumping 
investigation is likely to lead to continuation or recurrence of 
dumping where--
    (a) dumping continued at any level above de minimis after the 
issuance of the order or the suspension agreement, as applicable;
    (b) imports of the subject merchandise ceased after issuance of the 
order or the suspension agreement, as applicable; or
    (c) dumping was eliminated after the issuance of the order or the 
suspension agreement, as applicable, and import volumes for the subject 
merchandise declined significantly.
    The Department recognizes that, in the context of a sunset review 
of a suspended investigation, the data relevant to the criteria under 
paragraphs (a) through (c), above, may not be conclusive with respect 
to likelihood. Therefore, the Department may be more likely to 
entertain good cause arguments under paragraph II.C in a sunset review 
of a suspended investigation.
4. No Likelihood of Continuation or Recurrence of Dumping
    The SAA at 889-90, and the House Report at 63, state that,

    [D]eclining (or no) dumping margins accompanied by steady or 
increasing imports may indicate that foreign companies do not have 
to dump to maintain market share in the United States and that 
dumping is less likely to continue or recur if the order were 
revoked.

See also, the Senate Report at 52.
    Therefore, the Department normally will determine that revocation 
of an antidumping order or termination of a suspended dumping 
investigation is not likely to lead to continuation or recurrence of 
dumping where dumping was eliminated after issuance of the order or the 
suspension agreement, as applicable, and import volumes remained steady 
or increased. Declining margins alone normally would not qualify 
because the legislative history makes clear that continued margins at 
any level would lead to a finding of likelihood. See section II.A.3, 
above. In analyzing whether import volumes remained steady or 
increased, the Department normally will consider companies' relative 
market share. Such information should be provided to the Department by 
the parties.
    The Department recognizes that, in the context of a sunset review 
of a suspended investigation, the elimination of dumping coupled with

[[Page 18873]]

steady or increasing import volumes may not be conclusive with respect 
to no likelihood. Therefore, the Department may be more likely to 
entertain good cause arguments under paragraph II.C in a sunset review 
of a suspended investigation.
5. Treatment of Zero or De Minimis Margins
    Section 752(c)(4)(A) of the Act provides that a weighted-average 
dumping margin determined in the investigation or subsequent reviews 
that is zero or de minimis shall not by itself require the Department 
to determine that revocation of an antidumping duty order or 
termination of a suspended investigation would not be likely to lead to 
continuation or recurrence of sales at less than fair value.
    Therefore, although the Department may consider the existence of a 
zero or de minimis dumping margin in making its determination of 
likelihood, a zero or de minimis dumping margin, in itself, will not 
require that the Department determine that continuation or recurrence 
of dumping is not likely. In accordance with section 752(c)(4)(B) of 
the Act and 19 CFR 351.106(c)(1), the Department will treat as de 
minimis any weighted-average dumping margin that is less than 0.5 
percent ad valorem or the equivalent specific rate.

B. Magnitude of the Margin of Dumping That is Likely to Prevail

1. In General
    Section 752(c)(3) of the Act provides that the Department will 
provide to the Commission the magnitude of the margin of dumping that 
is likely to prevail if the order is revoked or the suspended 
investigation is terminated. The SAA at 890, and the House Report at 
64, provide that the Department normally will select a margin ``from 
the investigation, because that is the only calculated rate that 
reflects the behavior of exporters * * * without the discipline of an 
order or suspension agreement in place.''
    Therefore, except as provided in paragraphs II.B.2 and II.B.3, the 
Department normally will provide to the Commission the margin that was 
determined in the final determination in the original investigation. In 
certain situations, the Department may provide to the Commission the 
margin that was determined in the preliminary determination in the 
original investigation, e.g., where the Department did not issue a 
final determination because the investigation was suspended and 
continuation was not requested. Specifically, the Department normally 
will provide the company-specific margin from the investigation for 
each company regardless of whether the margin was calculated using a 
company's own information or based on best information available or 
facts available. Furthermore, in light of the legislative history 
discussed above, for companies not specifically investigated or for 
companies that did not begin shipping until after the order was issued, 
the Department normally will provide a margin based on the all others 
rate from the investigation. In addition, the Department normally will 
provide to the Commission a list of companies excluded from the order 
based on zero or de minimis margins, if any, or subsequently revoked 
from the order, if any.
    In a sunset review of an antidumping duty finding, i.e., where the 
original investigation was conducted by the Department of the Treasury 
(``Treasury''), the Department normally will provide to the Commission 
the company-specific margin or the all others rate included in the 
Treasury finding published in the Federal Register. If no company-
specific margin or all others rate is included in the Treasury finding, 
the Department normally will provide to the Commission the company-
specific margin from the first final results of administrative review 
published in the Federal Register by the Department. If the first final 
results of administrative review of the finding do not contain a margin 
for a particular company, the Department normally will provide to the 
Commission, as the margin for that company, the first ``new shippers'' 
rate \1\ established by the Department for the finding.
---------------------------------------------------------------------------

