[Federal Register Volume 63, Number 163 (Monday, August 24, 1998)]
[Notices]
[Pages 45045-45048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22664]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-122-815]


Pure and Alloy Magnesium From Canada; Final Results of the Fifth 
(1996) Countervailing Duty Administrative Reviews

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

ACTION: Notice of final results of countervailing duty administrative 
reviews.

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SUMMARY: On April 30, 1998, the Department of Commerce (the Department) 
published in the Federal Register its preliminary results of the fifth 
administrative reviews of the countervailing duty orders on pure and 
alloy magnesium from Canada covering the period January 1, 1996 through 
December 31, 1996 (see Pure Magnesium and Alloy Magnesium From Canada; 
Preliminary Results of the Fifth Countervailing Duty Administrative 
Reviews (Preliminary Results), 63 FR 23728). We have completed these 
reviews and determine the net subsidy in each to be 2.78 percent ad 
valorem for Norsk Hydro Canada, Inc. (NHCI). We will instruct the U.S. 
Customs Service (Customs) to assess countervailing duties in this 
amount.

EFFECTIVE DATE: August 24, 1998.

FOR FURTHER INFORMATION CONTACT: Marian Wells or Rosa Jeong, AD/CVD 
Enforcement, Group 1, Office 1, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC. 20230; telephone: (202) 482-
6309 or (202) 482-3853, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In accordance with 19 CFR 355.22(a), these reviews cover only those 
producers or exporters of the subject merchandise for which reviews 
were specifically requested. Accordingly, these reviews cover only 
NHCI, a producer of the subject merchandise which exported pure and 
alloy magnesium to the United States during the review period.
    On April 30, 1998, the Department published in the Federal Register 
the Preliminary Results of its fifth administrative reviews of the 
countervailing duty orders on pure and alloy magnesium from Canada (63 
FR 23728). We invited interested parties to comment on the Preliminary 
Results. On June 1, 1998, case briefs were submitted by the Government 
of Quebec (GOQ), and the petitioner, Magnesium Corporation of America 
(MAGCORP). The GOQ subsequently filed a rebuttal brief on June 8, 1998. 
The Department did not conduct a hearing for these reviews because none 
of the interested parties requested one.
    These reviews cover the period January 1, 1996 through December 31, 
1996 (the period of review or POR). The reviews involve one company 
(NHCI) and the following programs: Exemption from Payment of Water 
Bills, Article 7 Grants from the Quebec Industrial Development 
Corporation (SDI), 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, and Transportation Research and 
Development Assistance Program.

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. References to 
``Countervailing Duties: Notice of Proposed Rulemaking and Request for 
Public Comments,'' (54 FR 23366, May 31, 1989) (``1989 Proposed 
Regulations''), which have been withdrawn, are provided solely for 
further explanation of the Department's countervailing duty practice.

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 of the United States (HTSUS). Although the HTSUS 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).

[[Page 45046]]

Analysis of Programs

    Based upon our analysis of the questionnaire responses and written 
comments from the interested parties, we determine the following:

I. Programs Conferring Subsidies

A. Exemption from Payment of Water Bills

    In the Preliminary Results, we found that this program conferred 
countervailable benefits on the subject merchandise. Our analysis of 
the comments submitted by the interested parties, summarized below, has 
not led us to change our findings from the Preliminary Results. On this 
basis, the net subsidy rate for this program is as follows:

------------------------------------------------------------------------
                                                                  Rate  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
NHCI.........................................................      0.46 
------------------------------------------------------------------------

B. Article 7 Grants from the Quebec Industrial Development Corporation

    In the Preliminary Results, we found that this program conferred 
countervailable benefits on the subject merchandise. Our analysis of 
the comments submitted by the interested parties, summarized below, has 
not led us to change our findings from the Preliminary Results. On this 
basis, the net subsidy rate for this program is as follows:

------------------------------------------------------------------------
                                                                  Rate  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
NHCI.........................................................      2.32 
------------------------------------------------------------------------

II. Programs Found Not to be Used

    In the Preliminary Results, we found that NHCI did not apply for or 
receive benefits under the following programs:
     St. Lawrence River Environment Technology Development 
Program
     Program for Export Market Development
     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.
    We received no comments on these programs from the interested 
parties; therefore, we have not changed our findings from the 
Preliminary Results.

Analysis of Comments

    In its June 1, 1998 case brief, Magcorp affirmed all of the 
Department's positions in the preliminary results of review.

Comment 1: Obligation of Department to Re-examine Specificity of 
Article 7 Assistance

    In the event the Department continues to treat the Article 7 
assistance as a nonrecurring grant, the GOQ argues that the Department 
must re-examine whether the assistance was specific. In particular, the 
Department is obliged to evaluate, according to the GOQ, in each 
administrative review the countervailability of a program previously 
determined to be de facto specific, regardless of whether the parties 
have provided new information. The Department may not rely, as it did 
in the Preliminary Results, on a de facto specificity determination 
made in the original investigations.

