[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Notices]
[Pages 23728-23730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11527]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-122-815]


Preliminary Results of the Fifth Countervailing Duty 
Administrative Reviews; Pure Magnesium and Alloy Magnesium From Canada

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

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Reviews.

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SUMMARY: The Department of Commerce is conducting administrative 
reviews of the countervailing duty orders on pure magnesium and alloy 
magnesium from Canada. For information on the net subsidy for the 
reviewed company, as

[[Page 23729]]

well as for all non-reviewed companies, see the Preliminary Results of 
Reviews section of this notice. If the final results remain the same as 
these preliminary results, we will instruct the U.S. Customs Service to 
assess countervailing duties as detailed in the Preliminary Results of 
Reviews section of this notice. Interested Parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: April 30, 1998.

FOR FURTHER INFORMATION CONTACT: Hong-Anh Tran or Beth Graham, AD/CVD 
Enforcement, Group 1, Office 1, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-0176 or (202) 482-4105, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 31, 1992, the Department of Commerce (the Department) 
published in the Federal Register (57 FR 39392) the countervailing duty 
orders on pure and alloy magnesium from Canada. On August 4, 1997, the 
Department published a notice of ``Opportunity to Request an 
Administrative Review'' (62 FR 41925) of these orders. We received a 
timely request for review from Norsk Hydro Canada Inc. (NHCI) on August 
29, 1997, and we initiated these reviews, covering the period January 
1, 1996, through December 31, 1996, on September 25, 1997 (62 FR 
50292).
    In accordance with 19 CFR 351.213(b), these reviews cover NHCI, the 
only producer or exporter of the subject merchandise for which a review 
was specifically requested. Also, these reviews cover 17 subsidy 
programs.
    On October 15, 1997, the Department issued questionnaires to NHCI, 
the Government of Canada (GOC), and the Government of Quebec (GOQ). We 
received a questionnaire response from NHCI, the GOC and the GOQ on 
November 21, 1997. The Department issued a supplemental questionnaire 
to NHCI on December 19, 1997, and received a response to it on December 
23, 1997. On February 2, 1998, the GOQ submitted additional factual 
information.

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 these administrative reviews in 
accordance with section 751(a) of the Act. All other references are to 
the Department's regulations of 19 CFR Part 351 et al. Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296; May 19, 1997, 
unless otherwise indicated.

Scope of the Reviews

    The products covered by these reviews are shipments of pure and 
alloy magnesium from Canada. Pure magnesium contains at least 99.8 
percent magnesium by weight and is sold in various slab and ingot forms 
and sizes. Magnesium alloys contain less than 99.8 percent magnesium by 
weight with magnesium being the largest metallic element in the alloy 
by weight, and are sold in various ingot and billet forms and sizes. 
Pure and alloy magnesium are currently classifiable under subheadings 
8104.11.0000 and 8104.19.0000, respectively, of the Harmonized Tariff 
Schedule (HTS). Although the HTS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of this proceeding is dispositive.
    Secondary and granular magnesium are not included in the scopes of 
these orders. Our reasons for excluding granular magnesium are 
summarized in the Preliminary Determination of Sales at Less Than Fair 
Value: Pure and Alloy Magnesium From Canada (57 FR 6094, February 20, 
1992).

Analysis of Programs

I. Programs Previously Determined to Confer Subsidies

A. Exemption from Payment of Water Bills

    Pursuant to a December 15, 1988, agreement between NHCI and La 
Societe du Parc Industriel et Portuaire de Becancour (Industrial Park), 
NHCI is exempt from payment of its water bills. Except for the taxes 
associated with its bills, NHCI does not pay the invoiced amounts of 
its water bills.
    In the Final Affirmative Countervailing Duty Determinations: Pure 
Magnesium and Alloy Magnesium from Canada (Magnesium from Canada) 57 FR 
30946, 30948 (July 13, 1992), the Department determined that the 
exemption received by NHCI was limited to a specific enterprise or 
industry, or group of enterprises or industries because no other 
company receives such an exemption. In these reviews, neither the GOQ 
nor NHCI provided new information which would warrant reconsideration 
of this determination.
    We preliminarily determine the countervailable benefit to be the 
amount NHCI would have paid absent the exemption. To calculate the 
benefit under this program, we divided the amount NHCI would have paid 
for water during the POR by NHCI's total POR sales of Canadian-
manufactured products. We preliminarily determine that the net subsidy 
provided by this program is 0.46 percent ad valorem.