    \1\ In 1993, the Department began using the all others rate from 
the original investigation as the appropriate cash deposit rate for 
companies not covered by a review or the original investigation. 
Prior to that time, the Department's practice was to use a ``new 
shippers'' rate resulting from a particular review as the cash 
deposit rate for companies whose first shipment occurred after the 
period covered by the review. The Department used as the ``new 
shippers'' rate the highest of the rates of all responding firms 
with shipments during the review period. This ``new shippers'' rate 
is unrelated to new shipper reviews conducted pursuant to the URAA 
under section 751(a)(2)(B) of the Act.
---------------------------------------------------------------------------

2. Use of a More Recently Calculated Margin
    The SAA at 890-91, and the House Report at 64, provide that in 
certain instances, it may be more appropriate for the Department to 
provide the Commission with a more recently calculated margin. 
Specifically, the SAA and the House Report state that, ``if dumping 
margins have declined over the life of an order and imports have 
remained steady or increased, [the Department] may conclude that 
exporters are likely to continue dumping at the lower rates found in a 
more recent review.'' In addition, the SAA at 889-90, and the House 
Report at 63, state that, ``declining (or no) dumping margins 
accompanied by steady or increasing imports may indicate that foreign 
companies do not have to dump to maintain market share in the United 
States and that dumping is less likely to continue or recur if the 
order were revoked.'' See also, the Senate Report at 52.
    Therefore, unless the Department finds no likelihood of 
continuation or recurrence of dumping, the Department may, in response 
to argument from an interested party, provide to the Commission a more 
recently calculated margin for a particular company where, for that 
particular company, dumping margins declined or dumping was eliminated 
after the issuance of the order or the suspension agreement, as 
applicable, and import volumes remained steady or increased. In 
analyzing whether import volumes remained steady or increased, the 
Department normally will consider the company's relative market share. 
Such information should be provided to the Department by the parties.
    In addition, a company may choose to increase dumping in order to 
maintain or increase market share. As a result, increasing margins may 
be more representative of a company's behavior in the absence of an 
order. Therefore, unless the Department finds no likelihood of 
continuation or recurrence of dumping, the Department may, in response 
to argument from an interested party, provide to the Commission a more 
recently calculated margin for a particular company where, for that 
particular company, dumping margins increased after the issuance of the 
order, even if the increase was as a result of the application of best 
information available or facts available.
3. Duty Absorption
a. In General
    Section 751(a)(4) of the Act provides that, during the second or 
fourth administrative review of an order (or, for transition orders, 
during an administrative review initiated in 1996 or 1998 (see 19 CFR 
351.213(j))), upon request, the Department will determine whether 
antidumping duties have been absorbed by a foreign producer or exporter 
subject to an order if the subject merchandise is sold in the

[[Page 18874]]

United States through an importer who is affiliated with such foreign 
producer or exporter. The statute further provides that the Department 
will notify the Commission of its findings regarding such duty 
absorption for the Commission to consider in conducting a sunset 
review.
    Therefore, the Department will provide to the Commission, on a 
company-specific basis, its findings regarding duty absorption, if any, 
for all reviews in which the Department conducted a duty absorption 
analysis.
b. Effect on Magnitude of the Margin
    The SAA at 885, and the House report at 60, state that,

    Duty absorption is a strong indicator that the current dumping 
margins calculated by [the Department] in reviews may not be 
indicative of the margins that would exist in the absence of an 
order. Once an order is revoked, the importer could achieve the same 
pre-revocation return on its sales by lowering its prices in the 
U.S. in the amount of the duty that previously was being absorbed.