DOC Position

    Just as it does not revisit prior determinations that a program is 
not specific, it is the Department's policy not to revisit prior 
determinations that a program is specific, absent the presentation of 
new facts or evidence (see e.g., Carbon Steel Wire Rod From Saudi 
Arabia; Final Results of Countervailing Duty Administrative Review and 
Revocation of Countervailing Duty Order (Carbon Steel Wire Rod from 
Saudi Arabia), 59 FR 58814 (November 15, 1994); Final Results of the 
First Countervailing Duty Administrative Reviews: Pure Magnesium and 
Alloy Magnesium From Canada (First Magnesium Reviews), 62 FR 13857 
(March 24, 1997); Final Results of the Second Countervailing Duty 
Administrative Reviews: Pure Magnesium and Alloy Magnesium From Canada 
(Second Magnesium Reviews), 62 FR 48607 (September 16, 1997); and Final 
Results of the Third Countervailing Duty Administrative Reviews: Pure 
Magnesium and Alloy Magnesium From Canada (Third Magnesium Reviews), 62 
FR 18749 (April 17, 1997)). In the present reviews, no new facts or 
evidence have been presented which would lead us to question our 
original specificity determination for the POI.

Comment 2: Alternative Methodology for Determining Specificity of 
Article 7 Assistance

    The GOQ continues to argue, as it has in previous reviews, that the 
Department should take an entirely different approach to the question 
of how to determine if a nonrecurring grant is disproportionately 
large, and therefore, specific. Rather than base its analysis on the 
entire amount of the grant at the time of bestowal, the GOQ maintains 
that the Department must instead examine only the portion of the 
benefit allocated--in accordance with the Department's standard 
allocation methodology--to the POR. It is this amount, in relationship 
to the portions of benefits allocated to the POR for all assistance 
bestowed under the program to all other enterprises, that must be 
determined to be disproportionate. Because the benefit attributable to 
the POR is the subsidy at issue, it is that amount, according to the 
GOQ, that must be found specific before it may be countervailed.
    The GOQ also counters the Department's assertion in Final Results 
of the Fourth Countervailing Duty Administrative Reviews: Pure 
Magnesium and Alloy Magnesium From Canada (Fourth Magnesium Reviews), 
62 FR 48812, 48814 (September 17, 1997) that the GOQ has not cited a 
single determination by the Department or any other legal authority to 
support its position. The GOQ asserts that it has cited to the sixth 
administrative review of Live Swine from Canada: Final Results of 
Countervailing Duty Administrative Review (Live Swine from Canada), 59 
FR 12243, 12249 (March 16, 1994) as an example where the Department 
reexamined the countervailability of benefits found to be de facto 
specific in prior reviews.

DOC Position

    As we have explained in previous final results (see First Magnesium 
Reviews, Second Magnesium Reviews, and Third Magnesium Reviews), the 
GOQ is confusing the determination of specificity with the measurement 
of the subsidy.
    The specificity determination and the measurement of the subsidy 
are two separate and distinct processes. The question of whether a 
nonrecurring grant is disproportionately large is based on an 
examination of the entire amount of the grant at the time of bestowal. 
If such a grant is found to be

[[Page 45047]]

disproportionately large, it is determined to be specific. (As a grant 
specifically provided, it is also at this point that the statutory 
requirements for countervailing the grant are met. See section 771(5) 
of the Act.) The separate and distinct second step is the measurement 
of the benefit. This step involves allocating portions of the grant 
over time. It is these portions of the grant which then provide the 
basis for the calculation of the ad valorem rate of subsidization. The 
portions of subsidies allocated to periods of time using the 
Department's standard allocation methodology are irrelevant to an 
examination of the actual distribution of benefits by the granting 
government at the time of bestowal.
    The GOQ refers to the sixth review of the countervailing duty order 
on Live Swine from Canada as demonstrating that the Department has, as 
a matter of course, revisited its de facto specificity determinations 
from one segment of a proceeding to another. We continue to believe 
that the situation in the Magnesium reviews can be distinguished from 
the situation in Live Swine from Canada. As explained in the First, 
Second, and Third Magnesium Reviews the facts underlying our analyses 
in Live Swine from Canada differ from the situation here. Because those 
facts have not changed, we continue to make the identical distinction 
in the current reviews. For a full discussion of the distinction made 
between the revisiting specificity determinations in Live Swine from 
Canada and the Magnesium case, see First Magnesium Reviews at 13861, 
Second Magnesium Reviews at 48609, and Third Magnesium Reviews at 
18753.)