B. Article 7 Grants From the Quebec Industrial Development Corporation

    The Societe de Developpement Industriel du Quebec (SDI) administers 
development programs on behalf of the GOQ. SDI provides assistance 
under Article 7 of the SDI Act in the form of loans, loan guarantees, 
grants, assumptions of costs associated with loans, and equity 
investments. This assistance involves projects capable of having a 
major impact upon the economy of Quebec. Article 7 assistance greater 
than 2.5 million dollars must be approved by the Council of Ministers, 
and assistance over 5 million dollars becomes a separate budget item 
under Article 7. Assistance provided in such amounts must be of 
``special economic importance and value to the province.'' (See 
Magnesium from Canada, 57 FR 30946, 30949 (July 13, 1992).) In 1988, 
NHCI was awarded a grant under Article 7 to cover a large percentage of 
the cost of certain environmental protection equipment. In Magnesium 
from Canada, we determined that NHCI received a disproportionately 
large share of assistance under Article 7. On this basis, we determined 
that the Article 7 grant was limited to a specific enterprise or 
industry, or group of enterprises or industries. In these reviews, we 
are not considering information submitted by the GOQ on February 2, 
1998, regarding Article 7 assistance provided to other companies 
subsequent to the assistance granted to NHCI in 1988; information with 
respect to the distribution of benefits after the provision of the 
subsidy in question is irrelevent. (See Final Results of the Fourth 
Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy 
Magnesium from Canada, (Magnesium from Canada Fourth Review) 62 FR 
48812 (September 17, 1997).) For the reasons set forth in the Magnesium 
from Canada Fourth Review, we preliminarily determine in these reviews 
that the Article 7 assistance received by NHCI was a non-recurring 
grant.
    We calculated the benefit from the non-recurring grant received by 
NHCI using the company's cost of long-term, fixed-rate debt as the 
discount rate and

[[Page 23730]]

our declining balance methodology. We divided that portion of the 
benefit allocated to the POR by NHCI's total sales of Canadian-
manufactured products. We preliminarily determine the net subsidy 
provided by this program to be 2.32 percent ad valorem.

II. Programs Preliminarily Found Not To be Used

    We preliminarily find that NHCI did not apply for or receive 
benefits under the following programs during the POR:

St. Lawrence River Environment Technology Development Program
Program for Export Market Development
The Export Development Corporation
Canada-Quebec Subsidiary Agreement on the Economic Development of the 
Regions of Quebec
Opportunities to Stimulate Technology Programs
Development Assistance Program
Industrial Feasibility Study Assistance Program
Export Promotion Assistance Program
Creation of Scientific Jobs in Industries
Business Investment Assistance Program
Business Financing Program
Research and Innovation Activities Program
Export Assistance Program
Energy Technologies Development Program
Transportation Research and Development Assistance Program

Preliminary Results of Reviews

    In accordance with 19 CFR 351.221(b)(4)(i) we calculated a subsidy 
rate for NHCI, the sole producer/exporter subject to these 
administrative reviews. For the period January 1, 1996, through 
December 31, 1996, we preliminarily determine the net subsidy to be 
2.78 percent ad valorem. If the final results of these reviews remain 
the same as these preliminary results, the Department intends to 
instruct Customs to assess countervailing duties as indicated above. 
The Department also intends to instruct Customs to collect cash 
deposits of estimated countervailing duties as indicated above of the 
F.O.B. invoice price on all shipments of the subject merchandise from 
NHCI entered or withdrawn from warehouse, for consumption on or after 
the date of publication of the final results of these administrative 
reviews.
    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 reviews 
will normally cover only those companies specifically named. See 19 CFR 
351.213(b). Pursuant to 19 CFR 351.212(c), 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)). Therefore, the 
cash deposit rates for all companies except those covered by these 
reviews will be unchanged by the results of these reviews.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies, except Timminco Limited (which was excluded 
from the orders during the investigation), 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 these orders are those established in the most recently 
completed administrative proceeding, conducted pursuant to the 
statutory provisions that were in effect prior to the URAA amendments. 
See the Final Results of the Second Countervailing Duty Administrative 
Reviews: Pure Magnesium and Alloy Magnesium from Canada, 62 FR 48607 
(September 16, 1997). 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, 1996, through 
December 31, 1996, the assessment rates applicable to all non-reviewed 
companies covered by these orders are the cash deposit rates in effect 
at the time of entry, except for Timminco Limited (which was excluded 
from the orders during the original investigation).

Public Comment

    Parties to these proceedings may request disclosure of the 
calculation methodology and interested parties may request a hearing 
not later than 30 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. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
five days after the time limit for filing the case brief. Parties who 
submit an 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 two 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 CFR 351.303(f).
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR Sec. 351.309(c)(ii), are due.
    The Department will publish the final results of these 
administrative reviews, including the results of its analysis of issues 
raised in any case or rebuttal briefs or at a hearing.
    These administrative review results are published in accordance 
with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), 19 CFR 
351.213.

    Dated: April 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-11527 Filed 4-29-98; 8:45 am]
BILLING CODE 3510-DS-P