See also, the Senate Report at 50. The SAA at 886, and the House Report 
at 61, also provide that if, in the fourth administrative review (or, 
for transition orders, for an administrative review initiated in 1998), 
the Department finds that absorption has taken place, the Department 
will take that into account in its determination regarding the dumping 
margins likely to prevail if an order were revoked. The Senate Report 
at 50, suggests that the Department's notification to the Commission of 
its findings on duty absorption should include, to the extent 
practicable, some indication of the magnitude of the absorption.
    Therefore, notwithstanding paragraphs II.B.1 and II.B.2, where the 
Department has found duty absorption in the fourth administrative 
review of the order (or, for transition orders, in an administrative 
review initiated in 1998), the Department normally will--
    (a) determine that a company's current dumping margin is not 
indicative of the margin likely to prevail if the order is revoked; and
    (b) provide to the Commission the higher of the margin that the 
Department otherwise would have reported to the Commission or the most 
recent margin for that company adjusted to account for the Department's 
findings on duty absorption.
    The Department normally will adjust a company's most recent margin 
to take into account its findings on duty absorption by increasing the 
margin by the amount of duty absorption on those sales for which the 
Department found duty absorption.

C. Consideration of Other Factors

    Section 752(c)(2) of the Act provides that, if the Department 
determines that good cause is shown, the Department also will consider 
other price, cost, market or economic factors in determining the 
likelihood of continuation or recurrence of dumping. The SAA at 890, 
states that such other factors might include,

the market share of foreign producers subject to the antidumping 
proceeding; changes in exchange rates, inventory levels, production 
capacity, and capacity utilization; any history of sales below cost 
of production; changes in manufacturing technology in the industry; 
and prevailing prices in relevant markets.

The SAA at 890, also notes that the list of factors is illustrative, 
and that the Department should analyze such information on a case-by-
case basis.
    Therefore, the Department will consider other factors in AD sunset 
reviews if the Department determines that good cause to consider such 
other factors exists. The burden is on an interested party to provide 
information or evidence that would warrant consideration of the other 
factors in question. With respect to a sunset review of a suspended 
investigation, where the Department determines that good cause exists, 
the Department normally will conduct the sunset review consistent with 
its practice of examining likelihood under section 751(a) of the Act.

III. Sunset Reviews in Countervailing Duty Proceedings

A. Determination of Likelihood of Continuation or Recurrence of a 
Countervailable Subsidy

1. In General
    In accordance with section 752(b)(1) of the Act, in determining 
whether revocation of a countervailing duty order or termination of a 
suspended countervailing duty investigation would be likely to lead to 
continuation or recurrence of a countervailable subsidy, the Department 
will consider--
    (a) the net countervailable subsidy determined in the investigation 
and subsequent reviews, and
    (b) whether any change in the program which gave rise to the net 
countervailable subsidy determined in the investigation and subsequent 
reviews has occurred that is likely to affect that net countervailable 
subsidy.
2. Basis for Likelihood Determination
    Consistent with the SAA at 879, and the House Report at 56, the 
Department will make its determination of likelihood on an order-wide 
basis.
3. Continuation, Temporary Suspension, or Partial Termination of a 
Subsidy Program
a. In General
    The SAA at 888, states that,

    Continuation of a program will be highly probative of the 
likelihood of continuation or recurrence of countervailable 
subsidies. Temporary suspension or partial termination of a subsidy 
program also will be probative of continuation or recurrence of 
countervailable subsidies, absent significant evidence to the 
contrary.

See also, the Senate Report at 52.
    Therefore, the Department normally will determine that revocation 
of a countervailing duty order or termination of a suspended 
investigation is likely to lead to continuation or recurrence of a 
countervailable subsidy where--
    (a) a subsidy program continues;
    (b) a subsidy program has been only temporarily suspended; or
    (c) a subsidy program has been only partially terminated.
b. Exception
    The SAA at 888-89, provides that, if companies have a long track 
record of not using a program, the mere availability of the program 
should not, by itself, indicate likelihood of continuation or 
recurrence of a countervailable subsidy. However, the SAA at 888, also 
provides that as long as a subsidy program continues to exist, the 
Department should not consider company- or industry-specific 
renunciations of countervailable subsidies, by themselves, as an 
indication that continuation or recurrence of countervailable subsidies 
is unlikely.
    Therefore, where a company has a long track record of not using a 
program, including during the investigation, the Department normally 
will determine that the mere availability of the program does not, by 
itself, indicate likelihood of continuation or recurrence of a 
countervailable subsidy. In addition, where a subsidy program continues 
to exist, the Department normally will not consider company-specific or 
industry-specific renunciation of countervailable subsidies under that 
program, by themselves, as an indication that continuation or 
recurrence of a countervailable subsidy is unlikely.
4. Subsidies for Which Benefits Are Allocated Over Time
    The SAA at 889, provides that, with respect to subsidies for which 
the benefits are allocated over time, such as grants, long-term loans, 
or equity infusions, the Department ``will consider whether the fully 
allocated