Comment 3: Appropriate Time of Specificity Determination: 
``Bestowal'' or Disbursement

    The GOQ argues that although the Department concluded in the First 
Magnesium Reviews and the Third Magnesium Reviews that the proper time 
period for a specificity determination is the time of bestowal, the 
Department did not examine specificity in the original period of 
investigation (POI) at the time of bestowal. Rather, the Department 
examined specificity at the time of approval of the funds. The GOQ 
states that it is confused by the Department's policy to determine 
specificity at a time when no funds have been provided to NHCI. The GOQ 
argues that the time of bestowal for the purpose of a specificity 
determination should refer to the time of actual disbursement of funds, 
and should not refer to the time funds are approved by the granting 
authority.

DOC Position

    We disagree with the GOQ's assertion that the Department's 
specificity analysis during the original investigations should have 
been conducted based on the time of actual disbursement of funds. We 
acknowledge that the specificity determination in the original 
investigations was based on the action of the granting authority, i.e., 
the GOQ, at the time of approval. However, we note that the Department 
uses the terms ``approval'' and ``bestowal'' interchangeably in this 
context. The time of bestowal or approval is the appropriate basis for 
the specificity determination because it most directly demonstrates 
whether a government has limited the benefits bestowed upon an 
enterprise or industry, or group thereof.

Comment 4: Relevance of New Information

    The GOQ maintains that given the Department's responsibility to 
make a finding of specificity and countervailability based on the 
information relevant to the POR, the Department should consider any new 
assistance provided by SDI since the end of the original POI. To this 
end, the GOQ provided information on the Article 7 assistance extended 
up to, and including, the POR in a submission dated January 15, 1997. 
According to the GOQ, this new factual information was apparently 
considered irrelevant information by the Department.

DOC Position

    As stated above, the proper time period for a specificity 
determination is the time of bestowal. Therefore, information submitted 
by the GOQ concerning assistance that was provided subsequent to the 
time of bestowal of the assistance granted to NHCI under Article 7 of 
the SDI Act is not relevant to the specificity determination. The 
remaining information presented by the GOQ on the Article 7 assistance 
granted prior to and including the time of bestowal of NHCI's Article 7 
benefits is nearly identical to that utilized by the Department in its 
original specificity determination. Differences between the updated 
information on Article 7 provided by the GOQ and information used in 
the original specificity determination are sufficiently small so as not 
to compromise the original specificity determination. Fourth Magnesium 
Reviews at 48815.

Comment 5: Relevance of Article 9 Information

    The GOQ argues that assistance under Article 9 should be included 
in the Article 7 specificity analysis because Article 9 was the 
predecessor of Article 7 and the provisions of Article 9 functioned 
basically the same as those of Article 7.

DOC Position

    We disagree. The GOQ did not provide any information which would 
allow us to make a determination on whether Article 9 and Article 7 
should be considered integrally linked or otherwise considered a single 
program for purposes of our specificity analysis (see Section 
355.43(b)(6) of the 1989 Proposed Regulations). Information on the 
record in these proceedings with respect to Article 9 consists only of 
a statement by the GOQ in its case brief that Article 9 was the 
predecessor of Article 7. This is an insufficient basis to determine 
that the two programs should be treated as one.

Final Results of Review

    In accordance with 19 CFR 355.22(c)(4)(ii), we calculated an 
individual subsidy rate for each producer/exporter subject to these 
administrative reviews. For the period January 1, 1996 through December 
31, 1996, we determine the net subsidy for NHCI to be 2.78 percent ad 
valorem. We will instruct Customs to assess countervailing duties in 
this amount for all entries of NHCI's merchandise during this period. 
The Department will also instruct Customs to collect cash deposits of 
estimated countervailing duties of 2.78 percent of the f.o.b. invoice 
price on all shipments of subject merchandise from NHCI, entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the final results of these 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. Consequently, the 
requested review will normally cover only those companies specifically 
named (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

[[Page 45048]]

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 
NHCI are unchanged by the results of these reviews.
    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, except from Timminco Limited 
(which was excluded from the order in the original investigations). 
Accordingly, the cash deposit rates that will be applied to non-
reviewed companies covered by these orders are those established in the 
administrative reviews completed for the most recent POR, conducted 
pursuant to the statutory provisions that were in effect prior to the 
URAA amendments. See Fourth Magnesium Reviews. This rate shall apply to 
all non-reviewed companies until a review of a company assigned this 
rate is requested. In addition, countervailing duties will be assessed 
on any entries during the period January 1, 1996 through December 31, 
1996, for all non-reviewed companies at 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 CFR 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.
    These administrative reviews and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: August 18, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-22664 Filed 8-21-98; 8:45 am]
BILLING CODE 3510-DS-P