[[Page 18875]]

benefit stream is likely to continue after the end of the review, 
without regard to whether the program that gave rise to the long-term 
benefit continues to exist.''
    Therefore, where the Department is examining a subsidy for which 
the benefits are allocated over time, the Department normally will 
determine that a countervailable subsidy will continue to exist when 
the benefit stream, as defined by the Department, will continue beyond 
the end of the sunset review, without regard to whether the program 
that gave rise to the long-term benefit continues to exist.
5. Elimination of a Subsidy Program or Exclusion of Subject Companies 
by the Foreign Government
    The SAA at 888, states that,

    If the foreign government has eliminated a subsidy program, . . 
. [the Department] will consider the legal method by which the 
government eliminated the program and whether the government is 
likely to reinstate the program. For example, programs eliminated 
through administrative action may be more likely to be reinstated 
than those eliminated through legislative action.

    Therefore, where the foreign government has eliminated a subsidy 
program or changes a program to exclude subject companies, the 
Department will consider--
    (a) the legal method by which the government eliminated the 
program, and
    (b) whether the government is likely to reinstate the program,

in determining whether revocation of a countervailing duty order or 
termination of a suspended investigation is likely to lead to 
continuation or recurrence of a countervailable subsidy. The Department 
normally will determine that programs eliminated through administrative 
action are more likely to be reinstated than those eliminated through 
legislative action.
6. Treatment of Zero or De Minimis Rates
a. In General
    Section 752(b)(4)(A) of the Act provides that a net countervailable 
subsidy determined in the investigation or subsequent reviews that is 
zero or de minimis shall not by itself require the Department to 
determine that revocation of a countervailing duty order or termination 
of a suspended investigation would not be likely to lead to 
continuation or recurrence of a countervailable subsidy.
    Therefore, although the Department may consider the existence of a 
zero or de minimis countervailable subsidy rate in making its 
determination of likelihood, a zero or de minimis countervailable 
subsidy rate, in itself, will not require that the Department determine 
that continuation or recurrence of a countervailable subsidy is not 
likely. In accordance with section 752(b)(4)(B) of the Act and 19 CFR 
351.106(c)(1), the Department will treat as de minimis any 
countervailable subsidy rate that is less than 0.5 percent ad valorem 
or the equivalent specific rate.
b. De Minimis Combined Benefits
    The SAA at 889, and the House Report at 63, state that,

    [I]f the combined benefits of all programs considered by [the 
Department] for purposes of its likelihood determination have never 
been above de minimis at any time the order was in effect, and if 
there is no likelihood that the combined benefits of such programs 
would be above de minimis in the event of revocation or termination, 
[the Department] should determine that there is no likelihood of 
continuation or recurrence of countervailable subsidies.

    Therefore, if the combined benefits of all programs considered by 
the Department for purposes of its likelihood determination have never 
been above de minimis at any time the order was in effect, and if there 
is no likelihood that the combined benefits of such programs would be 
above de minimis in the event of revocation or termination, the 
Department normally will determine that there is no likelihood of 
continuation or recurrence of countervailable subsidies. In accordance 
with section 752(b)(4)(B) of the Act and 19 CFR 351.106(c)(1), the 
Department will treat as de minimis any overall countervailable subsidy 
rate that is less than 0.5 percent ad valorem or the equivalent 
specific rate.

B. Net Countervailable Subsidy That is Likely to Prevail

1. In General
    Section 752(b)(3) of the Act provides that the Department will 
provide to the Commission the net countervailable subsidy that is 
likely to prevail if the order is revoked or the suspended 
investigation is terminated. The SAA at 890, and the House Report at 
64, provide that the Department normally will select a rate ``from the 
investigation, because that is the only calculated rate that reflects 
the behavior of exporters and foreign governments without the 
discipline of an order or suspension agreement in place.''
    Therefore, except as provided in paragraph III.B.3, the Department 
normally will provide to the Commission the net countervailable subsidy 
that was determined in the final determination in the original 
investigation. In certain situations, the Department may provide to the 
Commission the net countervailable subsidy that was determined in the 
preliminary determination in the original investigation, e.g., where 
the Department did not issue a final determination because the 
investigation was suspended and continuation was not requested. In 
addition, the Department normally will provide to the Commission a list 
of companies excluded from the order based on zero or de minimis rates, 
if any, or subsequently revoked from the order, if any.
    In a sunset review of a countervailing duty order where the 
original investigation was conducted by Treasury, the Department 
normally will provide to the Commission the net countervailable subsidy 
(sometimes previously called the net bounty, subsidy, or grant) from 
the first final results of administrative review published in the 
Federal Register by the Department, where the net countervailable 
subsidy was first calculated on an ad valorem basis.
2. Determination of Net Countervailable Subsidy; Company-Specific Rates
    Prior to enactment of the URAA, the Department calculated company-
specific countervailable subsidy rates in the original investigation 
only where such rates were ``significantly different'' from the 
country-wide rate. See 19 CFR 355.20(d) (1995). Since enactment of the 
URAA, and in accordance with section 777A(e)(1) of the Act, the 
Department, where possible, calculates individual countervailable 
subsidy rates in an investigation for each known exporter or producer 
of the subject merchandise (see section 777A(e)(2) of the Act 
(providing for an exception to the calculation of individual rates 
where it is not practicable to do so because of the large number of 
exporters or producers involved in the investigation)).
    Therefore, except as provided in paragraph III.B.3, where a 
company-specific countervailing duty rate was determined for a 
particular company in the original investigation, the Department 
normally will provide that rate to the Commission as the net 
countervailable subsidy that is likely to prevail for that company if 
the order is revoked or the suspended investigation is terminated. 
Specifically, the Department normally will provide the company-specific 
countervailing duty rate from the investigation for each company, where 
available, regardless of whether the rate was calculated using a

[[Page 18876]]

company's own information or was based on best information available or 
facts available. If no company-specific countervailing duty rate was 
determined for a particular company in the original investigation, 
because the company's rate was not ``significantly different'' from the 
country-wide rate, the company was not specifically investigated, or 
the company did not begin shipping until after the order was issued, 
except as provided in paragraph III.B.3, the Department normally will 
provide to the Commission the country-wide rate or all others rate 
determined in the original investigation as the net countervailable 
subsidy that is likely to prevail for that particular company if the 
order is revoked or the suspended investigation is terminated.
3. Adjustments to the Subsidy
    As discussed in paragraph III.B.1, the Department normally will 
provide to the Commission the net countervailable subsidy that was 
determined in the original investigation. However, the purpose of the 
net countervailable subsidy in the context of sunset reviews is to 
provide the Commission with a rate which represents the countervailable 
rate that is likely to prevail if the order is revoked or the suspended 
investigation is terminated. Furthermore, section 752(b)(1)(B) of the 
Act provides that the Department will consider whether any change in 
the program which gave rise to the net countervailable subsidy 
determination in the investigation or subsequent reviews has occurred 
that is likely to affect the net countervailable subsidy. Consequently, 
although the SAA at 890, and the House Report at 64, provide that the 
Department normally will select a rate from the investigation, this 
rate may not be the most appropriate if, for example, the rate was 
derived (in whole or part) from subsidy programs which were found in 
subsequent reviews to be terminated, there has been a program-wide 
change, or the rate ignores a program found to be countervailable in a 
subsequent administrative review.
    Therefore, the Department may make adjustments to the net 
countervailable subsidy determined pursuant to paragraphs III.B.1 and 
III.B.2, including, but not limited to, the following:
    (a) Where the Department has conducted an administrative review of 
the order, or suspension agreement, as applicable, and found that a 
program was terminated with no residual benefits and no likelihood of 
reinstatement, the Department normally will adjust the net 
countervailable subsidy rate determined in the original investigation 
to reflect the change. If, in an investigation, the Department found 
that a program had been terminated with no residual benefits subsequent 
to the period of investigation, the Department normally will consider 
this information in determining the net countervailable subsidy.
    (b) The Department normally will not make adjustments to the net 
countervailable subsidy rate for programs that still exist, but were 
modified subsequent to the order, or suspension agreement, as 
applicable, to eliminate exports to the United States (or subject 
merchandise) from eligibility.
    (c) Where the Department has conducted an administrative review of 
the order, or suspension agreement, as applicable, and found a new 
countervailable program, or found a program previously not used but 
subsequently found countervailable, that was included in the new 
subsidy rate for the administrative review, the Department normally 
will adjust the net countervailable subsidy rate determined in the 
original investigation to reflect the change.
    (d) Where the Department has conducted an administrative review of 
the order, or suspension agreement, as applicable, and determined to 
increase the net countervailable subsidy rate for any reason, including 
as a result of the application of best information available or facts 
available, the Department may adjust the net countervailable subsidy 
rate determined in the original investigation to reflect the increase 
in the rate.
    (e) Where the Department has conducted an administrative review of 
the order, or suspension agreement, as applicable, and found that a 
program is not countervailable based on sections 771(5B)(B), (C), or 
(D) of the Act, the Department normally will adjust the net 
countervailable subsidy rate determined in the original investigation 
to reflect the change. Also, where a subsidy is provided pursuant to a 
program that has been notified in accordance with Article 8.3 of the 
Subsidies Agreement (see section 771(5B)(E)(i) of the Act), the 
Department normally will adjust the net countervailable subsidy rate 
determined in the original investigation to reflect the change, unless 
the Department determines to treat the subsidy as countervailable based 
upon notification from the Trade Representative under section 
771(5B)(E)(ii) of the Act.
    (f) Where the Department has conducted an administrative review of 
the order, or suspension agreement, as applicable, and found that a 
program is not countervailable based on section 771(5B)(F) of the Act, 
the Department normally will adjust the net countervailable subsidy 
rate determined in the original investigation to reflect the change.
    (g) Where the Department has not conducted an administrative review 
of the order, or suspension agreement, as applicable, subsequent to the 
investigation, except as provided in paragraph III.C, the Department 
normally will not make adjustments to the net countervailable subsidy 
rate determined in the original investigation.
4. Nature of the Countervailable Subsidy
    Consistent with section 752(a)(6) of the Act, the Department will 
provide information to the Commission concerning the nature of a 
countervailable subsidy and whether the subsidy is a subsidy described 
in Article 3 or Article 6.1 of the Subsidies Agreement.

C. Consideration of Other Factors

1. Programs Determined To Provide Countervailable Subsidies in Other 
Investigations or Reviews
    Section 752(b)(2)(A) of the Act provides that if the Department 
determines that good cause is shown, the Department also will consider 
programs determined to provide countervailable subsidies in other 
investigations or reviews, but only to the extent that such programs--
    (a) can potentially be used by the exporters or producers subject 
to the sunset review, and
    (b) did not exist at the time that the countervailing duty order 
was issued or the suspension agreement accepted.
    Therefore, the Department will consider such other programs in CVD 
sunset reviews if the Department determines that good cause to consider 
such other programs exists. The burden is on interested parties to 
provide information or evidence that would warrant consideration of the 
subsidy program in question. In addition, with respect to a sunset 
review of a suspended investigation, where the Department determines 
that good cause exists, the Department normally will conduct the sunset 
review consistent with its practice of examining likelihood under 
section 751(a) of the Act.
2. Programs Newly Alleged To Provide Countervailable Subsidies
    Section 752(b)(2)(B) of the Act provides that if the Department 
determines that good cause is shown, the Department also will consider 
programs newly alleged to provide countervailable subsidies, but only 
to

[[Page 18877]]

the extent that the Department makes an affirmative countervailing duty 
determination with respect to such programs and with respect to the 
exporters or producers subject to the sunset review. The SAA at 889, 
states that,

    [S]ubsidy allegations normally should be made in the context of 
[administrative] reviews * * *, and [the Department is not expected] 
to entertain frivolous allegations in . . . [sunset] reviews. 
However, where there have been no recent [administrative] reviews or 
where the alleged countervailable subsidy program came into 
existence after the most recently completed [administrative] review, 
[the Department] may consider new subsidy allegations in the context 
of a * * * [sunset] review.

    Therefore, the Department will consider programs newly alleged to 
provide countervailable subsidies if the Department determines that 
good cause to consider such programs exists. Furthermore, the 
Department normally will consider a new subsidy allegation in the 
context of a sunset review only where information on such program was 
not reasonably available to domestic interested parties during the most 
recently completed administrative review or the alleged countervailable 
subsidy program came into existence after that administrative review. 
The burden is on interested parties to provide information or evidence 
that would warrant consideration of the subsidy program in question. In 
addition, with respect to a sunset review of a suspended investigation, 
where the Department determines that good cause exists, the Department 
normally will conduct the sunset review consistent with its practice of 
examining likelihood under section 751(a) of the Act.

[FR Doc. 98-10039 Filed 4-15-98; 8:45 am]
BILLING CODE 3510-DS-P